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REVOLVING CREDIT AGREEMENT
by and between
MEDITRUST
as the Company
and
VIA BANQUE
as the Bank
October 23, 1997
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TABLE OF CONTENTS
Section 1 DEFINITIONS ..................................................... 1
Section 1.1 "Affected Loans" ........................................ 1
Section 1.2 "Affiliate" ............................................. 1
Section 1.3 "Agreement".............................................. 1
Section 1.4 "Appraised Value"........................................ 1
Section 1.5 "Assignment and Acceptance" ............................. 1
Section 1.6 "Balloon Payments" ...................................... 1
Section 1.7 "Bank" .................................................. 2
Section 1.8 "Bank Affiliate" ........................................ 2
Section 1.9 "Borrowing Base" ........................................ 2
Section 1.10 "Borrowing Report" ..................................... 2
Section 1.11 "Breakage Costs" ....................................... 2
Section 1.12 "Business Day" ......................................... 2
Section 1.13 "Closing Date" ......................................... 2
Section 1.14 "Code" ................................................. 2
Section 1.15 "Combined" ............................................. 3
Section 1.16 "Commitment" ........................................... 3
Section 1.17 "Commitment Amount" .................................... 3
Section 1.18 "Company" .............................................. 3
Section 1.19 "Company Limited Partnership" .......................... 3
Section 1.20 "Consolidated" ......................................... 3
Section 1.21 "Construction Investments" ............................. 3
Section 1.22 "Continental Investments" .............................. 4
Section 1.23 "Controlled Limited Partnership" ....................... 4
Section 1.24 "Controlled Group" ..................................... 4
Section 1.25 "Default" .............................................. 4
Section 1.26 "Default Rate" ......................................... 4
Section 1.27 "Dividend" ............................................. 4
Section 1.28 "Eligible Investments" ................................. 4
Section 1.29 "Environmental Laws" ................................... 6
Section 1.30 "ERISA" ................................................ 6
Section 1.31 "Eurodollar Office" .................................... 6
Section 1.32 "Event of Default" ..................................... 7
Section 1.33 "Facility" ............................................. 7
Section 1.34 "Federal Funds Effective Rate" ......................... 7
Section 1.35 "Fees" ................................................. 7
Section 1.36 "Financial Statement" .................................. 7
Section 1.37 "Fixed Charge Coverage" ................................ 7
Section 1.38 "Fleet Bank" ........................................... 8
Section 1.39 "Fleet Bank Amount" .................................... 8
Section 1.40 "Fleet Bank Credit Facility" ........................... 8
Section 1.41 "Funded Debt" .......................................... 8
Section 1.42 "GAAP" ................................................. 9
Section 1.43 "Gross Real Estate Investments" ........................ 9
Section 1.44 "Guarantees" ........................................... 10
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Section 1.45 "Guarantees Outstanding" ............................... 10
Section 1.46 "Hazardous Materials" .................................. 10
Section 1.47 "Imputed Management Fees" .............................. 11
Section 1.48 "Indebtedness" ......................................... 11
Section 1.49 "Insurance" ............................................ 11
Section 1.50 "Interest Expense" ..................................... 11
Section 1.51 "Interest Period" ...................................... 11
Section 1.52 "Investment" ........................................... 12
Section 1.53 "Investment Amount" .................................... 12
Section 1.54 "Investment Commitment" ................................ 12
Section 1.55 "Investment Fee" ....................................... 12
Section 1.56 "IRS" .................................................. 12
Section 1.57 "Law" .................................................. 12
Section 1.58 "Lease" ................................................ 12
Section 1.59 "Lease Rental Expense" ................................. 13
Section 1.60 "Legal Impediment" ..................................... 13
Section 1.61 "Legal Requirements" ................................... 13
Section 1.62 "LIBOR Base" ........................................... 13
Section 1.63 "LIBOR Loan" ........................................... 13
Section 1.64 "LIBOR Margin" ......................................... 13
Section 1.65 "LIBOR Rate" ........................................... 14
Section 1.66 "Lien" ................................................. 14
Section 1.67 "Line of Credit" ....................................... 14
Section 1.68 "Liquid Assets" ........................................ 14
Section 1.69 "Litigation" ........................................... 14
Section 1.70 "Loan" ................................................. 14
Section 1.71 "Loan Account" ......................................... 14
Section 1.72 "Loan Documents" ....................................... 15
Section 1.73 "Loans" ................................................ 15
Section 1.74 "Material Adverse Effect" .............................. 15
Section 1.75 "Meditrust" ............................................ 15
Section 1.76 "Modified Operating Cash Flow" ......................... 15
Section 1.77 "Mortgage" ............................................. 15
Section 1.78 "Mortgage Expense" ..................................... 15
Section 1.79 "Net Earnings" ......................................... 15
Section 1.80 "Note" ................................................. 15
Section 1.81 "Notice of Borrowing" .................................. 16
Section 1.82 "Notice of Continuation or Conversion" ................. 16
Section 1.83 "Obligations" .......................................... 16
Section 1.84 "Operating Cash Flow" .................................. 16
Section 1.85 "Operating Company" .................................... 16
Section 1.86 "Operating Facilities" ................................. 16
Section 1.87 "Operator" ............................................. 16
Section 1.88 "Operator Interest Expense" ............................ 16
Section 1.89 "Other Documents" ...................................... 16
Section 1.90 "Outstanding Amount" ................................... 16
Section 1.91 "PBGC" ................................................. 17
Section 1.93 "Permitted Indebtedness" ............................... 17
Section 1.94 "Permitted Investments" ................................ 17
Section 1.95 "Permitted Liens" ...................................... 18
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Section 1.96 "Permitted Operating Company
Acquisitions" ..................................................... 18
Section 1.97 "Person" ................................................ 18
Section 1.98 "Plan" .................................................. 18
Section 1.99 "Pooled Facilities" ..................................... 19
Section 1.100 "Pooled Guaranteed Facilities" ......................... 19
Section 1.101 "Prime Rate" ........................................... 19
Section 1.102 "Prime Rate Loan" ...................................... 19
Section 1.103 "Qualified Appraisal" .................................. 19
Section 1.104 "Rating" ............................................... 19
Section 1.105 "Register" ............................................. 19
Section 1.106 "REIT" ................................................. 20
Section 1.107 "Release" .............................................. 20
Section 1.108 "Relevant Local Time" .................................. 20
Section 1.109 "Reportable Event" ..................................... 20
Section 1.110 "Request" .............................................. 20
Section 1.111 "Revolving Credit Note" ................................ 20
Section 1.112 "Revolving Loan" ....................................... 20
Section 1.113 "Revolving Loans" ...................................... 20
Section 1.114 "Santa Xxxxx Merger" ................................... 20
Section 1.115 "Scheduled Maturity Date" .............................. 20
Section 1.116 "SEC" .................................................. 20
Section 1.117 "Solvent" .............................................. 20
Section 1.118 "Subsidiary" ........................................... 21
Section 1.119 "Tangible Net Worth" ................................... 21
Section 1.120 "Total Capital" ........................................ 21
Section 1.121 "Total Liabilities" .................................... 21
Section 1.122 "Tribunal" ............................................. 22
Section 1.123 "Unsecured Indebtedness" ............................... 22
Section 1.124 "Unused Commitment" .................................... 22
Section 1.125 "Unused Commitment Amount" ............................. 22
Section 1.126 "Unused Fee" ........................................... 22
Section 2 THE CREDIT FACILITIES ........................................... 22
Section 2.1 The Line of Credit ........................................ 22
Section 2.1.1 Revolving Loans .................................. 22
Section 2.1.2 Use of Proceeds .................................. 23
Section 2.1.3 Calculation of the Borrowing Base ................ 23
Section 2.1.4 Notice of Borrowing .............................. 23
Section 2.1.5 The Loan Account ................................. 24
Section 2.1.6 Revolving Credit Note ............................ 24
Section 2.1.7 Payment of Principal ............................. 24
Section 2.1.8 Interest Rates and Payments of ................... 24
Interest
Section 2.1.9 Termination ...................................... 25
Section 2.1.10 Renewal ......................................... 25
Section 2.1.11 Mandatory Prepayments ........................... 25
Section 2.1.12 Reduction of Commitment ......................... 26
Section 2.2 Interest ................................................ 26
Section 2.2.1 Calculation of Interest .......................... 26
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Section 2.2.2 Continuation or Conversion of Loans ............... 26
Section 2.2.3 Duration of Interest Periods ...................... 27
Section 2.2.4 Changed Circumstances ............................. 27
Section 2.2.5 Payments Not at End of Interest
Period ...................................................... 28
Section 2.2.6 Usury ............................................. 29
Section 2.3 Fees .................................................... 29
Section 2.3.1 Unused Fee ........................................ 29
Section 2.3.2 Calculation of Fees ............................... 29
Section 2.4 General Terms Applicable to the Credit Facility........... 29
Section 2.4.1 Direct Debit ...................................... 29
Section 2.4.2 Overdue Payments .................................. 30
Section 2.4.3 Manner and Time of Payments by the
Company ..................................................... 30
Section 2.4.4 Increased Costs and Capital Adequacy............... 30
Section 2.4.5 Withholding Tax Exemption ......................... 34
Section 2.4.6 Prepayments of the Loans .......................... 34
Section 3 REPRESENTATIONS AND WARRANTIES .................................. 34
Section 3.1 Organization. Power and Authority ....................... 35
Section 3.2 Authority ............................................... 35
Section 3.3 No Breach ............................................... 35
Section 3.4 Qualification as a Real Estate Investment
Trust ........................................................... 36
Section 3.5 Binding Obligations ..................................... 36
Section 3.6 Permits ................................................. 36
Section 3.7 No Consents ............................................. 36
Section 3.8 Financial Statements .................................... 37
Section 3.9 Financial Information ................................... 37
Section 3.10 INTENTIONALLY LEFT BLANK ............................... 37
Section 3.11 Use of Proceeds ........................................ 37
Section 3.12 Title to Real and Personal Property .................... 38
Section 3.13 Statutory Compliance ................................... 38
Section 3.14 Events of Default ...................................... 38
Section 3.15 Other Defaults ......................................... 39
Section 3.16 Taxes .................................................. 39
Section 3.17 Solvency ............................................... 39
Section 3.18 Ranking of Loan ........................................ 39
Section 3.19 Litigation ............................................. 39
Section 3.20 Guarantees ............................................. 40
Section 3.21 ERISA .................................................. 40
Section 3.22 Environmental Protection ............................... 40
Section 3.23 Facilities and Operators ............................... 41
Section 3.24 Material Subsidiaries .................................. 41
Section 3.25 Materiality ............................................ 41
Section 3.26 Intercompany Indebtedness .............................. 41
Section 4 CONDITIONS TO OBLIGATIONS OF THE BANK ........................... 42
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Section 4.1 Authorizations .......................................... 42
Section 4.2 Representations and Warranties True ..................... 42
Section 4.3 Performance and Compliance .............................. 42
Section 4.4 Delivery of Documents ................................... 42
Section 5 CONDITIONS TO MAKING REVOLVING LOANS ............................ 43
Section 5.1 Notice of Borrowing ..................................... 43
Section 5.2 No Adverse Change ....................................... 44
Section 5.3 Truth of Representations and Warranties ................. 44
Section 5.4 No Default .............................................. 44
Section 5.5 Payment of Fees ......................................... 44
Section 5.6 Authority ............................................... 44
Section 6 CONDITIONS TO APPROVAL OF SANTA XXXXX MERGER .................... 44
Section 6.1 Representations and Warranties True ..................... 44
Section 6.2 Performance and Compliance .............................. 44
Section 6.3 Surviving Entity ........................................ 44
Section 6.4 No Adverse Change ....................................... 45
Section 6.5 Terms and Conditions of Merger .......................... 45
Section 6.6 Assumption of the Obligations ........................... 45
Section 6.7 Delivery of Documents ................................... 45
Section 6.8 Copies of Opinions of Counsel ........................... 46
Section 7 AFFIRMATIVE COVENANTS OF COMPANY ................................ 46
Section 7.1 Financial Statements and Reporting
Requirements ..................................................... 46
Section 7.2 Appraisals .............................................. 50
Section 7.3 Maintenance of Property ................................. 50
Section 7.4 Maintenance of Existence ................................ 51
Section 7.5 Taxes and Other Assessments ............................. 52
Section 7.6 Inspection .............................................. 52
Section 7.7 Notices of Default ...................................... 52
Section 7.8 Maintenance of Books and Records ........................ 52
Section 7.9 Maintenance of Permits .................................. 52
Section 7.10 Use of Proceeds ........................................ 52
Section 7.11 Chance of Offices ...................................... 53
Section 7.12 Compliance with Laws ................................... 53
Section 7.13 Compliance with Environmental Laws ..................... 53
Section 7.14 Business of the Company ................................ 54
Section 7.15 Ranking of Loan ........................................ 54
Section 7.16 Intercompany Indebtedness .............................. 54
Section 8 NEGATIVE COVENANTS ............................................. 54
Section 8.1 Limitation on Indebtedness .............................. 55
Section 8.2 Negative Pledge/Encumbrances ............................ 56
Section 8.3 Investments ............................................. 57
Section 8.4 ERISA ................................................... 59
Section 8.5 Fiscal Year ............................................. 59
Section 8.6 Gross Real Estate Investments ........................... 59
Section 8.7 Construction Investments ................................ 60
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Section 8.8 Interest Rate Protection ................................ 60
Section 8.9 Dividends ............................................... 60
Section 8.10 Amendment of Declaration of Trust or
Charter Documents ............................................... 60
Section 8.11 Future Leases .......................................... 60
Section 8.12 Leases ................................................. 61
Section 8.13 Prohibited Transactions ................................ 61
Section 8.14 Mergers ................................................ 61
Section 8.15 Change in Business ..................................... 62
Section 8.16 Issuance of Stock by Subsidiaries ...................... 62
Section 8.17 Sale of Stock and Indebtedness ......................... 62
Section 8.18 Transactions with Affiliates ........................... 63
Section 8.19 Guarantees ............................................. 63
Section 9 FINANCIAL COVENANTS ............................................. 63
Section 9.1 Combined Cash Flow Coverage ............................. 63
Section 9.2 Combined Modified Cash Flow Coverage .................... 63
Section 9.3 Combined Total Liabilities to Combined
Tangible Net Worth .............................................. 63
Section 9.4 Combined Tangible Net Worth ............................. 64
Section 9.5 Establishment of Covenants .............................. 64
Section 10 DEFAULT ........................................................ 64
Section 10.1 Events of Default ...................................... 64
Section 10.2 Remedies ............................................... 67
Section 11 ASSIGNMENT ..................................................... 67
Section 11.1 Assignment ............................................. 67
Section 11.2 Maintenance of a Register .............................. 69
Section 11.3 Sale of Participations ................................. 69
Section 11.4 Disclosure of Information .............................. 70
Section 11.5 Assignee or Participant Affiliated with
the Company ..................................................... 70
Section 11.6 Miscellaneous Assignment Provisions .................... 70
Section 11.7 No Assignment or Delegation by the
Company ......................................................... 70
Section 12 MISCELLANEOUS .................................................. 71
Section 12.1 Confidentiality ........................................ 71
Section 12.2 Waivers ................................................ 71
Section 12.3 Notices ................................................ 72
Section 12.4 Fees and Expenses ...................................... 74
Section 12.5 Term of Agreement ...................................... 74
Section 12.6 Taxes .................................................. 74
Section 12.7 Schedules and Exhibits ................................. 75
Section 12.8 Governing Law: Consent to Jurisdiction ................. 75
Section 12.9 Survival of Representations ............................ 75
Section 12.10 Amendments ............................................ 75
Section 12.11 Counterparts .......................................... 75
Section 12.12 No Agency Relationship ................................ 75
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Section 12.13 Severability .......................................... 75
Section 12.14 Headings .............................................. 76
Section 12.15 Brokers ............................................... 76
Section 12.16 Reinstatement ......................................... 76
Section 12.17 Interpretation and Construction ....................... 76
Section 12.18 Indemnification ....................................... 77
Section 12.19 Limitation of Liability ............................... 77
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TABLE OF EXHIBITS
Exhibit A Notice of Borrowing
Exhibit B Form of Revolving Credit Note
Exhibit C INTENTIONALLY LEFT BLANK
Exhibit D Notice of Continuation or Conversion
Exhibit E Form of Opinion of Counsel to the Company
Exhibit F Form of Borrowing Report
Exhibit G INTENTIONALLY LEFT BLANK
Exhibit H Form of Assignment and Acceptance
Exhibit I Form of Assignment, Assumption and Release Agreement
Exhibit J Form of Opinion of Counsel to the Company regarding Santa
Xxxxx Merger
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TABLE OF SCHEDULES
Schedule 1.92. Pre-Existing Guarantees
Schedule 3.3. Restrictions
Schedule 3.8. Material Adverse Changes
Schedule 3.12. Liens
Schedule 3.18. Existing Indebtedness
Schedule 3.19. Litigation
Schedule 3.20. Guarantees
Schedule 3.22. Environmental Matters
Schedule 8.1. Indebtedness
REVOLVING CREDIT AGREEMENT
This REVOLVING CREDIT AGREEMENT (the "Agreement") is made as of this 23rd
day of October, 1997 by and between MEDITRUST, a Massachusetts business trust,
with its chief executive office located at 000 Xxxxx Xxxxxx, Xxxxxxx,
Xxxxxxxxxxxxx 00000 ("Meditrust"); and VIA BANQUE, a banking corporation
organized under the laws of the Republic of France, with an office at 00, xxx
Xxxxxx, 00000 Xxxxx, Xxxxxx (the "Bank"), and restates, amends and is
substituted for that certain Revolving Credit Agreement between the parties
dated as of December 12, 1996.
Section 1 DEFINITIONS
All capitalized terms used in this Agreement, the Notes or the Other
Documents, or in any certificate, report or other document, agreement or
instrument executed or delivered pursuant hereto and thereto (unless otherwise
indicated therein) shall have the meanings ascribed to such terms below.
Section 1.1 "Affected Loans" has the meaning ascribed to it in Section
2.2.4. hereof.
Section 1.2 "Affiliate" means any Person (i) which directly or indirectly
controls, or is controlled by, or is under common control with, another Person
or any Subsidiary of such other Person; (ii) which directly or indirectly
beneficially owns or holds ten percent (10%) or more of any class of voting
stock of such other Person or any Subsidiary of such other Person; or (iii) ten
percent (10%) or more of the voting stock of which is directly or indirectly
beneficially owned or held by such other Person or any Subsidiary of such other
Person. The term "control" (and its correlative meanings "controlled by" and
"under common control with") as used in this Section 1.2. means the possession,
directly or indirectly, of the power to direct, or cause the direction of, the
management and policies of a Person, whether through ownership of voting stock,
by contract or otherwise.
Section 1.3 "Agreement" means this Revolving Credit Agreement and shall
include any and all amendments, restatements, modifications and supplements
hereto.
Section 1.4 "Appraised Value" means, with respect to any Investment, the
value of such Investment reflected in the most recent Qualified Appraisal
prepared with respect to such Investment.
Section 1.5 "Assignment and Acceptance" has the meaning ascribed to it in
Section 11.1. hereof.
2
Section 1.6 "Balloon Payments" means, as of any date as of which the
amount thereof shall be determined, an amount equal to the Company's or the
Operating Company's, as applicable, aggregate obligation to make payments of
principal in respect of Indebtedness having a maturity during the immediately
succeeding six (6) month period minus Liquid Assets and, in the case of the
Company, availability under the Line of Credit and the Fleet Bank Credit
Facility; provided, however, that any Indebtedness with respect to which the
Company or the Operating Company, as applicable, has received a commitment for
the renewal or other refinancing of such Indebtedness shall not be included in
the computation of Balloon Payments and provided, further, that if the
calculation of the amount of Balloon Payments results in a negative number, then
the amount thereof shall be deemed to be zero (0).
Section 1.7 "Bank" has the meaning ascribed to it in the Preamble hereof.
Section 1.8 "Bank Affiliate" or "Bank Affiliates" means any Affiliate of
the Bank or its parent company.
Section 1.9 "Borrowing Base" means, as of any date as of which the amount
thereof shall be determined, an amount equal to (x) the sum of (i) seventy-five
percent (75%) of Eligible Investments as of such date plus (ii) Liquid Assets as
of such date minus (y) Unsecured Indebtedness as of such date, the Fleet Bank
Amount as of such date and Guarantees Outstanding as of such date.
Section 1.10 "Borrowing Report" has the meaning ascribed to it in Section
6.1.(c) hereof.
Section 1.11 "Breakage Costs" means an amount equal to all costs the Bank
sustains in breaking or unwinding or in not making after receiving a Notice of
Borrowing or a Notice of Continuation or Conversion any LIBOR funding contract,
and all expenses that the Bank sustains or incurs as a result of prepayment or
receipt of principal with respect to a LIBOR Loan on a day other than the last
day of the then current Interest Period.
Section 1.12 "Business Day" means any day in which dealings in foreign
currencies and exchange between banks may be carried on in the place where the
Eurodollar Office is located and in the place where the head office of the Bank
is located, other than a Saturday, Sunday, legal holiday or other day on which
banks in such places or in London, England or New York, New York are required or
permitted by law to close.
Section 1.13 "Closing Date" means October 23, 1997.
3
Section 1.14 "Code" means the Internal Revenue Code of 1986 and the rules
and regulations promulgated thereunder, collectively, as the same may from time
to time be supplemented or amended and remain in effect.
Section 1.15 "Combined" means, with reference to any term defined in this
Agreement, that term as applied to the Consolidated accounts of the Company
combined with the Consolidated accounts of the Operating Company.
Section 1.16 "Commitment" means the Bank's obligation to make Revolving
Loans.
Section 1.17 "Commitment Amount" means an amount equal to the Commitment
as in effect from time to time in accordance with the provisions hereof, but in
no event greater than FIFTY MILLION AND NO/100 DOLLARS ($50,000,000.00).
Section 1.18 "Company" means Meditrust and, following the effective date
of the Merger between Meditrust and Santa Xxxxx Realty Enterprises, Inc., any
corporation or entity surviving such merger.
Section 1.19 "Company Limited Partnership" means a limited partnership
which is organized to own a Facility of which the Company or a Subsidiary of the
Company is the general partner and owns one hundred percent (100%) of the
partnership interests of such limited partnership.
Section 1.20 "Consolidated" or "consolidated" means, with reference to any
term defined in this Agreement, that term as applied to the accounts of the
Company or the Operating Company, as applicable, consolidated in accordance with
GAAP and whenever "Consolidated" or "consolidated" is used herein, it shall
always mean, with reference to the Company, the Company and all of its
Subsidiaries (but including for purposes of this definition all entities in
which the Company has any interest, even if less than fifty percent (50%)).
Section 1.21 "Construction Investments" means financing extended by the
Company or a Subsidiary of the Company with respect to a Facility which is
either under construction (i.e., has not received a certificate of occupancy) or
in development (i.e., has received a certificate of occupancy or operating
license within the preceding eighteen (18) months); provided, however, that a
Facility will not be considered to be in development if at least three (3)
calendar months have lapsed since the date on which the Facility received a
certificate of occupancy and (i) such Facility has a Fixed Charge Coverage of at
least 1.10 to 1.0 or (ii), in the case of a Facility which is a
4
Pooled Facility, the Pooled Facilities' Fixed Charge Coverage is at least 1.2 to
1.0 and the Pooled Facility's Fixed Charge Coverage is at least 0.8 to 1.0 or
(iii) in the case of a Facility which is a Pooled Guaranteed Facility, the
Pooled Guaranteed Facilities' Fixed Charge Coverage is at least 1.0 to 1.0 and
the Pooled Guaranteed Facility's Fixed Charge Coverage is at least 0.8 to 1.0.
Section 1.22 "Continental Investments" means Investments which relate to
Facilities leased or operated by Continental Medical Systems, Inc. or its
affiliates and existing as of the Closing Date and which are subject to
Indebtedness provided by a Person other than the Company or a Subsidiary of the
Company.
Section 1.23 "Controlled Limited Partnership" means a limited partnership,
other than a Company Limited Partnership, organized to own a Facility of which
the Company or a Subsidiary of the Company is the sole general partner and which
the Company or a Subsidiary of the Company owns at least sixty-six and
two/thirds percent (66.66%) of the aggregate partnership interests of such
limited partnership.
Section 1.24 "Controlled Group" means all trades or businesses (whether or
not incorporated) under common control that, together with the Company, are
treated as a single employer under Section 414(b) or 414(c) of the Code or
Section 4001 of ERISA.
Section 1.25 "Default" means an Event of Default or event or condition
that, but for the lapse of time, the giving of notice, or both, would constitute
an Event of Default.
Section 1.26 "Default Rate" means a rate of interest equal to four
percentage points (4%) above the rate of interest otherwise in effect under this
Agreement.
Section 1.27 "Dividend" or "Dividends" means the payment of any dividend
or other distribution in respect of the capital stock of a corporation or, with
respect to Meditrust, shares of beneficial interest, in cash or other property
(excepting distribution in the form of such stock or shares of beneficial
interest) or the redemption or acquisition of any capital stock or shares of
beneficial interest.
Section 1.28 "Eligible Investments" means, as of any date as of which the
amount thereof is to be determined, an amount equal to the sum of:
(i) the lesser of the Appraised Value or purchase price of
Facilities owned (whether through fee simple title ownership
5
or pursuant to rights as lessee under a longterm ground lease) entirely by the
Company, a Subsidiary of the Company or a Company Limited Partnership; plus
(ii) the lesser of the Appraised Value of any Facility securing a
Mortgage or the outstanding principal amount of the Mortgage secured by any such
Facility; plus
(iii) seventy and one-half percent (70.5%) of the lesser of the
Appraised Value or the outstanding principal amount of the Continental
Investments minus the aggregate outstanding principal amount of any loans
secured by a first lien mortgage in the Continental Investments but in no event
greater than FIFTY-EIGHT MILLION AND NO/100 DOLLARS ($58,000,000.00); plus
(iv) seventy-five percent (75%) of the amount determined by
multiplying the lesser of the Appraised Value of a Facility owned by a
Controlled Limited Partnership or the purchase price of a Facility owned by a
Controlled Limited Partnership by a fraction, the numerator of which is the
aggregate interest in the Controlled Limited Partnership possessed by the
Company or a Subsidiary of the Company and the denominator of which is one
hundred (100);
but excluding from the calculation thereof:
(a) any Investment in which the Company or a Subsidiary of the
Company has granted a voluntary Lien other than the Continental Investments as
set forth above;
(b) any Construction Investments;
(c) any Pooled Facilities or Pooled Guaranteed Facilities which have
a Fixed Charge Coverage of less than 1.0 to 1.0, and as to Pooled Guaranteed
Facilities only, any Pooled Guaranteed Facility which has an individual Fixed
Charge Coverage ratio of less than .8 to 1.0 and, in the case of a Facility
which is not a Pooled Facility or a Pooled Guaranteed Facility, 1.10 to 1.0;
(d) any Investment where audited Financial Statements are not
available within one hundred twenty (120) days after year end; provided,
however, that no Facility shall be excluded from the calculation of Eligible
Investments once such audited Financial Statements are available; and provided,
further, that no Facility shall be excluded from the calculation of Eligible
Investments for failure to deliver Financial Statements if the Investment Amount
of such Facility, when aggregated with the Investment Amount of other Facilities
owned by the same Operator, equal less than FIFTEEN MILLION AND NO/100 DOLLARS
6
($15,000,000.00) of the Company's actual Gross Real Estate Investments in a
sale/leaseback transaction or Mortgage and provided, further, that the foregoing
proviso shall not discharge the Company's obligation to deliver Financial
Statements to the Bank upon receipt of the same by the Company;
(e) any Investment which is delinquent for thirty (30) days or more
in payments to the Company or a Subsidiary of the Company;
(f) Gross Real Estate Investments relating to Controlled Limited
Partnerships which exceed fifteen percent (15%) of the Company's Gross Real
Estate Investments; and
(g) any Investment which is not located within the United States of
America.
Section 1.29 "Environmental Laws" means any and all Laws of any Tribunal
pertaining to the environment, including without limitation, the federal Clean
Water Act, the Clean Air Act, as amended, the Comprehensive Environmental
Response, Compensation and Liability Act of 1980, as amended by the Superfund
Amendments and Reauthorization Act of 1986 ("XXXX"), and as may be further
amended (all together herein called "CERCLA"), the Federal Water Pollution
Control Amendments, the Resource Conservation and Recovery Act of 1976, as
amended ("RCRA"), the Hazardous Materials Transportation Act of 1975, as
amended, the Safe Drinking Water Act, as amended, the Toxic Substances Control
Act, as amended, and any comparable or similar environmental laws of any state
in which the Company, a Subsidiary of the Company or Operator owns or operates a
Facility. Likewise, the terms "hazardous substance," "release," and "threatened
release" herein referenced in connection with Environmental Laws shall have the
meanings specified in CERCLA and the terms "solid waste" and "dispose" (or
"disposed") shall have the meanings specified in RCRA; provided, however, in the
event either CERCLA or RCRA is amended so as to broaden the meaning of any term
defined therein, such broader meaning shall apply subsequent to the effective
date of such amendment, and provided further that, to the extent the laws of any
state which are applicable to a specific Facility and which establish a meaning
for "hazardous substance," "release," "solid waste" or "disposal" which is
broader than that specified in either CERCLA or RCRA, such broader meaning shall
apply with respect to such Facility.
Section 1.30 "ERISA" means the Employee Retirement Income Security Act of
1974 and the rules and regulations promulgated thereunder, collectively, as the
same may from time to time be supplemented or amended and remain in effect.
7
Section 1.31 "Eurodollar Office" means, initially, the Bank's office in
Paris, France, and thereafter such other office or offices of the Bank or any
Bank Affiliate (as designated from time to time by notice from the Bank) through
which the LIBOR Rate is determined.
Section 1.32 "Event of Default" has the meaning ascribed to it in Section
9 hereof.
Section 1.33 "Facility" or "Facilities" means a health care facility
(including, but not limited to, long-term care and retirement living facilities,
psychiatric and rehabilitation hospitals, alcohol and substance abuse treatment
facilities and medical office buildings), whether already existing or under
construction, owned (whether through fee simple title ownership or pursuant to
rights as lessee under a long-term ground lease) by the Company, a Company
Limited Partnership, a Controlled Limited Partnership or any Subsidiary of the
Company or upon which the Company, a Company Limited Partnership, a Controlled
Limited Partnership or any Subsidiary of the Company holds a Mortgage.
Section 1.34 "Federal Funds Effective Rate" means for any day, a
fluctuating interest rate per annum equal to the weighted average of the rates
on overnight Federal funds transactions with members of the Federal Reserve
System arranged by Federal funds brokers, as published for such day (or, if such
day is not a Business Day, for the preceding Business Day) by the Federal
Reserve Bank of New York, or, if such rate is not so published for any day that
is a Business Day, the average of the quotations for such day on such
transactions received by the Bank from three (3) Federal funds brokers of
recognized standing selected by the Bank.
Section 1.35 "Fees" means the Unused Fee and any and all other fees, if
any, payable hereunder.
Section 1.36 "Financial Statement" or "Financial Statements" means, as of
any date, or with respect to any period, as applicable, a financial report or
reports consisting of (i) a balance sheet; (ii) an income statement; (iii) a
statement of cash flow; (iv) a statement of retained earnings (if prepared by
the Company); and (v) changes in stockholders' equity.
Section 1.37 "Fixed Charge Coverage" means, with respect to any Facility,
Pooled Facilities or Pooled Guaranteed Facilities, the ratio of (x) pre-tax net
income plus Operator Interest Expense, Mortgage Expense (but excluding therefrom
any amounts relating to principal), Lease Rental Expense, depreciation and
amortization on the Facility, Pooled Facilities or Pooled
8
Guaranteed Facilities, management fees and any revenues from prior period
adjustments relating to the settlement, filing or audit of cost reports less
Imputed Management Fees to (y) the sum of Operator Interest Expense (but
excluding therefrom Operator Interest Expense, the payment of which is
subordinated to the payment of Indebtedness owing to the Company or to a
Subsidiary of the Company), Mortgage Expense, Lease Rental Expense, and current
maturities of Indebtedness of the Operator (other than Indebtedness relating to
a Mortgage) which are not subordinated to the Company or a Subsidiary of the
Company, all of the foregoing calculated on a year-to-date basis by reference to
the period commencing on the first day of the fiscal year for which such
calculation applies.
Section 1.38 "Fleet Bank" means Fleet National Bank, a national banking
association.
Section 1.39 "Fleet Bank Amount" means, as of any date as of which the
amount thereof shall be determined, the principal amount of Indebtedness
outstanding under the Fleet Bank Credit Facility.
Section 1.40 "Fleet Bank Credit Facility" means the credit facility
provided to the Company pursuant to the Revolving Credit Agreement among the
Company, the lending institutions referenced therein, and Fleet Bank as Agent,
in the original principal amount of TWO HUNDRED THIRTY MILLION AND NO/100
DOLLARS ($230,000,000.00) as of September 23, 1996, as amended and in effect
from time to time.
Section 1.41 "Funded Debt" shall mean and include, without duplication,
(i) any obligation payable more than one (1) year from the date of
creation thereof which, under GAAP, is shown on a balance sheet of a Person as a
liability (including capitalized lease obligations and excluding reserves to the
extent that such reserves do not constitute an obligation),
(ii) Indebtedness payable more than one (1) year from the date of creation
thereof which is secured by any Lien on property owned by the Company or any
Subsidiary, whether or not the Indebtedness secured thereby shall have been
assumed by the Company or such Subsidiary,
(iii) Guarantees (other than endorsements of negotiable instruments for
collection in the ordinary course of business) and other contingent liabilities
(whether direct or indirect) in connection with the obligations, stock or
dividends of any Person,
9
(iv) obligations under any contract providing for the making of loans,
advances or capital contributions to any Person, or for the purchase of any
property from any Person, in each case in order to enable such Person primarily
to maintain working capital, net worth or any other balance sheet condition or
to pay debts, dividends or expenses,
(v) obligations under any contract for the purchase of materials,
supplies or other property or services if such contract (or any related
document) requires that payment for such materials, supplies or other property
or services shall be made regardless of whether or not delivery of such
materials, supplies or other property or services is ever made or tendered,
(vi) obligations under any contract to rent or lease (as lessee) any real
or personal property if such contract (or any related document) provides that
the obligation to make payments thereunder is absolute and unconditional under
conditions not customarily found in commercial leases then in general use or
requires that the lessee purchase or otherwise acquire securities or obligations
of the lessor,
(vii) obligations under any contract for the sale or use of materials,
supplies or other property or services if such contract (or any related
document) requires that payment for such materials, supplies or other property
or services, or the use thereof, shall be subordinated to any indebtedness (of
the purchaser or user of such materials, supplies or other property or the
Person entitled to the benefit of such services) owed or to be owed to any
Person,
(viii) any arrangement with any lender or investor or to which such lender
or investor is a party providing for the leasing by the Company or any
Subsidiary of the Company of real property which has been or is to be sold or
transferred by the Company or any Subsidiary to such lender or investor or to
any Person to whom funds have been or are to be advanced by such lender or
investor on the security of such property or rental obligations of the Company
or any Subsidiary, and
(ix) obligations under any other contract which, in economic effect, is
substantially equivalent to a Guarantee.
Section 1.42 "GAAP" means generally accepted accounting principles in the
United States of America in effect from time to time.
Section 1.43 "Gross Real Estate Investments" means, as of any date as of
which the amount thereof shall be determined, an amount equal to the purchase
price of Facilities owned by, or the
10
amount of the Company's or any Subsidiary of the Company's investment in
Facilities leased by, the Company or any Subsidiary of the Company plus the
outstanding principal amount of Mortgages encumbering Facilities which are owned
by Persons other than the Company as of such date.
Section 1.44 "Guarantees" means, as applied to the Company and its
Subsidiaries, all guarantees, endorsements or other contingent or surety
obligations with respect to obligations of any other Person (except those made
to or by the Company or any Subsidiary with respect to an underlying obligation
of the Company, any Subsidiary, any Company Limited Partnership or any
Controlled Limited Partnership), whether or not reflected on the balance sheet
of the Company or its Subsidiaries, including any obligation to furnish funds,
directly or indirectly (whether by virtue of partnership arrangements, by
agreement to keep-well or otherwise), through the purchase of goods, supplies or
services, or by way of stock purchase, capital contribution, advance or loan, or
to enter into a contract for any of the foregoing, for the purpose of payment of
obligations of any other Person.
Section 1.45 "Guarantees Outstanding" means, as of any date as of which
the amount thereof shall be determined, the aggregate amount of Guarantees with
respect to which the Company is liable or obligated (but not including Permitted
Guarantees) as of such date.
Section 1.46 "Hazardous Materials" means (i) any chemical, compound,
material, mixture or substance that is now or hereafter defined as or included
in the definition of "hazardous substances", "hazardous wastes", "hazardous
materials", "extremely hazardous waste", "restricted hazardous waste", or "toxic
substances" or terms of similar import under any Environmental Laws; (ii) any
oil, petroleum or petroleum derived substance, any drilling fluids, produced
waters and other wastes associated with the exploration, development or
production of crude oil, any flammable substances or explosives, any radioactive
materials, any hazardous wastes or substances, any toxic wastes or substances or
any other materials or pollutants which (a) poses a hazard to human health or
the environment or (b) causes any of any properties or assets of the Company or
its Subsidiaries to be in violation of any Environmental Laws; (iii) asbestos in
any form, urea formaldehyde foam insulation, electrical equipment which contains
any oil or dielectric fluid containing levels of polychlorinated biphenyls in
excess of fifty (50) parts per million; (iv) to the extent prohibited or
required to be mitigated by any Environmental Laws, lead in paint, plaster or
other accessible materials and (v) any other chemical, material or substance,
exposure to, or disposal of, which is now or hereafter prohibited, limited or
regulated by any Tribunal but
11
shall not mean cleaning agents, pharmaceuticals and petroleum products in such
quantities and concentrations as are customarily used in connection with the
operation and maintenance of health care facilities and which are used in
compliance with applicable Environmental Laws.
Section 1.47 "Imputed Management Fees" means, for any period, an amount
equal to five percent (5%) of the net revenues of a Facility.
Section 1.48 "Indebtedness" means any obligation for borrowed money (and
any notes payable and drafts accepted representing extensions of credit whether
or not representing obligations for borrowed money) but excluding Guarantees.
Section 1.49 "Insurance" has the meaning ascribed to it in Section 7.3.(c)
hereof.
Section 1.50 "Interest Expense" for any period shall mean, on a
consolidated basis, the sum of all interest on, and all amortization of debt
discount and expenses on, all Indebtedness of the Company and its Subsidiaries
or the Operating Company and its subsidiaries, as applicable, outstanding at any
time during such period.
Section 1.51 "Interest Period" means, (i) with respect to each LIBOR Loan,
the period commencing on the date of the making or continuation of, or
conversion to, such Loan and ending one (1), two (2), or three (3) months
thereafter, as the Company may elect in the applicable Notice of Borrowing or
Notice of Continuation or Conversion and (ii) with respect to a Prime Rate Loan,
the period commencing on the date of the making of such Loan and the date on
which the Prime Rate Loan is repaid or the Company elects, in accordance with
this Agreement, to convert such Loan to a LIBOR Loan;
provided, however, that:
(i) any Interest Period (other than an Interest Period determined
pursuant to clause (iii) below) that would otherwise end on a day that is not a
Business Day shall be extended to the next succeeding Business Day unless, in
the case of LIBOR Loans, such Business Day falls in the next calendar month, in
which case such Interest Period shall end on the immediately preceding Business
Day;
(ii) any Interest Period applicable to a LIBOR Loan that begins on
the last Business Day of a calendar month (or on a day for which there is no
numerically corresponding day in the calendar month at the end of such Interest
Period) shall,
12
subject to clause (iii) below, end on the last Business Day of a calendar month;
(iii) any Interest Period that would otherwise end after the
Scheduled Maturity Date shall end on the Scheduled Maturity Date;
(iv) notwithstanding clause (iii) above, no Interest Period
applicable to a LIBOR Loan shall have a duration of less than one (1) month and
if any Interest Period applicable to such Loan would be for a shorter Interest
Period, such Interest Period shall not be available hereunder; and
(v) if the Company fails to designate the length of the Interest
Period with respect to a LIBOR Loan, then the period shall be thirty (30) days.
Section 1.52 "Investment" or "Investments" means a Facility or a Mortgage,
individually or collectively, as the case may be.
Section 1.53 "Investment Amount" means, with respect to any individual
Investment, the purchase price in the case of a Facility owned by the Company or
a Subsidiary of the Company, the amount invested by the Company or a Subsidiary
of the Company in the case of a Facility leased by the Company or any such
Subsidiary or the outstanding principal amount in the case of a Mortgage.
Section 1.54 "Investment Commitment" means a commitment, agreement or
undertaking by the Company or a Subsidiary of the Company to acquire a Facility
or to make or acquire a Mortgage.
Section 1.55 "Investment Fee" means a fee paid by a third party to the
Company or a Subsidiary of the Company as an inducement to the Company or a
Subsidiary of the Company to make or issue an Investment Commitment.
Section 1.56 "IRS" has the meaning ascribed to it in Section 3.4. hereof.
Section 1.57 "Law" or "Laws" means all constitutions, treaties, statutes,
laws, ordinances, codes, regulations, rules, orders, decisions, writs,
injunctions, or decrees of the United States of America or any other Tribunal,
now in effect and as hereafter amended, issued, promulgated, or otherwise coming
into effect.
Section 1.58 "Lease" means leases for Facilities for which the Company, a
Subsidiary of the Company, a Company Limited
13
Partnership or a Controlled Limited Partnership is the lessor or sublessor.
Section 1.59 "Lease Rental Expense" means, for any period and with respect
to any Facility, the total amount payable during such period by the lessee of
such Facility to the Company or a Subsidiary of the Company, including, without
limitation, (a) base rent (as adjusted from time to time), plus (b) all
incremental charges to which the Facility is subject under the lease relating
thereto, plus (c) in the case of ground leases, any other amounts payable
thereunder to the Company or a Subsidiary of the Company under the lease
relating thereto.
Section 1.60 "Legal Impediment" has the meaning ascribed to it in Section
2.2.4. (ii) (A) hereof.
Section 1.61 "Legal Requirements" means all Laws, and all recorded or
unrecorded agreements, covenants, restrictions, easements or conditions
(including any requirement of any insurance or surety company or any board of
fire underwriters), as now in effect and as hereafter amended, issued,
promulgated, or otherwise coming into effect.
Section 1.62 "LIBOR Base" means the rate per annum (rounded upwards, if
necessary, to the nearest 1/16 of one percentage point (1%) shown on the display
referred to as the "LIBOR page" (or any display substituted therefor) of the
Telerate U.S. Domestic Money Service transmitted through the Telerate monitor
system as being the respective rates at which U.S. dollar deposits would be
offered two (2) Business Days prior to the beginning of the relevant Interest
Period by the principal London offices of each of the banks named thereon to
major banks in the London interbank Eurodollar market where the Eurodollar
Office is located at the Relevant Local Time for delivery on the first day of
such Interest Period for the number of days comprised therein and in the amount
of the principal amount of the applicable LIBOR Loan.
Section 1.63 "LIBOR Loan" means a Loan bearing interest at the LIBOR Rate.
Section 1.64 "LIBOR Margin" means, as of any date as of which the amount
thereof shall be determined, an amount determined by reference to the Rating as
follows:
(i) If the Rating is A-/A3, then the Libor Margin shall be one-half of one
percentage point (0.5%); and
(ii) If the Rating is BBB+/Baa1, then the Libor Margin shall be
five-eighths of one percentage point (0.625%); and
14
(iii) If the Rating is BBB/Baa2, then the Libor Margin shall be
three-quarters of one percentage point (0.75%); and
(iv) If the Rating is BBB-/Baa3, then the Libor Margin shall be
seven-eighths of one percentage point (0.875%); and
(v) If the Rating is less than BBB-/Baa3, then the Libor Margin shall be
one and one-half percentage points (1.5%).
Section 1.65 "LIBOR Rate" means, with respect to each Interest Period, the
rate per annum equal to the sum of:
(A) (i) the LIBOR Base for such Interest Period divided by (ii) a percentage
equal to one hundred percent (100%) minus the maximum reserve percentage
applicable during such Interest Period under regulations issued from time to
time by the Board of Governors of the Federal Reserve System (or equivalent in
the jurisdiction of the head office of the Bank) for determining the maximum
reserve requirements (including, without limitation, any basic, supplemental,
marginal or emergency reserve requirements) for the Bank in respect of
liabilities or assets consisting of or including Eurocurrency liabilities (as
defined in Regulation D of the Board of Governors of the Federal Reserve System)
having a term equal to the Interest Period; and
(B) the LIBOR Margin.
Section 1.66 "Lien" means any security interest, mortgage, pledge, lien,
claim, charge, encumbrance, title retention agreement, lessor's interest under a
financing lease or any analogous arrangements in a Person's properties or
assets, intended as, or having the effect of, security, whether voluntary or
involuntary.
Section 1.67 "Line of Credit" has the meaning ascribed to it in Section
2.1.1. hereof.
Section 1.68 "Liquid Assets" means the aggregate cash and cash equivalents
possessed by the Company and its Subsidiaries or the Operating Company and its
subsidiaries, as applicable, as of such date on a consolidated basis.
Section 1.69 "Litigation" means any proceeding, claim, suit, action, case
or investigation by, before or involving any Tribunal.
Section 1.70 "Loan" means any Revolving Loan.
Section 1.71 "Loan Account" has the meaning ascribed to it in Section
2.1.5. hereof.
15
Section 1.72 "Loan Documents" means this Agreement, the Notes, and the
Other Documents.
Section 1.73 "Loans" means the Revolving Loans.
Section 1.74 "Material Adverse Effect" means an effect resulting from any
circumstance or event of whatever nature (including any adverse determination in
any Litigation) which does, or could reasonably be expected to, materially and
adversely (i) impair the validity or enforceability of this Agreement, the Notes
or the Other Documents, (ii) impair the ability of the Company to pay or perform
the Obligations, (iii) cause an Event of Default or (iv) affect the business
operations or financial condition of the Company taken as a whole.
Section 1.75 "Meditrust" has the meaning ascribed to it in the Preamble
hereof.
Section 1.76 "Modified Operating Cash Flow" shall mean, for any period,
the sum of (a) Net Earnings for such period, (b) any gains (net of expenses and
taxes applicable thereto) in excess of losses resulting from the sale,
conversion or other disposition of capital assets (i.e., assets other than
current assets), (c) depreciation and amortization and (d), where applicable,
Investment Fees received in cash during such period minus the amortized amount
of all Investment Fees included in Net Earnings for such period, all of the
foregoing determined on a consolidated basis.
Section 1.77 "Mortgage" or "Mortgages" means the mortgages of any real
estate which is a Facility or part of a Facility and for which the Company or a
Subsidiary of the Company is the mortgagee, whether or not the Company or a
Subsidiary of the Company has sold third party participations in such Mortgages.
Section 1.78 "Mortgage Expense" means, for any period and with respect to
any Facility, the total amount payable during such period by the mortgagor of
such Facility to the Company, a Subsidiary of the Company or any third party
under any participating agreement relating to a Mortgage, including, without
limitation, (a) interest and principal (as adjusted from time to time) plus (b)
all incremental charges to which the Facility is subject under the Mortgage.
Section 1.79 "Net Earnings" means, for any period, the consolidated net
earnings of the Company or the Operating Company, as applicable, during such
period as determined in accordance with GAAP.
16
Section 1.80 "Note" means the Revolving Credit Note.
Section 1.81 "Notice of Borrowing" has the meaning ascribed to it in
Section 2.1.4. hereof.
Section 1.82 "Notice of Continuation or Conversion" has the meaning
ascribed to it in Section 2.2.2. hereof.
Section 1.83 "Obligations" means any and all loans, advances,
indebtedness, liabilities, obligations, covenants or duties of the Company to
the Bank or any Bank Affiliate under this Agreement, the Note or the Other
Documents.
Section 1.84 "Operating Cash Flow" shall mean, for any period, the sum of
(a) Net Earnings for such period, (b) depreciation and amortization and (c),
where applicable, Investment Fees received in cash during such period minus the
amortized amount of all Investment Fees included in Net Earnings for such
period, all of the foregoing determined on a consolidated basis.
Section 1.85 "Operating Company" means Meditrust Acquisition Company and,
following the effective date of the merger between Meditrust Acquisition Company
and Santa Xxxxx Operating Company, any corporation or entity surviving such
merger.
Section 1.86 "Operating Facilities" shall mean any Facility, Pooled
Facilities or Pooled Guaranteed Facilities which are not Construction
Investments and which are currently operating in accordance with all applicable
Laws.
Section 1.87 "Operator" means the lessee or sublessee of a Facility owned
or leased by the Company or a Subsidiary of the Company, a Company Limited
Partnership or a Controlled Limited Partnership and also means the mortgagor or
lessee or sublessee of a Facility which is subject to a Mortgage to the extent
that such entity controls the operation of such Facility.
Section 1.88 "Operator Interest Expense" means, for any period, the sum of
all interest on, and all amortization of debt discount and expenses on, all
Indebtedness of an Operator outstanding at any time during such period but
excluding any amounts which constitute Mortgage Expense.
Section 1.89 "Other Documents" means any document, guarantee, agreement or
instrument other than the Agreement and the Note now or hereafter executed by
the Company or any of its Subsidiaries in connection with the Loans as renewed,
extended, amended, supplemented, increased, modified, or replaced.
17
Section 1.90 "Outstanding Amount" means, as of any date as of which the
amount thereof shall be determined, the aggregate outstanding principal amount
of (i) the Line of Credit and (ii) Credits Outstanding, all as of the date of
determination.
Section 1.91 "PBGC" means the Pension Benefit Guaranty Corporation or any
entity succeeding to all or part of its functions under ERISA.
Section 1.92 "Permitted Guarantees" means:
(a) Guarantees in favor of the Bank or any Bank Affiliates;
(b) Guarantees existing on the date of this Agreement and disclosed on
Schedule 1.92. attached hereto or in the Financial Statements referred to
in Section 3.8. hereof or in favor of Subsidiaries of the Company;
(c) Guarantees resulting from the endorsement of negotiable instruments
for collection in the ordinary course of business;
(d) Guarantees of the Company and its Subsidiaries with respect to surety,
appeal performance and return-of-money and other similar obligations
incurred in the ordinary course of business (exclusive of obligations for
the payment of borrowed money) not exceeding ONE HUNDRED THOUSAND AND
NO/100 DOLLARS ($100,000.00) in the aggregate;
(e) Guarantees of normal trade debt relating to the acquisition of goods
and supplies;
(f) Guarantees relating to Permitted Indebtedness described in subsections
(a) and (b) of Section 8.1.
Section 1.93 "Permitted Indebtedness" has the meaning ascribed to it in
Section 8.1. hereof.
Section 1.94 "Permitted Investments" means:
(a) Obligations of the United States of America or any department or
agency thereof, and obligations guaranteed by the United States of America, in
each case due within one year from the date of purchase and payable in the
United States in United States dollars,
(b) Prime Commercial Paper which is rated P-1 by Xxxxx'x Investors
Service, Inc. ("Moody's") or A-1 by Standard & Poor's Corporation ("S&P"),
bankers acceptances and certificates of deposit in United States commercial
banks or foreign banks with
18
United States branches (having capital resources in excess of ONE HUNDRED
MILLION AND NO/100 DOLLARS ($100,000,000.00) and having a long-term certificate
of deposit rating of either A-1 by Moody's or A+ by S&P),
(c) Repurchase agreements of United States commercial banks or brokerage
institutions or foreign banks with United States branches (any such bank or
institution having capital resources in excess of TWO HUNDRED FIFTY MILLION AND
NO/100 DOLLARS ($250,000,000.00)), in respect of the certificates and
obligations referred to in clause (b) above, provided that any such repurchase
agreement (x) has a term of less than one year and (y) is fully collateralized,
and
(d) Long-term corporate bonds with respect to which the Company or a
Subsidiary of the Company has the option, granted by a brokerage institution
having capital resources in excess of TWO HUNDRED FIFTY MILLION AND NO/100
DOLLARS ($250,000,000.00) and having a long-term debt rating of either A-1 by
Moody's or A+ by S&P, to require such brokerage institution to repurchase such
bonds at par within twelve (12) months following acquisition thereof by the
Company or a Subsidiary of the Company, provided that any such bond (x) may only
be held during the time that the Company or a Subsidiary of the Company is
entitled to the benefit of the repurchase option with respect to such bond, and
(y) must be rated at least BBB- by S&P, and Baa3 by Moody's (provided that no
such bond is required to be rated by both S&P and Moody's).
Section 1.95 "Permitted Liens" has the meaning ascribed to it in Section
8.2. hereof.
Section 1.96 "Permitted Operating Company Acquisitions" means the
acquisition, by the Operating Company or any Subsidiary of the Operating
Company, of any other legal entity.
Section 1.97 "Person" means an individual, partnership, corporation,
business trust, joint stock company, trust, unincorporated association, joint
venture or other entity of whatever nature, whether public or private.
Section 1.98 "Plan" means, at any time, an employee pension or other
benefit plan that is subject to Title IV of ERISA or subject to the minimum
funding standards under Section 412 of the Code and is either (i) maintained by
the Company or any member of the Controlled Group for employees of the Company
or any member of the Controlled Group or (ii) if such plan is established,
maintained pursuant to a collective bargaining agreement or any other
arrangement under which more than one (1) employer makes contributions and to
which the Company or any member of the Controlled Group is then making or
accruing an obligation to make
19
contributions or has within the preceding five (5) plan years made
contributions.
Section 1.99 "Pooled Facilities" means three or more Operating Facilities
having an aggregate appraised value of at least TWENTY MILLION AND NO/100
DOLLARS ($20,000,000.00), (i) the debt financings or leases of which are cross
defaulted and, with respect to Mortgages, cross collateralized and (ii) which
are commonly owned or operated by any Person or Affiliate of such Person.
Section 1.100 "Pooled Guaranteed Facilities" means three or more Operating
Facilities having an aggregate appraised value of at least TWENTY MILLION AND
NO/100 DOLLARS ($20,000,000.00), which are commonly owned or operated by any
Person or Affiliate of such Person and the debt financings or leases of which
are subject to a valid, binding and enforceable unconditional guarantee of
payment from such Person or Affiliate of such Person which commonly owns or
operates such Facilities.
Section 1.101 "Prime Rate" means the rate of interest then announced from
time to time by Chase Manhattan Bank, N.A. (or successor bank) as its prime rate
of interest; provided, however, that if, at any time, the Rating shall ever be
less than BBB- or Baa3, then the Prime Rate shall mean the rate of interest
announced by Chase Manhattan Bank, N.A. (or successor bank) as its prime rate of
interest plus one-quarter of one percentage point (0.25%). The Prime Rate shall
be adjusted automatically as of the effective date of any change in the prime
rate of interest announced by Chase Manhattan Bank, N.A. (or successor bank).
Section 1.102 "Prime Rate Loan" means a Loan bearing interest at a rate
equal to the Prime Rate.
Section 1.103 "Qualified Appraisal" means an appraisal independently and
impartially prepared by a qualified appraiser retained or approved in writing by
the Bank and having substantial experience in the appraisal of health care
facilities and conforming to Uniform Standards of Professional Appraisal
Practice ("USPAP") adopted by the Appraisal Standards Board of the Appraisal
Foundation.
Section 1.104 "Rating" means the higher two ratings established from time
to time by either Standard & Poors Corporation, Xxxxx'x Investors Service Inc.
and Duff & Xxxxxx Ratings Group for senior, unsecured non-credit-enhanced
long-term indebtedness of the Company.
Section 1.105 "Register" has the meaning ascribed to it in Section 11.2.
hereof.
20
Section 1.106 "REIT" means a "real estate investment trust," as such term
is defined in Section 856 of the Code.
Section 1.107 "Release" means any release, emission, disposal, leaching,
or migration into the environment (including, without limitation, the
abandonment or improper disposal of any barrels, containers, or other closed
receptacles containing any Hazardous Materials), or into or out of any property
owned, occupied or used by the Company or any of its Subsidiaries.
Section 1.108 "Relevant Local Time" means 10:00 a.m. local time in the
place where the Eurodollar Office is located.
Section 1.109 "Reportable Event" means any of the events described in
Section 4043(b) of ERISA.
Section 1.110 "Request" has the meaning set forth in Section 2.4.4.
hereof.
Section 1.111 "Revolving Credit Note" has the meaning ascribed to it in
Section 2.1.6. hereof.
Section 1.112 "Revolving Loan" means any loan or advance which the Company
requests pursuant to Section 2.1.1. hereof.
Section 1.113 "Revolving Loans" means each group of Revolving Loans
requested by the Company and made by the Bank under Section 2.1.1. hereof.
Section 1.114 "Santa Xxxxx Merger" means, collectively, the merger between
Meditrust and Santa Xxxxx Realty Enterprises, Inc., the merger between Meditrust
Acquisition Company and Santa Xxxxx Operating Company and all associated and
related transactions.
Section 1.115 "Scheduled Maturity Date" has the meaning ascribed to it in
Section 2.1.10. hereof.
Section 1.116 "SEC" means the United States Securities and Exchange
Commission or any successor agency or body.
Section 1.117 "Solvent" means, when used with respect to any Person, that
as of the date as to which the Person's solvency is to be determined:
(a) it has sufficient capital to conduct its business; and
(b) it is able to meet its debts as they mature.
21
Section 1.118 "Subsidiary" means, in the case of the Company, any
corporation or other entity, including Company Limited Partnerships but
excluding Controlled Limited Partnerships, of which fifty percent (50%) or more
of the outstanding voting stock or interests are owned or controlled directly or
indirectly by the Company or one or more of its Subsidiaries and, in the case of
any other Person, any Person of which fifty percent (50%) or more of the
ordinary voting power for the election of a majority of the members of the board
of directors or other governing body of such Person is held or controlled by
another Person or a Subsidiary of such other Person; or any other organization
the management of which is directly or indirectly controlled by another Person
or Subsidiary of such other Person through the exercise of voting power or
otherwise; or any joint venture, whether incorporated or not, in which a Person
has more than a fifty percent (50%) ownership interest. The term "control" (and
its correlative meanings "controlled by" and "under common control with") as
used in this Section 1.118. means the possession, directly or indirectly, of the
power to direct, or cause the direction of, the management and policies of a
Person, whether through ownership of voting stock, by contract or otherwise.
Section 1.119 "Tangible Net Worth" means, as of any date of which the
amount thereof shall be determined, the excess of (a) the sum of (i) the par
value (or value stated on the books of the Company or the Operating Company, as
applicable) of the shares of beneficial interest or stock of the Company or the
Operating Company, as applicable, plus (or minus, in the case of a surplus
deficit) and (ii) the amount of the consolidated surplus, whether capital or
earned, of the Company or the Operating Company, as applicable, over (b) the sum
of treasury stock, goodwill, intangible items such as unamortized debt discount
and expense, patents, trade and service marks and names, copyrights and research
and development expenses and any write-up in the value of assets, all of the
foregoing determined on a consolidated basis.
Section 1.120 "Total Capital" means, as of any date as of which the amount
thereof shall be determined, the sum of (i) the Company's Funded Debt plus (ii)
the Company's Tangible Net Worth as of such date, all of the foregoing
determined on a consolidated basis.
Section 1.121 "Total Liabilities" means as of any date all of the
Company's or the Operating Company's, as applicable, liabilities that should, in
accordance GAAP, be classified as total liabilities on a balance sheet of the
Company or the Operating Company, as applicable, prepared as of such date, all
of the foregoing determined on a consolidated basis.
22
Section 1.122 "Tribunal" means any state, commonwealth, country,
municipal, federal, foreign, territorial or other governmental body, court,
administrative department, commission, board, bureau, district, authority,
agency, or instrumentality, or any arbitration authority.
Section 1.123 "Unsecured Indebtedness" means Indebtedness of the Company
other than Indebtedness under the Line of Credit and the Fleet Bank Credit
Facility which is not secured by any Lien.
Section 1.124 "Unused Commitment" means, as of the date as of which the
amount thereof shall be determined, the positive difference, if any, between (i)
the amount of the Bank's Commitment as of such date and (ii) the aggregate
outstanding principal amount of Revolving Loans made by the Bank as of such
date.
Section 1.125 "Unused Commitment Amount" means, as of any date as of which
the amount thereof shall be determined, the positive difference, if any, between
(i) the Commitment Amount as of such date and (ii) the Outstanding Amount as of
such date.
Section 1.126 "Unused Fee" has the meaning ascribed to it in Section
2.3.1. hereof.
Section 2 THE CREDIT FACILITIES
Section 2.1 The Line of Credit.
Section 2.1.1 Revolving Loans. Subject to the terms and conditions
contained in this Agreement, the Bank agrees to extend to the Company a line of
credit and to lend to the Company, and the Company may borrow, repay and
reborrow, on a revolving basis, in one (1) or more Revolving Loans from time to
time during the period commencing after the Closing Date and continuing through
the close of business on the Scheduled Maturity Date, amounts which are at least
TWO MILLION AND NO/100 DOLLARS ($2,000,000.00) and in integral multiples of FIVE
HUNDRED THOUSAND AND NO/100 DOLLARS ($500,000.00) thereafter and which, together
with the Outstanding Amount, do not exceed (after giving effect to all amounts
requested) in the aggregate at any one time outstanding the lesser of the
Commitment Amount or the Borrowing Base in effect from time to time (the "Line
of Credit"). Notwithstanding any provision of this Agreement to the contrary,
all Revolving Loans shall constitute one obligation of the Company to the Bank.
The Bank's obligation to make Revolving Loans hereunder (i) shall terminate on
the Scheduled Maturity Date or any earlier date as may be provided for in this
Agreement and (ii) is limited to the amount of its Commitment.
23
Section 2.1.2 Use of Proceeds. The proceeds from the Revolving Loans
shall be used by the Company solely (a) to acquire Facilities; (b) to fund
Construction Investments; (c) to extend or acquire loans secured by Mortgages;
(d) for general corporate purposes of the Company but not the Operating Company;
(e) to extend loans to the Operating Company, the proceeds of which are to be
used by such Operating Company solely for Permitted Operating Company
Acquisitions in compliance with Section 8.3.(j) hereof; and (f) to finance the
purchase of shares of stock of Santa Xxxxx Realty Enterprises, Inc. and Santa
Xxxxx Operating Company in connection with the Santa Xxxxx Merger.
Section 2.1.3 Calculation of the Borrowing Base. The Borrowing Base
shall be calculated by reference to the most recent Borrowing Report delivered
by the Company under Section 7.1.(c) hereof. The Company shall calculate the
Borrowing Base on a quarterly basis and the Company shall immediately notify the
Bank when the Outstanding Amount exceeds the available Borrowing Base and shall
pay any excess in accordance with Section 2.1.11. hereof. The Company may
request that it receive a Revolving Loan in excess of the amount which would be
available under the most recent Borrowing Report delivered by the Company;
provided, however, that the Company shall provide the Bank with evidence set
forth in a new Borrowing Report to be delivered with such request that, on a pro
forma basis, the inclusion of the value of new or reappraised Facilities will be
sufficient to increase the Borrowing Base so as to permit the requested
borrowing. The acceptance or rejection of any such request or any calculation of
the Borrowing Base shall be within the reasonable discretion of the Bank.
Section 2.1.4 Notice of Borrowing. Whenever the Company desires to
obtain a Revolving Loan, the Company shall notify the Bank (which notice shall
be irrevocable) by telex, telegraph or telephone received no later than 10:00
a.m. (New York, New York time) on the date two (2) Business Days before the date
of the requested Revolving Loan in the case of a Prime Rate Loan and no later
than 10:00 a.m. (New York, New York time) on the date three (3) Business Days
before the date of the requested Revolving Loan in the case of a LIBOR Loan.
Such notice shall specify: (i) the effective date and amount of the requested
Revolving Loan; (ii) the interest rate option to be applicable thereto; and
(iii) the duration of the applicable Interest Period, if any (subject to the
provisions of the definition of Interest Period). Each such notification shall
be immediately followed by a written confirmation thereof by the Company in
substantially the form of Exhibit A attached hereto (the "Notice of Borrowing");
provided, however, that if such written confirmation differs in any material
respect from the action
24
taken by the Bank, the records of the Bank shall control absent manifest error.
Notwithstanding the foregoing, no Revolving Loan shall be made unless at the
time thereof:
(a) no Default or Event of Default shall exist; and
(b) as of the date of making such Revolving Loan, no event,
circumstance or condition shall exist or shall have occurred and be continuing
which has a Material Adverse Effect.
Section 2.1.5 The Loan Account. Each Revolving Loan shall be
recorded in an account on the books of the Bank bearing the Company's name (the
"Loan Account"). There shall also be recorded in the Loan Account all
prepayments and payments made by the Company in respect of the Line of Credit
and other appropriate debits and credits as herein provided. The Bank shall
render and send to the Company on a monthly basis a statement of the Loan
Account showing the respective outstanding principal balance of the Line of
Credit, together with interest and other appropriate debits and credits as of
the date of the statement. The statement of the Loan Account shall be considered
correct in all respects and accepted by and be conclusively binding upon the
Company unless the Company makes specific written objection thereto within sixty
(60) days after the date the statement of the Loan Account is sent.
Section 2.1.6 Revolving Credit Note. The Company has previously
issued and delivered to the Bank a promissory note dated December 12, 1996,
executed in substantially the form attached hereto as Exhibit B (the "Revolving
Credit Note"). The Revolving Credit Note shall evidence the continuing
obligation of the Company to repay to the Bank all Revolving Loans made by the
Bank to the Company on account of the Bank's Commitment.
Section 2.1.7 Payment of Principal. The aggregate unpaid principal
amount of all Revolving Loans, together with accrued and unpaid interest
thereon, as evidenced by the Revolving Credit Note shall, unless sooner
accelerated by the Bank following the occurrence of an Event of Default, be
repaid by the Company on the Scheduled Maturity Date.
Section 2.1.8 Interest Rates and Payments of Interest.
(a) Each Revolving Loan which is a LIBOR Loan shall bear interest on
the outstanding principal amount thereof, for each Interest Period applicable
thereto, at a rate per annum equal to the LIBOR Rate. Such interest shall be
payable (i) in arrears on the last Business Day of the Interest Period with
25
respect thereto and (ii) when such LIBOR Loan is due (whether at maturity, by
reason of acceleration or otherwise). In addition, upon any prepayment which has
the effect of reducing the outstanding principal amount of any LIBOR Loan to
zero (0), all accrued and unpaid interest in respect of such LIBOR Loan shall be
payable at the time of any such prepayment.
(b) Each Revolving Loan which is a Prime Rate Loan shall bear
interest on the outstanding principal amount thereof, for the Interest Period
applicable thereto, at a rate per annum equal to the Prime Rate in effect from
time to time. Such interest shall be payable (i) quarterly in arrears on the
last day of each quarter commencing December 31, 1997 and continuing on each
December 31, March 31, June 30 and September 30 thereafter and (ii) when such
Revolving Loan is due (whether at maturity, by reason of acceleration or
otherwise). In addition, upon any prepayment which has the effect of reducing
the outstanding principal amount of any Prime Rate Loan to zero (0), all accrued
and unpaid interest in respect of such Prime Rate Loan shall be payable at the
time of any such prepayment.
Section 2.1.9 Termination. The Line of Credit and the Bank's
obligation to lend thereunder shall terminate on September 23, 1999 (the
"Scheduled Maturity Date"), at which time all outstanding principal, accrued and
unpaid interest and any other sums due and owing under the Line of Credit shall
be immediately due and payable.
Section 2.1.10 Renewal. This Agreement may be renewed upon the
agreement of the Company and the Bank no later than March 23, 1999. If this
Agreement shall be so renewed, the Scheduled Maturity Date shall be extended to
September 23, 2001.
Section 2.1.11 Mandatory Prepayments. The Company shall be required
to pay to the Bank and to Fleet Bank on behalf of the lending institutions party
to the Fleet Bank Credit Facility on a pari passu and pro rata basis, as a
prepayment in respect of outstanding Revolving Loans, one hundred percent (100%)
of the net proceeds (defined as all proceeds received or to be received less
customary transaction costs and expenses) from (i) sales or other dispositions
of assets of the Company, including shares of stock of, and Indebtedness due and
owing to, Subsidiaries of the Company, the aggregate proceeds of which are in
excess of TWO MILLION FIVE HUNDRED THOUSAND AND NO/100 DOLLARS ($2,500,000.00)
in the trailing twelve (12) month period, (ii) the creation or issuance of
additional Indebtedness of the Company (except for loans and advances under the
Fleet Bank Credit Facility) and (iii) the sale of additional equity securities
or other ownership interests of the Company, said amount to be paid immediately
upon the receipt of said proceeds
26
unless such proceeds are to be used for the purposes set forth in Section 2.1.2
hereof within ten (10) Business Days of receipt. In addition, if it should be
determined at any time that the Outstanding Amount exceeds the available
Borrowing Base, the Company shall be required to prepay any such excess amount
within five (5) Business Days following such determination. Further, if at any
time the Outstanding Amount exceeds the Commitment Amount in effect from time to
time, any such excess amount shall be due and payable within five (5) Business
Days.
Section 2.1.12 Reduction of Commitment. The Company may reduce any
unused portion of the Commitment Amount at any time upon ten (10) days prior
written notice from the Company to the Bank; provided, however, that any such
reduction shall be in an amount of at least FIVE MILLION AND NO/100 DOLLARS
($5,000,000.00) or any multiple thereof and no such reduction shall be subject
to reinstatement.
Section 2.2 Interest
Section 2.2.1 Calculation of Interest. Interest on Prime Rate Loans
shall accrue on the basis of a three hundred sixty-five (365) day year, and
interest on LIBOR Loans shall accrue on the basis of a three hundred sixty (360)
day year. In each case, interest shall be calculated according to the actual
number of days elapsed during each accrual period.
Section 2.2.2 Continuation or Conversion of Loans. The Company may
continue or convert all or any part (in amounts which are at least TWO MILLION
AND NO/100 DOLLARS ($2,000,000.00) and in integral multiples of FIVE HUNDRED
THOUSAND AND NO/100 DOLLARS ($500,000.00)) of any outstanding Revolving Loan
into a Loan of any other type provided for in this Agreement in the same
aggregate principal amount, on any Business Day (which, in the case of a
conversion of a LIBOR Loan, shall be the last day of the Interest Period
applicable to such Loan unless the Company shall prepay all Breakage Costs
associated therewith). Whenever the Company desires to continue or convert a
Revolving Loan, the Company shall notify the Bank (which notice shall be
irrevocable) by telex, telegraph or telephone received no later than 10:00 a.m.
(New York, New York time) on the date two (2) Business Days before the date on
which the Revolving Loan is to be continued or converted to a Prime Rate Loan
and three (3) Business Days before the date on which the requested Revolving
Loan is to be continued or converted to a LIBOR Loan. Such notice shall specify:
(i) the effective date and amount of each Revolving Loan or portion thereof to
be continued or converted; (ii) the interest rate option to be applicable
thereto; and (iii) the duration of the applicable Interest Period, if any
(subject to the provisions of the definition of Interest Period). Each such
notification shall
27
be immediately followed by a written confirmation thereof by the Company in
substantially the form of Exhibit D attached hereto (the "Notice of Continuation
or Conversion"); provided, however, that if such written confirmation differs in
any material respect from the action taken by the Bank, the records of the Bank
shall control absent manifest error.
Section 2.2.3 Duration of Interest Periods.
(a) Subject to the provisions of the definition of Interest
Period, the duration of each Interest Period applicable to a Loan shall be as
specified in the applicable Notice of Borrowing or Notice of Continuation or
Conversion delivered pursuant to the provisions of Section 2.1.4. or Section
2.2.2.
(b) If the Bank does not receive a notice of election of
duration of an Interest Period for a Loan pursuant to subsection (a) above
within the applicable time limits specified therein, or if a Default or an Event
of Default exists when such notice must be given, the Company shall be deemed to
have elected to convert such Loan in whole into a Prime Rate Loan on the last
day of the then current Interest Period with respect thereto, except that if
such Loan is converted to a Prime Rate Loan because an Event of Default exists,
the rate of interest payable on all Loans shall be the Default Rate.
(c) Notwithstanding the foregoing, the Company may not select
an Interest Period that would end, but for the provisions of the definition of
Interest Period, after the Scheduled Maturity Date.
Section 2.2.4 Changed Circumstances.
In the event that:
(i) on any date on which the LIBOR Rate would otherwise be set
the Bank shall have reasonably determined in good faith (which determination
shall be final and conclusive) that adequate and fair means do not exist for
ascertaining the LIBOR Base, or
(ii) at any time the Bank shall have reasonably determined in
good faith (which determination shall be final and conclusive) that:
(A) the making or continuation of or conversion of any
Loan to a LIBOR Loan has been made impracticable or unlawful by (1) the
occurrence of a contingency that materially and adversely affects the interbank
market or (2)
28
compliance by the Bank in good faith with any applicable law or governmental
regulation, guideline or order or interpretation or change thereof by any
governmental authority charged with the interpretation or administration thereof
or with any request or directive of any such governmental authority, whether or
not having the force of law (in any such case, a "Legal Impediment"); or
(B) the LIBOR Rate shall no longer represent the
effective cost to the Bank for United States dollar deposits in the interbank
market for deposits in which it regularly participates; or
(C) that U.S. dollar deposits in immediately available
funds in an amount approximately equal to the outstanding principal balance of
the Line of Credit are not readily available to the Bank's Eurodollar Office for
delivery on the first day of any Interest Period;
then, and in any such event, the Bank shall forthwith so notify the Company by
facsimile notice at least one (1) day prior to (i) the date that the LIBOR Rate
is to be set, (ii) the commencement date of the applicable Interest Period or
(iii) the occurrence of the applicable event, and the Interest Rate shall become
the Prime Rate and shall remain the Prime Rate until the Bank determines and so
notifies the Company that the circumstances giving rise to such notice no longer
apply. Until the Bank notifies the Company that the circumstances giving rise to
such notice no longer apply, the obligation of the Bank to allow selection by
the Company of a LIBOR Loan (during the occurrence of such circumstances,
referred to as "Affected Loans") shall be suspended. If at the time the Bank so
notifies the Company, the Company has previously given the Bank a Notice of
Borrowing or a Notice of Continuation or Conversion with respect to one or more
Affected Loans but such borrowing or conversion has not yet gone into effect,
such notification shall be deemed to be void and the Company may only borrow or
convert to a Prime Rate Loan. If as a result of a Legal Impediment, the Bank
shall incur Breakage Costs in converting from a LIBOR Loan, then the Company
shall pay all such Breakage Costs to the Bank promptly upon its demand therefor
for its account.
Section 2.2.5 Payments Not at End of Interest Period. If the Company
for any reason makes any payment of principal with respect to any LIBOR Loan on
any day other than the last day of an Interest Period applicable to such Loan or
fails to borrow or continue, or convert to, a LIBOR Loan after giving a Notice
of Borrowing or Notice of Continuation or Conversion, the Company shall pay to
the Bank an amount equal to all Breakage Costs associated therewith (which
amounts shall be disclosed to the
29
Company in reasonable detail). The Company shall pay such amount within ten (10)
Business Days of receipt by the Company of a statement therefor.
Section 2.2.6 Usury. If the rate of interest payable by the Company
under this Agreement, the Note or the Other Documents shall be or become
usurious or otherwise unlawful under laws applicable thereto, the interest rate
shall be reduced to the maximum lawful rate and any amount paid by the Company
in excess of the maximum lawful rate shall be considered a payment in reduction
of principal or, at the sole election of the Bank, shall be returned to the
Company.
Section 2.3 Fees.
Section 2.3.1 Unused Fee. The Company agrees to pay to the Bank a
fee (the "Unused Fee") on the average daily unused portion of the Commitment
Amount from the Closing Date until the Scheduled Maturity Date at a per annum
rate determined daily by reference to the Rating as follows:
(i) If the Rating is A-/A3, then the per annum rate shall be seventeen and
one-half basis points (17.5bp); and
(ii) If the Rating is BBB+/Baa1, then the per annum rate shall be twenty
basis points (2Obp); and
(iii) If the Rating is BBB/Baa2, then the per annum rate shall be
twenty-two and one-half basis points (22.5bp); and
(iv) If the Rating is BBB-/Baa3, then the per annum rate shall be
twenty-five basis points (25bp); and
(v) If the Rating is less than BBB-/Baa3, then the per annum rate shall be
fifty basis points (50bp).
The Unused Fee shall be payable in arrears on (i) the last day of each quarter
commencing on December 31, 1997 and continuing on each December 31, March 31,
June 30 and September 30 thereafter, (ii) the Scheduled Maturity Date, (iii) the
acceleration of the Obligations and (iv) the termination of this Agreement.
Section 2.3.2 Calculation of Fees. All Fees shall, except as
otherwise provided in this Agreement, be calculated on the basis of a three
hundred sixty (360) day year and according the actual number of days elapsed in
each accrual period.
Section 2.4 General Terms Applicable to the Credit Facility.
Section 2.4.1 Direct Debit. The Company hereby authorizes the Bank to
automatically debit, charge against and collect from the Company's demand
deposit account established with the Bank any and all principal, interest, fees,
charges, expenses and other amounts due and payable under this Agreement as when
the same become due and payable.
Section 2.4.2 Overdue Payments. Overdue principal (whether at maturity,
by reason of acceleration or otherwise) and, to the extent permitted by
applicable law, overdue interest and fees and any other amounts payable
hereunder and under the Note shall bear interest from and including the due date
thereof until paid, compounded monthly and payable on demand, at a rate per
annum equal to the Default Rate.
Section 2.4.3 Manner and Time of Payments by the Company. All payments
made by the Company hereunder on account of principal, interest, and fees and
expenses shall be made in United States funds on their respective due dates to
the Bank in immediately available funds without setoff or counterclaim not later
than 11:00 a.m. (New York, New York time) at the head office of the Bank or at
such other address as the Bank may from time to time specify in writing. Each
such payment will be applied, first, on account of fees and expenses which may
be due and payable hereunder, second, on account of the interest then due and
owing, and third, on account of the principal then due and owing.
Section 2.4.4 Increased Costs and Capital Adequacy.
(a) If any change in any law, regulation, order, decree, treaty,
directive or bulletin or in the interpretation or application thereof after the
date hereof by any court or administrative or governmental authority charged
with the administration thereof, or if the Bank's or Bank Affiliate's compliance
with any request or directive (whether or not having the force of law) from any
central bank or monetary authority or other governmental authority, agency or
instrumentality enacted or adopted after the date hereof, shall in any such
case:
(i) impose, modify or deem applicable any reserve, special deposit or
similar requirement against any credit extended by the Bank or any Bank
Affiliate under this Agreement; or
(ii) impose on the Bank or any Bank Affiliate or its parent company
any other condition regarding this Agreement, and the result of any event
referred to in the preceding clause (i) or (ii) above shall be to increase the
cost to the Bank or any Bank Affiliate or such parent company of issuing,
funding or maintaining the Loans (which increase in cost shall be determined by
the Bank's reasonable allocation of the aggregate of such cost increases
resulting from such event), then, upon written request by the Bank (a
"Request"), the Company shall pay to the Bank from time to time as specified by
the Bank, additional amounts which shall be sufficient to compensate the Bank
for such increased cost from the date of such change. The Request
shall include a certificate as to such increased cost incurred as a result of
any event mentioned in clause (i) or (ii) above prepared in reasonable detail
(which shall include the method employed by the Bank in determining the
allocation of such costs to the Company) and otherwise in accordance with this
subsection (a), submitted by the Bank, shall be conclusive evidence, absent
manifest error, as to the amount thereof.
(b) (i) In addition to the foregoing, if any change in any domestic or
foreign law, regulation, order, decree, treaty, directive or bulletin or in the
interpretation or application thereof after the date hereof by any court or
administrative or governmental authority charged with the administration
thereof, or if the Bank's or Bank Affiliate's compliance with any request or
directive (whether or not having the force of law) from any central bank or
monetary authority or other governmental authority, agency or instrumentality
enacted or adopted after the date hereof, shall in any such case:
(A) subject the Bank or Bank Affiliate to any new or additional
tax or change in any tax with respect to the Notes or the Line of Credit, or
change the basis of taxation of payments to the Bank or Bank Affiliate of
principal, commitment fee, interest, premium, or any other amount payable under
the Notes; or
(B) impose, modify or hold applicable or change any reserve
(including, without limitation, basic, supplemental, marginal and emergency
reserves) on an industrywide special deposit, capital adequacy, compulsory loan
or similar requirement against assets held by, or deposits or other liabilities
in or for the account of, advances or other credit extended by, or any other
acquisition of funds for loans by (including, without limitation, all
Eurocurrency funding by all "Eurocurrency liabilities" as defined in Regulation
D of the Board of Governors of the Federal Reserve System, as amended) any
office of the Bank or Bank Affiliate; or
(C) impose on the Bank or Bank Affiliate any other condition or
change therein; and the result of any of the foregoing is to increase the cost
to the Bank or Bank Affiliate of making, renewing or maintaining advances or
extensions of credit or to reduce any amount receivable thereon then, in any
such case, the Company shall promptly pay the Bank, upon a Request, such amounts
as will compensate the Bank or Bank Affiliate for such additional cost or
reduced amount receivable. Upon the failure of the Company to compensate the
Bank or the Bank Affiliate for the amounts set forth herein within ten (10)
Business Days of a Request, then, at the Bank's option, the obligation of the
Bank or any Bank Affiliates to make, convert and maintain advances hereunder as
loans under which the Interest Rate is the LIBOR Rate, and the right of the
Company to elect that the Interest Rate be the LIBOR Rate, shall forthwith be
unavailable and the Interest Rate hereunder shall be automatically converted to
the Prime Rate.
-2-
(ii) If the Bank or Bank Affiliate becomes entitled to claim any
additional amounts payable pursuant to this subsection (b), the Bank shall
promptly submit to the Company a Request with respect to such entitlement. A
certificate as to any additional amounts payable pursuant to the foregoing
submitted by the Bank (and signed by an authorized officer of the Bank) to the
Company shall, absent manifest error, be conclusive.
(iii) If a Request is given, the Company shall have the option,
exercisable by notice to the Bank given within five (5) Business Days' after the
Company's receipt of such notice, to convert the Interest Rate to the LIBOR
Rate, or the Prime Rate, as applicable; provided, however, that if the Company
makes such election, or if the Interest Rate is converted to another Interest
Rate pursuant to this subsection (b), the Company shall pay any Breakage Costs
incurred in making any such conversion to the Bank for the account of the Bank
or Bank Affiliate. The Bank shall certify such costs to the Company, which
certification may be based on certifications submitted to the Bank, and such
certification shall be binding absent manifest error.
(c) If the Bank shall have determined that (i) the applicability of any
law, rule, regulation or guideline adopted pursuant to or arising out of the
July 1988 report of the Basle Committee on Banking Regulations and Supervisory
Practices entitled "International Convergence of Capital Measurement and Capital
Standards", (ii) the adoption after the date hereof of any applicable law, rule
or regulation regarding capital adequacy, or any change therein, or (iii) any
change in the interpretation or administration thereof, or compliance by the
Bank or its parent company with any requirement or directive regarding capital
adequacy (whether or not having the force of law) of any such authority, central
bank or comparable agency, except any such adoption or change or any such
compliance with a request or directive which applies or has been applied solely
to the Bank or its parent company by reason of events or conditions relating
solely to the Bank, has the effect of reducing the rate of return on the Bank's
or its parent bank holding company's capital as a consequence of its commitment
hereunder to a level below that which the Bank or its parent company could have
achieved but for such adoption, change or compliance by an amount deemed by the
Bank to be material (for which reduction of the rate of return shall be
determined by the Bank's or the parent company's reasonable allocation of such
reduction of the rate of return resulting from such event) then, upon the
submission of a Request by the Bank, the Company shall pay to the Bank, from
time to time as specified by the Bank, such additional amount or amounts which
shall be sufficient to compensate the Bank for such reduction. A certificate as
to such increased cost incurred by the Bank as a result of any event mentioned
in this subsection (c), prepared in reasonable detail (which shall include the
method employed by the Bank in determining the allocation of such costs to the
Company) and otherwise in accordance with this subsection (c) submitted by the
Bank to the Company, shall be conclusive evidence, absent manifest error, as to
the amount thereof.
(d) Except as otherwise specifically provided in this Section, amounts
payable by the Company pursuant to this Section shall be payable within ten (10)
Business Days of receipt by the Company of a Request.
-3-
(e) Any certificate relating to a Request shall provide reasonable
supporting documentation relative to the calculation of any amounts set forth
thereon.
(f) Notwithstanding any provision of this Section 2.4.4. to the
contrary, prior to giving any Request, the Bank shall first use its best efforts
(which shall not require additional costs or administrative burdens on the Bank)
to take such steps (including, without limitation, changing its head office or
Eurodollar office) as would eliminate or reduce any cost or expense to be borne
by the Company under this Section 2.4.4.
(g) in lieu of paying any Request, the Company shall have the right,
within thirty (30) Business Days of the delivery of such Request, to terminate
the Commitment by prepaying the entire principal amount due and payable under
this Agreement, the Note and the Other Documents in accordance with Section
2.4.6. hereof. In such an event, the Company shall have no liability to pay any
Request.
(h) Notwithstanding any provision of this Section 2.4.4. to the
contrary, in no event shall the Company be obligated to pay any Request which
relates to any income, excise or franchise taxes imposed or sought to be imposed
on the Bank.
Section 2.4.5 Withholding Tax Exemption. The Bank agrees to deliver to
the Company (if it has not already done so or if the same have expired or become
obsolete), at least three (3) Business Days before interest or fees first become
payable hereunder for the account of the Bank, two (2) duly completed copies of
United States Internal Revenue Service Form 1001 or 4224, in either case
certifying whether the Bank is entitled to receive payments under this Agreement
and the Note without deduction or withholding of any United States Federal
income taxes. The Bank further undertakes to deliver to the Company two (2)
additional copies of such form (or a successor form) on or before the date that
such form expires or becomes obsolete or after the occurrence of any event
requiring a change in the most recent form so delivered by it, and such
amendments thereto or extensions or renewals thereof as may be reasonably
requested by the Company, in each case certifying whether the Bank is entitled
to receive payments under this Agreement and the Note without deduction or
withholding of any United States Federal income taxes, unless an event
(including without limitation any change in treaty, law or regulation) has
occurred prior to the date on which any such delivery would otherwise be
required which renders all such forms inapplicable or which would prevent the
Bank from duly completing and delivering any such form with respect to it and
the Bank advises the Company that it is not capable of receiving payments
without any deduction or withholding of United States federal income tax.
Section 2.4.6 Prepayments of the Loans. The Company may upon at least
three (3) Business Days' notice to the Bank in the case of LIBOR Loans and upon
at least two (2) Business Days' notice in the case of Prime Rate Loans prepay
any Revolving Loan in whole by paying the entire principal amount of such Loan
together with accrued and unpaid
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interest thereon to the date of such prepayment and, in the case where the Bank
will be required to break a LIBOR funding contract by reason of such prepayment,
any Breakage Costs. Any such prepayment hereunder shall be applied first to any
Breakage Costs and other amounts due with respect to the Revolving Loan being
prepaid, then to accrued and unpaid interest and finally to the principal due in
respect thereof. Any and all prepayments shall not affect the obligation, if
any, to pay the regular installments required hereunder, until all Obligations
have been paid in full.
Section 3 REPRESENTATIONS AND WARRANTIES
In order to induce the Bank to enter into this Agreement and to make
the Loans, the Company makes the following representations and warranties to the
Bank, which, except as specifically provided below, shall be deemed made as of
the Closing Date and as of the date each Revolving Loan is made which shall
survive the execution and delivery hereof and each performance hereunder. Any
knowledge acquired by the Bank shall not diminish its right to rely upon such
representations and warranties.
Section 3.1 Organization, Power and Authority. As of the Closing Date
and at all times prior to the effective date of the Santa Xxxxx Merger, the
Company is a selfadministered REIT, validly existing and in good standing under
the laws of the Commonwealth of Massachusetts. After the effective date of the
Santa Xxxxx Merger, the Company is a validly existing self-administered REIT and
a corporation validly existing and in good standing under the laws of the State
of Delaware. The Company is qualified to do business in each jurisdiction in
which such qualification is necessary in view of its business and operations or
the ownership of its properties, except where the failure to so qualify would
not have a Material Adverse Effect.
Section 3.2 Authority. The execution, delivery and performance by the
Company of this Agreement, the Note and the Other Documents are within the
Company's powers, have been duly authorized by all necessary action, and do not
and will not (a) require any consent or approval of the shareholders of the
Company not obtained, (b) contravene the Company's Declaration of Trust,
Certificate of Incorporation or other charter document, (c) violate any
provision of any Legal Requirement (including, without limitation, Regulation X
of the Board of Governors of the Federal Reserve System) presently in effect
having applicability to the Company, the violation of which would have a
Material Adverse Effect, (d) result in a breach of or constitute a default under
any indenture or loan or credit agreement or any other agreement, lease or
instrument to which the Company is a party or by which it or its properties may
be bound or affected, the default under or breach of which would have a Material
Adverse Effect, or (e) result in, or require, the creation or imposition of any
mortgage, deed of trust, pledge, lien, security interest or other charge or
encumbrance of any nature upon or with respect to any of the properties now
owned or hereafter acquired by the Company. The Company is not in default under
any such Legal Requirement or any
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such indenture, agreement, lease or instrument, which default would result in or
cause any Material Adverse Effect.
Section 3.3 No Breach. Neither the execution nor delivery of this
Agreement or the Note, nor the offering, issuance and sale of the Note, nor
fulfillment of nor compliance with the terms and provisions hereof and of the
Note will conflict with, or result in a breach of the terms, conditions or
provisions of, or constitute a default under, or result in any violation of, or
result in the creation of any Lien upon any of the properties or assets of the
Company pursuant to, the Declaration of Trust, Certificate of Incorporation or
other charter document of the Company or any agreement (including any agreement
with stockholders), instrument or Legal Requirements to which the Company is
subject which would have a Material Adverse Effect. The Company is not a party
to, or otherwise subject to any provisions contained in, any instrument
evidencing Indebtedness of the Company, any agreement relating thereto or any
other contract or agreement (including its Declaration of Trust) which limits
the amount of, or otherwise imposes restrictions on the incurring of,
Indebtedness of the Company of the type to be evidenced by the Note except as
set forth in the Declaration of Trust and the agreements listed in Schedule 3.3.
attached hereto.
Section 3.4 Qualification as a Real Estate Investment Trust. Meditrust
qualified as a REIT under the provisions of the Code, as applicable for its
fiscal years ended December 31, 1988 through December 31, 1993. Appropriate
Federal income tax returns for the fiscal years through December 31, 1993 have
been filed by the Company with the Internal Revenue Service (the "IRS") and no
previously filed return has been examined and reported on by the IRS. Meditrust
is in a position to qualify for the 1994, 1995 and 1996 fiscal years as a REIT
under the provisions of the Code. The Company has not incurred any liability for
excise taxes pursuant to Section 4981 of the Code.
Section 3.5 Binding Obligations. This Agreement, the Note and the Other
Documents, when issued and delivered for value received, constitute the legal,
valid and binding obligations of the Company enforceable against it in
accordance with their respective terms, except as the same may be limited by
bankruptcy, insolvency, reorganization, moratorium or similar laws affecting the
enforcement of creditors' rights generally or general principles of equity.
Section 3.6 Permits. The Company possesses all material permits,
authorizations, licenses, approvals, waivers and consents, the failure of which
to possess would have a Material Adverse Effect, all of which are in full force
and effect.
Section 3.7 No Consents. The execution, delivery and performance of the
Agreement, the Note and the Other Documents did not and does not require any
approval, consent or waiver of the Board of Governors of the Federal Reserve
System. None of the proceeds of the Loans will be used, or have been used,
directly or indirectly, for the purpose of reducing or retiring any Indebtedness
which was originally incurred to purchase or carry any margin security or for
any other purpose which might constitute any of the Loans a
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"purpose credit" within the meaning of said Regulation U or Regulations G or X
of the Federal Reserve Board.
Section 3.12 Title to Real and Personal Property. Unless otherwise
disclosed to the Bank, the Company or a Subsidiary of the Company has good and
marketable fee or leasehold title to all its real property, including all
Facilities owned by the company, a Subsidiary of the Company, a Company Limited
Partnership or a Controlled Limited Partnership, and good and marketable title
to all the other property and assets, including Mortgages, reflected in the
Financial Statements referred to in Section 3.8. hereof or acquired by the
Company subsequent to such date, free of all Liens except (a) property and
assets sold or otherwise disposed of subsequent to such date; (b) Permitted
Liens; and (c) imperfections of title and other Liens not otherwise insured
against that do not materially detract from the value of the property or have a
Material Adverse Effect. All Mortgages have been properly recorded in the
jurisdictions necessary in order to perfect the Company's or a Subsidiary of the
Company's Liens therein. No financing statement under any Uniform Commercial
Code or other law which names the Company or any Subsidiary of the Company as a
debtor relating to any Facility has been filed in any jurisdiction and neither
the Company nor any Subsidiary of the Company has signed any financing statement
or any security agreement authorizing any secured party thereunder to file any
such financing statement relating to any Facility except for Permitted Liens or
as set forth on Schedule 3.12. attached hereto.
Section 3.13 Statutory Compliance. Except where noncompliance would not
have a Material Adverse Effect, the Company is in material compliance with all
material Laws existing on the date hereof of all Tribunals applicable to it, its
properties and assets and the business conducted by it, including, without
limitation, (i) the provisions of the Code (Sections 856 through 860) relating
to the organization of REITs and their qualification and maintenance as such,
(ii) all SEC and state "blue sky" laws relating to the offering its securities,
(iii) ERISA, (iv) the United States Occupational Safety and Health Act of 1970
and (v) all Environmental Laws.
Section 3.14 Events of Default. No Event of Default has occurred and/or
is continuing and no Default would occur as a result of the execution and
delivery by the Company of this Agreement, the Note and the Other Documents, or
the making of any Revolving Loan.
Section 3.15 Other Defaults. The Company is not in default, after
giving effect to any applicable notice, grace or cure periods, in the
performance, observance or fulfillment of any of the material obligations,
covenants or conditions contained in any indenture, mortgage, deed of trust,
lease, agreement, document or instrument to which it is a party or by which it
or its properties and assets are bound, where such default would have a Material
Adverse Effect.
-7-
Section 3.16 Taxes. The Company has filed all tax returns and reports
required to be filed by them with any and all Federal, state or local
governmental bodies, instrumentalities or agencies and has paid in full, made
adequate provisions or established adequate reserves for or is contesting in
good faith in appropriate proceedings, the payment of all taxes, interest,
penalties, assessments or deficiencies shown to be due or claimed to be due on
or in respect to such tax returns and reports.
Section 3.17 Solvency. The Company is currently, and after giving
effect to the transactions contemplated by this Agreement will be, Solvent and
is not contemplating either the filing of a petition under any Federal or state
bankruptcy or insolvency law or the liquidating of all or a major portion of its
properties and assets, and the Company has no knowledge of any Person
contemplating the filing of any such petition against it.
Section 3.18 Ranking of Loan. Except as permitted by Section 8.2. or as
set forth in Schedule 3.18. attached hereto, no Indebtedness of the Company is
secured by or otherwise benefits from any Lien on or with respect to the whole
or any part of the Company's properties or assets, present or future. The
Revolving Loans and other sums payable by the Company hereunder and under the
Note rank at least equal in terms of seniority and priority with all Unsecured
Indebtedness of the Company and at least pari passu with the Fleet Bank Credit
Facility. There exists no default or event or condition which, with the giving
of notice or passage of time, or both, would constitute a default under the
provisions of any instrument evidencing such Indebtedness or of any agreement
relating thereto.
Section 3.19 Litigation. Except as set forth on Schedule 3.19. attached
hereto or in the Company's filings with the United States Securities and
Exchange Commission, there are no actions, suits or proceedings by or before any
Tribunal or any arbitration or alternate dispute resolution proceeding, pending
or, to the knowledge of the Company or any of its officers, threatened against
the Company, its Subsidiaries or their properties or assets, which if adversely
determined, would have a Material Adverse Effect.
Section 3.20 Guarantees. Except as permitted in Schedule 1.92. or as
set forth in the Financial Statements referred to in Section 3.8. hereof and
Schedule 3.20. attached hereto, the Company is not a party to any Guarantee or
other similar type of agreement, and the Company has not offered its endorsement
to any Person which would in any way create a contingent liability (except by
endorsement of negotiable instruments payable at sight for deposit or collection
or similar banking transactions in the Company's ordinary course of business).
Section 3.21 ERISA. The Company and each member of the Controlled Group
have fulfilled their obligations under the minimum funding standards of ERISA
and the Code with respect to each Plan and are in compliance in all material
respects with the currently applicable provisions of ERISA and the Code, and
have not incurred any liability to the PBGC or a Plan under Title IV of ERISA.
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Section 3.22 Environmental Protection. Except as set forth on Schedule
3.22. attached hereto, to the best of the Company's knowledge, after due inquiry
and investigation:
(a) The business operations of the Company, each Subsidiary of
the Company and each Facility comply in all material respects with all
applicable Environmental Laws except where noncompliance would not have a
Material Adverse Effect or result in a material decrease in the value of a
Facility.
(b) Neither the Company nor, to the Company's knowledge, any
Subsidiary of the Company or any Operator has received any notice or claim to
the effect that it is or may be liable to any Person as a result of the Release
or threatened Release of any Hazardous Materials or any letter or request for
information under CERCLA or any other Environmental Laws which would have a
Material Adverse Effect or result in a material decrease in the value of a
Facility, and, neither the Company, any Subsidiary of the Company, any Operator
nor any Facility are the subject of any investigation by a Federal, state or
local governmental instrumentality, body or agency evaluating whether any
remedial action is needed to respond to a Release or threatened Release of any
Hazardous Material or claim, or threatened lawsuit or claim arising under or
related to any Environmental Law which would have a Material Adverse Effect or
result in a material decrease in the value of a Facility.
(c) Neither the Company, any Subsidiary of the Company nor, to
the Company's knowledge, any Operator or any Facility are, nor are any of their
properties, assets and operations, subject to any outstanding written order or
agreement with any Federal, state or local governmental instrumentality, body or
agency or private party respecting any Environmental Laws which would have a
Material Adverse Effect or result in a material decrease in the value of a
Facility.
(d) Neither the Company, any Subsidiary of the Company, any
Operator nor any Facility has filed any notice under any Environmental Law
indicating past or present treatment or disposal of Hazardous Materials, except
where non-compliance would not have a Material Adverse Effect or result in a
material decrease in the value of a Facility, and all of the operations of the
Company, any Subsidiary of the Company, any Operator or any Facility which
involve the generation, transportation, treatment, storage or disposal of
Hazardous Materials are in substantial and material compliance with all
Environmental Laws except where noncompliance would not have a Material Adverse
Effect or result in a material decrease in the value of a Facility.
(e) No Hazardous Material exists on, under or about any of the
Facilities, in a manner that could give rise to any claim or suit against the
Company, any Subsidiary of the Company, or any Operator, which would have a
Material Adverse Effect or result in a material decrease in the value of a
Facility, and neither the Company, any Subsidiary of the Company, any Operator
nor any Facility has filed any notice or report of a Release of any Hazardous
Materials that could give rise to any such claim or suit against the Company,
any
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Subsidiary of the Company or any Operator which would have a Material Adverse
Effect or result in a material decrease in the value of a Facility.
Section 3.23 Facilities and Operators. Each Subsidiary of the Company
which is the owner or operator of a Facility and, to the knowledge of the
Company, each Operator is in compliance in all material respects with all
applicable Laws pertaining to the ownership or operation of health care
facilities of the types owned by a Subsidiary of the Company or any Operator.
Section 3.24 Material Subsidiaries. All Subsidiaries of the Company are
listed on Schedule 3.24. attached hereto.
Section 3.25 Materiality. Nothing has come to the attention of the
Company that causes it to believe that any documents or agreements delivered or
caused to be delivered by it, or any statements made by the Company or its
agents or representatives, to the Bank or its agents or representatives
regarding the transactions contemplated hereby, contains an untrue statement of
a material fact or omits to state a material fact necessary to make the
statements therein not misleading.
Section 3.26 Intercompany Indebtedness. All Indebtedness of the
Operating Company, any Subsidiary of the Operating Company or any Subsidiary of
the Company to the Company or any Subsidiary of the Company, and all
Indebtedness of the Company to the Operating Company, any Subsidiary of the
Operating Company or any Subsidiary of the Company, shall be evidenced by an
intercompany promissory note executed within 30 days after the issuance of such
indebtedness. All Indebtedness of any Subsidiary of the Company which relates to
any Investment shall be subject to terms and conditions, including rates of
interest and terms of repayment, which are substantially similar to the terms
and conditions of the underlying Investment in all material respects.
Section 4 CONDITIONS TO OBLIGATIONS OF THE BANK
The Bank shall have no obligations under this Agreement unless and
until it is satisfied, in its reasonable credit judgment, that all of the
following conditions shall have been fulfilled prior to or on the Closing Date:
Section 4.1 Authorizations. The Bank shall have received:
(i) evidence satisfactory to the Bank to verify the authority of
the Person or Persons signing this Agreement, the Note and the Other Documents
to legally bind the Company, and the authority of each Person who will sign the
other statements, reports, certificates and documents called for by the terms of
this Agreement and will otherwise act under this Agreement and the Note for and
on behalf of the Company; and
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(ii) the specimen signature of each Person named pursuant to
clause (i) of this Section 4.1. certified by an appropriate officer of the
Company to be a true specimen thereof.
Section 4.2 Representations and Warranties True. The representations
and warranties contained in Section 3 of this Agreement are true and correct in
all material respects, and the Company shall have so certified to the Bank.
Section 4.3 Performance and Compliance. The Company shall have
performed and complied in all material respects with all covenants, agreements
and conditions in this Agreement, the Note and the Other Documents which are
required to be Performed or complied with by the Company on or prior to the
Closing Date, and the Company shall have so certified to the Bank.
Section 4.4 Delivery of Documents. The Company shall have duly executed
and delivered to the Bank, in form and substance satisfactory to the Bank and
its legal counsel, this Agreement, the Note, the Other Documents and all further
documents as they may request to evidence the Obligations. In addition, the Bank
shall have received or agreed to waive or delay the receipt of:
Section 4.4.1 A certificate of a duly authorized officer of Meditrust
certifying as to (A) the resolutions of the Trustees of Meditrust approving this
Agreement, the Note and the Other Documents to which it is a party, (B)
Meditrust's Declaration of Trust and (C) all documents evidencing other
necessary action and governmental approvals, if any, with respect to the
transactions contemplated by this Agreement.
Section 4.4.2 A certificate from the Secretary of the Commonwealth of
Massachusetts certifying as to the Declaration of Trust of Meditrust.
Section 4.4.3 A certificate from the Secretary of the Commonwealth of
Massachusetts certifying as to the good standing of Meditrust.
Section 4.4.4 The Company shall deliver a certificate executed by a
duly authorized officer that the Company, after giving effect to the
transactions contemplated by the Agreement, is Solvent on the Closing Date.
Section 4.4.5 The Company's legal counsel shall deliver to the Bank an
opinion as to certain matters relating to the transactions contemplated by this
Agreement, the Note and the Other Documents, such opinion to be substantially in
the form attached hereto as Exhibit E.
Section 4.4.6 Fleet Bank, as Agent under the Fleet Bank Credit
Facility, shall have executed and delivered to the Bank a letter acknowledging
and agreeing as to the pari
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passu nature of payments and borrowings under the Line of Credit and the Fleet
Bank Credit Facility.
Section 4.4.7 Such further documents, instruments and agreements as the
Bank shall reasonably request, all reasonably satisfactory in form and substance
to the Bank and its legal counsel.
Section 5 CONDITIONS TO MAKING REVOLVING LOANS
The Bank shall have no obligation to make Revolving Loans unless and until
it is satisfied, in its sole and absolute discretion, that all of the following
conditions shall have been fulfilled prior to or contemporaneously with the
making of such Revolving Loan.
Section 5.1 Notice of Borrowing. The Bank shall have received, in a
timely manner, a Notice of Borrowing in a form reasonably satisfactory to the
Bank.
Section 5.2 No Adverse Change. No event, circumstance, or condition
shall exist or shall have occurred and be continuing which has a Material
Adverse Effect and the Company shall have so certified.
Section 5.3 Truth of Representations and Warranties. All of the
representations and warranties set forth in Section 3 hereof shall be true and
correct in all material respects as of the date of the requested Revolving Loan
and the Company shall have so certified.
Section 5.4 No Default. No event which constitutes an Event of Default
has occurred and is continuing, or would occur as a result of the making of the
requested Revolving Loan and the Company shall have so certified.
Section 5.5 Payment of Fees. The Company shall have paid any fees and
expenses due and payable to the Bank under this Agreement and the Other
Documents.
Section 5.6 Authority. To the extent necessary, the authority referred
to in Section 4.1. shall remain in full force and effect and the incumbency of
officers shall be as stated in the certificates of incumbency delivered pursuant
to Section 4.1. or as subsequently reflected in a new certificate of incumbency
delivered to the Bank in connection with the requested Revolving Loan.
Section 6 CONDITIONS TO APPROVAL OF SANTA XXXXX MERGER
The Bank hereby consents to the Company's participation in all of the
transactions involved with the Santa Xxxxx Merger, provided that all of the
following conditions have been fulfilled:
12
Section 6.1 Representations and Warranties True. The representations
and warranties contained in Section 3 of this Agreement are true and correct in
all material respects, and all such representations and warranties will continue
to be true and correct in all material respects after the Santa Xxxxx Merger.
Section 6.2 Performance and Compliance. The Company shall have
performed and complied in all material respects with all covenants, agreements
and conditions in this Agreement, the Note and the Other Documents, and no event
which constitutes an Event of Default has occurred and is continuing or will
occur as a result or consequence of the Santa Xxxxx Merger.
Section 6.3 Surviving Entity. The entity surviving the merger between
Meditrust and Santa Xxxxx Realty Enterprises, Inc. shall be a Delaware
corporation. Such surviving entity shall also be a validly existing
self-administered REIT.
Section 6.4 No Adverse Change. No event, circumstance or condition
shall exist or shall have occurred and be continuing which has a Material
Adverse Effect, and no such event, circumstance or condition shall occur as a
result or consequence of the Santa Xxxxx Merger.
Section 6.5 Terms and Conditions of Merger. The Santa Xxxxx Merger
shall have been completed on terms and conditions previously disclosed to and
approved by the Bank as summarized by that certain draft Securities and Exchange
Commission Form S-4 prepared with regard to the Santa Xxxxx Merger and dated as
of June 11, 1997.
Section 6.6 Assumption of the Obligations. The entity surviving the
merger between Meditrust and Santa Xxxxx Realty Enterprises, Inc. shall assume
all of the Obligations by executing an Assignment, Assumption and Release
Agreement substantially in the form attached hereto as Exhibit I.
Section 6.7 Delivery of Documents. The Bank shall have received or
agreed to waive or delay the receipt of:
Section 6.7.1 A certificate of a duly authorized officer of the Company
dated as of the effective date of the Santa Xxxxx Merger certifying as to the
Company's Certificate of Incorporation.
Section 6.7.2 A certificate dated as of the effective date of the Santa
Xxxxx Merger from the Secretary of State of the state of Delaware certifying as
to the Company's Certificate of Incorporation.
Section 6.7.3 A certificate dated as of the effective date of the Santa
Xxxxx Merger from the Secretary of State of the State of Delaware certifying as
to the good standing of the Company.
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Section 6.7.4 A certificate executed by a duly authorized officer of
the Company certifying that the Company, after giving effect to the Santa Xxxxx
Merger, is Solvent.
Section 6.7.5 A certificate executed by a duly authorized officer of
the Company certifying that (i) the Assignment, Assumption and Release Agreement
referred to in Section 6.6 hereof is valid and binding upon the Company and (ii)
the Santa Xxxxx Merger and all transactions associated therewith comply with the
terms of this Agreement, the Note and the Other Documents.
Section 6.7.6 An opinion of the Company's legal counsel as to certain
matters relating to the Santa Xxxxx Merger, such opinion to be substantially in
the form attached hereto as Exhibit J.
Section 6.8 Copies of Opinions of Counsel. All written opinions
provided by the Company's legal counsel to any party in connection with the
Santa Xxxxx Merger shall also be addressed and delivered to the Bank.
Section 7 AFFIRMATIVE COVENANTS OF COMPANY
The Company covenants and agrees that from the Closing Date until the
payment and performance in full of the Obligations, unless the Bank otherwise
consents in writing:
Section 7.1 Financial Statements and Reporting Requirements.
(a) Quarterly Reports. As soon as available and in any event
within fifty (50) days after the end of each of the first three fiscal quarters
of each fiscal year, the Company shall provide to the Bank (1) a Consolidated
Financial Statement for the Company, (2) a Consolidated Financial Statement for
the Operating Company and (3) a Combined Financial Statement, each including
balance sheets as of the end of such quarter, statements of income and
statements of cash flow for the period commencing as of the end of the previous
fiscal year and ending with such fiscal quarter (copies of reports on Form 10-Q
filed with the SEC shall satisfy the obligations hereunder), together with a
certificate of a duly authorized officer of the Company stating that as of the
date of such certificate, to the best of such officer's knowledge, after
reasonable inquiry, no Event of Default or Default has occurred, or, if an Event
of Default or a Default has occurred and is continuing, a statement as to the
nature thereof and the action which the Company has taken or proposes to take
with respect thereto, and further setting out in such detail as is reasonably
required by the Bank.
(b) Annual Reports. As soon as available and in any event within
one hundred (100) days after the end of each fiscal year, the Company shall
provide to the Bank (1) a Consolidated Financial Statement for the Company, (2)
a Consolidated Financial
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Statement for the Operating Company and (3) a Combined Financial Statement, each
for such fiscal year audited without qualification by Coopers & Xxxxxxx L.L.P.
or such an independent certified public accountant of recognized standing and
acceptable to the Bank, each of which Financial Statements shall include the
balance sheets as of the end of such fiscal year, statements of income and
statements of cash flow for such year and a statement of shareholders, equity
(copies of reports on Form 10-K filed with the SEC shall satisfy the obligations
hereunder), together with a certificate of a duly authorized officer of the
Company stating that, as of the date of such certificate, to the best of such
officer's knowledge and after reasonable inquiry, no Event of Default or Default
has occurred, or, if an Event of Default or a Default has occurred and is
continuing, a statement as to the nature thereof and the action which the
Company has taken or proposes to take with respect thereto further setting out
in such detail as is reasonably requested by the Bank.
(c) Borrowing Base Report. As soon as available but in any event
within fifty (50) days of the end of each fiscal quarter, the Company shall
furnish to the Bank a report in the form of Exhibit F attached hereto setting
forth a computation of the Borrowing Base, a listing of all Investments which
are thirty (30) days or more delinquent in payments to the Company and such
other information in respect of the Borrowing Base as the Bank may reasonably
require (the "Borrowing Report").
(d) Covenant Compliance. The Company shall submit with any
quarterly or annual reports required under subsections (a) or (b) above, a
report executed by a duly authorized officer of the Company certifying as to the
Company's compliance with the financial covenants set forth in Section 8 hereof
in a form reasonably acceptable to the Bank.
(e) Other Reports. The Company shall also submit with any
quarterly or annual reports required under subsections (a) or (b) above, a
report as to any material litigation relating to the Company not previously
disclosed to the Bank and such other information as the Bank may reasonably
require.
(f) SEC Reports. As soon as available, the Company shall provide
the Bank with copies of any and all reports and filings required to be made by
the Company with the SEC, including Form 10-Q and Form 10-K.
(g) Additional Reports. The Company shall provide the Bank with
the following additional reports:
(i) as soon as available and in any event within a reasonable
time after the close of each fiscal year of the Company copies of
the portions of any and all auditor's letters to the trustees or
board of directors of the Company, the Operating Company or to
any Subsidiary of the Company or the Operating Company regarding
any material weakness of the various accounting practices and
control procedures used by the Company or any Subsidiary of the
Company;
-15-
(ii) promptly after the Company becomes aware of the commencement
thereof, notice of all actions, suits and proceedings against the
Company or any Subsidiary of the Company before any Tribunal
which are not fully covered by insurance without the
applicability of any coinsurance provisions or which have not
been bonded and in which either (a) the amount in controversy
exceeds THREE MILLION AND NO/100 DOLLARS ($3,000,000.00) for any
single proceeding or FIVE MILLION AND N0/100 DOLLARS
($5,000,000.00) in the aggregate or (b) the results thereof may
have a Material Adverse Effect;
(iii) promptly after becoming aware of a claim by any Person that
the Company or any Subsidiary of the Company is in default under
any agreement entered into in connection with the borrowing of
money in excess of ONE MILLION AND NO/100 DOLLARS
($1,000,000.00), notice of any such claim or default;
(iv) notice of any material adverse change in the conduct of the
business operations or financial condition of the Company, any
Subsidiary of the Company, or any Company Limited Partnership
taken as a whole promptly upon the Company, any Subsidiary of the
Company or any Company Limited Partnership becoming aware of any
such change;
(v) notice of any Release or any danger of a Release resulting
from a condition which exists on any Facility which could form a
basis for a claim pursuant to Environmental Laws or of any
notification having been filed with regard to a Release on or
into any Facility under any Environmental Laws but only if the
foregoing may result in a material decrease in the value of such
Facility and such notice shall indicate the steps the Company has
or will take to remediate all hazardous environmental conditions
and the reserves it has or expects to establish in its Financial
Statements for such purposes;
(vi) notice of any Facilities which have not provided the Company
with financial and operating reports for a period of ninety (90)
days from the date specified for the delivery thereof promptly
upon the passage of such ninetieth day; and
(vii) promptly after the request of the Bank, a description of
any Indebtedness referred to in Section 8.1(d).
(h) The Company shall provide the Bank, as soon as possible, but
in any event not later than one hundred (100) days after the end of each fiscal
year of the Company, a certificate of a duly authorized officer of the Company
stating that the Company qualified as a REIT under Sections 856 through 860 of
the Code (or any successor provisions thereto)
-16-
for such fiscal year and that it is in a position to qualify as such REIT for
its current fiscal year.
(i) The Company shall also provide the Bank with such other
information relating to the Company, the Operating Company or any Subsidiary of
the Company or the Operating Company (including, without limitation, any Plan)
as the Bank may from time to time reasonably request.
(j) To the extent the Bank is obligated to do so by applicable
Law, it may deliver to any Tribunal having jurisdiction over it, copies of the
reports and other information provided by the Company to the Bank pursuant to
this Section 6.1.
(k) The Company shall notify the Bank immediately upon the
amendment or modification of the Fleet Bank Credit Facility and the Bank shall
have a period of five (5) Business Days in which to determine whether or not
they wish to make a corresponding amendment or modification to this Agreement.
(1) As soon as available, but in no event later than thirty (30)
days following the consummation of the Santa Xxxxx Merger, the Company shall
provide the Bank the following documents, agreements, reports and other
information with respect to the Santa Xxxxx Merger:
(i) True and correct copies of any and all material documents,
agreements and instruments executed and delivered in connection
with the Santa Xxxxx Merger, together with all schedules and
exhibits thereto, certified as true, correct and complete by an
officer of the Company;
(ii) A pro forma Combined balance sheet for the Company and the
Operating Company reflecting the consummation of the Santa Xxxxx
Merger; and
(iii) Such other information as the Bank may reasonably request
relating to the Santa Xxxxx Merger.
Section 7.2 Appraisals. The Company shall, from time to time and upon
the request of the Bank, deliver a Qualified Appraisal with respect to each
Facility included in the Borrowing Base and, notwithstanding the foregoing, the
Bank may, at the Company's expense, obtain an updated Qualified Appraisal with
respect to any Facility included in the Borrowing Base; provided, however, that,
unless an Event of Default has occurred and is continuing beyond any applicable
grace or cure period, the Company shall not have to pay for a new or updated
Qualified Appraisal for which the existing appraisal is less than eighteen (18)
months old or expend more than FIFTY THOUSAND ($50,000.00) in any twelve (12)
month period in respect of appraisals.
-17-
Section 7.3 Maintenance of Property.
(a) The Company covenants, on behalf of itself and each of its
Subsidiaries, to keep and maintain, or to use all reasonable legal remedies to
cause the Operator of each Facility to keep and maintain, all of their
respective material property in good repair, working order and condition
reasonable wear and tear excepted, and from time to time to make, or use all
reasonable legal remedies to cause to be made, all proper repairs, renewals or
replacements, betterments and improvements thereto so that the business carried
on in connection therewith may be properly and advantageously conducted at all
times.
(b) The Company covenants, on behalf of itself and each of its
Subsidiaries, to procure and maintain, or use all reasonable legal remedies to
cause the Operator of each Facility to procure and maintain, (i) all necessary
licenses and permits and (ii) if operating hospital facilities, all
accreditations or health care facilities accredited, as appropriate, by the
Accreditation Association for Ambulatory Care and the Joint Commission on
Accreditation of Healthcare Organizations (or any successors thereto).
(c) The Company, on behalf of itself and each of its Subsidiaries,
covenants to (i) keep all of its respective insurable properties insured, or to
use all reasonable legal remedies to cause the Operator of each Facility to keep
such property insured, against loss or damage by theft, fire, smoke, sprinklers,
riot and explosion, such insurance (the "Insurance") to be in such form, in such
amounts and against such other risks and hazards as are customarily maintained
by other Persons operating similar business and having similar properties in the
same general areas in which the Company or its Subsidiaries presently own
Facilities, including but not limited to liability coverage; (ii) with respect
to Facilities operated pursuant to Leases or Mortgages in effect on the date of
this Agreement, to use all reasonable legal remedies to cause the Operators of
such Facilities to place the Insurance on each such Facility with an insurer
which is financially sound and reputable, and (iii) with respect to any Facility
operated pursuant to a Lease or Mortgage entered into after the date of this
Agreement, to include in such Lease or Mortgage contractual provisions requiring
the Operator thereunder to at all times have Insurance in effect with respect to
such Facility, carried by an insurer which is financially sound and reputable,
and the Company covenants to use all reasonable legal remedies to enforce such
contractual provisions. The Company further covenants, on behalf of itself and
each of its Subsidiaries, that it shall require, or use its best efforts to
cause the Operator of each Facility to require, that the insurer with respect to
each such Insurance policy provide for thirty (30) days' advance written notice
to the Company of any cancellation or termination of, or other change of any
nature whatsoever in, the coverage provided under any such policy.
Section 7.4 Maintenance of Existence. (a) The Company shall preserve
and maintain (i) its qualifications as a REIT under Sections 856 through 860 of
the Code (and any successor provisions thereto) and (ii) the applicability to
the Company and its shareholders of the method of taxation provided for in
Section 857(b) of the Code (and any successor provision thereto).
-18-
(b) Prior to the effective date of the Santa Xxxxx Merger, Meditrust
shall preserve and maintain its existence as a Massachusetts business trust and
all of its rights, franchises and privileges as a business trust and shall cause
each of its Subsidiaries to preserve and maintain its existence as a corporation
or partnership in the state in which it is incorporated or organized and all of
its rights, franchises and privileges as a corporation or partnership. After the
Santa Xxxxx Merger, the Company shall preserve and maintain its existence as a
Delaware corporation and all of its rights, franchises and privileges as a
Delaware corporation and shall cause each of its Subsidiaries to preserve and
maintain its existence as a corporation or partnership in the state in which it
is incorporated or organized and all of its rights, franchises and privileges as
a corporation or partnership. Notwithstanding the foregoing provisions of this
subsection (b), (i) the Company may change its existence with the prior written
consent of the Bank, which consent shall not be unreasonably withheld,
conditioned or delayed, if such change does not, in the reasonable opinion of
the Bank and its counsel, have a Material Adverse Effect, (ii) any Subsidiary or
Controlled Limited Partnership may be dissolved if it no longer possesses any
assets and (iii) Meditrust may, subject to the conditions set forth in Section 6
of this Agreement, participate in the Santa Xxxxx Merger and make any change to
its existence required by such merger.
Section 7.5 Taxes and Other Assessments. The Company shall pay and
discharge, and maintain adequate reserves for the payment and discharge of, all
taxes, assessments, government charges or levies, or claims for labor, supplies,
rent or other obligations made against it or its properties and assets which, if
unpaid, might become a Lien against the Company, any Subsidiaries of the Company
or their properties and assets, except liabilities which are being contested in
good faith in appropriate proceedings or with respect to which the Company has
made adequate provision or established adequate reserves, except that the
Company shall pay all such taxes, assessments, government charges, levies or
claims forthwith upon the commencement of proceedings to foreclose any Lien that
may have attached as security therefor.
Section 7.6 Inspection. The Company shall permit the Bank or any of its
officers, agents, attorneys or accountants, at its expense and at any time
during normal business hours and upon reasonable prior notice (or if an Event of
Default shall have occurred and is continuing, at any time and without prior
notice), to (i) examine and take abstracts from the books and records of the
Company and any Subsidiary of the Company; and (ii) discuss the affairs,
finances and business operations of the Company and any Subsidiary of the
Company with its and their appropriate officers, employees and accountants;
provided, however, that the right of inspection under this Section 7.6. is
subject to the contractual provisions contained in the Leases and Mortgages and
the legal rights of patients in Facilities.
Section 7.7 Notices of Default. Upon becoming aware of the occurrence
of any Default or Event of Default the Company shall promptly notify the Bank
thereof in writing.
Section 7.8 Maintenance of Books and Records. The Company and its
Subsidiaries shall keep adequate books and records of account, in which true and
complete entries will be
-19-
made reflecting all of their business and financial transactions, and such
entries will be made in accordance with GAAP including the maintenance of
adequate reserves for depreciation of property, if such reserves are required by
GAAP.
Section 7.9 Maintenance of Permits. The Company and its Subsidiaries
shall obtain and/or maintain in full force and effect all material permits,
authorizations, licenses, approvals, waivers and consents which they presently
possess and are advisable to maintain or which may become necessary in the
future to conduct their business operations.
Section 7.10 Use of Proceeds. The Company will use the proceeds of the
Loans solely for the purposes set forth in Section 2.1.2. hereof.
Section 7.11 Change of Offices. The Company shall give the Bank prompt
written notice of any change or relocation of its chief executive office.
Section 7.12 Compliance with Laws. (a) The Company and its Subsidiaries
will, or will use all reasonable legal remedies to cause the Operators of each
of the Facilities to, comply in all material respects with all Legal
Requirements applicable to such Operators or to the Company or any Subsidiary of
the Company as owner or mortgagee of health care facilities, such compliance to
include, without limitation, compliance with all applicable Laws pertaining to
the operation of health care facilities of the types owned by the Company or its
Subsidiaries, paying before the same become delinquent all taxes, assessments
and governmental charges or levies imposed upon it or upon its income or profits
or its properties, and paying all its properties, except to the extent contested
in good faith by proper proceedings which stay the imposition of any penalty,
fine or Lien resulting from the nonpayment thereof and with respect thereof, and
except to the extent that payment of such items or compliance with the relevant
Legal Requirements is the responsibility of the Operator of the Facility, where
the Company or any of its Subsidiaries is using all reasonable legal remedies to
enforce its rights against such operator and to obtain compliance by such
Operator with the relevant Legal Requirements, and except where the nonpayment
or noncompliance would not have a Material Adverse Effect.
Section 7.13 Compliance with Environmental Laws.
(a) The Company shall promptly advise the Bank in writing and in
reasonable detail of (i) any Release of any Hazardous Material required to be
reported to any Tribunal under any applicable Environmental Laws which would
have a Material Adverse Effect or result in a material decrease in the value of
a Facility; (ii) any and all written communications received by the Company or
any of its Subsidiaries with respect to claims or suits under such Environmental
Laws or any Release of Hazardous Materials required to be reported to any
Tribunal which would have a Material Adverse Effect or result in a material
decrease in the value of a Facility; or (iii) any remedial action taken by the
Company or any of its Subsidiaries, each Operator or any other Person in
response to any Hazardous Materials on, under or about the properties or assets
of the Company or any of its
-20-
Subsidiaries or any Facility, the existence of which could give rise to a claim
or suit which would have a Material Adverse Effect, result in a material adverse
change of any Operator's business operations or financial condition or result in
a material decrease in the value of a Facility.
(b) The Company shall, and shall use all reasonable efforts to insure
that each of its Subsidiaries, each Facility and each Operator, comply in all
material respects with all Environmental Laws and establish and maintain
policies and procedures to ensure and monitor continued compliance with all
Environmental Laws. The Company shall, and shall use all reasonable efforts to
insure that each of its Subsidiaries, Facilities and Operators, to the extent
required by any Environmental Law, promptly take any and all necessary remedial
action in connection with the presence, storage, use, disposal, transportation
or Release of any Hazardous Materials on, under or about its business premises
or any Facility.
Section 7.14 Business of the Company. Prior to the effective date of
the Santa Xxxxx Merger, the Company, on a consolidated basis, will continue to
operate the same primary business as those in which it currently operates (i.e.,
investing in and financing Facilities and Mortgages). After the effective date
of the Santa Xxxxx Merger, the Company, on a consolidated basis, will continue
to operate so that, at any time, no less than seventy-five percent (75%) of its
total assets and seventy-five percent (75%) of its revenues relate directly to
(1) the primary business in which Meditrust was engaged as of the effective date
of the Santa Xxxxx Merger or (2) those particular business ventures in which
Santa Xxxxx Realty Enterprises, Inc. was engaged as of the effective date of the
Santa Xxxxx Merger.
Section 7.15 Ranking of Loan. The obligations of the Company to the
Bank under this Agreement and the Note shall rank at least equal in seniority
and priority with all other Unsecured indebtedness of the Company and, in the
event that any of such other Indebtedness shall be secured, the obligations to
the Bank hereunder shall be secured likewise so as to continue to rank at least
equal in seniority and priority with such other secured Indebtedness.
Section 7.16 Intercompany Indebtedness. All Indebtedness of the
Operating Company or any Subsidiary of the Company or the Operating Company to
the Company or any Subsidiary of the Company and all Indebtedness of the Company
to the Operating Company or any Subsidiary of the Company or the Operating
Company shall be evidenced by an intercompany promissory note executed within 30
days after the incurrence of such Indebtedness. All Indebtedness of any
Subsidiary of the Company which relates to any Investment shall be subject to
terms and conditions, including rates of interest and terms of repayment, which
are substantially similar to the terms and conditions of the underlying
Investment in all material respects.
-21-
Section 8 NEGATIVE COVENANTS
The Company covenants and agrees that from the date hereof until the
payment and performance in full of the Obligations, unless the Bank otherwise
consents in writing:
Section 8.1 Limitation on Indebtedness. Neither the Company nor any of
its Subsidiaries shall create, incur or assume any Indebtedness other than the
following ("Permitted Indebtedness"):
(a) Indebtedness of the Company or any of its Subsidiaries to the
Bank or any Bank Affiliates;
(b) Indebtedness existing as of the date of this Agreement and
disclosed on Schedule 8.1 hereto or in the Financial Statements referred to in
Section 3.8. hereof;
(c) Indebtedness under the Fleet Bank Credit Facility; and
(d) Indebtedness of the Company which satisfies the following
conditions:
(1) the additional Indebtedness must conform in all material
respect with the restrictions contained in Section 8.2. hereof
regarding additional Liens;
(2) the terms and provisions of the instrument or instruments
controlling the covenants, events of default and acceleration of
maturity provisions of such additional Indebtedness may not be
less favorable to the Company than the comparable terms and
provisions set forth in this Agreement; provided, however, that
the Company or its Subsidiaries may incur additional Indebtedness
which does not exceed FIFTY MILLION AND NO/100 DOLLARS
($50,000,000.00) in the aggregate at any one time outstanding,
plus the amount outstanding pursuant to Section 8.1(f), on terms
and provisions which are less favorable to the Company than the
comparable terms and provisions hereof;
(3) the additional Indebtedness and the instrument or instruments
controlling the creation, assumption or issuance thereof shall
satisfy the requirements of Section 7.15. hereof;
(4) any additional Indebtedness otherwise permitted by this
Section 8.1. shall not affect the Company's obligation to prepay
outstanding Loans pursuant to Section 2.1.11 hereof; and
(5) the proceeds of such additional Indebtedness shall be used to
prepay outstanding Loans as required by said Section 2.1.11; and
-22-
(e) Indebtedness of any Subsidiary of the Company to the Company
the proceeds of which are used to fund Investments in the ordinary course of the
business of the Company; and
(f) Indebtedness relating to $3,475,000 Manatee County, Florida
First Mortgage Revenue Refunding Bonds, Series 1995 (Meditrust Project) or any
refinancing thereof in an amount not to exceed THREE MILLION FIVE HUNDRED
THOUSAND AND NO/100 DOLLARS ($3,500,000.00) and Northwood Nursing Home, Bedford,
New Hampshire, CFHA Project No. 024-43039-PM or any refinancing thereof in an
amount not to exceed SEVEN MILLION FIVE HUNDRED THOUSAND AND NO/100 DOLLARS
($7,500,000.00).
Section 8.2 Negative Pledge/Encumbrances. Neither the Company nor any
of its Subsidiaries shall create, incur, assume or suffer to exist any Lien on
any of its properties and assets, or assign or otherwise convey any right to
receive income with respect to, any of its properties and assets except the
following ("Permitted Liens"):
(a) Liens for taxes, assessments and governmental charges not yet
due and payable or which are being actively contested in good faith by
appropriate proceedings or for which adequate reserves have been established in
accordance with GAAP,
(b) other Liens incidental to the conduct of the Company's or any
Subsidiary's business or the ownership of its property and assets which were not
incurred in connection with the borrowing of money or the obtaining of advances
or credit, and which do not in the aggregate materially detract from the value
of its property or assets or materially impair the use thereof in the operation
of its business,
(c) existing Liens securing Indebtedness of the Company or any
its Subsidiaries that is outstanding on the Closing Date and set forth in
Schedule 8.1. attached hereto or as otherwise described in the Financial
Statements (including, for this purpose, any substitute Lien required to be
created to secure such Indebtedness where (i) either the existing Lien was
released to enable the Company or any such Subsidiary to comply with the option
provisions under a Facility Lease, which permits the lessee thereunder to
purchase the Facility covered by such Lease, or the substitution provisions
under a Facility Lease, which permit the lessee of such Facility to substitute
one property for another under the relevant Lease, and (ii) a Qualified
Appraisal has been obtained which shows that the property covered by such
substitute Lien is of equivalent value to the property it has replaced, and
(iii) the Board of Trustees or Board of Directors of the Company has made a good
faith determination that the property subject to such substitute Lien is of
equivalent value to the property it has replaced, and (iv) the failure to create
such Lien would create a default under the terms of the instrument governing
such Indebtedness); provided, that neither the Company nor any of its
Subsidiaries may create, assume, incur or suffer to exist any Lien upon any of
its property or assets to secure any Indebtedness set forth in Schedule 8.1. or
as
-23-
is otherwise described in the Financial Statements that is hereafter renewed,
refunded, extended or refinanced,
(d) Liens incurred in connection with the borrowing of money not
otherwise permitted provided that immediately after creation of such Lien, the
total amount of Indebtedness secured by Liens permitted by this Agreement will
not exceed 15% of the shareholders, equity in the Company; provided, further,
that (A) nothing in this subsection (d) shall be deemed to permit any
transaction which would otherwise be prohibited by this Agreement and (B)
shareholders' equity shall, for the purpose of all calculations thereof under
this subsection (d) only, be reduced by the amount by which the Company's
intangible assets exceed five percent (5%) of shareholders' equity,
(e) Liens (other than those permitted by subsections (a)
through (d) of this Section 8.2.) securing Indebtedness in an aggregate
principal amount at any time outstanding not exceeding ONE HUNDRED THOUSAND AND
NO/100 DOLLARS ($100,000.00) for the Company and its Subsidiaries taken as a
whole, and
(f) Liens on property of the Company or any of its Subsidiaries
other than those permitted by subsections (a) through (e) of this Section 8.2.,
provided that the Indebtedness incurred under this Agreement shall be equally
and ratably secured, on a pari passu and pro rata basis, with any and all
Indebtedness hereinafter incurred by the Company or any of its Subsidiaries and
secured by such Lien.
Section 8.3 Investments. Neither the Company nor any Subsidiary shall
make or permit to remain outstanding any loan or advance to, or own, purchase or
acquire any stock, obligations or securities of, or any other interest in, or
make any capital contribution to, any Person, except that the Company and any
Subsidiary may:
(a) invest in Permitted Investments and, to the extent permitted
by Section 8.6., Gross Real Estate Investments and, to the extent permitted by
Section 8.7., Construction Investments;
(b) make or permit to remain outstanding loans and advances to
any Subsidiary of the Company;
(c) own, purchase or acquire stock, obligations or securities of,
or any other interest in, a Subsidiary or another Person which immediately after
such purchase or acquisition will be a Subsidiary;
(d) acquire and own stock, obligations or securities, or other
interests, received in settlement of debts (created in the ordinary course of
business) owing to the Company or any Subsidiary, provided, that such stock,
obligations, securities or other interests shall be carried on the books of the
Company at the lesser of book value or fair market value, such valuation to be
as determined by the board of trustees or board of
-24-
directors of the Company in good faith, in the case of any debt in an aggregate
principal amount equal to or exceeding ONE MILLION AND NO/100 DOLLARS
($1,000,000.00);
(e) make or permit to remain outstanding travel and other like
advances to officers and employees in the ordinary course of business;
(f) own, purchase or acquire stock, obligations or securities of
any Person, including, without limitation, making mortgage loans, entering into
sale and leaseback transactions not otherwise prohibited by this Agreement, or
investing in partnerships, to the extent that any such investments are in the
ordinary course of business and not prohibited by Meditrust's Declaration of
Trust or the Company's Certificate of Incorporation, as the same may from time
to time be amended;
(g) own, purchase or acquire stock, obligations or securities of
any REIT; provided, however, that the Company shall not purchase or acquire
stock, obligations or securities of any REIT which, when aggregated with all
other existing REIT investments of the Company, exceeds five percent (5%) of the
Company's total assets as defined by GAAP;
(h) following the effective date of the Santa Xxxxx Merger, and
in addition to the amount of the "Operating Note" referred to in the Merger
Agreement executed in connection with the Santa Xxxxx Merger, make equity
investments in, and loans and advances to the Operating Company in an aggregate
amount not to exceed TWO MILLION FIVE HUNDRED THOUSAND AND NO/100 DOLLARS
($2,500,000.00);
(i) make acquisitions of capital stock of Santa Xxxxx Realty
Enterprises, Inc. and Santa Xxxxx Operating Company in connection with the Santa
Xxxxx Merger; and
(j) in addition to transactions permitted pursuant to Section
8.3(h), make or permit to remain outstanding loans to the Operating Company, the
proceeds of which are to be used by such Operating Company solely for Permitted
Operating Company Acquisitions; provided that (1) the Company has maintained and
will maintain after the acquisition a Rating no lower than BBB/Baa3 or has
received the written consent of the Bank and (2) the Company has provided the
Bank, as soon as possible but in no event later than five (5) business days
prior to the effective date of such acquisition, with a pro forma Combined
Financial Statement showing that the Company will be in compliance with all of
the covenants contained in Section 9 hereof after the completion of such
acquisition.
Section 8.4 ERISA. Neither the Company nor any member of the Controlled
Group shall terminate any Plan so as to result in any material liability to the
Company or any Subsidiary to the PBGC or permit to exist any occurrence of any
"reportable event" (as defined in Title IV of ERISA), or any other event or
condition, which presents a material risk of such a termination by the PBGC of
any Plan.
Section 8.5 Fiscal Year. The Company shall not change its fiscal year
end.
-25-
Section 8.6 Gross Real Estate Investments. The Company and its
Subsidiaries shall not have Gross Real Estate Investments relating to a single
Operator which exceed, in the aggregate, thirty percent (30%) of the Company's
and its Subsidiaries' Gross Real Estate Investments.
Section 8.7 Construction Investments. The Company and its Subsidiaries
shall not permit the Construction Investments of the Company and its
Subsidiaries to exceed twenty-five percent (25%) of Gross Real Estate
Investments. In addition, neither the Company nor any Subsidiary shall make a
Construction Investment for a Facility unless (i) there is included in the terms
thereof an agreement for the conversion of the Company's or such Subsidiary's
interests in the Facility upon the completion thereof into full ownership, a
mortgage interest or majority partnership interest and (ii), if a mortgage
interest, the Company or a Subsidiary of the Company shall receive or retain a
first Lien in such Facility and otherwise satisfy all Legal Requirements.
Section 8.6 Interest Rate Protection. The Company shall not permit more
than twenty-five percent (25%) of its consolidated Total Capital to bear
interest at other than fixed rates; provided, however, that if and to the extent
that any of such consolidated Total Capital is subject to an interest rate
protection agreement approved by the Bank (which approval shall not be
unreasonably withheld, conditioned or delayed), such consolidated Total Capital
shall be deemed to bear interest at a fixed rate.
Section 8.9 Dividends. The Company shall not pay or declare any
Dividend on any of its shares of beneficial interest or stock or make any other
distribution on account thereof, or redeem or otherwise acquire, directly or
indirectly, any of its shares of beneficial interest if such action by the
Company would constitute an Event of Default or Default, or an event of default
or default under any other material agreement to which Meditrust is a party.
This Section 8.9. shall not apply to the payment or distribution made in the
form of shares of beneficial interest or stock of the Company or Meditrust
Acquisition Company or to the redemption of shares of common stock of Santa
Xxxxx Realty Enterprises, Inc. and Santa Xxxxx Operating Company.
Section 8.10 Amendment of Declaration of Trust or Charter Documents.
The Company shall not amend its Declaration of Trust, Certificate of
Incorporation or other charter document except if (a) such amendment is required
by applicable law, (b) the Bank consents to such amendment, which consent shall
not be unreasonably withheld or (c) such amendment is required by the Santa
Xxxxx Merger. In the event of any such amendment, the Company shall promptly
forward copies thereof to the Bank.
Section 8.11 Future Leases. Neither the Company nor any Subsidiary
shall become a party to any Lease after the Closing Date except for a Lease
where the obligations of the lessee to make payments under such Lease cover
fully the Company's or such Subsidiary's obligations to make principal, interest
and other payments on the Indebtedness relating to the
-26-
Facility which is the subject of such Lease, if any, including, without
limitation, all interest rate adjustments or escalations, prepayment penalties
and similar payments.
Section 8.12 Leases. Neither the Company nor any of its Subsidiaries
shall create or suffer to exist any obligations for the payment of rent by the
Company or such Subsidiary for any property under leases (other than capitalized
lease obligations included as Indebtedness of the Company or such Subsidiary)
except for the following:
(i) ground leases for Facilities existing on the Closing Date;
(ii) ground leases for terms no less than ten (10) years in
connection with sale/leaseback transactions of Facilities;
(iii) office leases in the ordinary course of business; and
(iv) office equipment and automobile leases in the ordinary
course of business.
Section 8.13 Prohibited Transactions. Neither the Company nor any of
its Subsidiaries shall engage in any prohibited transactions as such term is
defined in Section 857(b)(6) of the Code (except that the Company or a
Subsidiary may sell, transfer or otherwise dispose of a Facility within four (4)
years after the acquisition thereof so long as (i) such disposition, including
the excise taxes attributable thereto, will not have a Material Adverse Effect
and (ii) the trustees or board of directors of the Company have theretofore made
a good-faith determination that such disposition is in the best interests of the
Company, nor shall the Company or a Subsidiary incur any material liability for
excise taxes pursuant to Section 4981 of the Code.
Section 8.14 Mergers. Without the prior written consent of the Bank,
neither the Company nor any of its Subsidiaries shall merge or consolidate with,
or sell, assign, lease or otherwise dispose of (whether in one transaction or a
series of transactions) all or substantially all of its properties and assets
(whether now owned or hereafter acquired) to any Person, except that (i) any
Subsidiary may dispose of its properties and assets (subject to the limitations
of Section 8.13. hereof) to the Company or any Subsidiary, (ii) any Subsidiary
may dispose of its properties and assets to any Person other than the Company or
any Subsidiary if the proceeds of such disposition are applied in accordance
with the provisions of Section 2.1.11; (iii) notwithstanding Sections 8.16. and
8.17. to the contrary, the Company or a Subsidiary may merge or consolidate with
any other Person if in such transaction the Company or the Subsidiary is the
surviving entity; and (iv) notwithstanding Sections 8.17 and 8.18 to the
contrary and subject to the conditions set forth in Section 6 hereof, Meditrust
or a Subsidiary may merge in connection with the Santa Xxxxx Merger.
Section 8.15 Change in Business. Until the effective date of the Santa
Xxxxx Merger, the Company shall not make any material change in the nature of
its business as
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conducted as of the Closing Date. After the effective date of the Santa Xxxxx
Merger, the Company, on a consolidated basis, shall continue to operate so that,
at any time, no less than seventy-five percent (75%) of its total assets and
seventy-five percent (75%) of its revenues relate directly to the primary
business in which the Company was engaged as of the effective date of the Santa
Xxxxx Merger.
Section 8.16 Issuance of Stock by Subsidiaries. The Company shall not
permit any Subsidiary to issue, sell or dispose of any shares of its stock of
any class (including any warrants, rights or options to purchase or otherwise
acquire stock or other securities exchangeable for or convertible into stock) or
any of its partnership or other equity interests, except to the Company or any
wholly-owned Subsidiary, and except (i) for the purpose of qualifying directors
and (ii) to the extent that holders of minority interests may be entitled to
purchase stock by reason of validly pre-existing preemptive rights.
Section 8.17 Sale of Stock and Indebtedness. The Company shall not sell
or otherwise dispose of, or part with control of, any shares of stock or
Indebtedness of any Subsidiary, except to another Subsidiary, and except that
all shares of stock and Indebtedness of any Subsidiary at the time owned by or
owed to the Company and any Subsidiaries may be sold as an entirety for a cash
consideration which represents the fair value (as determined in good faith by
the trustees or board of directors of the Company) at the time of sale of the
shares of stock and such Indebtedness; provided, that the assets of such
Subsidiary do not constitute, when aggregated with all sales during the four (4)
most recently completed fiscal quarters, ten percent (10%) of the Company's
consolidated total assets (as defined by GAAP) or ten percent (10%) of the
Company's Operating Cash Flow; and provided further, that at the time of such
sale, such Subsidiary shall not own, directly or indirectly, any shares of stock
or Indebtedness of any other Subsidiary (unless all of the shares of stock and
Indebtedness of such other Subsidiary are being sold simultaneously as permitted
by this Section 8.17.).
Section 8.18 Transactions with Affiliates. Neither the Company nor any
Subsidiary shall directly or indirectly, purchase, acquire or lease any property
from, or sell, transfer or lease any property to, exchange any property with,
render any service to or otherwise deal with, (i) any Affiliate, (ii) any Person
owning, beneficially or of record, directly or indirectly, either individually
or together with all other Persons to whom such Person is related by blood,
adoption or marriage, equity securities of the Company aggregating ten percent
(10%) or more of the voting power of the Company or (iii) any Person related by
blood, adoption or marriage to any Person described or coming within the
provisions of clause (i) or (ii) of this Section 8.18., provided that the
Company may sell to or purchase (within the limitations of Section 8.18.) from
any such Person shares of equity securities of, or other interests in, the
Company; provided, however, that this Section shall not prohibit transactions
which are in the ordinary course of business of the Company or its Subsidiaries,
and which are made upon fair and reasonable terms no less favorable to the
Company or its Subsidiaries involved than could be obtained in a comparable
arm's-length transaction with a Person which is not an Affiliate.
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Section 8.19 Guarantees. Neither the Company nor any Subsidiary of the
Company shall Guaranty any Indebtedness of the Operating Company or any
Subsidiary of the Operating Company.
Section 9 FINANCIAL COVENANTS.
The Company covenants and agrees that from the date hereof, until the
payment and performance in full of the Obligations, unless the Bank otherwise
consents in writing:
Section 9.1 Combined Cash Flow Coverage. The Company shall not permit
the ratio of (x) its Combined Operating Cash Flow plus its Combined Interest
Expense to (y) its Combined Interest Expense to be less than 2.0 to 1.0 at the
end of each fiscal quarter. The Company's compliance with said ratio shall be
calculated on a year-to-date basis.
Section 9.2 Combined Modified Cash Flow Coverage. The Company shall not
permit the ratio of (x) its Combined Modified Operating Cash Flow plus its
Combined Interest Expense to (y) its Combined Interest Expense plus its Combined
Dividends plus its Combined Balloon Payments to be less than 1.0 to 1.0 at the
end of each fiscal quarter. The Company's compliance with said ratio shall be
calculated on a year-to-date basis.
Section 9.3 Combined Total Liabilities to Combined Tangible Net Worth.
The Company shall not permit the ratio of (x) its Combined Total Liabilities to
(y) its Combined Tangible Net Worth to be greater than 1.75 to 1.0 at any time.
Section 9.4 Combined Tangible Net Worth. The Company shall maintain a
Combined Tangible Net Worth at all times of at least ONE BILLION EIGHTY MILLION
AND NO/100 DOLLARS ($1,080,000,000.00) plus seventy-five percent (75%) of the
net amount received by the Company from the sale of equity securities, the
exercise of warrants and the conversion of debentures to equity after the
Closing Date plus seventy-five percent (75%) of any increase in the Company's
Combined Tangible Net Worth resulting from the Santa Xxxxx Merger.
Section 9.5 Establishment of Covenants. The Company acknowledges that
the foregoing covenants were established by the Company and the Bank on the
basis of financial information and forecasts provided to the Bank by the Company
in connection with the Bank's evaluation and underwriting of the Line of Credit
after leaving a margin in favor of the Company which the Company and the Bank
have mutually agreed is fair. Accordingly, the Company and the Bank have
mutually agreed that the Company's failure to comply with the express terms of
any financial covenant shall be deemed material for the purposes of this
Agreement.
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Section 10 DEFAULT
Section 10.1 Events of Default. The occurrence and continuance of any
of the following events after any applicable cure period shall constitute a
default under this Agreement, the Note and the Other Documents (an "Event of
Default"):
(a) the Company shall fail to pay when due and payable, whether
at the due date thereof, at a date fixed for prepayment thereof, by acceleration
thereof or otherwise, (i) any outstanding principal amount of any Loan; (ii) any
amount of accrued and unpaid interest thereon; or (iii) any fees, expenses or
other amounts payable under this Agreement, the Note or the Other Documents and,
in the case of clauses (ii) and (iii) above, such default shall continue
unremedied for (5) Business Days from the date specified for payment; or
(b) the Company shall fail to perform any term, covenant or
agreement contained in Section 8 of this Agreement; or
(c) the Company shall fail to perform any other term, covenant or
agreement contained in this Agreement (other than in respect of terms, covenants
or agreements covered elsewhere in this Section 10) and such nonperformance
shall continue unremedied for thirty (30) days after written notice of such
nonperformance shall have been received or deemed received by the Company from
the Bank; or
(d) any written representation or warranty of the Company made in
or in connection with this Agreement, the Note or the Other Documents or in any
certificate or report or any other document or instrument delivered hereunder or
thereunder, shall prove to have been false in any material respect upon the date
when made or deemed to have been made; or
(e) any monetary default (unless duly waived in writing by the
obligee) shall occur with respect to any Unsecured Indebtedness of the Company
or the Operating Company or any Subsidiary of the Company or the Operating
Company in excess of FIVE MILLION AND NO/100 DOLLARS ($5,000,000.00) or any
amount of recourse secured Indebtedness of the Company or the Operating Company
or any Subsidiary of the Company or the Operating Company under any agreements
under which any Indebtedness may be issued by the Company or the Operating
Company or any Subsidiary of the Company or the Operating Company and such
default shall continue for more than the grace period, if specified therein,
after all required notices have been given, and any other default under such
agreements if the effect of such other default under such agreements is to
accelerate the maturity of such Indebtedness or to permit the holder thereof (or
any representative on behalf of such holder) to cause the same to become due
prior to its stated maturity or if any such Indebtedness shall not be paid when
due or accelerated and such default shall continue for more than the period of
grace, if any, therein specified, all required notices having been given or if
the Company, the Operating Company or the Subsidiary of the Company or the
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Operating Company fails to make payment within five (5) days after demand is
made for payment of any Indebtedness which is due on demand; or
(f) one or more final judgments or orders for the payment of
money which would have a Material Adverse Effect shall be rendered against the
Company or the Operating Company or any Subsidiary of the Company or the
Operating Company and either (i) enforcement proceedings shall have been
commenced by any creditor upon such judgment or order, or (ii) a stay of
enforcement of such judgment or order, by reason of a pending appeal or
otherwise, shall not be in effect for any period of ten (10) consecutive
Business Days; or
(g) The Company or the Operating Company, or any Subsidiary of
the Company or the Operating Company having assets which in the aggregate exceed
FIFTEEN MILLION AND NO/100 DOLLARS ($15,000,000.00) shall commence a voluntary
case or other proceeding seeking liquidation, reorganization or other relief
with respect to itself or its debts under any bankruptcy, insolvency or other
similar law now or hereafter in effect or seeking the appointment of a trustee,
receiver, liquidator, custodian or other similar official or it or any
substantial part of its property, or shall consent to any such relief or to the
appointment of or taking possession by any such official in an involuntary case
or other proceeding commenced against it, or shall make a general assignment for
the benefit of creditors or shall fail generally to pay its debts as they become
due, or shall take any action to authorize any of the foregoing; or,
(h) an involuntary case or other proceeding shall be commenced
against the Company or the Operating Company or any Subsidiary of the Company or
the Operating Company having assets which in the aggregate exceed FIFTEEN
MILLION AND NO/100 DOLLARS ($15,000,000.00) seeking liquidation, reorganization
or other relief with respect to it or its debts under any bankruptcy, insolvency
or other similar law now or hereafter in effect or seeking the appointment of a
trustee, receiver, liquidator, custodian or other similar official of it or any
substantial part of its property, or an order for relief shall be entered
against the Company or the Operating Company or any Subsidiary of the Company or
the Operating Company under the federal bankruptcy laws as now or hereafter in
effect and remain undischarged for ninety (90) days; or
(i) there shall have occurred and be continuing, thirty (30) days
after knowledge or notice thereof shall have been given to the Company by the
Bank, any event which would allow for the termination of any Plan and the then
current value of such Plan's benefits guaranteed under Title IV of ERISA exceeds
the then current fair market value of such Plan's assets allocable to such
benefits by more than ONE MILLION AND NO/100 DOLLARS ($1,000,000.00) (or in the
case of such a termination event involving the withdrawal of a substantial
employer, the withdrawing employer's proportionate share of such excess exceeds
such amount); or
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(j) the Company should fail to terminate the Commitment and
prepay the entire principal amount due and payable under this Agreement, the
Note and the Other Documents within forty-five (45) days after any sale,
transfer, assignment or other permanent disposition of an Operator that
represents more than twenty percent (20%) of Gross Real Estate Investments, such
percentage being based on the Company's most recent Borrowing Report and
quarterly Financial Statements; or
(k) the company should fail to terminate the Commitment and
prepay the entire principal amount due and payable under this Agreement, the
Note and the Other Documents within forty-five (45) days after the accumulation
of fifteen percent (15%) or more of the voting stock of the Company by a Person
or group of affiliated Persons; or
(l) the occurrence of an "event of default" (after giving effect
to any applicable grace period) under any of the Other Documents, as such term
is defined or used therein.
Section 10.2 Remedies. Upon the occurrence of an Event of Default, the
Bank may, in its sole discretion, by notice to the Company (i) terminate the
obligation of the Bank to make Revolving Loans and such obligation shall
thereupon terminate, and (ii) declare the Note (together with accrued interest
thereon) to be, and the Note shall thereupon become, immediately due and payable
without presentment, demand, protest or other notice of any kind, all of which
are hereby waived by the Company; provided that in the case of any of the Events
of Default specified in subsection (g) or (h) of Section 10.1 hereof with
respect to the Company, without any notice to the Company or any other act by
the Bank, the obligation of the Bank to make Revolving Loans shall thereupon
terminate and the Note (together with accrued interest thereon) shall become
immediately due and payable without presentment, demand, protest or other notice
of any kind, all of which are hereby waived by the Company. The rights and the
remedies herein provided shall be cumulative and not exclusive of any rights or
remedies provided by law, in equity or in the Other Documents.
Section 11 ASSIGNMENT
Section 11.1 Assignment.
(a) The Bank may assign to one or more Persons all or a portion
of its interests, rights and obligations under this Agreement (including all or
a portion of its Commitment and the same portion of the Loans at the time owing
to it); provided, however, that (i) the Company must give its prior written
consent to such assignment (which consent shall not be unreasonably withheld
although it shall be reasonable for consent to be withheld, among other reasons,
if the proposed assignment is to a competitor of the Company or if the Company,
in its reasonable discretion, believes that such assignment would increase its
costs under Section 2.4.4. or 12.6. hereof); (ii) each such assignment shall be
of a constant, and not a varying, percentage of all the Bank's interests, rights
and obligations under this
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Agreement; (iii) the amount of the Commitment and the Loans of the Bank subject
to each such assignment (determined as of the date of the Assignment and
Acceptance with respect to such assignment) shall not be less than FIFTEEN
MILLION AND NO/100 DOLLARS ($15,000,000.00); (iv) the parties to each such
assignment shall execute and deliver an assignment and acceptance in the form of
Exhibit H attached hereto (the "Assignment and Acceptance") and a processing and
recordation fee in the amount of THREE THOUSAND AND NO/100 DOLLARS ($3,000.00);
and (v) the assignee shall be a bank or financial institution of recognized
standing and in the business of making the types of loans contemplated in this
Agreement. Upon such execution, delivery, acceptance and recording pursuant to
Section 11.2. hereof, from and after the effective date specified in each
Assignment and Acceptance, which effective date shall be at least five (5)
Business Days after the execution thereof, (A) the assignee thereunder shall be
a party hereto and, to the extent of the interest assigned by such Assignment
and Acceptance, have the rights and obligations of a Bank under this Agreement
(including, without limitation, the benefit of the cost protection provisions)
to the same extent as if it were the Bank; and (B) the Bank shall, to the extent
of the interest assigned by such Assignment and Acceptance, be released from its
obligations under this Agreement (and, in the case of an Assignment and
Acceptance covering all or the remaining portion of the Bank's interests, rights
and obligations under this Agreement, the Bank shall cease to be a party hereto
but shall continue to be entitled to the benefits of any indemnity, waiver,
release or limitation of liability contained herein, as well as to any Fees
accrued for its account and not yet paid).
(b) By executing and delivering an Assignment and Acceptance, the
Bank thereunder and the assignee thereunder shall be deemed to confirm to and
agree with each other and the Company as follows: (i) the Bank warrants that it
is the legal and beneficial owner of the interest being assigned thereby free
and clear of any adverse claim and that its Commitment and the outstanding
balances of its Loans, in each case without giving effect to assignments thereof
which have not become effective, are as set forth in such Assignment and
Acceptance; (ii) except as set forth in subsection (i) above, the Bank makes no
representation or warranty and assumes no responsibility with respect to any
statements, warranties or representations made in or in connection with this
Agreement, or the execution, legality, validity, enforceability, genuineness,
sufficiency or value of this Agreement, the Note, the Other Documents or any
other agreement, document or instrument furnished pursuant hereto or thereto;
(iii) such assignee represents and warrants that it is legally authorized to
enter into such Assignment and Acceptance; (iv) such assignee confirms that it
has received a copy of this Agreement, together with copies of the most recent
Financial Statements delivered pursuant to Section 7.1. hereof and such other
documents and information as it has deemed appropriate to make its own credit
analysis and decision to enter into such Assignment and Acceptance; (v) such
assignee will independently and without reliance upon the Bank and based on such
documents and information as it shall deem appropriate at the time, continue to
make its own credit decisions in taking or not taking action under this
Agreement; (vi) such assignee appoints and authorizes the Bank to take such
action as agent on its behalf; and (vii) such assignee agrees that it will
perform in accordance with their terms all the obligations which by the terms of
this Agreement are required to be
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performed by it as the Bank to the extent of the interest assigned pursuant to
the Assignment and Acceptance.
Section 11.2 Maintenance of a Register. The Bank shall maintain at its
principal office a copy of each Assignment and Acceptance delivered to it and a
register for the recordation of the names and addresses of each assignee, and
the Commitment and the principal amount of the Loans owing to each assignee
pursuant to the terms hereof from time to time (the "Register"). The entries in
the Register shall be conclusive in the absence of manifest error and the
Company and the Bank may treat each person whose name is recorded in the
Register pursuant to the terms hereof as a Bank hereunder, to extent of the
interest assigned pursuant to the Assignment and Acceptance, for all purposes of
this Agreement. The Register shall be available for inspection by the Company at
any reasonable time and from time to time upon reasonable prior notice. Upon its
receipt of a duly completed Assignment and Acceptance and the written consent of
the Company to such assignment, the Bank shall (i) record the information
contained in the Assignment and Acceptance in the Register, and (ii) give prompt
notice thereof to the Company.
Section 11.3 Sale of Participations. The Bank may, without the consent
of the Company, sell participations to one or more banks, financial institutions
or other entities in all or a portion of its rights and obligations under this
Agreement (including all or a portion of its Commitment and the same portion of
the Loans owing to the Bank); provided, however, that (i) the Bank's obligations
under this Agreement shall remain unchanged; (ii) the Bank shall remain solely
responsible to the Company for the performance of such obligations; (iii) the
participating banks, financial institutions or other entities shall be entitled
to the benefit of the cost protection provisions contained in this Agreement to
the same extent as if they were the Bank although such participating banks may
not increase any costs which shall be payable by the Company; and (iv) the
Company shall continue to deal solely and directly with the Bank in connection
with the Bank's rights, interests and obligations under this Agreement, and the
Bank shall retain the sole right to enforce the obligations of the Company
relating to the Loans and to approve any amendment, modification or waiver of
any provision of this Agreement (other than amendments, modifications or waivers
decreasing any Fees payable hereunder or the amount of principal of or the rate
at which interest is payable on the Loans, extending any scheduled principal
payment date or date fixed for the payment of interest on the Loans or changing
or extending the Commitment).
Section 11.4 Disclosure of Information. The Bank or any participant
may, in connection with any assignment or participation or proposed assignment
or participation pursuant to this Section, disclose to the assignee or
participant, or proposed assignee or participant, any information relating to
the Company furnished to the Bank by or on behalf of the Company; provided,
however, that prior to any such disclosure of information designated by the
Company as confidential, each such assignee or participant or proposed assignee
or participant shall be advised of the confidential nature of such information.
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Section 11.5 Assignee or Participant Affiliated with the Company. If
any assignee Bank is an Affiliate of the Company, then any such assignee Bank
shall have no right to vote as a Bank hereunder or under any of the Other
Documents for purposes of granting consents or waivers or for purposes of
agreeing to amendments or other modifications to this Agreement or any of the
Other Documents, and the determination of the Bank shall, for all purposes of
this Agreement and the Other Documents, be made without regard to such assignee
Bank's interest in any of the Loans. If the Bank sells a participating interest
in any of the Loans to a participant, and such participant is the Company or an
Affiliate of the Company, then the determination of the Bank shall for all
purposes of this Agreement and the Other Documents be made without regard to the
interest of such participant.
Section 11.6 Miscellaneous Assignment Provisions. If any assignee Bank
is not incorporated under the laws of the United States of America or any state
thereof, it shall, prior to the date on which any interest or fees are payable
under this Agreement or any of the Other Documents for its account, deliver to
the Company and the Bank certification as to its exemption from deduction or
withholding of any United States federal income taxes. Anything contained in
this Section 11 to the contrary notwithstanding, any Bank (including an assignee
Bank) may at any time pledge all or any portion of its interest and rights under
this Agreement (including all or any portion of its Note) to any of the twelve
(12) Federal Reserve Banks organized under Section 4 of the Federal Reserve Act.
No such pledge or the enforcement thereof shall release the pledgor Bank from
its obligations under this Agreement or any of the Other Documents.
Section 11.7 No Assignment or Delegation by the Company. The Company
shall not assign or delegate any of its rights or duties under this Agreement,
and any attempted assignment by the Company shall be null and void and without
legal effect.
Section 12 MISCELLANEOUS
Section 12.1 Confidentiality. In handling any financial or business
information provided under this Agreement by the Company, the Bank and its
officers, agents, attorneys, accountants or designees shall exercise the same
degree of care that such Person exercises with respect to its own proprietary
information of the same types to maintain the confidentiality of any non-public
information thereby received except that disclosure of such information may be
made (i) to Bank Affiliates in connection with their present or prospective
business relations with the Company; (ii) with the prior consent of the Company,
to prospective assignees, transferees or purchasers of an interest in the
Obligations (which consent shall not be unreasonably withheld although it shall
be reasonable for the Company to withhold such consent if the prospective
assignee, transferee or purchaser is a competitor of the Company); (iii) as
required by any Law or order, subpoena, judicial order or similar order; and
(iv) as may be required in connection with the examination, audit or similar
investigation of the Bank.
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Section 12.2 Waivers.
Section 12.2.1 The Company waives presentment, demand, notice, protest,
notice of acceptance, notice of loans made, credit extended, collateral received
or delivered or other action taken in reliance hereon and all other demands and
notices of any description. With respect to the Obligations, the Company assents
to any extension or postponement of the time of payment or any other indulgence,
to any substitution, exchange or release of any collateral, to the addition or
release of any party or Person primarily or secondarily liable therefor, to the
acceptance of partial payments thereon and the settling, compromising or
adjusting of any of the foregoing, all in such manner and at such time or times
as the Bank may deem advisable in its sole and absolute discretion. The Bank
shall have no duty, other than to act in a commercially reasonable manner, as to
the collection or protection of collateral or any income thereon, as to the
preservation of rights or remedies against prior parties, or as to the
preservation of rights and remedies pertaining thereto beyond the safe custody
thereof. The Bank may exercise its rights and remedies with respect to any
collateral without resorting or regard to other collateral or sources of
reimbursement for liability. The Bank shall not be deemed to have waived any of
its rights and remedies with respect to the Obligations or any collateral unless
such waiver shall be in writing and signed by the Bank. No delay or omission on
the part of the Bank in exercising any right or remedy shall operate as a waiver
of such right or remedy or any other right or remedy. A waiver on any one
occasion shall not be construed as a bar to any subsequent enforcement by the
Bank. All rights and remedies of the Bank with respect to the Obligations or any
collateral shall be cumulative and may be exercised singularly or concurrently.
Section 12.2.2 THE COMPANY ACKNOWLEDGES THAT THE TRANSACTION OF WHICH
THIS AGREEMENT IS A PART IS A COMMERCIAL TRANSACTION AND HEREBY WAIVES ITS
RIGHTS TO NOTICE AND HEARING UNDER ANY APPLICABLE LAW WITH RESPECT TO ANY
PREJUDGMENT REMEDY WHICH THE BANK MAY DESIRE TO USE.
Section 12.2.3 THE COMPANY HEREBY WAIVES TRIAL BY JURY IN ANY COURT IN
ANY SUIT, ACTION OR PROCEEDING OR ANY MATTER ARISING IN CONNECTION WITH OR IN
ANY WAY RELATED TO THE TRANSACTION OF WHICH THIS AGREEMENT IS A PART AND/OR IN
THE ENFORCEMENT BY THE BANK OF ANY OF ITS RIGHTS AND REMEDIES HEREUNDER OR UNDER
APPLICABLE LAW. THE COMPANY ACKNOWLEDGES THAT IT MAKES THIS WAIVER KNOWINGLY,
VOLUNTARILY AND ONLY AFTER CONSIDERATION OF THE RAMIFICATIONS OF THIS WAIVER
WITH ITS ATTORNEY.
Section 12.2.4 In addition to (and without limitation of) any right of
setoff, bankers' lien or counterclaim that the Bank may have, the Bank shall be
entitled, at its option, to the fullest extent permitted by law, to setoff and
apply any and all balances and deposits (general or special, time or demand,
provisional or final) at any time held and all other indebtedness owing by such
Bank to or for the credit or account of the Company
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(whether or not such balances, deposits or other indebtedness are then due to
the Company) against any and all of the Obligations upon the failure of the
Company to pay when due any amount owing pursuant to this Agreement or the Note.
The Bank shall give the Company prompt notice of its exercise of any right under
this Section 12.2.4; provided, however, that any failure to give such notice
shall not affect the validity of any such action.
Section 12.2.5 The Company does hereby waive any claims, causes of
action, losses, damages or expenses, in tort, contract or otherwise which the
Company may have against the Bank, or any Bank Affiliate which has arisen out of
the relationship between it and the Bank or any Bank Affiliate which the Company
may have as of the Closing Date. The Company acknowledges that it makes this
waiver and release knowingly, voluntarily and only after considering the
ramifications of this waiver and release with its attorneys.
Section 12.3 Notices. All notices, requests, demands or other
communications required by this Agreement shall be made in writing and shall be
(i) personally delivered, (ii) transmitted by postage prepaid registered mail,
return receipt requested, (iii) transmitted by telex (with postage prepaid mail
confirmation), (iv) transmitted by telecopier or facsimile or (v) transmitted by
internationally recognized courier service with provision for receipt (with
charges prepaid) and unless otherwise specifically provided herein, shall be
deemed to have been duly given on the first to occur of (i) the date of delivery
if delivered personally, (ii) seven (7) days following posting if transmitted by
mail, (iii) the date of transmission with confirmed answer back if transmitted
by telex, or (iv) the date of receipt if transmitted by telecopier or by
internationally recognized courier service if addressed as follows or to such
other address as either party may designate in writing:
If to the Company:
Meditrust
000 Xxxxx Xxxxxx
Xxxxxxx, XX 00000
Attn: Xxxxx X. Xxxxxx, President
Telephone: (000) 000-0000
Telecopier: (000) 000-0000
with a copy to:
Xxxxxx, XxXxxxxxx & Fish, LLP
Xxx Xxxxxxxxxxxxx Xxxxx
Xxxxxx, XX 00000-0000
Attn: Xxxx X. Xxxxxx, Esq.
Telephone: (000) 000-0000
Telecopier: (000) 000-0000
If to the Bank:
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Via Banque
00, xxx Xxxxxx
00000 Xxxxx Cedex 02
FRANCE
Attn: Xxxxxxxx Prot, Sous-Directeur
Telephone: 011-33-1-49-26-26-26
Telecopier: 011-33-1-49-26-29-93
with a copy to:
Pavia & Harcourt
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxxxxx X. Xxxxxx, Esq.
Telephone: (000) 000-0000
Telecopier: (000) 000-0000
Section 12.4 Fees and Expenses. The Company will pay on demand all
reasonable out-of-pocket expenses incurred by the Bank in connection with (i)
any amendment or modification of this Agreement or the Other Documents requested
by the Company; (ii) any prepayment, refinancing or other restructuring of this
Agreement; (iii) any Qualified Appraisal subject to the provisions of Section
7.2. hereof and (iv) the Bank's exercise, preservation or enforcement of any of
its rights and remedies under this Agreement and the Other Documents from and
after the occurrence of a Default or Event of Default, including, without
limitation, reasonable fees and expenses of outside legal counsel, accounting,
appraisal, auditing, consulting, or other similar professional fees or expenses,
and the amount of all such expenses shall, until paid, bear interest at the rate
applicable to principal hereunder (including any default rate).
Section 12.5 Term of Agreement. This Agreement shall continue in force
and effect so long as the Bank has any commitment to make Revolving Loans
hereunder or any of the Obligations shall be outstanding.
Section 12.6 Taxes.
(a) All payments made by the Company on account of this Agreement
shall be made free and clear of, and without deduction for or on account of, any
present or future stamp or other taxes, levies, imposts, duties, charges, fees,
deductions, withholdings, restrictions or conditions of any nature whatsoever
now or hereafter imposed, levied, collected, withheld or assessed by the United
States of America (or by any political subdivision or taxing authority thereof
or therein), excluding income, excise and franchise taxes now or hereafter
imposed by the United States of America or any political subdivision or taxing
authority thereof or therein (such nonexcluded taxes being called "Taxes"). If
any Taxes are required to be withheld from any amounts payable to the Bank
pursuant to this
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Agreement or the Other Documents, then the amounts so payable to the Bank shall
be increased to the extent necessary to yield to the Bank (after payment of all
Taxes) interest or any such other amounts payable hereunder at the rates or in
the amounts specified herein. Whenever any Tax is payable by the Company, as
promptly as possible thereafter, the Company shall send the Bank an original
official receipt showing payment thereof. The Company shall indemnify the Bank
for any incremental taxes, interest or penalties that may become payable by it
as a consequence of the failure of the Company to pay any Taxes or the failure
of the Company to deliver to the Bank an original official receipt therefor.
(b) The Company shall indemnify the Bank for and hold the Bank
harmless from any present or future claim of liability for any registration
charge or any stamp, excise or similar taxes, including any interest
equalization tax, and any penalties or interest with respect thereto, that may
be imposed by any jurisdiction in connection with this Agreement.
Section 12.7 Schedules and Exhibits. The Schedules and Exhibits which
are attached hereto are and shall constitute a part of this Agreement.
Section 12.8 Governing Law; Consent to Jurisdiction. This Agreement,
the Note and the Other Documents, and the rights and obligations of the parties
hereunder and thereunder, shall be governed by and construed and interpreted in
accordance with, the laws of the State of New York (or, if any portion of any
collateral is located in another state, by the laws of such state to the extent
necessary for the enforcement of the Bank's remedies under this Agreement). The
Company agrees that any suit for the enforcement of this Agreement, the Note or
the Other Documents may be brought in the courts of the State of New York or any
federal court sitting in the Borough of Manhattan in the City and State of New
York and consents to the non-exclusive jurisdiction of such court and to service
of process in any such suit being made upon the Company by mail at the address
referred to in Section 12.3. hereof.
Section 12.9 Survival of Representations. All representations,
warranties, covenants and agreements contained in this Agreement, the Note or
the Other Documents shall survive the Closing Date, and continue in full force
and effect until all of the payment and the performance of the Obligations in
full.
Section 12.10 Amendments. No modification or amendment of this
Agreement, the Note or the Other Documents shall be effective unless same shall
be in writing and signed by the Company and the Bank.
Section 12.11 Counterparts. This Agreement may be signed in any number
of counterparts with the same effect as if the signatures hereto and thereto
were upon the same instrument.
Section 12.12 No Agency Relationship. The Bank is not the agent or
representative of the Company nor is the Company the agent or the representative
of the Bank and this
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Agreement shall not make the Bank liable to any third party, including, but not
limited to, the Company's existing shareholders, directors, officers, creditors
or any other party in interest.
Section 12.13 Severability. Any provision of this Agreement which is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof or affecting the validity or
enforceability of such provisions in any other jurisdiction.
Section 12.14 Headings. All article, section and subsection headings in
this Agreement, the Note and the Other Documents are included for convenience of
reference only and shall not constitute a part of this Agreement, the Note or
the Other Documents for any other purpose.
Section 12.15 Brokers. No broker or finder has brought about the
obtaining, making or closing of, and no broker's or finder's fees or commissions
will be payable by the Company or the Bank to any Person in connection with, the
transactions contemplated by this Agreement, and, except as to Fees due to the
Bank under this Agreement, each party hereunder shall indemnify and hold the
other harmless from and against any and all cost, claim, liability, damage or
expense (including but not limited to reasonable attorneys, fees) in connection
with any broker's or finder's fees or commissions claimed to be due hereunder as
a result of such indemnifying party's actions.
Section 12.16 Reinstatement. This Agreement shall continue to be
effective or be reinstated, as the case may be, if at any time any amount
received by the Bank in respect of the Obligations is rescinded or must
otherwise be restored or returned by the Bank upon the insolvency, bankruptcy,
dissolution, liquidation or reorganization of the Company or upon the
appointment of any intervenor or conservator of, or trustee or similar official
for, the Company or substantial part of its properties or assets, or otherwise,
all as though such payments had not been made.
Section 12.17 Interpretation and Construction. The following rules
shall apply to the interpretation and construction of this Agreement, the Note
and the Other Documents unless the context requires otherwise: (a) the singular
includes the plural and the plural includes singular; (b) words importing any
gender include the other genders; (c) references to statutes are to be construed
as including all statutory provisions consolidating, amending or replacing the
statute to which reference is made and all regulations promulgated pursuant to
such statutes; (d) references to "writing" shall include printing, photocopy,
typing, lithography and other means of reproducing words in a tangible, visible
form; (e) the words "including", "includes" and "include" shall be deemed to be
followed by the words "without limitation"; (f) references to the introductory
paragraph, preliminary statements, articles, sections (or subdivisions of
sections), exhibits or schedules are to those of this Agreement unless otherwise
indicated; (g) references to agreements and other contractual instruments shall
be deemed to include all subsequent amendments and other modifications to such
instruments,
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but only to the extent that such amendments and other modifications are
permitted or not prohibited by the terms of this Agreement; (h) references to
Persons include their respective permitted successors and assigns; and (i) "or"
is not exclusive.
Section 12.18 Indemnification. The Company hereby indemnities and holds
the Bank and any Bank Affiliate (an "Indemnified Party"), harmless from and
against any and all claims, actions, causes of action, damages, losses,
obligations, payments, liabilities, costs, fees or expenses (including
reasonable legal fees and expenses) which the Indemnified Party may incur or
which may be claimed against the Indemnified Party by any Person by reason of or
in connection with the execution, delivery, operation, enforcement or
termination of this Agreement, the Note or the Other Documents or in any manner
in connection with or related to this Agreement, the Note or the Other Documents
or the transactions contemplated hereby or thereby; provided, however, that the
Company shall not be required to indemnify the Indemnified Party for any claims,
actions, causes of action, damages, losses, obligations, payments, liabilities,
costs, fees or expenses to the extent, but only to the extent, caused by the
Indemnified Party's gross negligence or willful misconduct or if the Company
shall be the prevailing party in any such claim, action or cause of action.
Nothing in this Section is intended to limit the Company's obligations
hereunder. In case any claim is asserted or any action or proceeding is brought
against an Indemnified Party, the Indemnified Party shall promptly notify the
Company of such claim, action or proceeding and, at the option of the
Indemnified Party, (i) such Indemnified Party may retain legal counsel,
reasonably satisfactory to the Company, to represent it in such defense and the
Company shall reimburse such indemnified Party for its reasonable fees and
expenses of such legal counsel or (ii) the Company shall resist, settle or
defend with counsel reasonably acceptable to such Indemnified Party, such claim,
action or proceeding. The Bank shall cooperate and join with the Company, at the
expense of the Company, as may be required in connection with any action taken
or defended by the Company as provided herein.
Section 12.19 Limitation of Liability. The Declaration of Trust of
Meditrust, a copy of which is duly filed in the office of the Secretary of the
Commonwealth of Massachusetts, provides that the name "Meditrust" refers to the
Trustees under the Declaration of Trust collectively as Trustees, but not
individually or personally; and that no trustee, officer, shareholder, employee
or agent of Meditrust shall be held to any personal liability, jointly or
severally, for any obligation of, or claim against, Meditrust. All persons
dealing with Meditrust, in any way, shall look only to the assets of Meditrust
and the collateral pledged as security for the Note, if any, for the payment of
any sum or the performance of any obligation of Meditrust under the Note or
otherwise.
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IN WITNESS WHEREOF, the Company and the Bank have executed this
Agreement as of the date first set forth above.
THE COMPANY:
MEDITRUST
By: /s/ Xxxxxxx X. Xxxxxxxx
------------------------------------
Name: Xxxxxxx X. Xxxxxxxx, Esq.
Title: Senior Vice President
THE BANK
VIA BANQUE
By: /s/ C. Prot /s/ X. Xxxxx
------------------------------------
Name: C. Prot X. Xxxxx
Its: Sous Director Sous Director
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