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EXHIBIT 10
$185,000,000
REVOLVING CREDIT AGREEMENT
among
LTC PROPERTIES, INC.
and
THE LENDERS REFERRED TO HEREIN
and
SANWA BANK CALIFORNIA,
as Administrative Agent
and
BANK OF MONTREAL,
as Syndication Agent
and
BNP PARIBAS,
as Documentation Agent
October 31, 2000
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TABLE OF CONTENTS
PAGE
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ARTICLE 1. DEFINITIONS, ACCOUNTING TERMS AND INTERPRETATION.......................................................1
SECTION 1.1 Certain Defined Terms.................................................................1
SECTION 1.2 Accounting Terms.....................................................................22
SECTION 1.3 Interpretation.......................................................................22
ARTICLE 2. AMOUNTS AND TERMS OF ADVANCES AND LETTERS OF CREDIT...................................................22
SECTION 2.1 Commitments..........................................................................22
SECTION 2.2 Making Advances......................................................................23
SECTION 2.3 Fees.................................................................................24
SECTION 2.4 Optional Reduction of Commitments....................................................25
SECTION 2.5 Mandatory Reduction of Commitments...................................................26
SECTION 2.6 Repayment............................................................................26
SECTION 2.7 Optional Prepayments.................................................................26
SECTION 2.8 Mandatory Prepayments................................................................26
SECTION 2.9 Interest.............................................................................27
SECTION 2.10 Conversion of Advances...............................................................28
SECTION 2.11 Increased Costs, Etc.................................................................29
SECTION 2.12 Payments and Computations............................................................30
SECTION 2.13 Taxes................................................................................31
SECTION 2.14 Sharing of Payments, Etc.............................................................33
SECTION 2.15 Letters of Credit....................................................................33
ARTICLE 3. CONDITIONS OF LENDING.................................................................................36
SECTION 3.1 Conditions Precedent to Effectiveness................................................36
SECTION 3.2 Conditions Precedent to Each Borrowing and Letter of Credit Issuance.................37
SECTION 3.3 Determinations under Section 3.1.....................................................38
SECTION 3.4 Conditions Subsequent to Effectiveness...............................................38
ARTICLE 4. REPRESENTATIONS AND WARRANTIES........................................................................39
SECTION 4.1 Existence and Power..................................................................39
SECTION 4.2 Authorization........................................................................40
SECTION 4.3 Governmental Action, Etc.............................................................40
SECTION 4.4 Binding Effect.......................................................................40
SECTION 4.5 Financial Condition..................................................................40
SECTION 4.6 Other Information....................................................................41
SECTION 4.7 Legal Proceedings....................................................................41
SECTION 4.8 Regulation U.........................................................................41
SECTION 4.9 ERISA................................................................................41
SECTION 4.10 Intellectual Property................................................................41
SECTION 4.11 Fire, Etc............................................................................42
SECTION 4.12 Taxes................................................................................42
SECTION 4.13 Investment Company...................................................................42
SECTION 4.14 Title to Property....................................................................42
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SECTION 4.15 Subsidiaries.........................................................................42
SECTION 4.16 Environmental Matters................................................................42
SECTION 4.17 REIT Status..........................................................................43
SECTION 4.18 Owned Properties, Mortgage Loans and REMIC Certificates..............................43
SECTION 4.19 Solvency.............................................................................43
ARTICLE 5. COVENANTS OF BORROWER.................................................................................43
SECTION 5.1 Affirmative Covenants................................................................43
SECTION 5.2 Negative Covenants...................................................................50
ARTICLE 6. EVENTS OF DEFAULT.....................................................................................56
SECTION 6.1 Events of Default....................................................................56
SECTION 6.2 Effect of Event of Default...........................................................58
ARTICLE 7. AGENT.................................................................................................59
SECTION 7.1 Authorization and Action.............................................................59
SECTION 7.2 Agent's Reliance, Etc................................................................59
SECTION 7.3 Sanwa and Affiliates.................................................................60
SECTION 7.4 Lender Credit Decision...............................................................60
SECTION 7.5 Indemnification......................................................................60
SECTION 7.6 Successor Agent......................................................................60
SECTION 7.7 Agent as Collateral Holder...........................................................61
SECTION 7.8 Syndication Agent and Documentation Agent............................................62
ARTICLE 8. MISCELLANEOUS.........................................................................................62
SECTION 8.1 Amendments, Etc......................................................................62
SECTION 8.2 Notices, Etc.........................................................................62
SECTION 8.3 No Waiver; Remedies..................................................................63
SECTION 8.4 Costs and Expenses...................................................................63
SECTION 8.5 Waiver of Right of Setoff............................................................64
SECTION 8.6 Binding Effect.......................................................................64
SECTION 8.7 Assignments and Participations.......................................................65
SECTION 8.8 Release of Collateral................................................................67
SECTION 8.9 Governing Law........................................................................67
SECTION 8.10 Submission to Jurisdiction...........................................................67
SECTION 8.11 Headings.............................................................................68
SECTION 8.12 Survival of Representation and Warranties............................................68
SECTION 8.13 Severability.........................................................................68
SECTION 8.14 Integration..........................................................................68
SECTION 8.15 Execution in Counterparts............................................................68
SECTION 8.16 Confidentiality......................................................................68
SECTION 8.17 WAIVER OF JURY TRIAL.................................................................69
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SCHEDULE 1: Lenders and Applicable Lending Offices
SCHEDULE 2: Mandatory Reduction of Aggregate Commitment
SCHEDULE 3.4: Assets to Be Encumbered
SCHEDULE 4.15: Subsidiaries
SCHEDULE 4.18: Other Owned Properties
SCHEDULE 5.1(m): Owned Properties to Be Sold or Refinanced
SCHEDULE 5.2(a): Existing Liens and Existing Debt
Exhibit A: Revolving Note
Exhibit B: Notice of Borrowing
Exhibit C: Notice of Conversion/Continuation
Exhibit D: Borrowing Base Certificate
Exhibit E: Compliance Certificate
Exhibit F: Assignment and Acceptance
Exhibit G: Collateral Valuation Certificate
Exhibit H: Taxable Income Certificate
Exhibit I: Book Value Units Certificate
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REVOLVING CREDIT AGREEMENT
This Agreement, dated as of October 31, 2000, is entered into by (1)
LTC PROPERTIES, INC., a Maryland corporation (the "BORROWER"), (2) the financial
institutions listed on the signature pages hereof and each other financial
institution that becomes a party hereto pursuant to Section 8.7 (the "LENDERS"),
(3) SANWA BANK CALIFORNIA, as administrative agent (together with any successor
appointed pursuant to Article 7, the "ADMINISTRATIVE AGENT") for the Lenders
hereunder, (4) BANK OF MONTREAL, as syndication agent (the "SYNDICATION AGENT"),
and (5) BNP PARIBAS, as documentation agent (the "DOCUMENTATION AGENT").
RECITAL
The Borrower, the Lenders, Sanwa Bank California, as administrative
agent, and BNP Paribas, as syndication agent, have been party to a Credit
Agreement dated as of October 3, 1997, as amended by a First Amendment to Credit
Agreement dated as of May 15, 1998, a Second Amendment to Credit Agreement dated
as of October 21, 1998, a Third Amendment to Credit Agreement dated December 23,
1999 and a Fourth Amendment to Credit Agreement dated September 26, 2000 (said
Credit Agreement, as so amended, herein called the "OLD REVOLVING CREDIT
AGREEMENT"), pursuant to which the Lenders made a $170,000,000 revolving credit
facility available to the Borrower. The Borrower, each of Bank of Montreal and
Sanwa Bank California, as lenders, Bank of Montreal, as administrative agent,
and Sanwa Bank California, as documentation agent, have been party to a Term
Loan Agreement dated as of March 8, 1999, as amended by a First Amendment to
Term Loan Agreement dated December 23, 1999 and a Second Amendment to Term Loan
Agreement dated September 26, 2000 (said Term Loan Agreement, as so amended,
herein called the "OLD TERM LOAN AGREEMENT"), pursuant to which such lenders
extended $25,000,000 of term loans to the Borrower. The parties to the Old
Revolving Credit Agreement and the parties to the Old Term Loan Agreement now
wish to amend and restate those agreements on the terms and conditions set forth
in this Agreement. Accordingly, the parties hereto hereby agree as set forth
below.
ARTICLE 1.
DEFINITIONS, ACCOUNTING TERMS AND INTERPRETATION
SECTION 1.1 CERTAIN DEFINED TERMS. As used in this Agreement,
the terms set forth below shall have the respective meanings specified
below.
"ADMINISTRATIVE AGENT" has the meaning specified in the
recital of parties to this Agreement.
"ADMINISTRATIVE AGENT'S ACCOUNT" means such account of the
Administrative Agent as the Administrative Agent may designate from time to time
by notice to the Borrower and the Lenders.
"ADVANCE" has the meaning specified in Section 2.1.
"AFFILIATE" means, as to any Person, any other Person that,
directly or indirectly, controls, is controlled by or is under common control
with such Person or is a director or officer of such Person. For purposes of
this definition, the term "control" (including the terms "controlling,"
"controlled by" and "under common control with") of a Person means the
possession, direct or indirect, of the power (a) to vote 20% or more of the
equity interests having ordinary voting power for the election of directors (or
the equivalent) of such Person or (b) to direct or cause the direction of the
management and policies of such Person, whether through the ownership of equity
interests, by contract or otherwise.
"AGGREGATE COMMITMENT" means the maximum amount of credit
available to the Borrower hereunder from time to time, initially $185,000,000,
as such amount is reduced from time to time pursuant to Sections 2.4 and 2.5.
"APPLICABLE EURODOLLAR MARGIN" means the applicable
interest-rate margin determined pursuant to the table set forth below, in
accordance with the Pricing Level in effect from time to time.
PRICING LEVEL MARGIN
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Pricing Xxxxx 0 2.00% PER ANNUM
Pricing Xxxxx 0 2.25% PER ANNUM
Pricing Xxxxx 0 2.50% PER ANNUM
Pricing Xxxxx 0 3.00% PER ANNUM
Notwithstanding the foregoing, (a) during the period from and including the
Closing Date to but excluding the fifth Business Day after the day on which
Sanwa receives a Compliance Certificate in accordance with Section 5.1(a)(v) for
the Borrower's fiscal quarter ended on September 30, 2000, the Applicable
Eurodollar Margin shall be 2.50% PER ANNUM, and (b) if the Borrower fails at any
time to deliver a Compliance Certificate to the Lenders within the time required
under Section 5.1(a)(v), then the Applicable Eurodollar Margin shall be based on
Pricing Xxxxx 0 from the date of such failure until 5 Business Days after such
Compliance Certificate is delivered to the Lenders.
"APPLICABLE LENDING OFFICE" means, with respect to each Lender,
such Lender's Domestic Lending Office in the case of a Reference Rate Advance
and such Lender's Eurodollar Lending Office in the case of a Eurodollar Rate
Advance.
"APPLICABLE LOC RATE" means the applicable rate determined
pursuant to the table set forth below, in accordance with the Pricing Level in
effect from time to time.
PRICING LEVEL RATE
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Pricing Xxxxx 0 2.00% PER ANNUM
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Pricing Level 2 2.25% PER ANNUM
Pricing Xxxxx 0 2.50% PER ANNUM
Pricing Xxxxx 0 3.00% PER ANNUM
Notwithstanding the foregoing, (a) during the period from and including the
Closing Date to but excluding the fifth Business Day after the day on which
Sanwa receives a Compliance Certificate in accordance with Section 5.1(a)(v) for
the Borrower's fiscal quarter ended on September 30, 2000, the Applicable LOC
Rate shall be 2.50% PER ANNUM, and (b) if the Borrower fails at any time to
deliver a Compliance Certificate to the Lenders within the time required under
Section 5.1(a)(v), then the Applicable LOC Rate shall be based on Pricing Xxxxx
0 from the date of such failure until 5 Business Days after such Compliance
Certificate is delivered to the Lenders.
"APPLICABLE UNUSED-COMMITMENT FEE RATE" means the applicable
rate determined pursuant to the table set forth below, in accordance with the
Pricing Level in effect from time to time.
PRICING LEVEL RATE
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Pricing Xxxxx 0 0.250% PER ANNUM
Pricing Level 2 or 3 0.375% PER ANNUM
Pricing Xxxxx 0 0.500% PER ANNUM
Notwithstanding the foregoing, (a) during the period from and including the
Closing Date to but excluding the fifth Business Day after the day on which
Sanwa receives a Compliance Certificate in accordance with Section 5.1(a)(v) for
the Borrower's fiscal quarter ended on September 30, 2000, the Applicable
Unused-Commitment Fee Rate shall be 3.75% PER ANNUM, and (b) if the Borrower
fails at any time to deliver a Compliance Certificate to the Lenders within the
time required under Section 5.1(a)(v), then the Applicable Unused-Commitment Fee
Rate shall be based on Pricing Xxxxx 0 from the date of such failure until 5
Business Days after such Compliance Certificate is delivered to the Lenders.
"APPLICABLE VALUE" means, with respect to the Borrower and its
Subsidiaries as of any date of determination, by reference to the most recent
annual or quarterly balance sheet delivered by the Borrower to the Lenders, (a)
for any Owned Property, the lesser of (i) the Book Value thereof, net of
depreciation applied on a PRO RATA basis, and (ii) the appraised value thereof
determined pursuant to the most recent Appraisal (if any) obtained with respect
thereto, (b) for any Mortgage Loan, the unpaid principal balance thereof and (c)
for any REMIC Certificate, the book value thereof determined in accordance with
GAAP.
"APPRAISAL" means an appraisal performed by Valuation Counselors
Group or by another member of the Appraisal Institute, in each case in
accordance with the standards of the Appraisal Institute.
"ASSIGNMENT AND ACCEPTANCE" means an Assignment and
Acceptance entered into by a Lender and another Person substantially in the
form of Exhibit F.
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"AUTHORIZED OFFICER" means the Chairman of the Board, Chief
Executive Officer, President, Chief Financial Officer or, if specifically
authorized by the Board of Directors of the Borrower, Treasurer of the Borrower.
"BOOK VALUE" means, as of any date of determination with respect
to any Owned Property, the sum of (a) the lesser of (i) the purchase price of
such Owned Property and (ii) if construction of such Owned Property was
completed within 90 days of such date, the final construction cost of such Owned
Property plus (b) the cost of capitalized improvements to such Owned Property
and all related closing costs, all as determined in accordance with GAAP.
"BOOK VALUE PER COMMON SHARE" means, as of any date of
determination, the quotient of (a) the difference between (i) the Borrower's
shareholders' equity minus (ii) the par value of the Borrower's issued and
outstanding preferred stock, divided by (b) the number of shares of the
Borrower's Common Stock issued and outstanding, all as adjusted appropriately to
avoid dilution caused by stock splits and stock dividends.
"BORROWER'S ACCOUNT" means such account of the Borrower as the
Borrower may designate from time to time by notice to the Administrative Agent.
"BORROWING" means a borrowing composed of Advances of the same
Type made on the same day by the Lenders.
"BORROWING BASE" means, as of any date of determination, the sum
of (a) 75% of the aggregate Applicable Value of Eligible Mortgage Loans plus (b)
60% of the aggregate Applicable Value of Eligible Owned Properties, as
determined by reference to the monthly certificate or quarterly Borrowing Base
Certificate most recently delivered to the Lenders pursuant to Section 5.1(a)(i)
or (ii).
"BORROWING BASE CERTIFICATE" means an appropriately completed
certificate of an Authorized Officer substantially in the form of Exhibit D.
"BUSINESS DAY" means a day of the year on which banks are not
required or authorized to close in Los Angeles, New York or Chicago and, if the
applicable Business Day relates to any Eurodollar Rate Advances, on which
dealings are carried on in the London interbank market.
"CAPITALIZED LEASES" has the meaning specified in clause (e) of
the definition of "Debt" in this Section 1.1.
"CASH FLOW" means, for any period of four consecutive fiscal
quarters for the Borrower and its Subsidiaries on a Consolidated basis, net
income plus (a) the sum of (i) Interest Expense, (ii) depreciation, (iii)
amortization, (iv) other noncash charges and (v) expenses associated with
minority interests, minus (b) the sum of (i) noncash revenues included in net
income and (ii) income associated with minority interests.
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"CERCLA" means the Comprehensive Environmental Response,
Compensation and Liability Act of 1980.
"CERCLIS" means the Comprehensive Environmental Response,
Compensation and Liability Information System maintained by the U.S.
Environmental Protection Agency.
"CHANGE OF CONTROL" means (a) the acquisition by any Person
(including any syndicate or group deemed to be a "person" under Section 13(d)(3)
or 14(d)(2) of the Securities Exchange Act of 1934) of beneficial ownership,
direct or indirect, of shares of capital stock of the Borrower entitling such
Person to exercise more than 50% of the total voting power of all voting shares
of the Borrower or (b) any consolidation of the Borrower with, or merger of the
Borrower into, any other Person, any merger of another Person into the Borrower
or any sale or other transfer of all or substantially all of the assets of the
Borrower to another Person, other than in a case in which (i) the surviving
corporation is the Borrower, (ii) the Borrower continues to be a REIT and (iii)
the Borrower is in PRO FORMA compliance with all of the provisions of this
Agreement after such Change of Control.
"CLOSING DATE" means the date on which this Agreement becomes
effective pursuant to Section 3.1.
"CODE" means the Internal Revenue Code of 1986.
"COLLATERAL" means all collateral referred to in the Collateral
Documents and all other property that is subject to any Lien in favor of the
Administrative Agent, the Lenders and/or the Issuing Bank to secure, directly or
(through a guaranty or similar instrument) indirectly, the Obligations of the
Borrower under the Credit Documents.
"COLLATERAL DOCUMENTS" means the Security Agreement and the
LTC Mortgages.
"COLLATERAL VALUE" means, as of any date of determination, the
sum of (a) the values specified in Schedule 3.4 of all Owned Properties on which
the Administrative Agent has a perfected first-priority Lien, (b) the values
specified in Schedule 3.4, as reduced by unscheduled principal repayments after
September 30, 2000, of all Mortgage Loans on which the Administrative Agent has
a perfected first-priority Lien and (c) the values specified in Schedule 3.4 of
all REMIC Certificates on which the Administrative Agent has a perfected
first-priority Lien, as such values are reduced by distributions after September
30, 2000 in respect of principal payments on the pooled mortgage loans
underlying such REMIC Certificates.
"COLLATERAL VALUATION CERTIFICATE" means an appropriately
completed certificate of an Authorized Officer substantially in the form of
Exhibit G.
"COMMITMENT" has the meaning specified in Section 2.1.
"COMMITMENT TERMINATION DATE" means October 2, 2004.
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"COMMONLY CONTROLLED ENTITY" means an entity, whether or not
incorporated, that is under common control with the Borrower within the meaning
of Section 4001 of ERISA or that is part of a group that includes the Borrower
and is treated as a single employer under Section 414(b), (c) or (m) of the
Code.
"COMPLIANCE CERTIFICATE" means an appropriately completed
certificate of an Authorized Officer substantially in the form of Exhibit E.
"CONSOLIDATED" and "CONSOLIDATING" refer to the consolidation
and consolidating, respectively, of financial statements in accordance with
GAAP.
"CONVERSION," "CONVERT" and "CONVERTED" each refers to a
conversion of Advances of one Type into Advances of the other Type pursuant to
Section 2.10 or 2.11.
"CREDIT DOCUMENTS" means this Agreement, the Notes, the
Guaranties, the Release of Claims, the Security Agreement, the LTC Mortgages,
the Nonrecourse Guaranties, each Subordination Agreement, each Letter of Credit
Request, each Assignment and Acceptance and the Engagement Letter.
"DEBT" of any Person means (a) all indebtedness of such Person
for borrowed money, (b) all obligations of such Person for the deferred purchase
price of property or services (excluding normal trade payables not overdue that
are incurred in the ordinary course of such Person's business), (c) all
obligations of such Person evidenced by notes, bonds, debentures or other
similar instruments, (d) all indebtedness created or arising under any
conditional-sale or other title-retention agreement with respect to property
acquired by such Person (even though the rights and remedies of the seller or
lender under such agreement in the event of default are limited to repossession
or sale of such property), (e) all obligations of such Person as lessee under
leases that have been or should be, in accordance with GAAP, accounted for as
capital leases ("CAPITALIZED LEASES"), (f) all obligations, contingent or
otherwise, of such Person under acceptance, letter-of-credit or similar
facilities, (g) all obligations of such Person to purchase, redeem, retire,
defease or otherwise acquire for value (i) any equity interest in such Person or
(ii) any warrants, rights or options to acquire any such equity interest, (h)
all executory obligations of such Person in respect of interest-rate swap
agreements and other similar agreements designed to hedge against fluctuations
in interest rates ("HEDGE AGREEMENTS"), (i) all Debt referred to in any of
clauses (a) through (h) above that is guaranteed directly or indirectly by such
Person, or in effect guaranteed directly or indirectly by such Person through an
agreement (i) to pay or purchase such Debt or to advance or supply funds for the
payment or purchase of such Debt, (ii) to purchase, sell or lease (as lessee or
lessor) property, or to purchase or sell services, primarily for the purpose of
enabling the debtor to make payment of such Debt or to assure the holder of such
Debt against loss, (iii) to advance or supply funds to maintain working capital
or equity capital of another Person or otherwise to maintain the net worth or
solvency of such Person (including any agreement in the nature of a support
arrangement to pay for property or services irrespective of whether such
property is received or such services are rendered) or (iv) otherwise to assure
a creditor against loss, and (j) all Debt referred to in any of clauses (a)
through (h) above that is secured by (or for which the holder of such Debt has
an existing right, contingent or otherwise, to be secured by) any Lien on
property (including accounts and contract
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rights) owned by such Person, even though such Person has not assumed or
become liable for the payment of such Debt.
"DEFAULT" means any Event of Default or any event that would
constitute an Event of Default but for the requirement that notice be given or
time elapse, or both.
"DEFINED BENEFIT PLAN" has the meaning specified in Section
4.14(j) of the Code.
"DOCUMENTATION AGENT" has the meaning specified in the
recital of parties to this Agreement.
"DOMESTIC LENDING OFFICE" means, with respect to any Lender, the
office of such Lender specified as its "Domestic Lending Office" opposite its
name on Schedule 1 or in the Assignment and Acceptance pursuant to which it
became a Lender, or such other office of such Lender as such Lender may from
time to time specify to the Borrower and the Administrative Agent.
"ELIGIBLE ASSIGNEE" means (a) a commercial bank organized under
the laws of the United States of America, any State thereof or the District of
Columbia and having total assets in excess of $500,000,000, (b) a commercial
bank organized under the laws of any other country that is a member of the
Organization for Economic Cooperation and Development, or a political
subdivision of any such country, and having total assets in excess of
$500,000,000, provided that such bank is acting through a branch or agency
located in the United States of America, (c) an insurance company or other
financial institution or an investment fund that is engaged in making,
purchasing or otherwise investing in commercial loans in the ordinary course of
its business and having total assets in excess of $500,000,000, (d) any
Affiliate of an existing Lender or (e) any other Person approved by the
Administrative Agent; PROVIDED, HOWEVER, that (i) no Affiliate of the Borrower
or any Guarantor may be an Eligible Assignee, (ii) no direct competitor of the
Borrower may be an Eligible Assignee and (iii) no financial institution may be
an Eligible Assignee if its participation hereunder would result in increased
liability to the Borrower under Section 2.11.
"ELIGIBLE MORTGAGE LOAN" means, as of any date of determination,
any Mortgage Loan other than the following:
(a) a Mortgage Loan to an Affiliate of the
Borrower;
(b) a Mortgage Loan evidenced by a Mortgage
Note not owned by the Borrower as sole owner and holder;
(c) a Mortgage Loan not originated by the
Borrower;
(d) a Mortgage Loan evidenced by a Mortgage
Note secured, in whole or in part, by a Mortgage on a ground lease;
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(e) a Mortgage Loan evidenced by a Mortgage
Note with respect to which any amount payable thereunder is more than 30 days
past-due;
(f) a Mortgage Loan with respect to which the
Borrower does not have the full right and authority (other than pursuant to
the Credit Documents) to sell, assign and transfer such Mortgage Loan, the
Mortgage Note evidencing such Mortgage Loan, the Mortgage securing such
Mortgage Note and any other related documents;
(g) a Mortgage Loan evidenced by a
Mortgage Note secured by a Mortgage on a Mortgaged Property for which there
does not exist a Phase I environmental report, with respect to which any
material environmental claim has been made or for which there exists an
environmental report that discloses the reasonable likelihood of a material
environmental claim;
(h) a Mortgage Loan evidenced by a Mortgage
Note secured by a Mortgage for which there has not been issued a title policy
showing the Borrower as first lienholder or for which there has been issued a
title policy showing the Borrower as first lienholder subject to encumbrances
or exceptions of a material nature not otherwise insured against;
(i) a Mortgage Loan evidenced by a Mortgage
Note whose principal balance is more than 80% of the value, as determined by
an Appraisal, of the Mortgaged Property encumbered by the Mortgage securing
such Mortgage Note;
(j) a Mortgage Loan to a Person that is the
subject of a bankruptcy proceeding or is otherwise insolvent;
(k) a Mortgage Loan evidenced by a Mortgage
Note secured by a Mortgage on a Mortgaged Property that has been in
operation as a licensed skilled-nursing home or a licensed long-term-care
facility for less than one year; PROVIDED, HOWEVER, that, if the Operator of
any such home or facility is a publicly traded company that is publicly
reporting financial information on a timely basis and such information
demonstrates that such company has maintained a ratio of (i) the sum of net
income plus depreciation, amortization, other noncash charges and Interest
Expense to (ii) Interest Expense of at least 1.0:1.0, calculated in
accordance with GAAP, for the period of four consecutive fiscal quarters
ended as of the end of such company's most recently completed fiscal quarter
for which financial information is publicly available, then such Mortgage
Loan shall be considered an Eligible Mortgage Loan; and FURTHER PROVIDED,
HOWEVER, that up to $20,000,000 in Applicable Value (calculated on an
aggregate basis with amounts permitted under the second proviso of clause (i)
of the definition of "Eligible Owned Property" in this Section 1.1) of
Mortgage Loans evidenced by Mortgage Notes secured by Mortgages on Mortgaged
Properties that have been in operation as licensed skilled-nursing homes or
licensed long-term-care facilities for less than one year, that are operated
by Operators that are publicly traded companies and are publicly reporting
financial information on a timely basis but that do no otherwise meet the
conditions specified in the proviso set forth above shall be considered
Eligible Mortgage Loans;
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(l) a Mortgage Loan evidenced by a
Mortgage Note secured by a Mortgage on a Mortgaged Property for which the
Operator does not have all material Governmental Action required for the
operation thereof as a Mortgaged Property;
(m) a Mortgage Loan with respect to which the
Borrower is not the sole lender;
(n) a Mortgage Loan evidenced by a Mortgage
Note secured by a Mortgage on Mortgaged Property for which an Appraisal has
not been completed; and
(o) a Mortgage Loan (i) that is not free and
clear of all material Liens other than in favor of the Administrative
Agent, (ii) evidenced by a Mortgage Note that is not free and clear of all
material Liens other than in favor of the Administrative Agent or (iii)
evidenced by a Mortgage Note secured by a Mortgage that is not free and clear
of all material Liens other than in favor of the Administrative Agent.
"ELIGIBLE OWNED PROPERTY" means, as of any date of
determination, any Owned Property other than the following:
(a) an Owned Property leased to or operated
by the Borrower or any Affiliate of the Borrower;
(b) an Owned Property not owned by the
Borrower or a Subsidiary in fee simple;
(c) an Owned Property subject to a lease
under which any lease payment is 30 or more days past-due;
(d) an Owned Property subject to a lease
that has not been renewed or replaced within 60 days before the date of
expiration of such lease;
(e) an Owned Property for which no lease is
in effect, whether because a lease previously in effect has been terminated
or otherwise;
(f) an Owned Property whose Operator is the
subject of a bankruptcy proceeding or is otherwise insolvent;
(g) an Owned Property subject to a
material Lien other than in favor of the Administrative Agent;
(h) an Owned Property (i) that does not fall
within clause (a) of the definition of "Owned Property" in this Section 1.1
or (ii) of a type described in clause (a) of the definition of "Owned
Property" in this Section 1.1 but for which the Operator does not have all
material Governmental Action required for the operation thereof as such type
of Owned Property;
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(i) an Owned Property that has been in
operation as a licensed skilled-nursing home or a licensed long-term-care
facility for less than one year, PROVIDED, HOWEVER, that, if the Operator of
any such home or facility is a publicly traded company that is publicly
reporting financial information on a timely basis and such information
demonstrates that such company has maintained a ratio of (i) the sum of net
income plus depreciation, amortization, other noncash charges and Interest
Expense to (ii) Interest Expense of at least 1.0:1.0, calculated in
accordance with GAAP, for the period of four consecutive fiscal quarters
ended as of the end of such company's most recently completed fiscal quarter
for which financial information is publicly available, then such Owned
Property shall be considered an Eligible Owned Property; and FURTHER
PROVIDED, HOWEVER, that up to $20,000,000 in Applicable Value (calculated on
an aggregate basis with amounts permitted under the second proviso of clause
(k) of the definition of "Eligible Mortgage Loan" in this Section 1.1) of
Owned Properties that have been in operation as licensed skilled-nursing
homes or licensed long-term-care facilities for less than one year, that are
operated by Operators that are publicly traded companies and are publicly
reporting financial information on a timely basis but that do not otherwise
meet the conditions specified in the proviso set forth above shall be
considered Eligible Owned Properties;
(j) an Owned Property for which there does
not exist a Phase I environmental report, with respect to which any material
environmental claim has been made or for which there exists an environmental
report that discloses the reasonable likelihood of a material environmental
claim;
(k) an Owned Property for which there has not
been issued a title policy showing the Borrower or any Subsidiary as
fee-simple owner or for which there has been issued a title policy showing
the Borrower or any Subsidiary as fee-simple owner subject to encumbrances or
exceptions of a material nature;
(l) an Owned Property of which the Borrower
or any Subsidiary is not the sole owner; and
(m) an Owned Property that the Borrower or
any Subsidiary does not have full right and authority (other than pursuant to
the Credit Documents) to sell, assign and transfer.
"ENGAGEMENT LETTER" means the letter agreement dated June 6,
2000 among the Borrower, Sanwa, Bank of Montreal and BNP Paribas concerning,
among other things, certain payments to be made by the Borrower with respect to
this Agreement.
"ENVIRONMENTAL LAW" means any Governmental Rule relating to
pollution or protection of the environment or any natural resource, to any
Hazardous Material or to health or safety, including any Governmental Rule
relating to the use, handling, transportation, treatment, storage, disposal,
release or discharge of any Hazardous Material.
"ENVIRONMENTAL PERMIT" means any Governmental Action required
under any Environmental Law.
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"ENVIRONMENTAL PROCEEDING" means any action, suit, written
demand, claim, notice of noncompliance or violation, notice of liability or
potential liability, investigation, proceeding, consent order or consent
agreement relating in any way to any Environmental Law, any Environmental Permit
or any Hazardous Material or arising from alleged injury or threat to health,
safety or the environment, including (a) by any Governmental Person for
enforcement, cleanup, removal, response, remedial or other action or damages and
(b) by any Person for damages, contribution, indemnification, cost recovery,
compensation or injunctive relief.
"ERISA" means the Employee Retirement Income Security Act of
1974.
"ERISA AFFILIATE" means any Person that for purposes of Title IV
of ERISA is a member of the Borrower's controlled group, or is under common
control with the Borrower, within the meaning of Sections 414 and 4001 of the
Code and the regulations promulgated and rulings issued thereunder.
"EUROCURRENCY LIABILITIES" has the meaning assigned to that term
in Regulation D of the Board of Governors of the Federal Reserve System.
"EURODOLLAR LENDING OFFICE" means, with respect to any Lender,
the office of such Lender specified as its "Eurodollar Lending Office" opposite
its name on Schedule 1 or in the Assignment and Acceptance pursuant to which it
became a Lender (or, if no such office is specified, its Domestic Lending
Office), or such other office of such Lender as such Lender may from time to
time specify to the Borrower and the Administrative Agent.
"EURODOLLAR RATE" means, for any Interest Period for each
Eurodollar Rate Advance composing part of the same Borrowing, the rate PER
ANNUM obtained by dividing (a) the rate of interest determined by the
Administrative Agent to be the offered rate that appears on the page of the
Telerate screen that displays an average British Bankers Association interest
settlement rate for deposits in U.S. dollars (for delivery on the first day
of such Interest Period) with a term equivalent to such Interest Period,
determined as of approximately 11:00 a.m., London time, 2 Business Days
before the first day of such Interest Period, by (b) a percentage equal to
100% minus the Eurodollar Rate Reserve Percentage for such Interest Period.
"EURODOLLAR RATE ADVANCE" means an Advance that bears
interest by reference to the Eurodollar Rate.
"EURODOLLAR RATE RESERVE PERCENTAGE" means, for any Interest
Period for each Eurodollar Rate Advance composing part of the same Borrowing,
the reserve percentage applicable 2 Business Days before the first day of such
Interest Period under regulations issued from time to time by the Board of
Governors of the Federal Reserve System for determining the maximum reserve
requirement (including any emergency, supplemental or other marginal reserve
requirement) for a member bank of the Federal Reserve System with respect to
liabilities or assets consisting of or including Eurocurrency Liabilities (or
with respect to any other category of liabilities that includes deposits by
reference to which the interest rate on Eurodollar Rate Advances is determined)
having a term equal to such Interest Period.
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"EVENT OF DEFAULT" has the meaning specified in Section 6.1.
"FEDERAL FUNDS RATE" means, for any period, a fluctuating
interest rate PER ANNUM equal for each day during such period 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 next 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 for
such transactions received by the Administrative Agent from three federal funds
brokers of recognized standing selected by it.
"FORMER PLAN" means any employee benefit plan in respect of
which the Borrower or a Commonly Controlled Entity has engaged in a transaction
described in Section 4069 or Section 4212(c) of ERISA.
"FUNDED DEBT" means, as of any date of determination, for the
Borrower and its Subsidiaries on a Consolidated basis, the sum of (a) the
aggregate principal amount of all Advances outstanding, plus (b) the aggregate
Letter of Credit Amount of all Letters of Credit outstanding, plus (c) the
aggregate amount of unreimbursed drawings under all Letters of Credit, plus (d)
the aggregate principal amount of all Debt of the types described in clauses
(a), (c), (d), (e) and (f) of the definition of "Debt" in this Section 1.1, but
excluding the Debt under the Credit Documents, plus (e) the aggregate principal
amount of all other interest-bearing Debt.
"FUNDED DEBT RATIO" means, as of the end of any fiscal quarter
of the Borrower, the ratio of (a) Funded Debt as of the end of such fiscal
quarter to (b) Tangible Net Worth of the Borrower and its Subsidiaries on a
Consolidated basis as of the end of such fiscal quarter.
"GAAP" means generally accepted accounting principles in the
United States of America as in effect as of the date of, and used in, the
preparation of the financial statements referred to in Section 4.5, except that,
with respect to the preparation of any financial statement required to be
furnished pursuant to Section 5.1(a)(iii) or (iv), "GAAP" shall mean such
principles in the United States of America as in effect from time to time.
"GOVERNMENTAL ACTION" means any authorization, approval,
consent, waiver, exception, license, filing, registration, permit, notarization
or other requirement of any Governmental Person.
"GOVERNMENTAL PERSON" means, whether domestic or foreign, any
national, federal, state or local government, any political subdivision thereof,
or any governmental, quasi-governmental, judicial, public or statutory
instrumentality, authority, body or entity, including any central bank and any
comparable authority.
"GOVERNMENTAL RULE" means any treaty, law, rule, regulation,
ordinance, order, code, interpretation, judgment, writ, injunction, decree,
determination, award, directive, guideline, request, policy or similar form of
decision of any Governmental Person, referee or arbitrator.
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"GUARANTORS" means LTC GP I, Inc., a Delaware corporation,
LTC-Tampa, Inc., a Nevada corporation, LTC West, Inc., a Nevada corporation,
Education Property Investors, Inc., a Nevada corporation, and each other
Subsidiary that executes a Guaranty pursuant to Section 5.1(l).
"GUARANTY" means a Guaranty, in form and substance satisfactory
to the Administrative Agent in its reasonable discretion, executed by a
Guarantor in favor of the Administrative Agent and the Lenders.
"HAZARDOUS MATERIAL" means any substance or material that is
described as a toxic or hazardous substance, waste or material or as a
pollutant, contaminant or infectious waste, or words of similar import, in any
Environmental Law, including asbestos, petroleum (including crude oil or any
fraction thereof, natural gas, natural-gas liquid, liquefied natural gas or
synthetic gas usable for fuel, or any mixture of any of the foregoing),
polychlorinated biphenyls, urea formaldehyde, radon gas, radioactive matter, and
chemicals that are likely to cause cancer or reproductive toxicity.
"HEDGE AGREEMENTS" has the meaning specified in clause (h) of
the definition of "Debt" in this Section 1.1.
"INDEMNIFIED PARTY" has the meaning specified in Section 8.4(b).
"INSOLVENCY" means, with respect to any Multiemployer Plan, the
condition that such Plan is insolvent within the meaning of Section 4245 of
ERISA.
"INTEREST EXPENSE" means, for any Person for any fiscal period,
without duplication, (a) the sum of (i) all interest on Debt that was paid,
payable and/or accrued for such fiscal period, (ii) all ongoing commitment fees
(such as those payable under Sections 2.3(a) and (b)), letter-of-credit fees and
ongoing line-of-credit fees paid, payable and/or accrued for such fiscal period
in exchange for a commitment to lend or to issue or maintain a letter of credit
and (iii) the aggregate amount payable under all Hedge Agreements for such
fiscal period, LESS (b) the sum of (i) all cash interest income for such fiscal
period and (ii) the aggregate amount receivable under all Hedge Agreements for
such fiscal period.
"INTEREST PERIOD" means, for each Eurodollar Rate Advance
composing part of the same Borrowing, the period commencing on the date of such
Eurodollar Rate Advance or on the date of the Conversion of any Reference Rate
Advance into such Eurodollar Rate Advance and ending on the last day of the
period selected by the Borrower pursuant to the provisions below and,
thereafter, each subsequent period commencing on the last day of the immediately
preceding Interest Period and ending on the last day of the period selected by
the Borrower pursuant to the provisions below. The duration of each such
Interest Period shall be 1 week or 1, 2, 3 or 6 months, as the Borrower may
select upon telephonic notice received by the Administrative Agent not later
than 11:00 a.m., Los Angeles time, on the third Business Day before the first
day of such Interest Period (such notice to be confirmed by the Borrower's
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delivery of a Notice of Conversion/Continuation to the Administrative Agent by
telecopier by the end of the same Business Day); PROVIDED, HOWEVER, that:
(a) the Borrower may not select any Interest
Period that ends after any principal repayment date unless, after giving
effect to such selection, the aggregate principal amount of Reference Rate
Advances and Eurodollar Rate Advances having Interest Periods that end on or
before such principal repayment date is equal to or greater than the
principal amount of Advances due and payable on and before such date;
(b) no more than 10 different Interest
Periods may be in effect at any one time under this Agreement;
(c) whenever the last day of any Interest
Period would otherwise occur on a day other than a Business Day, the last
day of such Interest Period shall be extended to occur on the next succeeding
Business Day; PROVIDED, HOWEVER, that, if such extension would cause the last
day of such Interest Period to occur in the next succeeding calendar month,
the last day of such Interest Period shall instead occur on the next
preceding Business Day; and
(d) whenever the first day of any Interest
Period occurs on a day of an initial calendar month for which there is no
numerically corresponding day in the calendar month that succeeds such
initial calendar month by the number of months equal to the number of months
in such Interest Period, such Interest Period shall end on the last Business
Day of such succeeding calendar month.
"INVESTMENTS" has the meaning specified in Section 5.2(f).
"ISSUING BANK" means Sanwa, as issuer of a Letter of Credit.
"LENDERS" means the financial institutions listed on the
signature pages hereof and each assignee that becomes a party hereto pursuant to
Section 8.7, including Sanwa in its role as the Issuing Bank.
"LETTER OF CREDIT" has the meaning specified in Section 2.1.
"LETTER OF CREDIT AMOUNT" means the stated maximum amount
available to be drawn under a particular Letter of Credit.
"LETTER OF CREDIT REQUEST" means a request for the issuance of a
Letter of Credit on the Issuing Bank's standard form, as in effect from time to
time, of application and agreement for standby letter of credit.
"LIEN" means any voluntary or involuntary lien, security
interest or other charge or encumbrance of any kind, or any other type of
preferential arrangement, including the lien or retained security title of a
conditional vendor and any easement, right of way or other encumbrance on title
to real property.
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"LOC DOCUMENTS" has the meaning specified in Section 2.15(d).
"LTC MORTGAGE" means a mortgage or deed of trust, in form and
substance satisfactory to the Administrative Agent in its reasonable discretion,
executed by the Borrower or a Subsidiary in favor of the Administrative Agent
for the benefit of the Lenders, securing the Obligations of the Borrower under
the Credit Documents in accordance with the terms of this Agreement.
"MATERIAL ADVERSE EFFECT" means a material and adverse effect on
(a) the business, condition (financial or otherwise), operations, performance or
properties of the Borrower and its Subsidiaries taken as a whole, (b) the
ability of the Borrower or any Guarantor to perform its obligations under the
Credit Documents to which it is a party or (c) the validity or enforceability of
any of the Credit Documents or the rights or remedies of the Administrative
Agent or the Lenders thereunder; PROVIDED, HOWEVER, that the sale of assets of
one or more Guarantors in accordance with the terms of this Agreement shall not
be deemed to cause a Material Adverse Effect.
"MORTGAGE" means a mortgage, deed of trust or other instrument
securing such Mortgage Loan by a first-priority Lien on the related Mortgaged
Property. In the case of a Mortgage Loan secured by more than one Mortgage, the
term "Mortgage" shall refer to each such Mortgage.
"MORTGAGED PROPERTY" means, with respect to any Mortgage Loan,
any real property comprising a healthcare facility that offers products and
services related to long-term healthcare, including a skilled-nursing home, a
long-term-care facility, an assisted-living facility and any similar healthcare
facility, which interest is (a) owned in fee simple by the obligor on the
Mortgage Note evidencing such Mortgage Loan and (b) subject to the Lien of a
Mortgage. In the case of any Mortgage Loan evidenced by a Mortgage Note secured
by a Mortgage on more than one Mortgaged Property, the term "Mortgaged Property"
shall refer to all such Mortgaged Properties.
"MORTGAGE LOAN" means a loan made by the Borrower to another
Person to finance a Mortgaged Property, evidenced by a Mortgage Note secured by
a Mortgage, together with any and all rights to payment under such Mortgage
Note, under any security agreement or guaranty in respect of such Mortgage Loan
or under any other agreement with respect to such Mortgage Loan.
"MORTGAGE NOTE" means, with respect to any Mortgage Loan, the
promissory note(s) and other instrument(s) evidencing the indebtedness of the
obligor in respect of such Mortgage Loan.
"MULTIEMPLOYER PLAN" means a Plan that is a "multiemployer
plan" as defined in Section 4001(a)(3) of ERISA.
"MULTIPLE EMPLOYER PLAN" means a single employer plan, as
defined in Section 4001(a)(15) of ERISA and subject to Title IV thereof, that
(a) is maintained by the Borrower or
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an ERISA Affiliate and at least one Person other than the Borrower and its
ERISA Affiliates or (b) was so maintained previously, but is not currently
maintained by the Borrower or its ERISA Affiliates, and in respect of which
the Borrower or an ERISA Affiliate would still have liability under Section
4063, 4064 or 4069 of ERISA in the event such plan has been or were to be
terminated.
"NET CASH PROCEEDS" means (a) with respect to any sale, transfer
or other disposition of any asset by any Person, the difference between (i) the
aggregate amount received by such Person in cash or cash equivalents (including
any cash or cash equivalents received by way of deferred payment pursuant to a
note receivable, other noncash consideration or otherwise, but only as and when
such cash or cash equivalents are so received) in connection with such
transaction, minus (ii) the sum of (A) the reasonable and customary fees,
commissions and other out-of-pocket expenses incurred and paid or payable by
such Person in connection with such transaction, (B) Debt (other than the
Advances) required to be paid as a result of such transaction and (C) taxable
income attributable to such Person in connection with such transaction; (b) with
respect to any sale or issuance of any debt securities or equity interests
(including stock, member interests or partnership interests) in any Person, or
any warrants, options or other rights to acquire such equity interests
(including any convertible securities), by any Person, the amount equal to the
difference between (i) the aggregate amount received by such Person in cash or
cash equivalents (including any cash or cash equivalents received by way of
deferred payment pursuant to a note receivable, other noncash consideration or
otherwise, but only as and when such cash or cash equivalents are so received)
in connection with such transaction, minus (ii) the reasonable and customary
fees, commissions and other out-of-pocket expenses incurred and paid or payable
by such Person in connection with such transaction; (c) with respect to any
borrowing by any Person, the difference between (i) the aggregate amount
received by such Person in cash or cash equivalents in connection with such
transaction, minus (ii) the sum of (A) the reasonable and customary fees,
commissions and other out-of-pocket expenses incurred and paid or payable by
such Person in connection with such transaction, (B) Debt (other than the
Advances) required to be paid as a result of such transaction and (C) taxable
income attributable to such Person in connection with such transaction; and (d)
with respect to any receipt by any Person of a prepayment of Debt owed to such
Person, the difference between (i) the aggregate amount received by such Person
in cash or cash equivalents in connection with such transaction, minus (ii) the
reasonable and customary fees, commissions and other out-of-pocket expenses
incurred and paid or payable by such Person in connection with such transaction.
"NONRECOURSE GUARANTY" means a Nonrecourse Guaranty, in form and
substance satisfactory to the Administrative Agent in its reasonable discretion,
executed by a Subsidiary in favor of the Administrative Agent and the Lenders.
"NOTE" means a Revolving Note of the Borrower payable to the
order of a Lender, substantially in the form of Exhibit A, evidencing the
indebtedness of the Borrower to such Lender resulting from the Advances made by
such Lender from time to time.
"NOTICE OF BORROWING" means a notice from the Borrower to the
Administrative Agent substantially in the form of Exhibit B.
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"NOTICE OF CONVERSION/CONTINUATION" means a notice from the
Borrower to the Administrative Agent substantially in the form of Exhibit C.
"OBLIGATION" means, with respect to any Person, any obligation
of such Person of any kind, including any obligation to make any payment for any
reason, whether or not such obligation is reduced to judgment, liquidated,
unliquidated, fixed, contingent, matured, disputed, undisputed, legal,
equitable, secured or unsecured, and whether or not such obligation is
discharged, stayed or otherwise affected by any proceeding referred to in
Section 6.1(e). Without limiting the generality of the foregoing, the
Obligations of the Borrower under or in respect of the Credit Documents include
(a) all principal, interest, Letter of Credit commissions, charges, expenses,
fees, attorneys' fees and disbursements, indemnities and any other amounts
payable by the Borrower under any Credit Document and (b) any amount in respect
of any of the foregoing that the Administrative Agent or any Lender, in its sole
discretion, elects to pay or advance on behalf of the Borrower after the
occurrence and during the continuation of an Event of Default. Upon any payment
or advance by the Administrative Agent or any Lender of any amount referred to
in the preceding sentence, such amount shall, until repaid by the Borrower,
constitute an outstanding Reference Rate Advance for all purposes under this
Agreement.
"OLD REVOLVING CREDIT AGREEMENT" has the meaning set forth in
the Recital.
"OLD TERM LOAN AGREEMENT" has the meaning set forth in the
Recital.
"OPERATOR" means (a) the lessee of any Owned Property or (ii)
the mortgagor or lessee of a Mortgaged Property, to the extent such mortgagor or
lessee controls the operation of such Mortgaged Property.
"OTHER TAXES" has the meaning specified in Section 2.13(b).
"OWNED PROPERTY" means any real property, owned in fee simple by
the Borrower or a Subsidiary, comprising (a) a healthcare facility that offers
products and services related to long-term healthcare, including a
skilled-nursing home, a long-term-care facility, an assisted-living facility and
any similar healthcare facility, or (b) an educational or other
education-related facility.
"PBGC" means the Pension Benefit Guaranty Corporation
established pursuant to Subtitle A of Title IV of ERISA.
"PERMITTED INVESTMENTS" means investments having a maturity of
not greater than 3 months from the date of acquisition thereof in (a)
obligations issued or unconditionally guaranteed by the United States of America
or issued by any agency thereof and backed by the full faith and credit of the
United States of America; (b) obligations issued by any state of the United
States of America, or any political subdivision or public instrumentality
thereof, having, at the time of acquisition, the highest rating obtainable from
Standard & Poor's Ratings Group or Xxxxx'x Investors Service, Inc.; (c)
certificates of deposit and other time deposits (in either case located within
the United States of America) (i) of any commercial bank organized under the
laws of the United States of America or any state thereof, or under the laws of
any other country
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that is a member of the Organization for Economic Cooperation and
Development, and having combined capital and surplus of at least
$1,000,000,000 and (ii) having, at the time of acquisition, a rating of at
least "Prime-1" by Xxxxx'x Investors Service, Inc. or "A-1" by Standard &
Poor's Ratings Group; (d) commercial paper with a rating of at least
"Prime-l" by Xxxxx'x Investors Service, Inc. or "A-l" by Standard & Poor's
Ratings Group; (e) repurchase agreements with respect to any of the
investments permitted under the foregoing clauses (a) through (d); (f)
institutional money-market funds organized by a Lender under the laws of the
United States of America or any state thereof that invest solely in any of
the investments permitted under the foregoing clauses (a) through (e); or (g)
other investments agreed to from time to time between the Borrower and the
Administrative Agent.
"PERMITTED LIENS" means such of the following as to which no
enforcement, collection, execution, levy or foreclosure proceeding has been
commenced: (a) Liens for taxes, assessments and governmental charges or levies
to the extent not required to be paid under Section 5.1(c); (b) Liens imposed by
law, such as materialmen's, mechanics', carriers', workmen's and repairmen's
Liens and other similar Liens arising in the ordinary course of business
securing obligations that are not overdue or that are being contested in good
faith and by proper proceedings and as to which appropriate reserves are being
maintained; (c) pledges or deposits to secure obligations under workers'
compensation laws or similar legislation or to secure public or statutory
obligations; (d) easements, rights of way and other encumbrances on title to
real property that do not materially and adversely affect the value of such
property or the use of such property for its present purposes; (e) deposits to
secure the performance of bids, trade contracts (other than for borrowed money),
leases, statutory obligations, surety and appeal bonds, performance bonds and
other obligations of like nature incurred in the ordinary course of business;
(f) Liens in favor of the United States of America for amounts paid to the
Borrower or any Subsidiary as progress payments under government contracts
entered into by it; and (g) attachment, judgment and other similar Liens arising
in connection with court, reference or arbitration proceedings, provided that
the same have been in existence less than 20 days, that the same have been
discharged or that execution or enforcement thereof has been stayed pending
appeal.
"PERSON" means an individual, a partnership, a limited liability
company, a corporation, a business trust, a trust, an unincorporated
association, a joint venture or any other entity, including any Governmental
Person.
"PLAN" means, at any time, an employee benefit plan that is
covered by ERISA and in respect of which the Borrower or a Commonly Controlled
Entity is an "employer" as defined in Section 3(5) of ERISA.
"PRICING LEVEL" means Pricing Xxxxx 0, Xxxxxxx Xxxxx 0, Xxxxxxx
Xxxxx 0 or Pricing Level 4.
"PRICING LEVEL 1" means the Pricing Level that applies to each
Eurodollar Rate Advance, Letter of Credit and unused Commitment from and after
the fifth Business Day after the date of receipt by the Lender that is also the
Administrative Agent of a Compliance Certificate pursuant to Section 5.1(a)(v)
if the Funded Debt Ratio as of the end of the fiscal
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quarter ended immediately before that date was less than or equal to 0.485,
as demonstrated by that Compliance Certificate.
"PRICING LEVEL 2" means the Pricing Level that applies to each
Eurodollar Rate Advance, Letter of Credit and unused Commitment from and after
the fifth Business Day after the date of receipt by the Lender that is also the
Administrative Agent of a Compliance Certificate pursuant to Section 5.1(a)(v)
if the Funded Debt Ratio as of the end of the fiscal quarter ended immediately
before that date was greater than 0.485 but less than or equal to 0.735, as
demonstrated by that schedule.
"PRICING LEVEL 3" means the Pricing Level that applies to each
Eurodollar Rate Advance, Letter of Credit and unused Commitment from and after
the fifth Business Day after the date of receipt by the Lender that is also the
Administrative Agent of a Compliance Certificate pursuant to Section 5.1(a)(v)
if the Funded Debt Ratio as of the end of the fiscal quarter ended immediately
before that date was greater than 0.735 but less than or equal to 0.860, as
demonstrated by that schedule.
"PRICING LEVEL 4" means the Pricing Level that applies to each
Eurodollar Rate Advance, Letter of Credit and unused Commitment from and after
the fifth Business Day after the date of receipt by the Lender that is also the
Administrative Agent of a Compliance Certificate pursuant to Section 5.1(a)(v)
if the Funded Debt Ratio as of the end of the fiscal quarter ended immediately
before that date was greater than 0.860, as demonstrated by that schedule.
"REFERENCE RATE" means the variable rate of interest PER ANNUM
announced by Sanwa from time to time as its "reference rate." Such "reference
rate" is set by Sanwa as a general reference rate of interest, taking into
account such factors as Sanwa may deem appropriate, it being understood that
many of Sanwa's commercial or other loans are priced in relation to such rate,
that it is not necessarily the lowest or best rate actually charged to any
customer and that Sanwa may make various commercial or other loans at rates of
interest having no relationship to such rate. For purposes of this Agreement,
each change in the Reference Rate shall be effective as of the opening of
business on the date announced as the effective date of any change in such
"reference rate."
"REFERENCE RATE ADVANCE" means an Advance that bears interest by
reference to the Reference Rate.
"REGISTER" has the meaning specified in Section 8.7(c).
"REIT" means a "real estate investment trust" (as defined in the
Code) formed and operated in compliance with the Code.
"RELEASE OF CLAIMS" means the Release of Claims dated the
Closing Date executed by the Borrower and its Subsidiaries in favor of the
Lenders and the Administrative Agent.
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"REMIC" means a "real estate mortgage investment conduit" (as
defined in the Code) formed and operated in compliance with the Code.
"REMIC CERTIFICATE" means a certificate issued by or on behalf
of any REMIC formed by the Borrower or any Subsidiary representing an interest
in a mortgage loan portfolio held by or on behalf of such REMIC.
"REMIC PROPERTY" means any real property, securing a pooled
mortgage loan underlying one or more REMIC Certificates held by the Borrower or
any Subsidiary, comprising a healthcare facility that offers products and
services related to long-term healthcare, including a skilled-nursing home, a
long-term-care facility, an assisted-living facility and any similar healthcare
facility.
"REORGANIZATION" means, with respect to any Multiemployer Plan,
the condition that such plan is in reorganization within the meaning of Section
4241 of ERISA.
"REPORTABLE EVENT" means any of the events set forth in
Section 4043(c) of ERISA, other than those events as to which the 30-day
notice period is waived under subsection .13, .14, .16, .18, .19 or .20 of
PBGC Reg. Section 4043.
"REQUIRED LENDERS" means at any time Lenders owed at least
66-2/3% of the then aggregate unpaid principal amount of the Advances owing to
the Lenders or, if no such principal amount is then outstanding, Lenders having
at least 66-2/3% of the Commitments under all of the Facilities.
"SANWA" means Sanwa Bank California, acting in its individual
capacity.
"SEC" means the Securities and Exchange Commission of the
United States of America.
"SECURITY AGREEMENT" means a Security Agreement, in form and
substance satisfactory to the Administrative Agent in its reasonable discretion,
executed by the Borrower in favor of the Administrative Agent (or, at the option
of the Administrative Agent, an independent collateral agent) for the benefit of
the Lenders.
"SENIOR DEBT" means all unsubordinated Debt of the Borrower and
its Subsidiaries on a Consolidated basis, excluding nonrecourse Debt secured by
a Lien on real property.
"SIGNIFICANT SUBSIDIARY" means a Subsidiary that has Tangible
Net Worth of at least $2,500,000, but excluding LTC REMIC Corp., a Delaware
corporation, and LTC REMIC IV Corp., a Delaware corporation.
"SINGLE EMPLOYER PLAN" means any Plan that is covered by Title
IV of ERISA but is not a Multiemployer Plan.
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"SOLVENT" means, with respect to any Person on a particular
date, that on such date (a) the fair value of the property of such Person is
greater than the total amount of liabilities, including contingent liabilities,
of such Person, (b) the present fair salable value of the assets of such Person
is not less than the amount that will be required to pay the probable liability
of such Person on its debts as they become absolute and matured, (c) such Person
does not intend to, and does not believe that it will, incur debts or
liabilities beyond such Person's ability to pay as such debts and liabilities
mature and (d) such Person is not engaged in business or a transaction, and is
not about to engage in business or a transaction, for which such Person's
property would constitute an unreasonably small capital.
"SUBORDINATED CREDITOR" means a creditor of the Borrower that
has entered into a Subordination Agreement.
"SUBORDINATED DEBT" means (a) the Borrower's 8.50% Convertible
Subordinated Debentures due January 1, 2001 in the original principal amount of
$51,500,000, (b) the Borrower's 8.25% Convertible Subordinated Debentures due
July 1, 2001 in the original principal amount of $30,000,000, (c) the Borrower's
7.75% Convertible Subordinated Debentures due January 1, 2002 in the original
principal amount of $30,000,000 and (d) any other Debt of the Borrower that is
subordinated to the Debt of the Borrower under the Credit Documents pursuant to
a Subordination Agreement.
"SUBORDINATION AGREEMENT" means an agreement, in form and
substance satisfactory to the Administrative Agent in its reasonable discretion,
pursuant to which Debt of the Borrower is subordinated to the Debt of the
Borrower under the Credit Documents.
"SUBSIDIARY" means, as to any Person, any corporation, limited
liability company, partnership, joint venture or other entity of which (a) a
majority of the outstanding capital stock or other ownership interests having
ordinary voting power to elect a majority of the board of directors or Persons
performing similar functions (irrespective of whether at the time other such
capital stock or interests have or might have voting power upon the occurrence
of a contingency) or (b) a majority of the interests in the capital or profits
of which is at the time directly or indirectly owned by such Person, by such
Person and one or more of its other Subsidiaries or by one or more of such
Person's other Subsidiaries. Unless otherwise specified herein, "Subsidiary"
means a Subsidiary of the Borrower.
"SYNDICATION AGENT" has the meaning specified in the recital
of parties to this Agreement.
"TANGIBLE NET WORTH" means, for any Person as of any date of
determination, the amount determined in accordance with the following: (a)
shareholders' equity, minus (b) the sum of (i) the cost of treasury shares
plus (ii) the book value of all assets that should be classified as
intangibles (without duplication of deductions in respect of items already
deducted in arriving at surplus and retained earnings) but in any event
including debt-issuance costs, unamortized costs of securitization,
unrealized gain or loss on mortgage-backed securities, goodwill, research and
development costs, trademarks, trade names, copyrights, patents and
franchises, unamortized debt discount and expense, and any writeup in the
book value of assets resulting from a
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revaluation of such assets after the Closing Date, minus (c) all amounts
(without duplication) due from current and former officers, directors,
consultants and employees.
"TAXABLE INCOME CERTIFICATE" means an appropriately completed
certificate of an Authorized Officer substantially in the form of Exhibit H.
"TAXES" has the meaning specified in Section 2.13(a).
"TOTAL INVESTMENT" means, as of any date of determination, with
respect to specified Mortgage Loans and Owned Properties, and specified pooled
mortgage loans underlying REMIC Certificates, held by the Borrower and/or its
Subsidiaries, the sum of (a) the aggregate unpaid principal amount of such
Mortgage Loans plus (b) the aggregate amount of Book Value and depreciation of
such Owned Properties plus (c) the aggregate unpaid principal balance of such
pooled mortgage loans (other than any such mortgage loans payable by the
Borrower or a Subsidiary to the applicable REMIC or a Person acting on behalf of
such REMIC).
"TYPE" refers to the distinction between Advances bearing
interest by reference to the Reference Rate and Advances bearing interest by
reference to the Eurodollar Rate.
SECTION 1.2 ACCOUNTING TERMS. All accounting terms not
specifically defined herein shall be construed in accordance with GAAP.
SECTION 1.3 INTERPRETATION. In this Agreement the singular includes
the plural and the plural the singular; words importing any gender include
the other genders; references to statutes are to be construed as including
all statutory provisions consolidating, amending or replacing the statute
referred to; references to "writing" include printing, typing, lithography
and other means of reproducing words in a tangible, visible form; the words
"including," "includes" and "include" are deemed to be followed by the words
"without limitation"; references to articles, sections (or subdivisions of
sections), recitals, exhibits, annexes and schedules are to those of this
Agreement unless otherwise indicated; references to agreements and other
contractual instruments are deemed to include all subsequent amendments and
other modifications to such instruments, but only to the extent such
amendments and other modifications are not prohibited by the terms of this
Agreement; and references to Persons include their respective permitted
successors and assigns.
ARTICLE 2.
AMOUNTS AND TERMS OF ADVANCES AND LETTERS OF CREDIT
SECTION 2.1 COMMITMENTS. Each Lender agrees severally, on the terms
and conditions contained in this Agreement, to extend credit to the Borrower
from time to time from the Closing Date to the Commitment Termination Date by
making funded advances to the Borrower (each an "ADVANCE") pursuant to
Section 2.2 and participating in standby letters of credit issued for the
account of the Borrower (each a "LETTER OF CREDIT") pursuant to Section 2.15,
in an aggregate amount not to exceed at any time outstanding the amount set
forth opposite such Lender's name
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on the signature pages hereof or, if such Lender has entered into one or more
Assignments and Acceptances, set forth for such Lender in the Register
maintained by the Administrative Agent pursuant to Section 8.7(c); PROVIDED,
HOWEVER, that the sum of (a) the aggregate principal amount of all Advances
outstanding, (b) the aggregate Letter of Credit Amount of all Letters of
Credit outstanding and (c) the aggregate amount of unreimbursed drawings
under all Letters of Credit shall not exceed at any time the lesser of the
Borrowing Base and the Aggregate Commitment; FURTHER PROVIDED, HOWEVER, that
the sum of (a) the aggregate Letter of Credit Amount of all Letters of Credit
outstanding and (b) the aggregate amount of unreimbursed drawings under all
Letters of Credit shall not exceed $15,000,000 at any time; and FURTHER
PROVIDED, HOWEVER, that on the Closing Date all "Loans" and "Letters of
Credit" outstanding under the Old Revolving Credit Agreement and all "Loans"
outstanding under the Old Term Loan Agreement shall be deemed to be Advances
and Letters of Credit, as applicable, outstanding under this Agreement (said
agreement by each Lender, subject to the foregoing provisos and to the
provisions of Sections 2.4 and 2.5, herein called such Lender's
"COMMITMENT"). Within the limits of each Lender's Commitment, the Borrower
may borrow under Section 2.2, have Letters of Credit issued for the
Borrower's account under Section 2.15, prepay Advances under Section 2.7,
reborrow under Section 2.2, and have additional Letters of Credit issued for
the Borrower's account under Section 2.15 after the expiration of previously
issued Letters of Credit.
SECTION 2.2 MAKING ADVANCES.
(a) Except as otherwise provided in Section 2.15, each
Borrowing shall be made on notice from the Borrower to the Administrative
Agent given not later than 9:00 a.m., Los Angeles time, (i) in the case of a
Borrowing composed of Reference Rate Advances, on the date of the proposed
Borrowing or (ii) in the case of a Borrowing composed of Eurodollar Rate
Advances, on the third Business Day before the date of the proposed
Borrowing. The Administrative Agent shall give each Lender prompt notice by
telecopier of each such notice of a Borrowing. Each such notice of a
Borrowing shall be by telephone confirmed, by the end of the same Business
Day, by the Borrower's delivery of a Notice of Borrowing to the
Administrative Agent by telecopier and shall specify therein the requested
(i) date of such Borrowing, which shall be a Business Day, (ii) Type of
Advances composing such Borrowing, (iii) aggregate amount of such Borrowing
and (iv) in the case of a Borrowing composed of Eurodollar Rate Advances,
initial Interest Period for such Advances. Each Lender will, before 12:00
noon, Los Angeles time, on the date of such Borrowing, make available to the
Administrative Agent at the Administrative Agent's Account, in immediately
available funds, such Lender's ratable portion of such Borrowing for the
account of such Lender's Applicable Lending Office. After the Administrative
Agent's receipt of such funds and upon fulfillment of the applicable
conditions set forth in Article 3, the Administrative Agent will make such
funds available to the Borrower by crediting the Borrower's Account.
(b) Notwithstanding anything in Section 2.2(a) to the
contrary, the Borrower may not select Eurodollar Rate Advances for any
Borrowing if (i) the aggregate amount of such Borrowing is less than
$5,000,000, (ii) the obligation of the Lenders to make Eurodollar Rate
Advances is then suspended pursuant to Section 2.11 or (iii) after giving
effect to such Borrowing, the aggregate number of different Interest Periods
for outstanding Eurodollar Rate Advances under this Agreement is greater than
10 (provided that, for purposes of this clause (iii),
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Interest Periods of the same duration but commencing on different dates shall
be treated as different Interest Periods).
(c) Each Notice of Borrowing shall be irrevocable and binding
on the Borrower. In the case of any Borrowing that the related Notice of
Borrowing specifies is to be composed of Eurodollar Rate Advances, the
Borrower will indemnify each Lender against any loss, cost or expense
incurred by such Lender as a result of any failure to fulfill, on or before
the date specified in such Notice of Borrowing, the applicable conditions set
forth in Article 3, including any loss, cost or expense incurred by reason of
the liquidation or reemployment of deposits or other funds acquired by such
Lender to fund the Advance to be made by such Lender as part of such
Borrowing when such Advance, as a result of such failure, is not made on such
date.
(d) Unless the Administrative Agent receives notice from a
Lender before the date of any Borrowing that such Lender will not make
available to the Administrative Agent such Lender's ratable portion of such
Borrowing, the Administrative Agent may assume that such Lender has made such
portion available to the Administrative Agent on the date of such Borrowing
in accordance with Section 2.2(a), and the Administrative Agent may, in
reliance upon such assumption, make available to the Borrower on such date a
corresponding amount. If and to the extent that such Lender does not make
such ratable portion available to the Administrative Agent, such Lender and
the Borrower agree severally to repay such corresponding amount to the
Administrative Agent forthwith on demand, together with interest thereon for
each day from the date such amount is made available to the Borrower until
the date such amount is repaid to the Administrative Agent, at (i) in the
case of the Borrower, the interest rate applicable at the time to Advances
composing such Borrowing and (ii) in the case of such Lender, the Federal
Funds Rate. If such Lender repays to the Administrative Agent such
corresponding amount, such amount so repaid shall constitute such Lender's
Advance as part of such Borrowing for purposes of this Agreement.
(e) The failure of any Lender to make the Advance to be made
by it as part of any Borrowing shall not relieve any other Lender of its
obligation, if any, hereunder to make its Advance on the date of such
Borrowing, but no Lender shall be responsible for the failure of any other
Lender to make the Advance to be made by such other Lender on the date of any
Borrowing.
SECTION 2.3 FEES.
(a) The Borrower will pay to the Administrative Agent for the
account of the Lenders, ratably in accordance with their respective
Commitments, a fee on the average daily amount by which the Aggregate
Commitment exceeds the sum of (i) the aggregate principal amount of all
Advances outstanding, (ii) the aggregate Letter of Credit Amount of all
Letters of Credit outstanding and (iii) the aggregate amount of unreimbursed
drawings under all Letters of Credit, from the Closing Date until the
Commitment Termination Date, at a rate PER ANNUM equal at all times to the
Applicable Unused-Commitment Fee Rate in effect from time to time, payable
quarterly in arrears (with respect to each calendar quarter) within 3
Business Days after the last day of each March, June, September and December,
commencing with December of 2000, and
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on the Commitment Termination Date; PROVIDED, HOWEVER, that, for any partial
fee-payment period before the Closing Date, the Borrower shall not be
required to pay a fee as provided above and instead will pay the fee as
provided in Section 2.10 of the Old Revolving Credit Agreement.
(b) The Borrower will pay to the Administrative Agent for the
account of the Lenders, ratably in accordance with their respective
Commitments, a fee on the Letter of Credit Amount of each Letter of Credit
outstanding from time to time, from the date of issuance of such Letter of
Credit until such Letter of Credit has terminated, at a rate PER ANNUM equal
at all times to the Applicable LOC Rate in effect from time to time, payable
quarterly in arrears (with respect to each calendar quarter) within 3
Business Days after the last day of each March, June, September and December,
commencing with December of 2000, and on the Commitment Termination Date;
PROVIDED, HOWEVER, that, for any partial fee-payment period before the
Closing Date, the Borrower shall not be required to pay a fee as provided
above and instead will pay the fee as provided in Section 2.3(v)(a) of the
Old Revolving Credit Agreement.
(c) On October 2, 2002 the Borrower will pay to the
Administrative Agent for the account of the Lenders, ratably in accordance
with their respective Commitments, a commitment fee in the amount equal to 4%
of the Aggregate Commitment in effect on that date.
(d) On October 2, 2002, the Lenders will receive, ratably in
accordance with their respective Commitments, 20,000 book value units
("BVUS") for each $1,000,000 of Aggregate Commitment (or portion thereof) in
effect on that date. Such BVUs shall be evidenced by certificates, payable to
each Lender and substantially in the form of Exhibit I, delivered by the
Borrower to the Administrative Agent on such date. On the later of December
1, 2004 and the fifteenth day after the day on which the Borrower's report on
Form 10-Q for its third fiscal quarter of 2004 is filed with the SEC, the
Borrower will redeem such BVUs by paying to the Administrative Agent for the
account of the Lenders, ratably in accordance with the number of BVUs held
thereby, the amount equal to the product of (i) the aggregate number of BVUs
received by the Lenders on October 2, 2002 times (ii) the difference between
(A) the amount, if any, by which the Book Value per Common Share as of
September 30, 2004 exceeds the Book Value per Common Share as of September
30, 2000 minus (B) $2.00. The Borrower's obligation to make such payment, if
any, shall survive the payment of all other obligations of the Borrower under
this Agreement and the termination of this Agreement, and the foregoing
provisions (including the $2.00 amount specified in the preceding sentence)
shall be adjusted appropriately to avoid dilution caused by stock splits and
stock dividends.
(e) The Borrower will pay to the Issuing Bank for its own
account such fees (in addition to those specified in Section 2.3(b)) and
charges as are generally associated with letters of credit, in accordance
with the Issuing Bank's standard internal charge guidelines.
(f) The Borrower will pay to the Administrative Agent for the
account of the Administrative Agent, the Syndication Agent and the
Documentation Agent such fees as are specified in the Engagement Letter.
SECTION 2.4 OPTIONAL REDUCTION OF COMMITMENTS. The Borrower shall
have the right, upon at least 1 Business Day's prior written notice to the
Administrative Agent, to terminate
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permanently in whole or reduce permanently in part the unused portion of the
Aggregate Commitment, ratably among the Lenders in accordance with their
respective Commitments; PROVIDED, HOWEVER, that each partial reduction shall
be in the aggregate amount of $1,000,000 or an integral multiple of $500,000
in excess thereof.
SECTION 2.5 MANDATORY REDUCTION OF COMMITMENTS.
(a) On each date specified in Schedule 2, the Aggregate
Commitment shall be automatically and permanently reduced, ratably among the
Lenders in accordance with their respective Commitments, to the amount set
forth opposite such date, but only if and to the extent that the Aggregate
Commitment has not previously been reduced to such amount or less pursuant to
Section 2.4, 2.5(b) or 2.5(c).
(b) If and to the extent that any prepayment of Advances is
made pursuant to Section 2.8(c) (whether or not such prepayment exceeds the
aggregate principal amount of Advances then outstanding), the Aggregate
Commitment shall be automatically and permanently reduced, ratably among the
Lenders in accordance with their respective Commitments, by the amount equal
to the amount of such prepayment.
(c) On each date on which the Borrower or any Subsidiary
receives any discount upon the prepayment of any Debt, the Aggregate
Commitment shall be automatically and permanently reduced, ratably among the
Lenders in accordance with their respective Commitments, by the amount equal
to the amount of such discount.
SECTION 2.6 REPAYMENT. The Borrower will repay the outstanding
principal amount of the Advances in full on the Commitment Termination Date.
SECTION 2.7 OPTIONAL PREPAYMENTS. The Borrower may, upon at least 1
Business Day's notice to the Administrative Agent in the case of a Reference
Rate Advance and upon at least 3 Business Days' notice to the Administrative
Agent in the case of a Eurodollar Rate Advance, in either case stating the
proposed date and aggregate principal amount of the prepayment, and if such
notice is given the Borrower will on such proposed date, prepay the
outstanding principal amount of the Advances in whole or in part in the
aggregate amount stated in such notice, without penalty or premium, together
with accrued interest to the date of such prepayment on the principal amount
prepaid; PROVIDED, HOWEVER, that each partial prepayment shall be in the
aggregate principal amount of $1,000,000 or an integral multiple of $500,000
in excess thereof. Any prepayment of a Eurodollar Rate Advance made other
than on the last day of an Interest Period therefor shall be subject to the
provisions of Section 8.4(c).
SECTION 2.8 MANDATORY PREPAYMENTS.
(a) If at any time (i) the sum of (A) the aggregate principal amount of all
Advances outstanding, (B) the aggregate Letter of Credit Amount of all Letters
of Credit outstanding and (C) the aggregate amount of unreimbursed drawings
under all Letters of Credit exceeds (ii) the lesser of the Aggregate Commitment
and the Borrowing Base for any reason, the Borrower will immediately, without
any notice or request by the Administrative Agent or any
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Lender, prepay the Advances and/or such unreimbursed drawings in the
aggregate amount equal to the amount of such excess or, if no Advances or
unreimbursed drawings under Letters of Credit are then outstanding, deposit
with the Administrative Agent cash collateral in the amount equal to the
amount of such excess.
(b) If at any time (i) the sum of (A) the aggregate Letter of
Credit Amount of all Letters of Credit outstanding plus (B) the aggregate
amount of unreimbursed drawings under all Letters of Credit exceeds (ii)
$15,000,000 for any reason, the Borrower will immediately deposit with the
Administrative Agent cash collateral in the amount equal to the amount of
such excess.
(c) The Borrower will, as promptly as practicable but in any
event within 3 Business Days after each date of receipt by the Borrower or
any Subsidiary of (i) Net Cash Proceeds from the sale, transfer or other
disposition by the Borrower or any Subsidiary of any asset constituting
Collateral (or any asset that would constitute Collateral but for the fact
that there is no Lien thereon in favor of the Administrative Agent although
required by the terms of this Agreement) or any other asset of the Borrower,
provided that such other asset is disposed of in a transaction or related
transactions whose aggregate consideration is at least $250,000, (ii) Net
Cash Proceeds from the sale or issuance of any debt securities of or equity
interest in the Borrower or any Subsidiary or any warrants, options or other
rights to acquire any such equity interest, (iii) Net Cash Proceeds from any
borrowing by the Borrower (other than under this Agreement) or any
Subsidiary, (iv) Net Cash Proceeds from the prepayment of any Debt owed to
the Borrower or any Subsidiary (other than any such Debt that is being
refinanced or that is permitted pursuant to Section 5.2(b)(ix) or 5.2(f)(ii))
or (v) insurance or condemnation proceeds from any casualty or condemnation
in respect of any Owned Property (unless the Borrower or such Subsidiary, as
applicable, is legally obligated to apply such proceeds to reconstruction of
such Owned Property), prepay an aggregate principal amount of Advances
composing part of the same Borrowings and/or unreimbursed drawings under
Letters of Credit, or, if no Advances or unreimbursed drawings under Letters
of Credit are then outstanding, deposit with the Administrative Agent cash
collateral in the amount, equal to 80% or, if the Aggregate Commitment has
been reduced to $145,000,000 or less before such date, 50% of the amount of
the applicable Net Cash Proceeds or insurance or condemnation proceeds.
(d) All prepayments under this Section 2.8 shall be made
together with accrued interest to the date of such prepayment on the
principal amount prepaid.
SECTION 2.9 INTEREST.
(a) The Borrower will pay interest on the unpaid principal
amount of each Advance, from the date of such Advance until such principal
amount is paid in full, (i) during such periods as such Advance is a
Reference Rate Advance, at the Reference Rate in effect from time to time,
payable monthly in arrears on the first Business Day of each calendar month
during such periods and on the date on which such Reference Rate Advance is
Converted or paid in full, and (ii) during such periods as such Advance is a
Eurodollar Rate Advance, at a rate PER ANNUM equal at all times during each
Interest Period for such Advance to the sum of (A) the Eurodollar Rate for
such Interest Period for such Advance plus (B) the Applicable Eurodollar
Margin in
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effect form time to time, payable on the last day of such Interest Period
and, if such Interest Period has a duration of more than 3 months, on each
day that occurs during such Interest Period every 3 months from the first day
of such Interest Period; PROVIDED, HOWEVER, that, for any partial
interest-payment period before the Closing Date, the Borrower shall not be
required to pay interest as provided above and instead will pay interest as
provided in Section 2.16 of the Old Revolving Credit Agreement or Section
2.13 of the Old Term Loan Agreement, as applicable.
(b) Upon the occurrence and during the continuation of any
Event of Default, the Borrower will pay interest on the unpaid principal
amount of each Advance at a rate PER ANNUM equal at all times to the sum of
the Reference Rate in effect from time to time plus 2% PER ANNUM, payable on
demand by the Administrative Agent.
SECTION 2.10 CONVERSION OF ADVANCES.
(a) The Borrower may on any Business Day, upon notice given
to the Administrative Agent not later than 12:00 noon, Los Angeles time, on
the third Business Day before the date of the proposed Conversion, subject to
the provisions of Section 2.11, Convert all or any portion of the Advances of
one Type composing the same Borrowing into Advances of the other Type;
PROVIDED, HOWEVER, that any Conversion of Eurodollar Rate Advances into
Reference Rate Advances shall be made on, and only on, the last day of an
Interest Period for such Eurodollar Rate Advances, any Conversion of
Reference Rate Advances into Eurodollar Rate Advances shall be in an amount
not less than the minimum amount specified in Section 2.2(b), and no
Conversion of any Advances shall result in more different Interest Periods
for outstanding Eurodollar Rate Advances than permitted under Section 2.2(b).
Each such notice of Conversion shall be by telephone confirmed, by the end of
the same Business Day, by the Borrower's delivery of a Notice of
Conversion/Continuation to the Administrative Agent by telecopier and, within
the restrictions specified above, shall specify (i) the date of such
Conversion, (ii) the Advances to be Converted and (iii) if such Conversion is
into Eurodollar Rate Advances, the duration of the initial Interest Period
for such Advances. Each notice of Conversion shall be irrevocable and binding
on the Borrower.
(b) On any day on which the aggregate unpaid principal amount
of Eurodollar Rate Advances composing any Borrowing is reduced, by payment,
prepayment or otherwise, to less than $5,000,000, such Advances shall
automatically Convert into Reference Rate Advances.
(c) If the Borrower fails to select the duration of any
Interest Period for any Eurodollar Rate Advances in accordance with the
provisions contained in the definition of "Interest Period" in Section 1.1,
the Administrative Agent will forthwith so notify the Borrower and the
Lenders, whereupon each such Eurodollar Rate Advance shall automatically, on
the last day of the then existing Interest Period therefor, be Converted into
a Reference Rate Advance.
(d) Upon the occurrence and during the continuation of any
Default, (i) each Eurodollar Rate Advance shall automatically, on the last
day of the then existing Interest Period therefor, Convert into a Reference
Rate Advance, and (B) the obligation of the Lenders to make, or to Convert
Advances into, Eurodollar Rate Advances shall be suspended.
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SECTION 2.11 INCREASED COSTS, ETC.
(a) If, due to either (i) the introduction of or any change
(other than any change by way of imposition or increase of reserve
requirements included in the Eurodollar Rate Reserve Percentage) in or in the
interpretation of any Governmental Rule or (ii) compliance with any guideline
or request from any Governmental Person (whether or not having the force of
law), in any case introduced or changed after the date hereof, there is an
increase in the cost to any Lender of agreeing to make, making, funding or
maintaining any Eurodollar Rate Advance, then the Borrower will from time to
time, upon demand by such Lender (with a copy of such demand to the
Administrative Agent), pay to the Administrative Agent for the account of
such Lender additional amounts sufficient to compensate such Lender for such
increased cost. A certificate as to the amount of such increased cost,
submitted to the Borrower by such Lender, shall be conclusive and binding for
all purposes, absent manifest error.
(b) If any Lender determines (i) that compliance with any
Governmental Rule or any guideline or request from any Governmental Person
(whether or not having the force of law) introduced or changed after the date
hereof affects or would affect the amount of capital required or expected to
be maintained by such Lender or any corporation controlling such Lender and
(ii) that the amount of such capital is increased by or based upon the
existence of such Lender's commitment to lend or Advances hereunder and other
commitments or loans of a similar type or upon the issuance of or
participation in the Letters of Credit or similar contingent obligations,
then, upon demand by such Lender (with a copy of such demand to the
Administrative Agent), the Borrower will pay to the Administrative Agent for
the account of such Lender, from time to time as specified by such Lender,
additional amounts sufficient to compensate such Lender in the light of such
circumstances, to the extent that such Lender reasonably determines such
increase in capital to be allocable to the existence of such Lender's
commitment to lend or Advances hereunder or to the issuance of or
participation in any Letters of Credit. A certificate as to such amounts,
submitted to the Borrower by such Lender, shall be conclusive and binding for
all purposes, absent manifest error.
(c) If, with respect to any Eurodollar Rate Advance, any
Lender notifies the Administrative Agent that the Eurodollar Rate for any
Interest Period for such Advance will not adequately reflect the cost to such
Lender of making, funding or maintaining such Eurodollar Rate Advance, then
the Administrative Agent will forthwith so notify the Borrower, whereupon (i)
such Eurodollar Rate Advance shall automatically, on the last day of the then
existing Interest Period therefor, Convert into a Reference Rate Advance, and
(ii) the obligation of such Lender to make, or to Convert Advances into,
Eurodollar Rate Advances shall be suspended until the Administrative Agent
notifies the Borrower that such Lender has determined that the circumstances
causing such suspension no longer exist.
(d) Notwithstanding any other provision of this Agreement, if
the introduction of or any change in or in the interpretation of any
Governmental Rule makes it unlawful, or any Governmental Person asserts that
it is unlawful, for any Lender or its Eurodollar Lending Office to perform
its obligations hereunder to make Eurodollar Rate Advances or to continue to
fund or maintain Eurodollar Rate Advances hereunder, then, on notice thereof
and demand therefor by such Lender to the Borrower through the Administrative
Agent, (i) each affected Eurodollar Rate
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Advance of such Lender shall automatically, upon such demand, Convert into a
Reference Rate Advance, and (ii) the obligation of such Lender to make, or to
Convert Advances into, Eurodollar Rate Advances shall be suspended until the
Administrative Agent notifies the Borrower that such Lender has determined
that the circumstances causing such suspension no longer exist.
(e) If, after the date hereof, any change in any Governmental
Rule or in the interpretation thereof by any Governmental Person charged with
the administration thereof either (i) imposes, modifies or deems applicable
any reserve, special-deposit or similar requirement against letters of credit
or guaranties issued by, or assets held by, or deposits in or for the account
of, the Issuing Bank or any Lender or (ii) imposes on the Issuing Bank or any
Lender any other condition regarding this Agreement, such Lender or any
Letter of Credit, and the result of any event referred to in the preceding
clause (i) or (ii) is to increase the cost to the Issuing Bank of issuing or
maintaining any Letter of Credit or to any Lender of participating therein,
then, upon demand by the Issuing Bank or such Lender, as applicable (with a
copy of such demand to the Administrative Agent), the Borrower will pay to
the Administrative Agent for the account of the Issuing Bank or such Lender,
as applicable, from time to time as specified by the Issuing Bank or such
Lender, as applicable, additional amounts sufficient to compensate the
Issuing Bank or such Lender, as applicable, for such increased cost. A
certificate as to the amount of such increased cost, submitted to the
Borrower by the Issuing Bank or such Lender, as applicable, shall be
conclusive and binding for all purposes, absent manifest error.
(f) If the Borrower becomes obligated to pay to any Lender
(other than Sanwa) any amount pursuant to this Section 2.11 or Section 2.13
or if any Lender requests that its Eurodollar Rate Advances be converted into
Reference Rate Advances pursuant to Section 2.11(c), then the Borrower may,
so long as no Default has occurred and is continuing, replace such Lender
with a Person that is an Eligible Assignee and that complies with the
provisions of Section 8.7; PROVIDED, HOWEVER, that the Borrower shall not
make any payment of principal or interest to such Lender in connection with
the replacement of such Lender.
SECTION 2.12 PAYMENTS AND COMPUTATIONS.
(a) The Borrower will make each payment hereunder not later
than 12:00 noon, Los Angeles time, on the day when due, in U.S. dollars and
immediately available funds, to the Administrative Agent at the
Administrative Agent's Account. The Administrative Agent will promptly
thereafter cause to be distributed (i) like funds relating to the payment of
principal, interest or fees ratably (other than any payments pursuant to
Section 2.3(e), 2.3(f), 2.11(a), 2.11(b), 2.11(e) or 2.13 and payments to the
Issuing Bank in respect of Letters of Credit) to the Lenders for the account
of their Applicable Lending Offices and (ii) like funds relating to the
payment of any other amount payable to any Lender to such Lender for the
account of its Applicable Lending Office, in each case to be applied in
accordance with the terms of this Agreement. Upon its acceptance of an
Assignment and Acceptance and recording of the information contained therein
in the Register pursuant to Section 8.7(d), from and after the effective date
of such Assignment and Acceptance the Administrative Agent will make all
payments hereunder in respect of the interest assigned thereby to the Lender
assignee thereunder,
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and the parties to such Assignment and Acceptance will make directly between
themselves all appropriate adjustments in such payments for periods before
such effective date.
(b) All computations of interest and fees shall be made by the
Administrative Agent on the basis of a year of 360 days, in each case for the
actual number of days (including the first day but excluding the last day)
occurring in the period for which such interest or fees are payable;
PROVIDED, HOWEVER, that computations of interest on Reference Rate Advances
shall be made on the basis of a year of 365 or 366 days, as applicable. Each
determination by the Administrative Agent of an interest rate or fee
hereunder shall be conclusive and binding for all purposes, absent manifest
error.
(c) Whenever any payment hereunder is stated to be due on a
day other than a Business Day, such payment shall be made on the next
succeeding Business Day, and such extension of time shall in such case be
included in the computation of payment of interest or fee, as the case may
be; PROVIDED, HOWEVER, that, if such extension would cause payment of
interest on or principal of any Eurodollar Rate Advances to be made in the
next succeeding calendar month, such payment shall instead be made on the
next preceding Business Day.
(d) Unless the Administrative Agent receives notice from the
Borrower before the date on which any payment is due to any Lender hereunder
that the Borrower will not make such payment in full, the Administrative
Agent may assume that the Borrower has made such payment in full to the
Administrative Agent on such date, and the Administrative Agent may, in
reliance upon such assumption, cause to be distributed to each such Lender on
such due date an amount equal to the amount then due to such Lender. If and
to the extent that the Borrower does not make such payment in full to the
Administrative Agent, each such Lender will repay to the Administrative Agent
forthwith on demand such amount distributed to such Lender, together with
interest thereon for each day from the date on which such amount is
distributed to such Lender until the date on which such Lender repays such
amount to the Administrative Agent, at the Federal Funds Rate.
SECTION 2.13 TAXES.
(a) Any and all payments by the Borrower hereunder shall be
made, in accordance with Section 2.12, free and clear of and without
deduction for any and all present or future taxes, levies, imposts,
deductions, charges or withholdings, and all liabilities with respect
thereto, excluding (i) in the case of each Lender and the Administrative
Agent, taxes imposed on its overall net income, and franchise taxes imposed
on it, by the jurisdiction under the laws of which such Lender or the
Administrative Agent (as the case may be) is organized or any political
subdivision thereof and (ii) in the case of each Lender, taxes imposed on its
overall net income, and franchise taxes imposed on it, by the jurisdiction of
such Lender's Applicable Lending Office or any political subdivision thereof
(all such nonexcluded taxes, levies, imposts, deductions, charges,
withholdings and liabilities being hereinafter referred to as "TAXES"). If
the Borrower is required by law to deduct any Taxes from or in respect of any
sum payable hereunder to any Lender or the Administrative Agent, then (A) the
sum payable shall be increased as may be necessary so that after making all
required deductions (including deductions applicable to additional sums
payable under this Section 2.13) such Lender or the Administrative
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Agent (as the case may be) receives an amount equal to the sum it would have
received had no such deductions been made, (B) the Borrower will make such
deductions, and (C) the Borrower will pay the full amount deducted to the
relevant taxation authority or other authority in accordance with applicable
law.
(b) In addition, the Borrower agrees to pay any present or
future stamp or documentary taxes or any other excise or property taxes,
charges or similar levies that arise from any payment made hereunder or from
the execution, delivery or registration of, or otherwise with respect to,
this Agreement (hereinafter referred to as "OTHER TAXES").
(c) The Borrower will indemnify each Lender and the
Administrative Agent for the full amount of Taxes and Other Taxes (including
any Taxes or Other Taxes imposed by any jurisdiction on amounts payable under
this Section 2.13) paid by such Lender or the Administrative Agent (as the
case may be) and any liability (including penalties, additions to tax,
interest and expenses) arising therefrom or with respect thereto, whether or
not such Taxes or Other Taxes were correctly or legally asserted. This
indemnification shall be made within 30 days from the date such Lender or the
Administrative Agent (as the case may be) makes written demand therefor.
(d) Within 30 days after the date of any payment of Taxes, the
Borrower will furnish to the Administrative Agent upon request thereby, at
its address referred to in Section 8.2, the original or a certified copy of a
receipt evidencing payment thereof. If no Taxes are payable in respect of any
payment hereunder, the Borrower will furnish to the Administrative Agent, at
such address, a certificate from each appropriate taxing authority, or an
opinion of counsel acceptable to the Administrative Agent, in either case
stating that such payment is exempt from or not subject to Taxes, PROVIDED,
HOWEVER, that such certificate or opinion need only be given if (i) the
Borrower makes any payment from any account located outside the United States
or (ii) the payment is made by a payor that is not a United States Person.
For purposes of this Section 2.13 the terms "UNITED STATES" and "UNITED
STATES PERSON" shall have the respective meanings set forth in Section 7701
of the Code.
(e) Without prejudice to the survival of any other agreement
of the Borrower hereunder, the agreements and obligations of the Borrower
contained in this Section 2.13 shall survive the payment in full of principal
and interest hereunder.
(f) Each Lender organized under the laws of a jurisdiction
outside the United States of America, on or before the date of its execution
and delivery of this Agreement in the case of each initial Lender hereunder
and on the date of the Assignment and Acceptance pursuant to which it becomes
a Lender in the case of each other Lender, to the extent it can lawfully do
so will provide the Borrower and the Administrative Agent a completed
Internal Revenue Service Form W-8BEN or W-8ECI, as appropriate, or any
successor form prescribed by the Internal Revenue Service, certifying that
such Lender is entitled to benefits under an income tax treaty to which the
United States of America is a party that reduces the rate of withholding tax
on payments of interest or certifying that the income receivable pursuant to
this Agreement is effectively connected with the conduct of a trade or
business in the United States of America. On or before the date that any such
form or certification expires or becomes
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obsolete and promptly after the occurrence of any event requiring a change in
the most recent form previously delivered by any such Lender to the Borrower
and the Administrative Agent, such Lender will deliver to the Borrower and
the Administrative Agent a completed and appropriate new form.
(g) Each Lender organized under the laws of a jurisdiction
outside the United States of America that is not a "bank" within the meaning
of Section 881(c)(3)(A) of the Code and that cannot comply with the
requirements of Section 2.13(f) above (i) represents to the Borrower and the
Administrative Agent that it is not a "bank" within the meaning of Section
881(c)(3)(A) of the Code and (ii) on or before the date of its execution and
delivery of this Agreement in the case of each initial Lender hereunder and
on the date of the Assignment and Acceptance pursuant to which it becomes a
Lender in the case of each other Lender, will provide the Borrower and the
Administrative Agent a certificate, in form and substance satisfactory
thereto, and a completed Internal Revenue Service Form W-8BEN, or any
successor form prescribed by the Internal Revenue Service, certifying that
the income receivable pursuant to this Agreement is effectively connected
with the conduct of a trade or business in the United States of America. On
or before the date that any such form or certification expires or becomes
obsolete and promptly after the occurrence of any event requiring a change in
the most recent form previously delivered by any such Lender to the Borrower
and the Administrative Agent, such Lender will deliver to the Borrower and
the Administrative Agent a completed and appropriate new form.
SECTION 2.14 SHARING OF PAYMENTS, ETC. If any Lender obtains any
payment (whether voluntary, involuntary or otherwise) on account of the
Advances owing to it (other than payments pursuant to Section 2.3(e), 2.3(f),
2.11(a), 2.11(b), 2.11(e) or 2.13 and payments to the Issuing Bank in respect
of Letters of Credit) in excess of its ratable share of payments on account
of the Advances obtained by all of the Lenders, then such Lender will
forthwith purchase from the other Lenders such participations in the Advances
owing to them as necessary to cause such purchasing Lender to share the
excess payment ratably with each of them; PROVIDED, HOWEVER, that, if all or
any portion of such excess payment is thereafter recovered from such
purchasing Lender, such purchase from each Lender shall be rescinded, and
such Lender will repay to the purchasing Lender the purchase price to the
extent of such recovery, together with an amount equal to such Lender's
ratable share (according to the proportion of (i) the amount of such Lender's
required repayment to (ii) the total amount so recovered from the purchasing
Lender) of any interest or other amount paid or payable by the purchasing
Lender in respect of the total amount so recovered. The Borrower agrees that
any Lender so purchasing a participation from another Lender pursuant to this
Section 2.14 may, to the fullest extent permitted by law, exercise all its
rights of payment with respect to such participation as fully as if such
Lender were the direct creditor of the Borrower in the amount of such
participation.
SECTION 2.15 LETTERS OF CREDIT.
(a) The Borrower may request the issuance of Letters of
Credit, from time to time from and including the Closing Date to but
excluding the 14th Business Day before the Commitment Termination Date, by
giving the Issuing Bank a Letter of Credit Request at least 3 Business Days
before the requested date of issuance (which shall be a Business Day) of each
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Letter of Credit. Any Letter of Credit Request received by the Issuing Bank
later than 11:00 a.m., Los Angeles time, shall be deemed to have been
received on the next Business Day. Each Letter of Credit Request shall be
delivered by telecopier, shall be signed by an Authorized Officer, shall be
irrevocable and shall be effective upon receipt by the Issuing Bank. Upon
fulfillment of the applicable conditions set forth in Article 3, the Issuing
Bank will issue the requested Letter of Credit. No Letter of Credit shall
have (i) an initial Letter of Credit Amount of less than $500,000 or (ii) an
expiration date later than the earlier of (A) the date that is 1 year after
the date of issuance of such Letter of Credit and (B) the 7th Business Day
before the Commitment Termination Date. The terms of this Agreement shall
take precedence if there is any inconsistency between such terms and those of
any Letter of Credit Request.
(b) Immediately upon the issuance of each Letter of Credit,
the Issuing Bank shall be deemed to have sold and transferred to each Lender,
and each Lender shall be deemed to have purchased and received from the
Issuing Bank, in each case irrevocably and without any further action by any
party, an undivided interest and participation in such Letter of Credit, each
drawing thereunder and the obligations of the Borrower under this Agreement
in respect thereof in an amount equal to the product of (i) a fraction the
numerator of which is the amount of the Commitment of such Lender and the
denominator of which is the aggregate amount of all of the Commitments and
(ii) the maximum amount available to be drawn under such Letter of Credit
(assuming compliance with all conditions to drawing). The Issuing Bank will
promptly notify each Lender of the issuance of each Letter of Credit, the
initial Letter of Credit Amount of each Letter of Credit, any change in the
face amount or expiration date of any Letter of Credit and the cancellation
or other termination of each Letter of Credit, and the Issuing Bank will
promptly notify the Borrower and each Lender of any drawing under a Letter of
Credit; PROVIDED, HOWEVER, that the Issuing Bank's failure to do any of the
foregoing shall not affect the Borrower's or any Lender's obligations
hereunder.
(c) The reimbursement by the Borrower of any payment of a
drawing under a Letter of Credit shall first be made by application of any
cash collateral held by the Administrative Agent with respect to such Letter
of Credit. After any such cash collateral has been applied, the payment by
the Issuing Bank of any drawing under a Letter of Credit shall constitute for
all purposes of this Agreement the making by the Issuing Bank of a Reference
Rate Advance in the amount of such drawing (but without any requirement of
compliance with the conditions set forth in Article 3). In the event that any
such Reference Rate Advance is not repaid by the Borrower by 12:00 noon, Los
Angeles time, on the day of the related payment by the Issuing Bank of a
drawing under a Letter of Credit, the Issuing Bank will promptly notify the
Administrative Agent and each other Lender. Each such Lender will, on the day
of such notification (or, if such notification is not given by 1:00 p.m., Los
Angeles time, on such day, then on the next succeeding Business Day), make a
Reference Rate Advance, which shall be used to repay the applicable portion
of the Issuing Bank's Reference Rate Advance with respect to such Letter of
Credit drawing, in the amount equal to the amount of such Lender's
participation in such drawing (but without any requirement for compliance
with the applicable conditions set forth in Article 3) and will make
available to the Administrative Agent for the account of the Issuing Bank by
deposit to the Administrative Agent's Account, in immediately available
funds, the amount of such Reference Rate Advance. In the event that any
Lender fails to make available to the Administrative Agent for the account of
the Issuing Bank the amount of
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such Reference Rate Advance, the Issuing Bank shall be entitled to recover
such amount on demand from such Lender, together with interest thereon at the
Federal Funds Rate.
(d) The obligations of the Borrower under this Agreement, any
Letter of Credit Request and any other agreement or instrument relating to
any Letter of Credit (collectively the "LOC DOCUMENTS") shall be absolute,
unconditional and irrevocable and shall be paid strictly in accordance with
the terms of the LOC Documents under all circumstances, including the
following circumstances:
(i) any lack of validity or enforceability of any LOC
Document;
(ii) the existence of any claim, setoff, defense or other
right that the Borrower may have at any time against any beneficiary or
transferee of a Letter of Credit (or any Person for whom any such beneficiary
or transferee may be acting), the Issuing Bank or any other Person, whether
in connection with this Agreement, the transactions contemplated hereby or by
the LOC Documents or any unrelated transaction;
(iii) any document presented under a Letter of Credit, or
any statement therein, proving to be forged, fraudulent, invalid or
insufficient in any respect; or any statement therein being untrue or
inaccurate in any respect;
(iv) payment by the Issuing Bank under a Letter of Credit
against presentation of a draft or certificate that does not comply with the
terms of such Letter of Credit;
(v) any exchange, release or nonperfection of any
collateral, or any release, amendment or waiver of, or consent to departure
from, any guaranty, for any or all of the Obligations of the Borrower in
respect of the Letters of Credit; or
(vi) any other circumstance or happening whatsoever,
whether or not similar to any of the foregoing, including any other
circumstance that might otherwise constitute a defense available to, or a
discharge of, the Borrower or a guarantor.
(e) The Borrower assumes all risks of the acts or omissions of
any beneficiary or transferee of any Letter of Credit with respect to its use
of such Letter of Credit. Neither the Issuing Bank nor any of its officers or
directors shall be liable or responsible for (i) the use that may be made of
any Letter of Credit or any act or omission of any beneficiary or transferee
in connection therewith, (ii) the validity, sufficiency or genuineness of
documents, or of any endorsement thereon, even if such documents should prove
to be in any or all respects invalid, insufficient, fraudulent or forged,
(iii) payment by the Issuing Bank against presentation of documents that do
not comply with the terms of a Letter of Credit, including failure of any
documents to bear any reference or adequate reference to the Letter of
Credit, or (iv) any other circumstance whatsoever in making or failing to
make payment under any Letter of Credit; PROVIDED, HOWEVER, that the Borrower
shall have a claim against the Issuing Bank, and the Issuing Bank shall be
liable to the Borrower, to the extent of any direct, but not consequential,
damages suffered by the Borrower that the Borrower proves were caused by (A)
the Issuing Bank's willful misconduct or gross negligence in determining
whether documents presented
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under any Letter of Credit comply with the terms of such Letter of Credit or
(B) the Issuing Bank's willful failure to make lawful payment under a Letter
of Credit after the presentation to it of a draft and certificates strictly
complying with the terms and conditions of the Letter of Credit. In
furtherance and not in limitation of the foregoing, the Issuing Bank may
accept any document that appears on its face to be in order, without
responsibility for further investigation, regardless of any notice or
information to the contrary.
ARTICLE 3.
CONDITIONS OF LENDING
SECTION 3.1 CONDITIONS PRECEDENT TO EFFECTIVENESS. The effectiveness
of this Agreement is subject to the Borrower's payment to the Administrative
Agent for the account of the Lenders, ratably in accordance with their
respective Commitments, of an amendment fee of $1,850,000, to the Borrower's
payment to the Administrative Agent for the account of the Administrative
Agent, the Syndication Agent and the Documentation Agent of all accrued fees
and expenses of such agents (as provided in Section 8.4 or in the Engagement
Letter, including the accrued fees and disbursements of legal counsel to the
Administrative Agent, the Syndication Agent and the Documentation Agent and
of the financial consultant to the Administrative Agent, provided that the
fees and disbursements of such financial consultant through the date hereof
shall be limited to $75,000) and to the Administrative Agent's receipt of the
following, each dated the effective date of this Agreement (unless otherwise
specified), in form and substance satisfactory to the Administrative Agent in
its reasonable discretion and in the number of originals requested by the
Administrative Agent:
(a) this Agreement, duly executed by the Borrower and the
Lenders;
(b) the Notes, duly executed by the Borrower;
(c) the Release of Claims, duly executed by the Borrower and
by the Guarantors named as such in the definition of "Guarantors" in Section
1.1;
(d) Guaranties, duly executed by the Guarantors named as such
in the definition of "Guarantors" in Section 1.1;
(e) a Borrowing Base Certificate as of September 30, 2000,
duly executed by an Authorized Officer;
(f) a Collateral Valuation Certificate as of September 30,
2000, which shall assume that the Borrower has already complied with Section
3.4, duly executed by an Authorized Officer and showing a ratio of the
Collateral Value to the Aggregate Commitment of at least 1.82 to 1.00;
(g) certificates of the appropriate Governmental Persons,
dated reasonably near the Closing Date, certifying (A) that the articles of
incorporation of each of the Borrower and the Guarantors, including all
amendments thereto, attached to such certificates are correct
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and that such amendments are the only such amendments on file with such
Governmental Person and (B) that each of the Borrower and the Guarantors is
in good standing to do business in the state of its incorporation and, in the
case of the Borrower, in California;
(h) a certificate of the Chief Executive Officer or Chief
Financial Officer, and the Secretary or an Assistant Secretary, of each of
the Borrower and the Guarantors certifying (A) that there has been no
amendment to such company's articles of incorporation since the date of the
certification with respect thereto referred to in Section 3.1(g), (B) that
such company is in good standing to do business in the state of its
incorporation and in each other state where the nature of its business
requires it to be qualified to do business, (C) that the copy of such
company's bylaws attached to such certificate is correct and complete and
that such bylaws are in full force and effect, (D) that the copy of
resolutions of the Board of Directors of such company attached to such
certificate, authorizing such company to enter into, deliver and perform its
obligations under the Credit Documents to which such company is or is to be a
party, is correct and complete and that such resolutions are in full force
and effect, (E) that no proceeding has been commenced for the dissolution or
liquidation of such company, (F) that the representations and warranties of
such company contained in the Credit Documents are correct on and as of the
Closing Date as though made on and as of such date and (G) that no Default
has occurred and is continuing;
(i) a certificate of the Secretary or an Assistant Secretary
of each of the Borrower and the Guarantors certifying as to the incumbency,
and setting forth a specimen signature, of each of the persons who has signed
or will sign any Credit Document on behalf of such company;
(j) one or more favorable opinions of legal counsel for the
Borrower and the Guarantors as to such matters as any Lender through the
Administrative Agent may reasonably request; and
(k) such other approvals, opinions, evidence and documents as
any Lender through the Administrative Agent may reasonably request.
SECTION 3.2 CONDITIONS PRECEDENT TO EACH BORROWING AND LETTER OF
CREDIT ISSUANCE. The obligation of each Lender to make an Advance on the
occasion of each Borrowing, and the right of the Borrower to request the
issuance of a Letter of Credit, shall be subject to the further conditions
precedent that the following statements shall be true (and each of the giving
of the applicable Notice of Borrowing or Letter of Credit Request and the
acceptance by the Borrower of the proceeds of such Borrowing or the issuance
of such Letter of Credit shall constitute a representation and warranty by
the Borrower that on the date of such Borrowing or issuance such statements
are true):
(a) the representations and warranties contained in each
Credit Document are correct in all material respects on and as of the date of
such Borrowing or issuance, before and after giving effect to such Borrowing
or issuance and to the application of the proceeds thereof, as though made on
and as of such date (other than any such representations or warranties that,
by their terms, refer to a specific date, in which case as of such specific
date); and
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(b) no event has occurred and is continuing, or would result
from such Borrowing or issuance or from the application of the proceeds
thereof, that constitutes a Default;
PROVIDED, HOWEVER, that the obligation of each Lender to make a Reference
Rate Advance pursuant to Section 2.15(c) shall be absolute and unconditional,
and such Advance shall be made by such Lender notwithstanding the failure of
the Borrower to satisfy any condition set forth in this Section 3.2.
SECTION 3.3 DETERMINATIONS UNDER SECTION 3.1. For purposes of
determining compliance with the conditions specified in Section 3.1, each
Lender shall be deemed to have consented to, approved or accepted, or to be
satisfied with, each document or other matter required thereunder to be
consented to, approved by, accepted or satisfactory to the Lenders unless an
officer of the Administrative Agent responsible for the transactions
contemplated by the Credit Documents and holding the position of Vice
President or a more senior position receives notice from such Lender before
the Closing Date specifying its objection thereto, and either such objection
is not withdrawn by notice to the Administrative Agent to that effect or such
Lender does not make available to the Administrative Agent such Lender's
ratable portion of such Borrowing.
SECTION 3.4 CONDITIONS SUBSEQUENT TO EFFECTIVENESS. The continuing
effectiveness of this Agreement is subject to the Administrative Agent's
receipt of the following, as soon as practicable but in any event by January
31, 2001, in form and substance satisfactory to the Administrative Agent in
its reasonable discretion and in the number of originals requested by the
Administrative Agent:
(a) the Security Agreement, duly executed by the Borrower,
together with the following:
(i) recent UCC searches, certified by the appropriate
Governmental Persons, listing all effective UCC-1 financing statements filed
in California or Maryland that name the Borrower as debtor, together with
copies of such financing statements;
(ii) proper UCC-1 financing statements, duly executed by
the Borrower, for filing with such Governmental Persons as the Administrative
Agent may reasonably require, covering the Collateral described in the
Security Agreement;
(iii) the Mortgage Notes evidencing the Mortgage Loans
identified in Schedule 3.4, together with (A) undated assignments of such
Mortgage Notes duly executed by the Borrower in blank and (B) the originals
(or, to the extent originals are not in the possession or control of the
Borrower, copies) of (1) any loan agreements pursuant to which such Mortgage
Loans were made, (2) any guaranties guaranteeing such Mortgage Loans and (3)
any security agreements securing such Mortgage Loans;
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(iv) the Mortgages encumbering the Mortgage Notes
described in Section 3.4(a)(iii), together with undated assignments of such
Mortgages duly executed by the Borrower in blank;
(v) the REMIC Certificates identified in Schedule 3.4,
together with undated assignments of such REMIC Certificates duly executed by
the Borrower in blank; and
(vi) evidence that all other action that the
Administrative Agent may reasonably deem to be necessary or desirable in
order to perfect and protect the Liens created by the Security Agreement has
been duly taken;
(b) LTC Mortgages, duly executed by the Borrower or a
Subsidiary, as applicable, with respect to the Owned Properties identified in
Schedule 3.4 (PROVIDED, HOWEVER, that the amount of indebtedness secured by
the LTC Mortgages on the Owned Properties located in Clearwater, Bradenton,
Lacanto and New Port Xxxxxx, Florida shall not exceed $3,356,495, $3,050,748,
$5,267,240 and $6,238,892, respectively), together with the following:
(i) a copy of each title-insurance policy (including all
endorsements thereto) obtained by, or in the possession or control of, the
Borrower or any Subsidiary with respect to each such Owned Property; and
(ii) in the case of any Subsidiary that is executing an
LTC Mortgage but that has not already executed a Guaranty, (A) a Nonrecourse
Guaranty duly executed by such Subsidiary and (B) certificates and other
documents for such Subsidiary equivalent to those specified in Sections
3.1(g), (h) and (i); and
(c) such other approvals, opinions, evidence and documents as
any Lender through the Administrative Agent may reasonably request.
ARTICLE 4.
REPRESENTATIONS AND WARRANTIES
The Borrower represents and warrants to the Lenders and the
Administrative Agent as set forth below.
SECTION 4.1 EXISTENCE AND POWER. The Borrower (a) is a corporation
duly organized, validly existing and in good standing under the laws of the
State of Maryland, (b) is duly qualified or licensed as a foreign corporation
and is in good standing in each jurisdiction in which it owns or leases
property or in which the conduct of its business requires it to so qualify or
be licensed (except for jurisdictions in which the failure to be so qualified
or licensed or to be in good standing could not reasonably be expected to
have a Material Adverse Effect) and (c) has all requisite power and authority
to own or lease its properties and to carry on its business as now conducted
and as proposed to be conducted.
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SECTION 4.2 AUTHORIZATION. The execution, delivery and performance by
the Borrower of this Agreement and each other Credit Document to which the
Borrower is or is to be a party, and the consummation of the transactions
contemplated hereby and thereby, are within the Borrower's corporate powers,
have been duly authorized by all necessary corporate action and do not (a)
contravene the Borrower's articles of incorporation or bylaws, (b) violate
any applicable Governmental Rule, (c) conflict with or result in the breach
of, or constitute a default under, any loan agreement, indenture, mortgage,
deed of trust or lease, or any other contract or instrument, binding on or
affecting the Borrower or any Subsidiary or any of their respective
properties, or (d) result in or require the creation or imposition of any
Lien upon or with respect to any of the properties of the Borrower or any
Subsidiary, other than in favor of the Administrative Agent. Neither the
Borrower nor any Subsidiary is in violation of any Governmental Rule or in
breach of any such loan agreement, indenture, mortgage, deed of trust, lease,
contract or instrument, the violation or breach of which could reasonably be
expected to have a Material Adverse Effect.
SECTION 4.3 GOVERNMENTAL ACTION, ETC. No Governmental Action, and no
authorization, approval or other action by, or notice to, any other third
party, is required for the due execution, delivery or performance by the
Borrower of this Agreement or any other Credit Document to which the Borrower
is or is to be a party, or for the consummation of the transactions
contemplated hereby or thereby, except for such Governmental Action,
authorizations, approvals, other action and notices that have been duly
taken, obtained or given and are in full force and effect and copies of which
have been delivered to the Administrative Agent.
SECTION 4.4 BINDING EFFECT. This Agreement has been, and each other
Credit Document to which the Borrower is or is to be a party when delivered
hereunder will be, duly executed and delivered by the Borrower. This
Agreement is, and each other Credit Document to which the Borrower is or is
to be a party when delivered hereunder will be, legal, valid and binding
obligations of the Borrower, enforceable against the Borrower in accordance
with their respective terms, except as the enforceability thereof may be
limited by bankruptcy, insolvency, moratorium, reorganization or other
similar laws affecting creditors' rights generally or by equitable principles
relating to enforceability.
SECTION 4.5 FINANCIAL CONDITION. The audited Consolidated balance
sheet of the Borrower and its Subsidiaries as of December 31, 1999 and the
related audited Consolidated statements of income, stockholders' equity and
cash flows of the Borrower and its Subsidiaries for the fiscal year then
ended, certified by Ernst & Young LLP, independent public accountants, and
the unaudited Consolidated balance sheet of the Borrower and its Subsidiaries
as of June 30, 2000 and the related unaudited Consolidated statements of
income and cash flows of the Borrower and its Subsidiaries for the 6-month
fiscal period then ended, fairly present the Consolidated financial condition
of the Borrower and its Subsidiaries as of such dates and the Consolidated
results of the operations of the Borrower and its Subsidiaries for the fiscal
periods ended on such dates, all in accordance with GAAP applied on a
consistent basis. Except as disclosed in a letter from the Borrower to the
Administrative Agent dated October 31, 2000, since June 30, 2000 no event or
situation has occurred that could reasonably be expected to have
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a Material Adverse Effect. The Borrower and its Subsidiaries have no material
contingent liabilities except as disclosed in the aforementioned balance
sheets or the notes thereto.
SECTION 4.6 OTHER INFORMATION. No information, exhibit or report
furnished by the Borrower or any Subsidiary to the Administrative Agent or
any Lender in connection with the negotiation of any of the Credit Documents
or pursuant to the terms of any of the Credit Documents contains any material
misstatement of fact or omits to state a material fact or any fact necessary
to make the statements contained therein, in light of the circumstances in
which made, not misleading.
SECTION 4.7 LEGAL PROCEEDINGS. Except as disclosed in a letter from
the Borrower to the Administrative Agent dated October 31, 2000, there is no
action, suit, investigation, litigation or proceeding affecting the Borrower
or any Subsidiary pending or, to the best knowledge of the Borrower,
threatened before any Governmental Person, referee or arbitrator that could
reasonably be expected to have a Material Adverse Effect.
SECTION 4.8 REGULATION U. The Borrower is not engaged in the business
of extending credit for the purpose of purchasing or carrying margin stock
(within the meaning of Regulation U issued by the Board of Governors of the
Federal Reserve System), and no proceeds of any Advance will be used directly
or indirectly for such purpose.
SECTION 4.9 ERISA. During the 5-year period before each date as of
which this representation is made or deemed made with respect to any Plan
(or, with respect to (f) and (h) below, as of the date on which such
representation is made or deemed made), none of the following events or
conditions, either individually or in the aggregate, has occurred and could
reasonably be expected to have a Material Adverse Effect: (a) a Reportable
Event; (b) an "accumulated funding deficiency" (within the meaning of Section
412 of the Code or Section 302 of ERISA); (c) noncompliance with the
applicable provisions of ERISA or the Code; (d) termination of a Single
Employer Plan; (e) a Lien on the property of the Borrower or any Subsidiary
in favor of the PBGC or a Plan; (f) a complete or partial withdrawal from a
Multiemployer Plan by the Borrower or any Commonly Controlled Entity; (g) a
liability of the Borrower or a Commonly Controlled Entity under ERISA if the
Borrower or such Commonly Controlled Entity were to withdraw completely from
all Multiemployer Plans as of the annual valuation date most closely
preceding the date on which this representation is made or deemed made; (h)
the Reorganization or Insolvency of any Multiemployer Plan; and (i) an event
or condition with respect to which the Borrower or any Commonly Controlled
Entity could reasonably be expected to incur any liability in respect of a
Former Plan. Neither the Borrower nor any Subsidiary maintains or
participates in any Defined Benefit Plan or Multiple Employer Plan.
SECTION 4.10 INTELLECTUAL PROPERTY. Each of the Borrower and its
Subsidiaries possesses, or is licensed to use, all trademarks, trade names,
copyrights and patents necessary to conduct its business as now operated,
without any known conflict with the valid trademarks, trade names, copyrights
or patents of others.
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SECTION 4.11 FIRE, ETC. Neither the business nor any property of the
Borrower or any Subsidiary is affected by any fire, explosion, accident,
strike, lockout, other labor dispute, civil disturbance, drought, storm,
flood, landslide, earthquake, embargo, act of God or the public enemy, or
other casualty (whether or not covered by insurance) that could reasonably be
expected to have a Material Adverse Effect.
SECTION 4.12 TAXES. Each of the Borrower and its Subsidiaries has
filed, or there has been filed on its behalf, all tax returns (federal,
state, local and foreign) required to be filed thereby before the date of the
making of this representation and warranty and has paid all taxes shown
thereon to be due, including interest, additions to taxes and penalties, or
has provided adequate reserves in accordance with GAAP for payment thereof.
SECTION 4.13 INVESTMENT COMPANY. Neither the Borrower nor any
Subsidiary is an "investment company" or an "affiliated person" of, or a
"promoter" or "principal underwriter" for, an "investment company," as such
terms are defined in the Investment Company Act of 1940. Neither the making
of any Advance nor the issuance of any Letter of Credit nor the application
of the proceeds or repayment thereof by the Borrower nor the consummation of
any other transaction contemplated hereby will violate any provision of said
Act or any Governmental Rule of the SEC thereunder.
SECTION 4.14 TITLE TO PROPERTY. Each of the Borrower and its
Subsidiaries has good record and marketable title in fee simple to, or a
valid leasehold interest in, all of its material real property and good title
to, or a valid leasehold interest in, all of its other material property, and
none of such property is subject to any Lien other than Liens permitted by
Section 5.2(a).
SECTION 4.15 SUBSIDIARIES. Schedule 4.15 contains a complete and
accurate list of all Subsidiaries as of the date hereof, setting forth their
respective jurisdictions of incorporation or organization and the percentage
of their respective capital stock or ownership interests owned by the
Borrower or other Subsidiaries.
SECTION 4.16 ENVIRONMENTAL MATTERS.
(a) To the best of the Borrower's knowledge, (i) the
operations and properties of the Borrower and of each Subsidiary, including
the Owned Properties, comply in all material respects with all applicable
Environmental Laws and Environmental Permits, (ii) all past noncompliance
with such Environmental Laws and Environmental Permits has been resolved
without material ongoing obligations or costs and (iii) no circumstances
exist that could reasonably be expected to (A) form the basis of an
Environmental Proceeding against the Borrower or any Subsidiary, or any
property thereof, that could reasonably be expected to have a Material
Adverse Effect or (B) cause any such property to be subject to any material
restriction on ownership, occupancy, use or transferability under any
Environmental Law or Environmental Permit.
(b) To the best of the Borrower's knowledge, (i) none of the
properties currently or formerly owned or operated by the Borrower or any
Subsidiary is listed or proposed for listing on the National Priorities List
under CERCLA, on CERCLIS or on any analogous
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foreign, state or local list or is adjacent to any such property, (ii) there
are not now, and never have been, any underground or aboveground storage
tanks, or any surface impoundments, septic tanks, pits, sumps or lagoons, in
which any Hazardous Material is being or has been treated, stored or disposed
of on any property owned or operated by the Borrower or any Subsidiary, in
each case in any manner not in compliance in all material respects with all
applicable Environmental Laws, (iii) there is no asbestos or
asbestos-containing material on any property owned or operated by the
Borrower or any Subsidiary, except in compliance in all material respects
with all applicable Environmental Laws, and (iv) no Hazardous Material has
been released, discharged or disposed of on any property owned or operated by
the Borrower or any Subsidiary, except in compliance in all material respects
with all applicable Environmental Laws.
(c) Neither the Borrower nor any Subsidiary is engaged in or
has completed, either individually or together with any other potentially
responsible party, any investigation, assessment or remedial or response
action relating to any actual or threatened release, discharge or disposal of
any Hazardous Material at any site, location or operation, either voluntarily
or pursuant to the order of any Governmental Person or the requirements of
any Environmental Law; and all Hazardous Materials generated, used, treated,
handled or stored at, or transported to or from, any property owned or
operated by the Borrower or any Subsidiary have been disposed of in a manner
reasonably expected not to result in liability to the Borrower or any
Subsidiary.
SECTION 4.17 REIT STATUS. The Borrower is a REIT.
SECTION 4.18 OWNED PROPERTIES, MORTGAGE LOANS AND REMIC CERTIFICATES.
As of the date of this Agreement, neither the Borrower nor any Subsidiary
owns any Owned Property, Mortgage Loan or REMIC Certificate that is not
identified in Schedule 3.4 or 5.1(m), except for Owned Properties identified
in Schedule 4.18.
SECTION 4.19 SOLVENCY. The Borrower is, both individually and together
with its Subsidiaries, Solvent.
ARTICLE 5.
COVENANTS OF BORROWER
SECTION 5.1 AFFIRMATIVE COVENANTS. So long as any Advance remains
unpaid, any Letter of Credit is outstanding or any Lender has any Commitment
hereunder, the Borrower will, unless the Required Lenders otherwise consent
in writing, observe the affirmative covenants set forth below.
(a) REPORTING REQUIREMENTS. The Borrower will furnish to the
Lenders:
(i) as soon as possible and in any event within 25 days
after the end of each calendar month, a certificate duly executed by an
Authorized Officer stating that the number and identity of the Eligible
Mortgage Loans and Eligible Owned Properties of the Borrower and its
Subsidiaries specified in the Borrowing Base Certificate most recently
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delivered to the Lenders have not changed or, if there has been any such
change, setting forth the details thereof;
(ii) as soon as possible and in any event within 50 days
after the end of each calendar quarter, a Borrowing Base Certificate as of
the end of such quarter duly executed by an Authorized Officer, together with
a statement that no Default has occurred and is continuing or, if any Default
has occurred and is continuing, a description of the nature thereof and the
action that the Borrower is taking or proposes to take with respect thereto;
(iii) as soon as available and in any event within 50 days
after the end of each of the first three fiscal quarters of each fiscal year
of the Borrower, (A) an unaudited Consolidated balance sheet of the Borrower
and its Subsidiaries as of the end of such quarter, setting forth in
comparative form the corresponding figures for the corresponding period of
the preceding fiscal year, (B) unaudited Consolidated statements of income
and cash flows of the Borrower and its Subsidiaries for the period commencing
at the end of the preceding fiscal year and ending with the end of such
quarter, setting forth in comparative form the corresponding figures for the
corresponding period of the preceding fiscal year, (C) an unaudited
Consolidating balance sheet of the Borrower, its Significant Subsidiaries and
its other Subsidiaries having assets in excess of 5% of the Borrower's
Consolidated total assets, as of the end of such quarter, and (D) an
unaudited Consolidating statement of income of the Borrower, its Significant
Subsidiaries and its other Subsidiaries having assets in excess of 5% of the
Borrower's Consolidated total assets, for the period commencing at the end of
the preceding fiscal year and ending with the end of such quarter, all
accompanied by a certificate of an Authorized Officer stating that the
aforementioned financial statements fairly present the Consolidated and
Consolidating financial condition and results of operations of the Persons
specified above in accordance with GAAP consistently applied (subject to
normal year-end audit adjustments and the absence of footnotes);
(iv) as soon as available and in any event within 95 days
after the end of each fiscal year of the Borrower, (A) an audited
Consolidated balance sheet of the Borrower and its Subsidiaries as of the end
of such fiscal year, setting forth in comparative form the corresponding
figures for the corresponding period of the preceding fiscal year, (B)
audited Consolidated statements of income, stockholders' equity and cash
flows of the Borrower and its Subsidiaries for such fiscal year, setting
forth in comparative form the corresponding figures for the corresponding
period of the preceding fiscal year, (C) an unaudited Consolidating balance
sheet of the Borrower, its Significant Subsidiaries and its other
Subsidiaries having assets in excess of 5% of the Borrower's Consolidated
total assets, as of the end of such fiscal year, and (D) an unaudited
Consolidating statement of income of the Borrower, its Significant
Subsidiaries and its other Subsidiaries having assets in excess of 5% of the
Borrower's Consolidated total assets, for such fiscal year, accompanied, in
the case of the aforementioned Consolidated financial statements, by an
unqualified opinion of independent certified public accountants of recognized
national standing stating that such Consolidated financial statements fairly
present the Consolidated financial condition and results of operations of the
Borrower and its Subsidiaries in accordance with GAAP consistently applied;
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(v) together with the financial statements described in
Sections 5.1(a)(iii) and (iv), a Compliance Certificate and a Collateral
Valuation Certificate duly executed by an Authorized Officer;
(vi) as soon as available and in any event within 95
days after the end of each fiscal year of the Borrower, the Borrower's
Consolidated financial projections for the next two fiscal years of the
Borrower and its Subsidiaries;
(vii) as soon as available and in any event within 95
days after the end of each fiscal year of any Operator that is not a publicly
traded company and that operates Owned Properties, Mortgaged Properties
securing Mortgage Loans and/or REMIC Properties securing pooled mortgage
loans underlying REMIC Certificates, the Borrower's and its Subsidiaries'
Total Investment (as determined as of the end of each fiscal quarter of the
Borrower by reference to its financial statements and records) in which Owned
Properties, Mortgage Loans and pooled mortgage loans constitutes 10% or more
of the Borrower's and its Subsidiaries' Total Investment (as determined as of
the end of each fiscal quarter of the Borrower by reference to its financial
statements and records) in all Owned Properties, Mortgage Loans and pooled
mortgages underlying REMIC Certificates, statements of income, retained
earnings and cash flows of such Operator for such fiscal year and the related
balance sheet of such Operator as of the end of such fiscal year, accompanied
by an opinion of independent certified public accountants of recognized
national standing stating that such financial statements fairly present the
financial condition and results of operations of such Operator as at the end
of, and for, such fiscal year in accordance with GAAP consistently applied;
PROVIDED, HOWEVER, that the Borrower shall be obligated to provide the
foregoing financial information and opinion to the Lenders with respect to
such Operator only if and to the extent that such information is prepared by
or at the request of such Operator and is made available to the Borrower
(provided that the Borrower shall use all reasonable efforts to obtain such
information and opinion to the extent that the Borrower has a contractual
right to obtain the same);
(viii) promptly upon the furnishing thereof to the
shareholders of the Borrower, copies of all financial statements, reports and
proxy statements so furnished;
(ix) promptly upon the filing thereof, copies of all
registration statements, Reports on Form 8-K and other filings, and copies of
all annual, quarterly, monthly and other regular reports or statutory
statements, that the Borrower or any Subsidiary files with the SEC;
(x) as soon as possible and in any event within 5
Business Days after the Borrower knows or has reason to know of the
occurrence of any Default, a statement of an Authorized Officer setting forth
the details of such Default and the action that the Borrower is taking or
proposes to take with respect thereto;
(xi) promptly after the commencement thereof, notice of
all actions, suits, investigations, litigation and proceedings before or by
any Governmental Person, referee or arbitrator affecting the Borrower or any
Subsidiary of any type described in Section 4.7;
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(xii) promptly after the assertion or occurrence thereof
or after any Authorized Officer becomes aware of the reasonable likelihood
thereof, notice of any Environmental Proceeding against the Borrower or any
Subsidiary, or of any noncompliance by the Borrower or any Subsidiary with
any Environmental Law or Environmental Permit, that (A) could reasonably be
expected to have a Material Adverse Effect or (B) causes any property owned
or operated by the Borrower or any Subsidiary to be subject to any
restriction on ownership, occupancy, use or transferability under any
Environmental Law;
(xiii) as soon as possible and in any event within 10 days
after the Borrower knows that any Reportable Event has occurred with respect
to any Single Employer Plan of the Borrower or any Subsidiary, a statement
duly executed by an Authorized Officer describing said Reportable Event and
the action that the Borrower is taking or proposes to take with respect
thereto;
(xiv) as soon as available but in any event before the
effective date of any Investment of $1,000,000 or more (which is not in the
ordinary course of the Borrower's business but which is permitted pursuant to
Section 5.2(f)), historical financial statements of the Person whose shares,
other equity interests or assets are to be acquired, together with such
information regarding the terms of such Investment as the Administrative
Agent may from time to time reasonably request;
(xv) as promptly as practicable but in any event within
3 Business Days after each date of receipt by the Borrower or any Subsidiary
of (A) Net Cash Proceeds from the sale, transfer or other disposition by the
Borrower or any Subsidiary of (1) any asset constituting Collateral (or that
would constitute Collateral but for the fact that there is no Lien thereon in
favor of the Administrative Agent although required by the terms of this
Agreement) or (2) any other asset of the Borrower or any Subsidiary, provided
that such other asset is disposed of in a transaction or related transactions
whose aggregate consideration is at least $250,000, (B) Net Cash Proceeds
from the sale or issuance of any debt securities of or equity interest in the
Borrower or any Subsidiary or any warrants, options or other rights to
acquire any such equity interest, (C) Net Cash Proceeds from any borrowing by
the Borrower (other than under this Agreement) or any Subsidiary, (D) Net
Cash Proceeds from the prepayment of any Debt owed to the Borrower or any
Subsidiary (other than any such Debt that is being refinanced or that is
permitted pursuant to Section 5.2(b)(ix) or 5.2(f)(ii)) or (E) insurance or
condemnation proceeds from any casualty or condemnation in respect of any
Owned Property (unless the Borrower or such Subsidiary, as applicable, is
legally obligated to apply such proceeds to reconstruction of such Owned
Property), a statement of an Authorized Officer describing such transaction
and the calculations used in determining such Net Cash Proceeds or insurance
or condemnation proceeds, in each case in form, scope and detail satisfactory
to the Administrative Agent in its reasonable discretion;
(xvi) within 3 Business Days after each date of receipt
by the Borrower or any Subsidiary of any discount upon the prepayment of any
Debt, a statement of an Authorized Officer describing such transaction and
the calculations used in determining the amount of such discount, in form,
scope and detail satisfactory to the Administrative Agent in its reasonable
discretion; and
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(xvii) promptly upon request, such other information
concerning the business, condition (financial or otherwise), operations,
performance, properties or prospects of the Borrower or any Subsidiary as any
Lender may from time to time reasonably request.
(b) COMPLIANCE WITH LAWS, ETC. The Borrower will comply, and
cause each Subsidiary to comply, in all material respects with all material
Governmental Rules applicable thereto; PROVIDED, HOWEVER, that neither the
Borrower nor any Subsidiary shall be required to comply with any such
Governmental Rule that is being contested in good faith and by proper
proceedings and as to which appropriate reserves are being maintained.
(c) PAYMENT OF TAXES, ETC. The Borrower will pay and
discharge, and cause each Subsidiary to pay and discharge, before the same
become delinquent, (i) all taxes, assessments and governmental charges or
levies imposed upon it or upon its property and (ii) all lawful claims that,
if unpaid, might by law become a Lien upon its property; PROVIDED, HOWEVER,
that neither the Borrower nor any Subsidiary shall be required to pay or
discharge any such tax, assessment, charge or claim that is being contested
in good faith and by proper proceedings and as to which appropriate reserves
are being maintained.
(d) MAINTENANCE OF INSURANCE. The Borrower will maintain, and
cause each Subsidiary to maintain, insurance with responsible and reputable
insurance companies or associations in such amounts and covering such risks
as is usually carried by companies engaged in similar businesses and owning
similar properties in the same general areas in which the Borrower or such
Subsidiary operates.
(e) PRESERVATION OF LEGAL EXISTENCE, ETC. The Borrower will
preserve and maintain, and cause each Subsidiary to preserve and maintain,
its legal existence, rights (charter and statutory) and franchises; provided,
HOWEVER, that neither the Borrower nor any Subsidiary shall be required to
preserve any such right or franchise if the Board of Directors or equivalent
body of the Borrower or such Subsidiary, as applicable, determines that the
preservation thereof is no longer desirable in the conduct of the business of
the Borrower or such Subsidiary, as the case may be, and the loss thereof is
not disadvantageous in any material respect to the Borrower, such Subsidiary
or the Lenders.
(f) VISITATION RIGHTS. At any reasonable time and from time to
time, upon reasonable prior notice, the Borrower will permit the
Administrative Agent and any of the Lenders, or any agents or representatives
thereof, to the extent reasonably requested, to examine and make copies of
and abstracts from the records and books of account of, and visit the
properties of, the Borrower and any of its Subsidiaries and to discuss the
affairs, finances and accounts of the Borrower and any of its Subsidiaries
with any of their officers or directors and with their independent certified
public accountants, including for the purpose of having Xxxxxxxx, Savett,
Finkel, Fingleson & Rose, Inc., or another firm of independent certified
public accountants acceptable to the Administrative Agent in its sole
discretion, verify at least annually the correctness of certain of the
Borrowing Base information provided by the Borrower to the Lenders.
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(g) KEEPING OF BOOKS. The Borrower will keep, and cause each
Subsidiary to keep, proper books of record and account in which appropriate
entries shall be made of all financial transactions and the assets and
business of the Borrower and each Subsidiary, to the extent necessary to
permit the preparation of the financial statements required to be delivered
hereunder.
(h) MAINTENANCE OF PROPERTIES, ETC. The Borrower will maintain
and preserve, cause each Subsidiary to maintain and preserve, and use its
reasonable best efforts to cause its and its Subsidiaries' Operators to
maintain and preserve, all of the Borrower's and each Subsidiary's properties
that are used or useful in the conduct of its business in good working order
and condition, ordinary wear and tear excepted.
(i) TRANSACTIONS WITH AFFILIATES. The Borrower will conduct,
and cause each Subsidiary to conduct, all transactions otherwise permitted
under the Credit Documents with any Affiliate on terms that are fair and
reasonable and no less favorable to the Borrower or such Subsidiary than it
would obtain in a comparable arms'-length transaction with a Person not an
Affiliate.
(j) USE OF PROCEEDS. The proceeds of the Advances and the
Letters of Credit shall be available, and the Borrower agrees that it will
use such proceeds, solely (i) to refinance the Borrower's indebtedness under
the Old Revolving Credit Agreement and the Old Term Loan Agreement and (ii)
for the Borrower's general corporate purposes.
(k) REIT STATUS. The Borrower will at all times maintain its
status as a REIT.
(l) SIGNIFICANT SUBSIDIARIES. The Borrower will cause each
Subsidiary, within 50 days after the end of the fiscal quarter of the
Borrower in which such Subsidiary becomes a Significant Subsidiary, to
deliver the following to the Administrative Agent, in form and substance
satisfactory to the Administrative Agent in its reasonable discretion and in
the number of originals requested by the Administrative Agent:
(i) a Guaranty, duly executed by such Subsidiary; and
(ii) certificates and other documents for such Subsidiary
equivalent to those specified in Sections 3.1(g), (h) and (i).
(m) LIENS ON OTHER OWNED PROPERTIES. If by April 30, 2001 any
of the Owned Properties identified in Schedule 5.1(m) has not been refinanced
as permitted by, and in accordance with the terms and conditions of, Section
5.2(b)(v) or has not been sold as permitted by, and in accordance with the
terms and conditions of, Section 5.2(e)(v), the Borrower will deliver the
following to the Administrative Agent with respect to such Owned Properties
not so refinanced or sold, as soon as practicable thereafter but in any event
by June 15, 2001, in form and substance satisfactory to the Administrative
Agent in its reasonable discretion and in the number of originals requested
by the Administrative Agent:
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(i) LTC Mortgages, duly executed by the Borrower or a
Subsidiary, as applicable, with respect to such Owned Properties (PROVIDED,
HOWEVER, that the amount of indebtedness secured by the LTC Mortgages, if
any, on the Owned Properties located in Spring Hill and Bluewater, Florida
shall not exceed $2,750,000 and $2,780,000, respectively), together with the
following:
(A) a copy of each title-insurance policy (including
all endorsements thereto) obtained by, or in the possession or control of,
the Borrower or any Subsidiary with respect to each such Owned Property;
(B) in the case of any Subsidiary that is executing
an LTC Mortgage but that has not already executed a Guaranty or a Nonrecourse
Guaranty, a Nonrecourse Guaranty duly executed by such Subsidiary; and
(C) certificates and other documents for such
Subsidiary equivalent to those specified in Sections 3.1(g), (h) and (i); and
(ii) such other approvals, opinions, evidence and
documents with respect to such Owned Properties as any Lender through the
Administrative Agent may reasonably request.
(n) MAINTENANCE OF COLLATERAL VALUE RATIO. The Borrower will
maintain a ratio, determined as of the end of each fiscal quarter of the
Borrower ending after the Closing Date, of (i) the Collateral Value as of the
end of such fiscal quarter to (ii) the Aggregate Commitment as of the end of
such fiscal quarter of not less than 1.82 to 1.00.
(o) MAINTENANCE OF FUNDED DEBT RATIO. The Borrower will
maintain a Funded Debt Ratio, determined as of the end of each fiscal quarter
of the Borrower ending after the Closing Date, of not more than 1.00 to 1.00.
(p) MAINTENANCE OF SENIOR LEVERAGE RATIO. The Borrower will
maintain a ratio, determined as of the end of each fiscal quarter of the
Borrower ending after the Closing Date, of (i) Senior Debt as of the end of
such fiscal quarter to (ii) Tangible Net Worth of the Borrower and its
Subsidiaries on a Consolidated basis as of the end of such fiscal quarter of
not more than 0.65 to 1.00.
(q) MAINTENANCE OF INTEREST COVERAGE RATIO. The Borrower will
maintain a ratio, determined as of the end of each fiscal quarter of the
Borrower ending after the Closing Date, of (i) Cash Flow for the 12-month
period ended as of the end of such fiscal quarter to (ii) Consolidated
Interest Expense of the Borrower and its Subsidiaries for the 12-month period
ended as of the end of such fiscal quarter of not less than 1.50 to 1.00.
(r) MAINTENANCE OF TANGIBLE NET WORTH. The Borrower will
maintain Tangible Net Worth of it and its Subsidiaries on a Consolidated
basis, determined as of the end of each fiscal quarter of the Borrower, of
not less than the amount set forth below opposite the applicable level of
Aggregate Commitment as of the end of such fiscal quarter:
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XXXXXXXXX XXXXXXXXXX TANGIBLE NET WORTH
greater than $135 million $350 million
greater than $120 million but less
than or equal to $135 million $325 million
greater than $100 million but less
than or equal to $120 million $300 million
less than or equal to $100 million $275 million
SECTION 5.2 NEGATIVE COVENANTS. So long as any Advance remains unpaid,
any Letter of Credit is outstanding or any Lender has any Commitment
hereunder, the Borrower will, unless the Required Lenders otherwise consent
in writing, observe the negative covenants set forth below.
(a) LIENS, ETC. The Borrower will not create, incur, assume or
suffer to exist, or permit any Subsidiary to create, incur, assume or suffer
to exist, any Lien, or enter into any agreement with any other Person not to
create any Lien, on or with respect to any of its properties of any character
(including accounts receivable), whether now owned or hereafter acquired, or
sign or file, or permit any Subsidiary to sign or file, under the Uniform
Commercial Code of any jurisdiction, a financing statement that names the
Borrower or any Subsidiary as debtor (except in connection with true leases),
or sign, or permit any Subsidiary to sign, any security agreement authorizing
any secured party thereunder to file such a financing statement (except in
connection with true leases), or assign, or permit any Subsidiary to assign,
any accounts receivable, excluding, however, from the operation of the
foregoing restrictions the following:
(i) Liens created by the Collateral Documents;
(ii) Permitted Liens;
(iii) Liens existing on the date of this Agreement and
described in Schedule 5.2(a), provided that no such Lien is spread to cover
any additional property after the Closing Date and that the amount of
indebtedness secured by any such Lien is not increased, except as permitted
by Section 5.2(b)(v); and
(iv) Liens securing Debt permitted under Section
5.2(b)(iii) or (v), provided that no such Lien is spread to cover any
property other than the asset(s) subject to a Capitalized Lease or the Owned
Property (or Owned Properties) being refinanced, as applicable, and that the
amount of indebtedness secured by any such Lien is not increased, except as
permitted by Section 5.2(b)(v).
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(b) DEBT. The Borrower will not create, incur, assume or
suffer to exist, or permit any Subsidiary to create, incur, assume or suffer
to exist, any Debt other than the following:
(i) Debt under the Credit Documents;
(ii) Debt existing on the date of this Agreement and
described in Schedule 5.2(a);
(iii) Capitalized Leases incurred after the Closing Date
not to exceed $5,000,000 in aggregate principal amount at any time
outstanding;
(iv) the endorsement of negotiable instruments for
deposit or collection in the ordinary course of the Borrower's business as
currently conducted;
(v) nonrecourse Debt that is incurred after the Closing
Date and secured by one or more Owned Properties, provided that (A) no
Default has occurred and is continuing or would be caused thereby, (B) the
Borrower complies with the terms of this Agreement, including Sections 2.8
and 5.1(a), in connection with the incurrence of such Debt and (C)
simultaneously with the closing of each such incurrence of Debt to be secured
by one or more Owned Properties that constitute Collateral (or that would
constitute Collateral but for the fact that there is no Lien on such Owned
Properties in favor of the Administrative Agent although required by the
terms of this Agreement), the Borrower delivers a Collateral Valuation
Certificate to the Lenders, duly executed by an Authorized Officer,
demonstrating that the ratio of the Collateral Value to the Aggregate
Commitment will be at least 1.82 to 1.00 after giving effect to such
incurrence of Debt;
(vi) Subordinated Debt incurred after the Closing Date,
provided that (A) no Default has occurred and is continuing or would be
caused thereby and (B) the Borrower complies with the terms of this
Agreement, including Sections 2.8 and 5.1(a), in connection with the
incurrence of such Debt;
(vii) Debt under Hedge Agreements that hedge interest
payable in respect of an aggregate principal amount not to exceed the sum of
(A) the aggregate principal amount of all outstanding Debt of the Borrower
and its Subsidiaries (other than Debt hereunder) that is secured by a Lien on
real property plus (B) the aggregate principal amount of all outstanding
Advances;
(viii) Debt incurred by a Subsidiary as a result of its
position as a general partner in a limited partnership that has borrowed
amounts from the Borrower pursuant to Section 5.2(f)(vii)(B);
(ix) Debt in the ordinary course of business between the
Borrower and any Subsidiary or between two Subsidiaries, provided that the
amount of such Debt owing to the Borrower or any Guarantor by Subsidiaries
that are not Guarantors shall not exceed $1,000,000 in aggregate principal
amount at any time outstanding; and
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(x) Debt that constitutes an extension or refinancing of
any Debt referred to above, provided that such extension or refinancing does
not result in an increase in the principal amount of such Debt.
(c) LEASE OBLIGATIONS. The Borrower will not create, incur,
assume or suffer to exist, or permit any Subsidiary to create, incur, assume
or suffer to exist, any obligations as lessee (i) for the rental or hire of
real or personal property in connection with any sale and leaseback
transaction or (ii) for the rental or hire of other real or personal property
of any kind under leases or agreements to lease, including Capitalized
Leases, having an original term of one year or more that would cause the
direct or contingent liabilities of the Borrower and its Subsidiaries, on a
Consolidated basis, in respect of all such obligations to exceed $1,000,000
payable in any period of 12 consecutive months.
(d) MERGERS, ETC. The Borrower will not merge or consolidate
with or into, or convey, transfer, lease or otherwise dispose of (whether in
one transaction or in a series of transactions) all or substantially all of
its assets (whether now owned or hereafter acquired) to, or acquire all or
substantially all of the assets of, any Person, or permit any Subsidiary to
do so; PROVIDED, HOWEVER, that the Borrower may merge or consolidate with
another Person, including a Subsidiary, if (A) the Borrower is the surviving
corporation, (B) the Borrower will be in PRO FORMA compliance with all
provisions of this Agreement upon and after such merger or consolidation and
(C) the Borrower will not engage in any material line of business
substantially different from that engaged in on the Closing Date.
(e) SALES, ETC. OF ASSETS. The Borrower will not sell, lease,
transfer or otherwise dispose of, or permit any Subsidiary to sell, lease,
transfer or otherwise dispose of, any of its assets (including both tangible
and intangible property), whether now owned or hereafter acquired, except for
the following:
(i) sales of inventory in the ordinary course of
business;
(ii) sales or other dispositions of obsolete, worn out or
surplus personal property in the ordinary course of business;
(iii) sales of assets permitted by Section 5.2(d);
(iv) leasing of any Owned Property in the ordinary course
of business; and
(v) sales of assets for fair consideration, provided
that (A) no Default has occurred and is continuing or would be caused
thereby, (B) the Borrower complies with the terms of this Agreement,
including Sections 2.8 and 5.1(a), in connection with each such sale and (C)
simultaneously with the closing of each such sale of an asset that
constitutes Collateral (or that would constitute Collateral but for the fact
that there is no Lien on such asset in favor of the Administrative Agent
although required by the terms of this Agreement), the Borrower delivers a
Collateral Valuation Certificate to the Lenders, duly executed by an
Authorized
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Officer, demonstrating that the ratio of the Collateral Value to the
Aggregate Commitment will be at least 1.82 to 1.00 after giving effect to
such sale.
(f) INVESTMENTS, LOANS, ADVANCES AND ACQUISITIONS. The
Borrower will not make, or permit any Subsidiary to make, any loan or advance
to any Person, or purchase or otherwise acquire, or permit any Subsidiary to
purchase or otherwise acquire, any debt or equity interest, warrant, right,
option, obligation or other security of, make any capital contribution to, or
otherwise invest in, any other Person, or make, or permit any Subsidiary to
make, any acquisition of any asset (including both tangible and intangible
property) of any other Person (all of the foregoing collectively referred to
as "INVESTMENTS"); PROVIDED, HOWEVER, that nothing in this Section 5.2(f)
shall prevent the Borrower or any Subsidiary from doing any of the following:
(i) generating and holding accounts receivable in the
ordinary course of business;
(ii) acquiring and holding Permitted Investments;
(iii) acquiring personal property, other than any type of
personal property referred to elsewhere in the exceptions to this Section
5.2(f), in the ordinary course of business for the operation of the business
of the Borrower and its Subsidiaries as currently conducted;
(iv) so long as no Default has occurred and is continuing
or would be caused thereby, acquiring and making Mortgage Loans, acquiring
Owned Properties and acquiring REMIC Certificates; PROVIDED, HOWEVER, that
(A) the Total Investment (as determined by reference to the Borrower's
financial statements and records) of the Borrower and its Subsidiaries in
Owned Properties operated by, Mortgage Loans secured by Mortgaged Properties
operated by, and pooled mortgage loans secured by REMIC Properties operated
by, a single Operator (including Subsidiaries of such Operator but excluding
other Affiliates thereof) may not exceed 20% or, in the case of Sun
Healthcare Group, Inc., a Delaware corporation, and Assisted Living Concepts,
a Delaware corporation, 30% of the Total Investment (as determined by
reference to the Borrower's financial statements and records) of the Borrower
and its Subsidiaries in all Owned Properties, Mortgage Loans and pooled
mortgage loans secured by REMIC Properties; (B) neither the Borrower nor any
Subsidiary may hold a single Mortgage Loan with a book value (as determined
by reference to the most recent financial statements of the Borrower
delivered pursuant to Section 5.1(a)) exceeding $20,000,000 or hold any Owned
Property with a Book Value (as determined by reference to the most recent
financial statements of the Borrower delivered pursuant to Section 5.1(a))
exceeding $20,000,000; (C) the Borrower and its Subsidiaries may not hold
REMIC Certificates with an aggregate book value (as determined by reference
to the most recent financial statements of the Borrower delivered pursuant to
Section 5.1(a)) exceeding the sum of $125,000,000 plus the amount equal to
25% of any increase in the Tangible Net Worth of the Borrower and its
Subsidiaries on a Consolidated basis after December 31, 1999; and (D) none of
such Investments (including indirectly through a REMIC Certificate) may be in
any Person engaged in, or asset utilized in, any education-related line of
business (except that, provided that no Default has occurred and is
continuing or would be caused thereby, the Borrower and its Subsidiaries
shall be permitted to take back promissory
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notes or other securities in connection with the sale or other disposition of
any existing Investments in Persons engaged in, or assets utilized in,
education-related lines of business); and FURTHER PROVIDED, HOWEVER, that the
Borrower shall not be deemed to violate this Section 5.2(f) solely by reason
of the merger of two or more Operators, so long as neither the Borrower nor
any Subsidiary increases its Total Investment in Owned Properties operated
by, Mortgage Loans secured by Mortgaged Properties operated by, or pooled
mortgage loans secured by REMIC Properties operated by, the surviving
Operator (including Subsidiaries of such Operator but excluding other
Affiliates thereof) after any such merger;
(v) so long as no Default has occurred and is continuing
or would be caused thereby, making loans and advances to LTC Healthcare,
Inc., a Nevada corporation, not exceeding $25,000,000 in aggregate principal
amount at any time outstanding;
(vi) so long as no Default has occurred and is continuing
or would be caused thereby, making loans and advances to current and former
officers, directors and employees of, or consultants to, the Borrower or any
Subsidiary for the purpose of exercising stock options or warrants with
respect to the stock of LTC; PROVIDED, HOWEVER, that such loans and advances
shall not exceed $15,000,000 in aggregate principal amount at any time
outstanding; and
(vii) so long as no Default has occurred and is continuing
or would be caused thereby, (A) making Investments not otherwise permitted
under this Section 5.2(f) in any Person or asset (but not more than 10% of
the stock of any publicly traded company), (B) making loans and advances to
limited partners of partnerships of which the general partner is a
Subsidiary, for the purpose of funding the limited partners' tax obligations
resulting from the sale of limited partnership assets, as required by the
partnership agreements of such partnerships, and (C) making loans and
advances to partnerships of which the general partner is a Subsidiary, for
the purpose of making distributions to the limited partners of such
partnerships, as required by the partnership agreements of such partnerships;
PROVIDED, HOWEVER, that (1) the aggregate book value of the Investments
permitted by clauses (A), (B) and (C) above, together with the aggregate book
value of all existing Investments of the Borrower and its Subsidiaries other
than those of the types permitted by clauses (i) through (vi) above (as
determined by reference to the most recent financial statements of the
Borrower delivered pursuant to Section 5.1(a)), shall not exceed $20,000,000
in the aggregate at any time outstanding and (2) none of such Investments may
be in any Person engaged in, or asset utilized in, any education-related line
of business;
(g) DIVIDENDS, ETC. The Borrower will not declare or pay any
dividends or other distributions, purchase, redeem, retire, defease or
otherwise acquire for value any of its equity interests or any warrants,
rights or options to acquire such equity interests, now or hereafter
outstanding, return any capital to its equity-holders as such, or make any
distribution of assets, equity interests, warrants, rights, options,
obligations or securities to its equity-holders as such, or permit any
Subsidiary to purchase, redeem, retire, defease or otherwise acquire for
value any equity interest in the Borrower or any warrants, rights or options
to acquire any such equity interest, except for the following:
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(i) provided that no Default has occurred and is
continuing or would be caused thereby, the Borrower may declare and pay cash
dividends to, and return capital to, the holders of its Common Stock in
respect of any fiscal quarter of the Borrower in an aggregate amount not to
exceed the amount equivalent to $0.29 per share of its Common Stock;
PROVIDED, HOWEVER, that, if an Authorized Officer delivers a Taxable Income
Certificate to the Administrative Agent not later than March 15 of any year
with respect to the immediately preceding fiscal year of the Borrower,
demonstrating that the Borrower has not previously distributed all of its
taxable income for such preceding fiscal year, then, provided that no Default
has occurred and is continuing or would be caused thereby, the Borrower may
declare and pay one additional cash dividend to the holders of its Common
Stock in respect of such fiscal year in excess of the amounts specified above
to the extent required to distribute all of the Borrower's taxable income for
such fiscal year; FURTHER PROVIDED, HOWEVER, that in no event may the
Borrower pay cash dividends to, and/or return capital to, the holders of its
Common Stock pursuant to this clause (i) and/or pay cash dividends to the
holders of its preferred stock pursuant to clause (ii) below in respect of
any fiscal year of the Borrower in an aggregate amount exceeding 110% of the
Consolidated taxable income (as set forth in the Borrower's U.S. federal
income tax return for such fiscal year) of the Borrower and its Subsidiaries
for such fiscal year; and FURTHER PROVIDED, HOWEVER, that in no event shall
the Borrower be deemed to be in violation of this Section 5.2(g) solely by
reason of the payment of dividends on its Common Stock and preferred stock
that were declared before the date of this Agreement;
(ii) provided that no Default has occurred and is
continuing or would be caused thereby, the Borrower may declare and pay cash
dividends on its preferred stock; PROVIDED, HOWEVER, that in no event may the
Borrower pay cash dividends to, and/or return capital to, the holders of its
Common Stock pursuant to clause (i) above and/or pay cash dividends to the
holders of its preferred stock pursuant to this clause (ii) in respect of any
fiscal year of the Borrower in an aggregate amount exceeding 110% of the
Consolidated taxable income (as set forth in the Borrower's U.S. federal
income tax return for such fiscal year) of the Borrower and its Subsidiaries
for such fiscal year; FURTHER PROVIDED, HOWEVER, that in no event shall the
Borrower be deemed to be in violation of this Section 5.2(g) solely by reason
of the payment of dividends on its Common Stock and preferred stock that were
declared before the date of this Agreement;
(iii) provided that (A) the Aggregate Commitment is
$135,000,000 or less and (B) no Default has occurred and is continuing or
would be caused thereby, the Borrower may repurchase its Common Stock and/or
its preferred stock;
(iv) the Borrower and its Subsidiaries may make
distributions to minority partners as contractually required pursuant to
partnership agreements to which the Borrower or any such Subsidiary is a
party; and
(v) any Subsidiary may pay cash dividends, or make other
cash distributions, to the Borrower.
(h) PREPAYMENT OF SUBORDINATED DEBT. The Borrower will not
prepay, and will not permit any Subsidiary to prepay, any Subordinated Debt;
PROVIDED, HOWEVER, that the
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Borrower may prepay up to $25,000,000 in aggregate principal amount of
Subordinated Debt outstanding on the date of this Agreement if (i) no Default
has occurred and is continuing or would be caused thereby and (ii) the
Borrower complies with the terms of this Agreement, including Sections 2.8
and 5.1(a), in connection with such prepayment.
(i) MAINTENANCE OF OWNERSHIP OF SUBSIDIARIES. The Borrower
will not sell or otherwise dispose of any equity interest in any of its
Subsidiaries or any warrants, rights or options to acquire any such equity
interest or permit any of its Subsidiaries to issue, sell or otherwise
dispose of any equity interest therein or in any other Subsidiary or any
warrants, rights or options to acquire any such equity interest, unless in
each such case (i) no Default has occurred and is continuing or would be
caused thereby and (ii) the Borrower complies with the terms of this
Agreement, including Sections 2.8 and 5.1(a), in connection with such sale,
disposition or issuance.
(j) CHANGE IN NATURE OF BUSINESS. The Borrower will not make,
or permit any Subsidiary to make, any material change in the nature of its
business as carried on as of the date hereof; PROVIDED, HOWEVER, that no sale
of assets by the Borrower or any Subsidiary in compliance with the terms of
this Agreement shall constitute a change in the nature of the business of the
Borrower or any Subsidiary.
(k) ACCOUNTING CHANGES, ETC. The Borrower will not make or
permit, or permit any Subsidiary to make or permit, any change in (i) any of
its accounting policies affecting the presentation of financial statements or
reporting practices, except as required or permitted by GAAP or (ii) its
fiscal year.
(l) CERTAIN PLANS. The Borrower will not establish or
participate in, or permit any Subsidiary to establish or participate in, any
Defined Benefit Plan or Multiple Employer Plan.
ARTICLE 6.
EVENTS OF DEFAULT
SECTION 6.1 EVENTS OF DEFAULT. Any one or more of the following
events shall constitute an "EVENT OF DEFAULT" hereunder:
(a) the Borrower (i) fails to pay any principal of any
Advance, or to reimburse any drawing under any Letter of Credit, when the
same becomes due and payable or (ii) fails to make any other payment under
any Credit Document within 3 days after the same becomes due and payable;
(b) any material representation or warranty made by the
Borrower or any Subsidiary (or any officer of any thereof) in or in
connection with any Credit Document proves to have been incorrect in any
material respect when made;
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(c) the Borrower fails to perform or observe any term,
covenant or agreement contained in Section 5.1(d), (e) (with respect to its
legal existence), (j), (k), (m), (n), (o), (p), (q) or (r) or Section 5.2 of
this Agreement; the Borrower or any Subsidiary fails to perform or observe
any term, covenant or agreement on its part to be performed or observed in
Section 4, 6(a), 7, 9 or 10 of the Security Agreement or in any LTC Mortgage;
or the Borrower or any Subsidiary fails to perform or observe any other term,
covenant or agreement contained in any Credit Document on its part to be
performed or observed, and such failure remains unremedied for 20 days after
the earlier of the Borrower's obtaining actual knowledge of the same and the
giving of written notice thereof to the Borrower by the Administrative Agent;
(d) the Borrower or any Subsidiary fails to pay any principal
of, or premium or interest on, any Debt of the Borrower or such Subsidiary
(as the case may be) that is outstanding in a principal amount of at least
$1,000,000 in the aggregate (but excluding Debt outstanding hereunder), when
the same becomes due and payable (whether by scheduled maturity, required
prepayment, acceleration demand or otherwise), and such failure continues
after the applicable grace period, if any, specified in the agreement or
instrument relating to such Debt; any other event occurs or condition exists
under any agreement or instrument relating to any such Debt and continues
after the applicable grace period, if any, specified in such agreement or
instrument, if the effect of such event or condition is to accelerate, or to
permit the acceleration of, the maturity of such Debt; or any such Debt is
declared to be due and payable or is required to be prepaid, redeemed,
purchased or defeased (other than by a regularly scheduled required
prepayment, redemption, purchase or defeasance), or an offer to prepay,
redeem, purchase or defease such Debt is required to be made, in each case
before the stated maturity thereof;
(e) the Borrower or any Subsidiary generally does not pay its
debts as such debts become due, admits in writing its inability to pay its
debts generally or makes a general assignment for the benefit of creditors;
any proceeding is instituted by or against the Borrower or any Subsidiary
seeking to adjudicate it a bankrupt or insolvent, seeking liquidation,
winding up, reorganization, arrangement, adjustment, protection, relief, or
composition of it or its debts under any law relating to bankruptcy,
insolvency or reorganization or relief of debtors, or seeking the entry of an
order for relief or the appointment of a receiver, trustee or other similar
official for it or for any substantial part of its property, and, in the case
of any such proceeding instituted against the Borrower or any Subsidiary that
is being diligently contested by it in good faith, either such proceeding
remains undismissed or unstayed for a period of 30 days or any of the actions
sought in such proceeding (including the entry of any order for relief
against, or the appointment of a receiver, trustee, custodian or other
similar official for, it or any substantial part of its property) occurs; or
the Borrower or any Subsidiary takes any action to authorize any of the
actions set forth above in this Section 6.1(e);
(f) any judgment or order for the payment of money in excess
of $1,000,000 is rendered against the Borrower or any Subsidiary, and there
is any period of 10 consecutive days (or, if the entire amount is covered by
insurance, 30 consecutive days) during which a stay of enforcement of such
judgment or order, by reason of a pending appeal or otherwise, is not in
effect, unless such judgment or order is vacated, satisfied or dismissed or
bonded pending appeal
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or, in the case of a judgment or order the entire amount of which is covered
by insurance, is the subject of a binding agreement with the plaintiff and
the insurer covering payment therefor;
(g) any nonmonetary judgment or order that could reasonably be
expected to have a Material Adverse Effect is rendered against the Borrower
or any Subsidiary, and there is any period of 10 consecutive days during
which a stay of enforcement of such judgment or order, by reason of a pending
appeal or otherwise, is not in effect;
(h) any Person engages in any "prohibited transaction" (as
defined in Section 406 of ERISA or Section 4975 of the Code) involving any
Plan; any "accumulated funding deficiency" (as defined in Section 302 of
ERISA), whether or not waived, exists with respect to any Plan, or any Lien
in favor of the PBGC or a Plan arises on the assets of the Borrower or any
Commonly Controlled Entity; a Reportable Event occurs with respect to a
Single Employer Plan, or a proceeding is commenced to have a trustee
appointed, or a trustee is appointed, to administer or to terminate, a Single
Employer Plan, and such Reportable Event, commencement of a proceeding or
appointment of a trustee could reasonably be expected to result in the
termination of such Plan for purposes of Title IV of ERISA (other than a
standard termination pursuant to Section 4041(b) of ERISA); any Single
Employer Plan terminates for purposes of Title IV of ERISA; the Borrower or
any Commonly Controlled Entity incurs, or could reasonably be expected to
incur, any liability in connection with a withdrawal from, or the Insolvency
or Reorganization of, a Multiemployer Plan; an event or condition occurs that
could reasonably be expected to result in the Borrower's or any Commonly
Controlled Entity's becoming responsible for any liability in respect of a
Former Plan; or any other event or condition occurs or exists with respect to
a Plan; PROVIDED, HOWEVER, that the occurrence or existence of any one or
more of the events and conditions described above in this Section 6.1(h)
shall constitute an Event of Default only if the same could reasonably be
expected to have a Material Adverse Effect;
(i) any material provision of any Credit Document for any
reason ceases to be valid and binding on or enforceable against the Borrower,
any Subsidiary or any Subordinated Creditor, as applicable, or the Borrower,
any Subsidiary or any Subordinated Creditor, as applicable, so states in
writing;
(j) the Security Agreement, after execution and delivery
thereof, or any LTC Mortgage, after execution, delivery and recording
thereof, for any reason (except pursuant to the terms of the Credit Documents
or through the fault of the Administrative Agent) ceases to create a valid
and perfected first-priority Lien on any of the Collateral purported to be
covered thereby, and such cessation to create such a Lien is not cured within
30 days after the Administrative Agent notifies the Borrower of such
cessation; or
(k) a Change of Control occurs.
SECTION 6.2 EFFECT OF EVENT OF DEFAULT. If an Event of Default occurs
and is continuing, then, and in any such event, the Administrative Agent (a)
shall at the request, or may with the consent, of the Required Lenders, by
notice to the Borrower, declare the obligation of each Lender to make
Advances to be terminated, whereupon the same shall forthwith terminate, and
(b) shall at the request, or may with the consent, of the Required Lenders,
by notice to the
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Borrower, declare the Advances, all interest thereon and all other amounts
payable under this Agreement and the other Credit Documents to be forthwith
due and payable, whereupon (i) the Advances, all such interest and all such
amounts shall become and be forthwith due and payable, without presentment,
demand, protest or further notice of any kind, all of which are hereby
expressly waived by the Borrower, and (ii) to the extent any Letters of
Credit are then outstanding, the Borrower will deposit with and pledge to the
Administrative Agent cash collateral in the aggregate Letter of Credit Amount
of such Letters of Credit; PROVIDED, HOWEVER, that, in the event of an actual
or deemed entry of an order for relief with respect to the Borrower or any
Subsidiary under the Federal Bankruptcy Code, (A) the obligation of each
Lender to make Advances (except pursuant to Section 2.15(c)) shall
automatically terminate, and (B) the Advances, all such interest and all such
amounts (including such cash collateral) shall automatically become and be
due and payable, without presentment, demand, protest or any notice of any
kind, all of which are hereby expressly waived by the Borrower.
ARTICLE 7.
AGENT
SECTION 7.1 AUTHORIZATION AND ACTION. Each Lender hereby appoints and
authorizes the Administrative Agent to take such action as agent on its
behalf and to exercise such powers and discretion under this Agreement and
the other Credit Documents as are delegated to the Administrative Agent by
the terms hereof, together with such powers as are reasonably incidental
thereto. As to any matters not expressly provided for by the Credit Documents
(including enforcement or collection of the Debt resulting from the
Advances), the Administrative Agent shall not be required to exercise any
discretion or take any action, but shall be required to act or to refrain
from acting (and shall be fully protected in so acting or refraining from
acting) upon the instructions of the Required Lenders, and such instructions
shall be binding on all of the Lenders; PROVIDED, HOWEVER, that the
Administrative Agent shall not be required to take any action that exposes
the Administrative Agent to personal liability or that is contrary to this
Agreement or any applicable Governmental Rule.
SECTION 7.2 AGENT'S RELIANCE, ETC. Neither the Administrative Agent
nor any of its directors, officers, agents or employees shall be liable for
any action taken or omitted to be taken by it or them under or in connection
with the Credit Documents, except for its or their own gross negligence or
willful misconduct. Without limitation of the generality of the foregoing,
the Administrative Agent (a) may treat the Lender that made any Advance as
the holder of the Debt resulting therefrom until the Administrative Agent
receives and accepts an Assignment and Acceptance entered into by such
Lender, as assignor, and an assignee as provided in Section 8.7, (b) may
consult with legal counsel (including counsel for the Borrower), independent
public accountants and other experts selected by it and shall not be liable
for any action taken or omitted to be taken in good faith by it in accordance
with the advice of such counsel, accountants or experts, (c) makes no
representation or warranty to any Lender and shall not be responsible to any
Lender for any representations, warranties or statements made in or in
connection with any of the Credit Documents, (d) shall not have any duty to
ascertain or inquire as to the performance or observance of any of the terms,
covenants or conditions of any Credit Document on the part of the Borrower or
any Subsidiary or to inspect the property (including the books and records) of
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the Borrower or any Subsidiary, (e) shall not be responsible to any Lender
for the due execution, legality, validity, enforceability, genuineness,
sufficiency or value of any Credit Document or any other instrument or
document furnished pursuant hereto and (f) shall incur no liability under or
in respect of any Credit Document by acting upon any notice, consent,
certificate or other instrument or writing (which may be by telecopier or
otherwise) believed by it to be genuine and signed or sent by the proper
party or parties.
SECTION 7.3 SANWA AND AFFILIATES. With respect to its Commitment, the
Advances made by it and its participations in Letters of Credit, Sanwa shall
have the same rights and powers under the Credit Documents as any other
Lender and may exercise the same as though it were not the Administrative
Agent; and the term "Lender" or "Lenders" shall, unless otherwise expressly
indicated, include Sanwa in its individual capacity and as Issuing Bank.
Sanwa and its Affiliates may accept deposits from, lend money to, act as
trustee under indentures of, accept investment banking engagements from, and
generally engage in any kind of business with, the Borrower, any Subsidiary
and/or any Person that may do business with or own securities of the Borrower
or any Subsidiary, all as if Sanwa were not the Administrative Agent and
without any duty to account therefor to the Lenders.
SECTION 7.4 LENDER CREDIT DECISION. Each Lender acknowledges that it
has, independently and without reliance on the Administrative Agent or any
other Lender and based on the financial statements referred to in Section 4.5
and such other documents and information as it has deemed appropriate, made
its own credit analysis and decision to enter into this Agreement. Each
Lender also acknowledges that it will, independently and without reliance on
the Administrative Agent or any other Lender and based on such documents and
information as it deems appropriate at the time, continue to make its own
credit decisions in taking or not taking action under this Agreement.
SECTION 7.5 INDEMNIFICATION. The Lenders agree to indemnify the
Administrative Agent (to the extent not promptly reimbursed by the Borrower),
ratably according to the respective principal amounts of the Advances then
owing to each of them (or, if no Advances are at the time outstanding or if
any Advances are then owing to Persons that are not Lenders, ratably
according to the respective amounts of their Commitments), from and against
any and all liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses or disbursements of any kind or nature
whatsoever that may be imposed on, incurred by or asserted against the
Administrative Agent in any way relating to or arising out of any of the
Credit Documents or any action taken or omitted by the Administrative Agent
under the Credit Documents; PROVIDED, HOWEVER, that no Lender shall be liable
for any portion of such liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, costs, expenses or disbursements resulting from
the Administrative Agent's gross negligence or willful misconduct. Without
limitation of the foregoing, each Lender agrees to reimburse the
Administrative Agent promptly upon demand for its ratable share of any costs
and expenses payable by the Borrower under Section 8.4, to the extent that
the Administrative Agent is not promptly reimbursed for such costs and
expenses by the Borrower.
SECTION 7.6 SUCCESSOR AGENT. The Administrative Agent may resign at
any time by giving written notice thereof to the Lenders and the Borrower and
may be removed at any time
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with or without cause by the Required Lenders. Upon any such resignation or
removal, the Required Lenders shall have the right to appoint a successor
Agent, which shall be a financial institution approved by the Borrower
(provided that such approval shall not be unreasonably withheld and that no
such approval shall be required if a Default has occurred and is continuing).
If no successor Agent is so appointed by the Required Lenders, and accepts
such appointment, within 30 days after the retiring Agent's giving of notice
of resignation or the Required Lenders' removal of the retiring Agent, then
the retiring Agent may, on behalf of the Lenders, appoint a successor Agent,
which shall be a commercial bank organized under the laws of the United
States of America or of any state thereof, shall have a combined capital and
surplus of at least $500,000,000 and shall be acceptable to the Borrower
(provided that such approval shall not be unreasonably withheld and that no
such approval shall be required if a Default has occurred and is continuing).
Upon the acceptance of any appointment as Agent hereunder by a successor
Agent, such successor Agent shall thereupon succeed to and become vested with
all of the rights, powers, discretion, privileges and duties of the retiring
Agent, and the retiring Agent shall be discharged from its duties and
obligations under the Credit Documents. After any retiring Agent's
resignation or removal hereunder as Agent, the provisions of this Article 7
shall inure to its benefit as to any actions taken or omitted to be taken by
it while it was Agent under this Agreement.
SECTION 7.7 AGENT AS COLLATERAL HOLDER.
(a) Except for action expressly required of the Administrative
Agent hereunder or under any other Credit Document, the Administrative Agent
shall in all cases be fully justified in refusing to act hereunder and
thereunder unless it is further indemnified to its satisfaction by the
Lenders, proportionately in accordance with the Obligations then due and
payable to each of them, against any and all liability and expense that may
be incurred by it by reason of taking or continuing to take any such action.
(b) Except as expressly provided herein or in any other Credit
Document, the Administrative Agent shall have no duty to take any affirmative
steps with respect to the collection of amounts payable in respect of the
Collateral. The Administrative Agent shall incur no liability as a result of
any sale of any of the Collateral.
(c) The Lenders hereby consent, and agree upon written request
by the Administrative Agent to execute and deliver any such instruments and
other documents as the Administrative Agent may deem desirable to confirm
such consent, to the release of the Liens on the Collateral in accordance
with the terms of the Credit Documents, including Section 8.8 hereof.
(d) The Administrative Agent shall be deemed to have exercised
reasonable care in the custody and preservation of the Collateral in its
possession if such Collateral is accorded treatment substantially equal to
that the Administrative Agent accords its own similar property, it being
understood that neither the Administrative Agent nor any Lender shall have
responsibility for taking any steps necessary to preserve rights against any
parties with respect to any Collateral.
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SECTION 7.8 SYNDICATION AGENT AND DOCUMENTATION AGENT. None of the
Lenders identified on the facing page of, or elsewhere in, this Agreement as
"Syndication Agent" or "Documentation Agent" shall have any right, power,
obligation, liability, responsibility or duty under this Agreement other than
those applicable to all Lenders as such. Without limiting the foregoing, none
of the Lenders so identified as "Syndication Agent" or "Documentation Agent"
shall have or be deemed to have any fiduciary relationship with any Lender.
Each Lender acknowledges that it has not relied, and will not rely, on any of
the Persons so identified in deciding to enter into this Agreement or in
taking or not taking action hereunder.
ARTICLE 8.
MISCELLANEOUS
SECTION 8.1 AMENDMENTS, ETC. No amendment or waiver of any provision
of this Agreement, or consent to any departure by the Borrower therefrom,
shall in any event be effective unless the same is in writing and is
consented to in one or more writings signed by the Required Lenders, and then
such waiver or consent shall be effective only in the specific instance and
for the specific purpose for which given; PROVIDED, HOWEVER, that no
amendment, waiver or consent shall, unless in writing and signed or consented
to by all the Lenders, do any of the following: (a) waive any of the
conditions specified in Section 3.1; (b) change the percentage specified in
the definition of "Required Lenders"; (c) amend in any material respect the
definition of "Borrowing Base" or any defined term used, directly or
indirectly, therein; (d) release any material portion of the Collateral,
except as specifically permitted by the terms of the Credit Documents; (e)
release any Guarantor from its obligations under its Guaranty; (f) amend this
Section 8.1; (g) increase the Commitments or subject the Lenders to any
additional obligations; (h) reduce the principal of or interest on the
Advances or any fees or other amounts payable hereunder; or (i) postpone any
date fixed for any payment of principal of or interest on the Advances or of
any fees or other amounts payable hereunder; FURTHER PROVIDED, HOWEVER, that
no amendment, waiver or consent shall, unless in writing and signed by the
Administrative Agent in addition to the Lenders required above to take such
action, affect the rights or duties of the Administrative Agent under this
Agreement; and FURTHER PROVIDED, HOWEVER, that the Borrower and the
Administrative Agent acting alone may amend Section 6.1(c) to the extent
necessary to correct references therein to provisions of the Security
Agreement after the execution and delivery of the Security Agreement by the
Borrower. Delivery by telecopier of an executed counterpart of any amendment
or waiver of, or consent to departure from, any provision of this Agreement
or any other Credit Document shall be effective as delivery of an originally
executed counterpart thereof.
SECTION 8.2 NOTICES, ETC. Unless otherwise specifically provided in
this Agreement, all notices, demands and other communications provided for
hereunder shall be in writing (including communication by telecopier) and
shall be mailed, telecopied or delivered, if to the Borrower, to it at 000
Xxxxxxxxx Xxxxx, Xxxxx 0000, Xxxxxx, Xxxxxxxxxx 00000, telecopier number
000-000-0000, Attention: Xxxxx X. Xxxxxxxxxxx, Chief Executive Officer; if to
any Lender, to it at its Domestic Lending Office specified opposite its name
on Schedule 1 or in the Assignment and Acceptance pursuant to which it became
a Lender; and if to the Administrative Agent, to it at 000 Xxxxx Xxxxxxxx
Xxxxxx, Xxx Xxxxxxx, Xxxxxxxxxx 00000, telecopier number 000-000-0000,
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Attention: E. Xxxxx Xxxxx, Senior Vice President; or, as to any party, to it
at such other address or telecopier number as designated by such party in a
written notice to the other parties. All notices, demands and other
communications hereunder shall, (a) when mailed, be effective 3 Business Days
after the same is deposited into the mails with first-class postage prepaid,
(b) when sent for next-day delivery by a reputable freight company or
reputable overnight courier service, be effective 1 Business Day after the
same is delivered to such company or service, as the case may be, and (c)
when sent by telecopier, be effective on the opening of the next Business Day
after sending, except that notices, demands and other communications to the
Administrative Agent pursuant to Article 2, 3 or 7 shall not be effective
until received by the Administrative Agent.
SECTION 8.3 NO WAIVER; REMEDIES. No failure on the part of any Lender
or the Administrative Agent to exercise, and no delay in exercising, any
right hereunder shall operate as a waiver thereof, and no single or partial
exercise of any such right shall preclude any other or further exercise
thereof or the exercise of any other right. The remedies provided herein are
cumulative and not exclusive of any remedies provided by law.
SECTION 8.4 COSTS AND EXPENSES.
(a) The Borrower agrees to pay on demand (i) all reasonable
costs and expenses of the Administrative Agent, the Syndication Agent and the
Documentation Agent in connection with the preparation, execution, delivery,
administration, amendment and other modification of the Credit Documents and
the documents and instruments to be delivered thereunder (including (A) all
due-diligence, transportation, computer, duplication, search, filing and
recording fees and expenses, (B) the reasonable fees and expenses of legal
counsel for the Administrative Agent, the Syndication Agent and the
Documentation Agent (including the allocated cost of in-house legal counsel)
with respect thereto, with respect to advising the Administrative Agent, the
Syndication Agent and the Documentation Agent as to their respective rights
and responsibilities, and the perfection, protection or preservation of
rights or interests, under the Credit Documents and with respect to
negotiations with the Borrower regarding any Default or any events or
circumstances that may give rise to a Default, (C) the reasonable fees and
expenses of the Administrative Agent's financial consultant (subject to the
limitation set forth in Section 3.1) and of any independent certified public
accounting firm engaged pursuant to Section 5.1(f) for the purpose of
verifying Borrowing Base information and (D) the reasonable fees and expenses
of any independent collateral agent employed by the Administrative Agent to
hold personal-property Collateral) and (ii) all costs and expenses of the
Administrative Agent, the Syndication Agent, the Documentation Agent and the
Lenders in connection with the enforcement of the Credit Documents, whether
in any action, suit or litigation or in any bankruptcy, insolvency or other
similar proceeding affecting creditors' rights generally, or otherwise
(including the reasonable fees and expenses of legal counsel for the
Administrative Agent, the Syndication Agent, the Documentation Agent and each
Lender (including the allocated cost of in-house counsel), and the reasonable
fees and expenses of the Administrative Agent's financial consultant, with
respect thereto).
(b) The Borrower agrees to indemnify and hold harmless the
Administrative Agent and each Lender and each of their Affiliates and their
respective directors, officers,
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employees, agents and advisors (each an "INDEMNIFIED PARTY") from and against
any and all claims, damages, losses, liabilities and expenses (including
reasonable fees and expenses of legal counsel) that may be incurred by or
asserted or awarded against any Indemnified Party, in each case arising out
of or in connection with or by reason of, or in connection with the
preparation for a defense of, any investigation, litigation or proceeding
arising out of, related to or in connection with (i) the actual or proposed
use of the proceeds of any Advance or Letter of Credit, (ii) the Credit
Documents or any of the transactions contemplated by any of the Credit
Documents, (iii) the actual or alleged presence of any Hazardous Material in,
on or under (A) any property owned or operated by the Borrower or any
Subsidiary, (B) any property to which any Hazardous Material has migrated
from any property owned or operated by the Borrower or any Subsidiary or (C)
any property at which the Borrower or any Subsidiary has disposed of any
Hazardous Material (whether or not legal at the time of such disposal) or
(iv) any Environmental Proceeding relating in any way to the Borrower or any
Subsidiary or any property owned or operated by the Borrower or any
Subsidiary, in each case whether or not such investigation, litigation or
proceeding is brought by the Borrower, any of the Borrower's directors,
shareholders or creditors or any Indemnified Party, whether or not an
Indemnified Party is a party thereto and whether or not the transactions
contemplated hereby are consummated; PROVIDED, HOWEVER, that the Borrower
shall not be liable to the extent any such claim, damage, loss, liability or
expense is found in a final, nonappealable judgment by a court of competent
jurisdiction to have resulted from such Indemnified Party's gross negligence
or willful misconduct.
(c) If any payment of principal of, or Conversion of, any
Eurodollar Rate Advance is made by the Borrower to or for the account of a
Lender other than on the last day of the Interest Period for such Advance, as
a result of a payment, prepayment or Conversion pursuant to Section 2.6, 2.7,
2.8 or 2.10 or acceleration of the maturity of the Advances pursuant to
Section 6.1 or for any other reason, then the Borrower will, upon demand by
such Lender (with a copy of such demand to the Administrative Agent), pay to
the Administrative Agent for the account of such Lender any amounts required
to compensate such Lender for any additional losses, costs or expenses that
it may reasonably incur as a result of such payment, including any loss
(excluding loss of anticipated profits), cost or expense incurred by reason
of the liquidation or reemployment of deposits or other funds acquired by any
Lender to fund or maintain such Advance.
SECTION 8.5 WAIVER OF RIGHT OF SETOFF. Each Lender hereby waives all
rights that it may have, whether statutory, common-law or otherwise (other
than rights pursuant to the Collateral Documents), to set off any deposit
accounts or other obligations that the Borrower now maintains or may
hereafter maintain with such Lender against any of the Obligations of the
Borrower under this Agreement or any of the other Credit Documents.
SECTION 8.6 BINDING EFFECT. This Agreement shall be binding upon and
inure to the benefit of the Borrower, the Administrative Agent and each
Lender and their respective successors and assigns, except that (a) the
Borrower may not assign any right or obligation hereunder or any interest
herein without the prior written consent of the Required Lenders and (b) no
Lender may assign any right or obligation hereunder or any interest herein
except in accordance with the provisions of Section 8.7.
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SECTION 8.7 ASSIGNMENTS AND PARTICIPATIONS.
(a) Each Lender may assign to one or more Eligible Assignees all or a
portion of its rights and obligations under this Agreement (including all or
a portion of its Commitment (including any outstanding Letter of Credit
participations thereunder) and the Advances owing to it); PROVIDED, HOWEVER,
that (i) the amount of the Commitment of the assigning Lender being assigned
pursuant to each such assignment (determined as of the date of the Assignment
and Acceptance with respect to such assignment) shall not be less than the
lesser of (A) the entire Commitment of such Lender at such time and (B)
$5,000,000, (ii) each such assignment shall be subject to the prior written
consent of the Administrative Agent, which consent shall not be unreasonably
withheld or delayed, and (iii) the parties to each such assignment shall
execute and deliver to the Administrative Agent, for its acceptance and
recording in the Register, an Assignment and Acceptance, together with a
processing and recording fee of $3,500. Upon such execution, delivery,
acceptance and recording (and subject to such consent), from and after the
effective date specified in each Assignment and Acceptance, which effective
date shall be at least 5 Business Days after the date of delivery thereof to
the Administrative Agent or, if so specified in such Assignment and
Acceptance, the date of acceptance thereof by the Administrative Agent, (A)
the assignee thereunder shall be a party hereto and, to the extent that
rights and obligations hereunder have been assigned to it pursuant to such
Assignment and Acceptance, shall have the rights and obligations of a Lender
hereunder and (B) the Lender assignor thereunder shall, to the extent that
rights and obligations hereunder have been assigned by it pursuant to such
Assignment and Acceptance, relinquish its rights and be released from its
obligations under this Agreement (and, in the case of an Assignment and
Acceptance covering all or the remaining portion of an assigning Lender's
rights and obligations under this Agreement, such Lender shall cease to be a
party hereto, except that such Lender shall continue to be an Indemnified
Party under Section 8.4(b)).
(b) By executing and delivering an Assignment and Acceptance, the
Lender assignor thereunder and the assignee thereunder confirm to and agree
with each other and the other parties hereto as follows: (i) other than as
provided in such Assignment and Acceptance, such assigning Lender makes no
representation or warranty and assumes no responsibility with respect to any
statements, warranties or representations made in or in connection with any
of the Credit Documents or the execution, legality, validity, enforceability,
genuineness, sufficiency or value of any of the Credit Documents or any other
instrument or document furnished pursuant thereto; (ii) such assigning Lender
makes no representation or warranty and assumes no responsibility with
respect to the financial condition of the Borrower, any Subsidiary or any
other Person or the performance or observance by the Borrower, any Subsidiary
or any other Person of any of its obligations under any of the Credit
Documents or any other instrument or document furnished pursuant thereto;
(iii) such assignee confirms that it has received copies of the Credit
Documents, together with copies of the financial statements referred to in
Section 4.5 and such other documents and information as it has deemed
appropriate to make its own credit analysis and decision to enter into such
Assignment and Acceptance; (iv) such assignee will, independently and without
reliance on the Administrative Agent, such assigning Lender or any other
Lender and based on such documents and information as it deems appropriate at
the time, continue to make its own credit decisions in taking or not taking
action under the Credit
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Documents; (v) such assignee appoints and authorizes the Administrative Agent
to take such action as agent on its behalf and to exercise such powers under
the Credit Documents as are delegated to the Administrative Agent by the
terms thereof, together with such powers as are reasonably incidental
thereto; and (vi) such assignee agrees that it will perform in accordance
with their terms all of the obligations that by the terms of this Agreement
are required to be performed by it as a Lender.
(c) The Administrative Agent shall maintain at its address referred
to in Section 8.2 a copy of each Assignment and Acceptance delivered to and
accepted by it and a register for the recordation of the names and addresses
of the Lenders and the Commitment of, and principal amount of the Advances
owing to, each Lender from time to time (the "REGISTER"). The entries in the
Register shall be conclusive and binding for all purposes, absent manifest
error, and the Borrower, the Administrative Agent and the Lenders may treat
each Person whose name is recorded in the Register as a Lender hereunder for
all purposes of this Agreement. The Register shall be available for
inspection by the Borrower or any Lender at any reasonable time and from time
to time upon reasonable prior notice.
(d) Upon its receipt of an Assignment and Acceptance executed by an
assigning Lender and an assignee in accordance with the terms of this Section
8.7 (subject to the consent of the Administrative Agent as described above),
the Administrative Agent shall, if such Assignment and Acceptance has been
completed and is substantially in the form of Exhibit F, (i) accept such
Assignment and Acceptance, (ii) record the information contained therein in
the Register and (iii) give prompt notice thereof to the Borrower.
(e) Each Lender may sell participations to one or more banks or other
Persons in or to all or a portion of its rights and obligations under this
Agreement (including all or a portion of its Commitment, Advances and Letter
of Credit participations); PROVIDED, HOWEVER, that (i) such Lender's
obligations under this Agreement (including its Commitment to the Borrower
hereunder) shall remain unchanged, (ii) such Lender shall remain solely
responsible to the other parties hereto for the performance of such
obligations, (iii) the Borrower, the Administrative Agent and the other
Lenders shall continue to deal solely and directly with such Lender in
connection with such Lender's rights and obligations under this Agreement and
(iv) no participant under any such participation shall have any right to
approve any amendment or waiver of any provision of any Credit Document, or
any consent to any departure by the Borrower therefrom, except to the extent
that such amendment, waiver or consent would reduce the principal of, or
interest on, the Advances or any fees or other amounts payable hereunder (in
each case to the extent subject to such participation), would postpone any
date fixed for any payment of principal of, or interest on, the Advances or
any fees or other amounts payable hereunder (in each case to the extent
subject to such participation) or would release a material portion of the
Collateral, except as specifically permitted by the terms of the Credit
Documents (provided that, in any case in which a participant has the right to
approve any amendment, waiver or consent as described above in this clause
(iv), such Lender shall retain (and hereby agrees to exercise) the right to
repurchase the participation of such participant if such participant does not
approve any such amendment, waiver or consent).
(f) Any Lender may, in connection with any assignment or
participation or proposed assignment or participation pursuant to this
Section 8.7, disclose to the assignee or participant or proposed assignee or
participant any information relating to the Borrower
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furnished to such Lender by or on behalf of the Borrower; PROVIDED, HOWEVER,
that, before any such disclosure, the assignee or participant or proposed
assignee or participant shall agree to be bound by the terms of Section 8.16.
SECTION 8.8 RELEASE OF COLLATERAL.
(a) Upon (i) any incurrence of Debt permitted by Section 5.2(b)(v),
(ii) any sale of an asset permitted by Section 5.2(e)(v) or (iii) any
prepayment of a Mortgage Loan (and, in connection with any such prepayment,
subject to the Borrower's delivery to the Lenders of a Collateral Valuation
Certificate, duly executed by an Authorized Officer and showing a ratio of
the Collateral Value to the Aggregate Commitment of at least 1.82 to 1.00
after reflecting the release of Collateral in connection therewith referred
to below), the Administrative Agent will execute and deliver to the Borrower,
as promptly as practicable and at the Borrower's expense, such documents as
the Borrower reasonably requests to evidence the release of any item of
Collateral from the Lien in favor of the Administrative Agent, to the extent
required to enable such incurrence of Debt, sale of an asset or prepayment of
a Mortgage Loan to occur.
(b) If (i) the Aggregate Commitment is reduced to $100,000,000 or
less and (ii) the Borrower delivers to the Lenders a Collateral Valuation
Certificate, duly executed by an Authorized Officer and showing a ratio of
the Collateral Value to the Aggregate Commitment of at least 1.82 to 1.00
after reflecting the release of REMIC Certificates referred to below, the
Administrative Agent will execute and deliver to the Borrower, as promptly as
practicable and at the Borrower's expense, such documents as the Borrower
reasonably requests to evidence the release of all REMIC Certificates from
the Lien thereon in favor of the Administrative Agent.
(c) If (i) the Aggregate Commitment is reduced to $60,000,000 or less
and (ii) the Borrower delivers to the Lenders a Collateral Valuation
Certificate, duly executed by an Authorized Officer and showing a ratio of
the Collateral Value to the Aggregate Commitment of at least 1.82 to 1.00
after reflecting the release of Mortgage Loans, Mortgage Notes and Mortgages
referred to below, the Administrative Agent will execute and deliver to the
Borrower, as promptly as practicable and at the Borrower's expense, such
documents as the Borrower reasonably requests to evidence the release of all
Mortgage Loans, Mortgage Notes and Mortgages from the Lien thereon in favor
of the Administrative Agent.
SECTION 8.9 GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY, AND
CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF
CALIFORNIA WITHOUT REFERENCE TO THE PRINCIPLES OF CONFLICTS OF LAWS THEREOF.
SECTION 8.10 SUBMISSION TO JURISDICTION. Each party hereto hereby
irrevocably and unconditionally (a) submits for itself and its property in
any legal action or proceeding relating to this Agreement or any other Credit
Document to which it is a party, and for recognition and enforcement of any
judgment in respect thereof, to the nonexclusive general jurisdiction of the
courts of the State of California, the courts of the United States of America
for the Central District of California and appellate courts from any thereof;
(b) consents that any such action or proceeding may be brought in such courts
and waives any objection that it may now or hereafter have to the venue of
any such action or proceeding in any such court or that such action or
proceeding was brought in an inconvenient forum and agrees not to plead or
claim the same; (c)
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agrees that service of process in any such action or proceeding may be
effected by mailing a copy thereof by registered or certified mail (or any
substantially similar form of mail), postage prepaid, to the Borrower, the
applicable Lender or the Administrative Agent, as the case may be, at the
address specified herein or at such other address as to which the Borrower,
such Lender and the Administrative Agent are notified pursuant hereto; (d)
agrees that nothing herein shall affect the right to effect service of
process in any other manner permitted by law or limit the right to xxx in any
other jurisdiction; and (e) waives, to the maximum extent not prohibited by
law, any right it may have to claim or recover punitive damages in any legal
action or proceeding referred to in this section.
SECTION 8.11 HEADINGS. Section headings in this Agreement are for
convenience of reference only and shall not be considered in the
interpretation of any of the provisions hereof.
SECTION 8.12 SURVIVAL OF REPRESENTATION AND WARRANTIES. All
representations and warranties made herein or in any other Credit Document
(including any amendment or other modification hereto or thereto) or in any
certificate delivered pursuant hereto or pursuant to any other Credit
Document shall survive the execution and delivery of this Agreement and the
making of Advances hereunder.
SECTION 8.13 SEVERABILITY. Any provision of this Agreement that 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, and no
such prohibition or unenforceability in any jurisdiction shall invalidate or
render unenforceable such provision in any other jurisdiction.
SECTION 8.14 INTEGRATION. This Agreement and the other Credit Documents
represent the entire agreement of each of the parties party hereto with
respect to the subject matter hereof, and there are no promises,
undertakings, representations or warranties by any of the parties hereto
relative to the subject matter hereof that are not expressly set forth or
referred to herein or in another Credit Document.
SECTION 8.15 EXECUTION IN COUNTERPARTS. This Agreement may be executed in
any number of counterparts and by different parties hereto in separate
counterparts, each of which when so executed shall be deemed to be an
original and all of which taken together shall constitute one and the same
agreement. Delivery by telecopier of an executed counterpart of a signature
page to this Agreement shall be effective as delivery of an originally
executed counterpart of this Agreement.
SECTION 8.16 CONFIDENTIALITY. Each Lender and the Administrative Agent
will keep confidential any confidential information that it may receive from
the Borrower or any Subsidiary pursuant to this Agreement and will not
disclose such information to any third party, except for disclosure as
follows: (a) to legal counsel, accountants and other professional advisors to
such Lender or the Administrative Agent; (b) to regulatory officials having
jurisdiction over such Lender or the Administrative Agent; (c) as required by
any Governmental Rule or in connection with any legal proceeding; (d) subject
to Section 8.7(f), to another Person in connection with a potential
assignment or participation hereunder; and (e) of information that has been
previously disclosed publicly without breach of this provision.
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SECTION 8.17 WAIVER OF JURY TRIAL. EACH OF THE BORROWER, THE
ADMINISTRATIVE AGENT AND THE LENDERS HEREBY IRREVOCABLY WAIVES ALL RIGHT TO
TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM RELATING TO THIS
AGREEMENT OR ANY OTHER CREDIT DOCUMENT OR ANY TRANSACTION CONTEMPLATED HEREBY
OR THEREBY.
LTC PROPERTIES, INC.
By:
----------------------------------------
Name:
--------------------------------------
Title:
-------------------------------------
SANWA BANK CALIFORNIA,
as Administrative Agent and Lender
By:
----------------------------------------
E. Xxxxx Xxxxx
Senior Vice President
By:
----------------------------------------
Xxxx Xxxxxxxx
Assistant Vice President
BANK OF MONTREAL,
as Syndication Agent and Lender
By:
----------------------------------------
Name:
--------------------------------------
Title:
-------------------------------------
-69-
BNP PARIBAS, Los Angeles Branch,
as Documentation Agent and Lender
By:
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Name:
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Title:
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By:
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Name:
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Title:
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BANK HAPOALIM B.M.
By:
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Name:
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Title:
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By:
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Name:
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Title:
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BANK OF AMERICA, N.A.
By:
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Name:
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Title:
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KEY CORPORATE CAPITAL INC.
By:
----------------------------------------
Name:
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Title:
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-70-
BHF (USA) CAPITAL CORPORATION
By:
----------------------------------------
Name:
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Title:
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By:
----------------------------------------
Name:
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Title:
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XXXXX FARGO BANK, N.A.
By:
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Name:
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Title:
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BANK LEUMI USA
By:
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Name:
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Title:
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-71-
