U.S. $250,000,000
THIRD AMENDED AND RESTATED
REVOLVING LOAN AGREEMENT
among
HEALTH AND RETIREMENT PROPERTIES TRUST,
as Borrower,
THE LENDERS NAMED HEREIN,
KLEINWORT ▇▇▇▇▇▇ LIMITED,
as Agent,
▇▇▇▇▇ FARGO BANK, NATIONAL ASSOCIATION,
as Administrative Agent
and
NATWEST BANK N.A.
as Co-Agent
Dated as of March 15, 1996
TABLE OF CONTENTS
SECTION PAGE
SECTION 1. DEFINITIONS...........................................................................................2
1.1. Defined Terms......................................................................................2
1.2. Other Definitional Provisions.....................................................................26
1.3 Certain Calculations: ▇▇▇▇-to Market.............................................................26
SECTION 2. AMOUNT AND TERMS OF REVOLVING LOANS..................................................................27
2.1. Revolving Loans...................................................................................27
2.2. Notes; Maturity Date..............................................................................29
2.3. Procedure for Borrowing...........................................................................29
2.4. Interest..........................................................................................32
2.5. Duration of Interest Period; Notice of Continuation/Conversion....................................33
2.6. Fees..............................................................................................35
2.7. Termination or Reduction of Commitment............................................................35
2.8. Optional Prepayments; Mandatory Prepayments.......................................................35
2.9. Computation of Interest and Fees..................................................................37
2.10. Payments and Currency............................................................................37
2.11. Use of Proceeds..................................................................................39
2.12. Increased Costs..................................................................................39
2.13. Change in Law Rendering Eurodollar Loans or Alternate Rate Loans Unlawful;
Failure to Give Notice of Continuation........................................................42
2.14. Eurodollar Availability..........................................................................43
2.15. Indemnities......................................................................................44
2.16 Eligible Mortgages and Eligible Properties .......................................................45
SECTION 3. REPRESENTATIONS AND WARRANTIES.......................................................................45
3.1. Financial Condition...............................................................................45
3.2. No Material Adverse Effect........................................................................45
3.3. Existence; Compliance with Law....................................................................45
3.4. Operator, Advisor, Credit Support Obligors; Compliance with Law...................................46
3.5. Power; Authorization; Enforceable Obligations.....................................................46
3.6. No Legal Bar......................................................................................47
3.7. No Material Litigation............................................................................47
3.8. No Default........................................................................................47
3.9. Ownership of Mortgage Interests and Property; Liens...............................................47
3.10. No Burdensome Restrictions.......................................................................50
3.11. Taxes............................................................................................50
3.12. Federal Regulations..............................................................................50
3.13. Employees........................................................................................50
3.14. ERISA............................................................................................50
3.15. Status as REIT...................................................................................50
3.16. Restrictions on Incurring Indebtedness...........................................................51
3.17. Subsidiaries.....................................................................................51
3.18. Compliance with Environmental Laws...............................................................51
i
3.19. Pollution; Hazardous Materials...................................................................51
3.20. Securities Laws..................................................................................52
3.21. Declaration of Trust, By-Laws, Advisory Contract, etc............................................52
3.22. Disclosures......................................................................................52
3.23. Medicare and Medicaid Certification..............................................................52
3.24. Offering, Etc., of Securities....................................................................52
SECTION 4. CONDITIONS PRECEDENT.................................................................................53
4.1. Conditions to Effectiveness.......................................................................53
4.2. Conditions Precedent to Loans.....................................................................54
SECTION 5. AFFIRMATIVE COVENANTS................................................................................55
5.1. Financial Statements..............................................................................55
5.2. Certificates; Other Information...................................................................56
5.3. Payment of Obligations............................................................................58
5.4. Conduct of Business and Maintenance of Existence..................................................58
5.5. Leases and Mortgage Interests; Credit Support Agreements..........................................58
5.6. Maintenance of Property, Insurance................................................................58
5.7. Inspection of Property; Books and Records; Discussions............................................59
5.8. Notices...........................................................................................59
5.9. Appraisals and Other Valuations...................................................................60
5.10. Meetings.........................................................................................60
5.11. REIT Requirements................................................................................61
5.12. Indemnification..................................................................................61
5.13. Changes in GAAP..................................................................................61
5.14. Clean-Down Period................................................................................62
5.15. Further Assurances; Restrictions on Negative Pledges.............................................62
5.16. Currency Arrangements............................................................................62
SECTION 6. NEGATIVE COVENANTS...................................................................................62
6.1. Financial Covenants...............................................................................62
6.2. Restricted Payments...............................................................................63
6.3. Merger; Sale of Assets; Termination and Other Actions............................................63
6.4. Transactions with Affiliates......................................................................64
6.5. Subsidiaries......................................................................................64
6.6. Accounting Changes................................................................................64
6.7. Change in Nature of Business......................................................................64
6.8. Indebtedness......................................................................................65
6.9. No Liens..........................................................................................66
6.10. Fiscal Year......................................................................................66
6.11. Chief Executive Office...........................................................................66
6.12. Amendment of Certain Agreements..................................................................66
6.13. Payments Not to Exceed Appraised Value.........................................................66
SECTION 7. EVENTS OF DEFAULT....................................................................................67
7.1. Events of Default.................................................................................67
7.2. Annulment of Acceleration.........................................................................70
7.3. Cooperation by Borrower...........................................................................70
ii
SECTION 8. THE AGENTS...........................................................................................71
8.1. Appointment of Agent and Administrative Agent.....................................................71
SECTION 9. SUBSIDIARY GUARANTIES................................................................................75
9.1 Guaranties.........................................................................................75
SECTION 10. GENERAL.............................................................................................77
10.1 CHOICE OF LAW.....................................................................................77
10.2 SUBMISSION TO JURISDICTION; WAIVER OF JURY TRIAL; ETC.............................................77
10.3 Notices; Certain Payments.........................................................................78
10.4 No Waivers; Cumulative Remedies; Entire Agreement; Headings; Successors and
Assigns; Counterparts; Severability. ..........................................................79
10.5 Survival..........................................................................................81
10.6 Amendments and Waivers............................................................................81
10.7 Payment of Expenses and Taxes.....................................................................82
10.8 Adjustments; Setoff...............................................................................83
10.9 NONLIABILITY OF TRUSTEES..........................................................................84
EXHIBITS
EXHIBIT A - FORM OF PROMISSORY NOTE
EXHIBIT B - FORM OF NOTICE OF BORROWING
EXHIBIT C - FORM OF NOTICE OF CONTINUATION/CONVERSION
EXHIBIT D - FORM OF SUBORDINATION AGREEMENT
SCHEDULES
Schedule 1 - LENDERS' COMMITMENTS AND CERTAIN LENDING
OFFICES
Schedule 2 - PERMITTED EXCEPTIONS
Schedule 3 - AMOUNTS OWED UNDER THE EXISTING LOAN
AGREEMENT
Schedule 4 - BORROWER'S SUBSIDIARIES
Schedule 5 - MANDATORY LIQUID ASSET COSTS (FOR GBP LOANS)
Schedule 6 - NON-CURRENT MORTGAGE INTEREST AGREEMENTS
iii
HEALTH AND RETIREMENT PROPERTIES TRUST
THIRD AMENDED AND RESTATED REVOLVING LOAN AGREEMENT
DATED AS OF MARCH 15, 1996
This THIRD AMENDED AND RESTATED REVOLVING LOAN AGREEMENT is
dated as of March 15, 1996, among HEALTH AND RETIREMENT PROPERTIES TRUST, a real
estate investment trust formed under the laws of the State of Maryland
("Borrower"), the several lenders parties to this Agreement (each, together with
any additional lender or lenders pursuant to Section 10.4, a "Lender" and,
collectively, the "Lenders"), KLEINWORT ▇▇▇▇▇▇ LIMITED, a bank organized under
the laws of England, as agent for itself and the other Lenders (in such
capacity, together with any successor in such capacity in accordance with the
terms hereof, "Agent"), ▇▇▇▇▇ FARGO BANK, NATIONAL ASSOCIATION, a bank organized
under the laws of the United States of America, as administrative agent, and
NATWEST BANK N.A. (formerly National Westminster Bank USA), a national banking
association, as co-agent (in such capacity, "Co-Agent"); and, in connection with
Section 9 and the guarantees given therein, HEALTH AND RETIREMENT PROPERTIES
INTERNATIONAL, INC., a Delaware corporation, CAUSEWAY HOLDINGS INC., a
Massachusetts corporation and SJO CORPORATION, a Massachusetts corporation, each
being a direct wholly-owned Subsidiary (as defined below) of Borrower.
WHEREAS, Borrower, Kleinwort ▇▇▇▇▇▇ Limited, as agent, ▇▇▇▇▇
Fargo Bank, National Association, as administrative agent, NatWest Bank N.A., as
co-agent, Health and Retirement Properties International, Inc., as guarantor and
the lenders described therein are parties to that certain Second Amended and
Restated Revolving Loan Agreement dated as of March 15, 1995 (as such agreement
may have been amended, supplemented or modified from time to time prior to the
date hereof, the "Existing Loan Agreement");
WHEREAS, Borrower desires that Lenders extend the maturity
date under the Existing Loan Agreement, change the fees and interest rate
margins thereunder, permit investments in Clinics (as defined below) and make
certain other amendments to the Existing Loan Agreement and amend and restate it
in its entirety; and
WHEREAS, Lenders desire to make such extension, change the
fees and margins, permit such investments and make such amendments and such
amendment and restatement.
NOW, THEREFORE, the parties hereto hereby agree that the
Existing Loan Agreement be amended and restated in its entirety as follows:
1
SECTION 1. DEFINITIONS
1.1. Defined Terms. As used in this Agreement:
"Acute Care Asset" means, in respect of any Property or
Mortgage Interest, that more than 50% of the licensed beds of the Property or,
in the case of a Mortgage Interest, of the Mortgaged Property covered thereby,
are designated for acute care.
"Adjusted Net Operating Cash Flow" means, in respect of a
Property that is a Medical Office Asset or a Clinic, the net result of (i)
aggregate lease payments made by the Operators(s) of the relevant Property
during the relevant period of determination, less (ii) direct costs of the
Borrower attributable to such Property for such period, provided that if either
(x) an Operator of the relevant Property has failed to exercise a renewal option
under the lease thereof prior to the expiration of that option (and no
replacement Lease with that or another Operator has been signed), or (y) an
Operator of the relevant Property is in default under any payment obligation or
in any material respect under any other Contractual Obligation between such
Operator and Borrower or any of its Subsidiaries, including without limitation
such Lease, any other Lease or any Mortgage Interest Agreement, or (z) a Credit
Support Obligor for the Lease of such Property is in default under any payment
obligation or in any material respect under any other Contractual Obligation of
such Credit Support Obligor to Borrower or any of its Subsidiaries, including
without limitation any Lease, Mortgage Interest, Mortgage Interest Agreement or
Credit Support Agreement, the lease payments made by the Operator referred to in
the preceding clause (x) or (y) and the lease payments made in respect of the
Property referred to in the preceding clause (z) during the relevant period of
determination shall not be included in Adjusted Net Operating Cash Flow.
"Adjusted Net Interest" means, in respect of a Mortgaged
Property that consists of a Medical Office Asset or a Clinic, the net result of
(i) aggregate interest payments made by the Mortgagor of the relevant Mortgaged
Property during the relevant period of determination less (ii) direct costs of
the Borrower attributable to such Mortgaged Property for such period, provided
that if either (y) the Mortgagor of the relevant Mortgaged Property is in
default under any payment obligation or in any material respect under any other
Contractual Obligation between such Mortgagor and Borrower or any of its
Subsidiaries, including without limitation the Mortgage Interest Agreement
related to such Mortgaged Property, any other Mortgage Interest Agreement or any
Lease or (z) a Credit Support Obligor for the Mortgage Interest Agreement of
such Mortgaged Property is in default under any payment obligation or in any
material respect under any other Contractual Obligation of such Credit Support
Obligor to Borrower or any of its Subsidiaries, including without limitation any
Lease, Mortgage Interest, Mortgage Interest Agreement or Credit Support
Agreement, the interest payments made by the Mortgagor referred to in the
preceding clause (y) and the interest payments made in respect of the Mortgaged
Property referred to in the preceding clause (z) during the relevant period of
determination shall not be included in Adjusted Net Interest.
"Administrative Agent" means ▇▇▇▇▇ Fargo Bank, National
Association ("▇▇▇▇▇") acting in its capacity as administrative agent in
connection with this Agreement; provided that with respect to Loans denominated
in GBP, "Administrative Agent" shall mean
2
a Lender (the "GBP Agent") agreed to by Borrower, Agent and ▇▇▇▇▇ and, in such
circumstances, references to "Administrative Agent" relating to Loans
denominated in GBP shall be read as references to the GBP Agent, while
references to "Administrative Agent" relating to Loans denominated in U.S.
Dollars or otherwise shall be read as references to ▇▇▇▇▇, and if such
circumstances are applicable the singular term "Administrative Agent" shall be
construed to include both ▇▇▇▇▇ and the GBP Agent where appropriate (including,
without limitation, for purposes of the indemnifications given in Sections 8 and
10.7); and, in addition, "Administrative Agent" shall mean any successor to
either ▇▇▇▇▇ or the GBP Agent in their respective capacities in accordance with
the terms hereof; provided further that in no event shall ▇▇▇▇▇ be or be deemed
to be the GBP Agent or have any of its related duties unless ▇▇▇▇▇ expressly
accepts such role.
"Advisor" means HRPT Advisors or such other Person as shall
act as an advisor to Borrower, whether pursuant to the Advisory Agreement, or an
agreement analogous to the Advisory Agreement, with the prior written consent of
Agent.
"Advisory Agreement" means the Advisory Agreement, dated as of
November 20, 1986, between Borrower and HRPT Advisors, as amended by an
Amendment Agreement, dated August 26, 1987, between Borrower and HRPT Advisors
and as amended by a Second Amendment Agreement, dated December 6, 1993, between
Borrower and HRPT Advisors, and as amended, supplemented or modified from time
to time in a manner not inconsistent with the terms hereof or of the
Subordination Agreement.
"Affiliate" means, with respect to a particular Person, (a)
any Person which, directly or indirectly, is in Control of, is Controlled by, or
is under common Control with such particular Person, or (b) any Person who is a
director or officer or trustee (i) of such particular Person, (ii) of any
Subsidiary of such particular Person or (iii) of any Person described in clause
(a) above.
"Agreement" means this Third Amended and Restated Revolving
Loan Agreement, as amended, supplemented or modified from time to time in
accordance herewith.
"Allowed Value" means, as of any date of determination, (i)
with respect to each Eligible Property or Property (as the context may require),
the lesser of (a) the acquisition cost to Borrower or to any of its Subsidiaries
of such Eligible Property or Property, (b) the Appraised Value of such Eligible
Property or Property as set forth in the then most recent Appraisal with respect
to such Eligible Property or Property less the value attributable to any capital
improvements made by the Operator of such Eligible Property or Property financed
by such Operator, and (c) the minimum purchase price (howsoever denominated)
that would be payable to Borrower or such Subsidiary by the Operator of such
Eligible Property or Property or any other Person if it purchased such Eligible
Property or Property on the date of determination pursuant to the exercise of
any right it may have (whether then or in the future exercisable) to purchase
such Eligible Property or Property (assuming in the case of any such right only
exercisable in the future that such right is exercisable on the date of
determination), and (ii) with respect to each Eligible Mortgage or Mortgage
Interest (as the context may require), the lesser of (a) the outstanding
principal
3
amount due to Borrower or any of its Subsidiaries from the relevant Mortgagor in
respect of such Eligible Mortgage or Mortgage Interest, and (b) the Appraised
Value of the Mortgaged Property which is covered by the relevant Eligible
Mortgage or Mortgage Interest as set forth in the most recent Appraisal with
respect to such Eligible Mortgage or Mortgaged Property.
"Alternate GBP Rate" means the interest rate per annum
specified by Administrative Agent from time to time as the cost to Lenders of
funding affected Loans denominated in GBP as described in Section 2.13 or 2.14
(without reference to the Applicable Margin or the Mandatory Liquid Asset Costs
payable under Section 2.4(a)).
"Alternate GBP Rate Loans" means the portion of Loans (which
are denominated in GBP) the interest on which is computed by reference to the
Alternate GBP Rate.
"Alternate Rate", in respect of any Loan, means the rate or
rates of interest agreed pursuant to Section 2.13 or 2.14, as the case may be,
between Borrower and Lenders to be applicable to such Loan; provided that in the
absence of such agreement under the circumstances specified in Section 2.13 or
2.14, as the case may be, the Alternate Rate shall be equal to the Base Rate in
the case of Loans denominated in U.S. Dollars and shall be equal to the
Alternate GBP Rate in the case of Loans denominated in GBP.
"Alternate Rate Loans" means the portion of the Loans (which
may be denominated in U.S. Dollars or in GBP) the interest on which is computed
by reference to the Alternate Rate.
"Applicable Facility Fee Percentage" means with respect to the
facility fee payable under Section 2.6, the per annum percentage corresponding
to the lower of the ratings provided by Standard & Poor's Rating Group and
▇▇▇▇▇'▇ Investors Service in respect of the senior unsecured long-term
indebtedness of Borrower, as specified in the following table:
A-/A3 BBB+/Baa1 BBB/Baa2 BBB-/Baa3 Lower than
Ratings or higher or higher or higher or higher BBB-/Baa3
Facility Fee 0.200% 0.250% 0.250% 0.250% 0.375%
Each change in the Applicable Facility Fee Percentage shall be
effective as of the date of the public announcement or publication by Standard &
Poor's Ratings Group or ▇▇▇▇▇'▇ Investors Service, as the case may be, of a
change in Borrower's senior unsecured long-term indebtedness ratings.
"Applicable Margin" means, with respect to Base Rate Loans,
Alternate Rate Loans and Eurodollar Loans, the per annum percentage
corresponding to the lower of the ratings provided by Standard & Poor's Ratings
Group and ▇▇▇▇▇'▇ Investors Service in respect of the senior unsecured long-term
indebtedness of Borrower, as specified in the following table:
4
A-/A3 Lower
Ratings or BBB+/Baa1 BBB/Baa2 BBB-/Baa3 than
higher or higher or higher or higher BBB-
/Baa3
Applicable Margin for 0.000% 0.000% 0.000% 0.000% 0.250%
Base Rate Loans or
for Alternate Rate
Loans that are Base
Rate Loans
Applicable Margin for 0.375% 0.500% 0.750% 0.875% 1.250%
Euro Dollar Loans or
Alternate Rate Loans
that are not Base Rate
Loans
Each change in the Applicable Margin shall be effective as of
the date of the public announcement or publication by Standard & Poor's Ratings
Group or ▇▇▇▇▇'▇ Investors Service, as the case may be, of a change in
Borrower's senior unsecured long-term indebtedness ratings.
"Appraisal" means an appraisal using methodologies acceptable
to Agent and Administrative Agent at the time such appraisal is or was made and
performed by a Recognized Appraiser.
"Appraised Value" of any Facility shall mean (a) in the case
of any Fee Interest, the lesser of (i) the value placed upon such Facility
pursuant to the most recent Appraisal thereof based on a valuation of the Fee
Interest subject to the Lease(s) in respect of such Fee Interest and (ii) the
value placed upon such Facility pursuant to the most recent Appraisal thereof
based on a valuation of the Fee Interest free and clear of all Leases and
determined by discounting to present value the Facility's future projected net
cash flow, provided that in the case where the most recent Appraisal only values
the Fee Interest under either subclause (i) or subclause (ii) of this clause (a)
but not both, the Appraised Value shall mean the value so placed on the Fee
Interest under either subclause (i) or subclause (ii) of this clause (a),
whichever is applicable; (b) in the case of a Leasehold Interest, the lesser of
(i) the value placed upon such Facility pursuant to the most recent Appraisal
thereof based on a valuation of the Leasehold Interest subject to the Lease(s)
in respect of such Leasehold Interest and (ii) the value placed upon such
Facility pursuant to the most recent Appraisal thereof based on a valuation of
the Leasehold Interest free and clear of all Leases and determined by
discounting to present value the Facility's future projected net cash flow,
provided that in the case where the most recent Appraisal only values the
Leasehold Interest under either subclause (i) or subclause (ii) of this clause
(b) but not both, the Appraised Value shall mean the value so placed on the
Leasehold Interest under either subclause (i) or subclause (ii) of this clause
(b), whichever is applicable; and (c) in the case of a Mortgage
5
Interest, the value placed upon the Mortgaged Property covered by such Mortgage
Interest pursuant to the most recent Appraisal thereof based on a valuation of
such Mortgaged Property free and clear of such Mortgage Interest and determined
by discounting to present value the future projected net cash flow of such
Mortgaged Property.
"Average Cost of Debt" means , in respect of Borrower, the
quotient (measured over the four most recent financial quarters of Borrower) of
(i) Interest Charges in respect of Indebtedness included in clauses (i)-(vi) of
the definition thereof set forth herein divided by (ii) the daily average
outstanding amount of Indebtedness included within such clauses.
"Base Rate" means a fluctuating interest rate per annum as
shall be in effect from time to time, which rate per annum shall at all times be
equal to the greater of:
(i) the prime rate of interest announced by
Administrative Agent from time to time, changing when
and as said prime rate changes; and
(ii) the sum of one-half of one percent (0.5%) and the
Federal Funds Rate in effect from time to time,
changing when and as such Federal Funds Rate changes.
"Base Rate Loans" means the portion of the Loans (which are
denominated in U.S. Dollars) the interest on which is computed by reference to
the Base Rate.
"Borrower" has the meaning set forth in the first paragraph of
this Agreement.
"Borrowing Date" means the Business Day specified in a Notice
of Borrowing as the date on which Borrower requests the Lenders to make Loans
hereunder.
"Business Day" means a day other than a Saturday, Sunday or
other day on which commercial banks in New York City or London, England are
authorized or required by law to remain closed or on which banks are not open
for dealings in U.S. Dollar and GBP deposits in the London interbank market.
"Capitalized Lease Obligation" means, as to any Person, any
obligation of such Person to pay rent or other amounts under a lease of (or
other agreement conveying the right to use) real or personal property which
obligation is required to be classified or accounted for as a capital lease
obligation on a balance sheet of such Person prepared in accordance with GAAP
and, for purposes of this Agreement, the amount of such obligation at any date
shall be the outstanding amount thereof at such date, determined in accordance
with GAAP and Section 1.3(a).
"Cash Flow" means, for any period and any Person in respect of
one or more Properties and/or Mortgaged Properties as to which such Person is
the Operator or Mortgagor thereof, the sum (without duplication of counting and
determined in accordance with Section
6
1.3(a)) of (i) Income Before Extraordinary Items, (ii) Interest Charges payable
to Borrower, in the case of a Mortgaged Property, (iii) depreciation expenses,
(iv) amortization expenses, (v) other non-cash items reducing Income before
Extraordinary Items, (vi) all payments required to be made to Borrower or any of
its Subsidiaries under a Lease, including without limitation fixed rent,
participation rent and additional rent in respect of (a) operating expenses, (b)
taxes based on the ownership of real property, (c) insurance premiums and/or (d)
any other costs or expenses of the relevant lessor or sublessor, (vii)
subordinated expenses paid to any Affiliate of such Operator or such Mortgagor
relating to management, accounting or other similar fees, and (viii) to the
extent otherwise included in the calculation of Income Before Extraordinary
Items, any Restricted Payment, less non-cash items increasing Income Before
Extraordinary Items, in each case of such Person for such period attributable to
such Properties and/or Mortgaged Properties.
"Cash Flow Event" means in respect of a Property or Mortgaged
Property, that the Cash Flow of the Operator or Mortgagor thereof (as
applicable) over its four most recent financial quarters (or, (i) if financial
reporting for such Cash Flow is provided on an annual basis, over its last
reported financial year, or (ii) where Marriott International, Inc. is the
Operator or Mortgagor and financial reporting for such Cash Flow is not
otherwise required to be provided to Borrower or its Subsidiaries, over the last
reported financial year as certified by an officer of Marriott International,
Inc. in a certificate described in Section 5.2(b)(iii)), attributable to that
Property or Mortgaged Property is less than its Fixed Charges over the same
period for such Property or Mortgaged Property; provided that a Cash Flow Event
shall not be deemed to occur in respect of a Property or a Mortgaged Property
that is part of a group of Cross Guarantied Assets if the Cash Flow of the
Operators and Mortgagors determined on an aggregate basis over their respective
four most recent financial quarters (or last reported financial year or last
certified financial year, as the case may be), attributable to the relevant
group of Cross Guarantied Assets, is greater than or equal to their Fixed
Charges determined on an aggregate basis over the same period in respect of such
group of Cross Guarantied Assets.
"Clinic" means, in the case of a Property, a Property 50% or
more of the rentable area of which is leased for use in, or, in the case of a
Mortgaged Property, a Mortgaged Property 50% of the usable area of which is used
for, the provision of outpatient medical services directly to patients.
"Code" means the Internal Revenue Code of 1986, as amended
from time to time.
"Commission" means the United States Securities and Exchange
Commission or any successor to the responsibilities of such commission.
"Commitment" has the meaning set forth in Section 2.1(b).
"Commitment Period" means the period from and including the
date hereof to and including the Final Borrowing Date or such earlier date as
the Commitments shall terminate as provided herein.
7
"Common Shares" means Borrower's common shares of beneficial
interest, $0.01 par value.
"Contingent Obligation" means, as to any Person, any
obligation of such Person guaranteeing or intended to guarantee any
Indebtedness, leases, dividends or other obligations ( "primary obligations") of
any other Person (the "primary obligor") in any manner, whether directly or
indirectly, including, without limitation, any obligation of such Person,
whether or not contingent, (a) to purchase any such primary obligation or any
property constituting direct or indirect security therefor, (b) to advance or
supply funds (i) for the purchase or payment of any such primary obligation or
(ii) to maintain working capital or equity capital of the primary obligor or
otherwise to maintain the net worth or solvency of the primary obligor, (c) to
purchase property, securities or services primarily for the purpose of assuring
the owner of any such primary obligation of the payment of, or the ability of
the primary obligor to make payment of, such primary obligation or (d) otherwise
to assure or hold harmless the owner of such primary obligation against loss in
respect thereof; provided that the term Contingent Obligation shall not include
endorsements of instruments for deposit or collection in the ordinary course of
business. The amount of any Contingent Obligation shall be determined in
accordance with Section 1.3(a) and shall be deemed to be an amount equal to the
stated or determinable amount of the primary obligation in respect of which such
Contingent Obligation is made or, if not stated or determinable, the maximum
reasonably anticipated liability in respect thereof (assuming such Person is
required to perform thereunder) as determined by such Person in good faith.
"Contractual Obligation" means, as to any Person, the
Certificate of Incorporation and By-Laws or other organizational or governing
documents of such Person, and any provision of any security issued by such
Person or of any agreement, instrument or undertaking to which such Person is a
party or by which it or any of its property is bound.
"Control" (including with correlative meanings the terms
"Controlling", "Controlled by" and "under common Control with"), as applied to
any Person, means the possession of the power, direct or indirect, (i) to vote
5% or more of the securities having ordinary voting power for the election of
directors or trustees of such Person, or (ii) to direct or cause the direction
of the management and policies of such Person whether by contract or otherwise.
"Credit Support Agreements" means each of the Lease
Guarantees, Mortgage Guarantees, Pledges and Sublease Agreements, and any other
agreements or instruments providing assurances in any form, in each case in
respect of any Person's obligations under a Lease or Mortgage Interest
Agreement.
"Credit Support Obligors" means the obligors in respect of the
Credit Support Agreements, and each of them.
"Cross Guarantied Assets" means a group of Properties and/or
Mortgage Interests as to which the various Operators and/or Mortgagors have
guarantied each other's obligations to Borrower and/or any of Borrower's
Subsidiaries and have agreed to cross-default such obligations and/or
cross-collateralize those obligations to the extent of any
8
security or credit support that has been provided for such obligations or a
group of Properties and/or Mortgage Interests operated by a single Operator or
Mortgagor as to which such Operator or Mortgagor has agreed to cross-default all
of its obligations to Borrower and/or any of Borrower's Subsidiaries and to
cross-collateralize those obligations to the extent of any security or credit
support that has been provided for such obligations.
"Current" means, at any date of determination, in respect of
cash flow information of an Operator or Mortgagor required in a Real Property
Statement, (a) for a fiscal year of that Operator or Mortgagor, that such
information relates to its fiscal year then current or the fiscal year ended not
more than one hundred and fifty days prior thereto or (b) for a fiscal quarter
of that Operator or Mortgagor, that such information relates to its fiscal
quarter then current or a fiscal quarter ended not more than seventy five days
prior thereto.
"Declaration of Trust" means the Declaration of Trust
establishing Borrower, dated October 9, 1986, as amended and restated on July 1,
1994, as such Declaration of Trust may be further amended, supplemented or
modified from time to time.
"Default" means any of the events specified in Section 7.1,
whether or not any requirement for the giving of notice, the lapse of time, or
both, or any other condition, has been satisfied.
"EBI" means, with respect to Borrower and its Subsidiaries,
for any period of time, without duplication of counting and determined in
accordance with Section 1.3(a), the sum of (i) the net income on a consolidated
basis (determined in accordance with GAAP for such period), plus (ii) any losses
for such period and reserves for such losses from the sale of real property
assets (on a tax effected basis) plus (iii) any non-cash extraordinary losses
and expenses and reserves for any non-cash extraordinary losses and expenses for
such period, minus (iv) any gains for such period from the sale of assets (on a
tax effected basis) outside the ordinary course of business, minus (v) any
extraordinary gains from such period, plus (vi) to the extent deducted from
gross income to calculate net income, Interest Charges of Borrower and its
Subsidiaries on a consolidated basis for such period.
"Effective Date" means the date when the conditions precedent
set forth in Section 4 are first satisfied, or are waived pursuant to Section
10.6.
"Eligible Mortgage" means each Mortgage Interest where (i) the
requirements of Section 2.16 in respect of such Mortgage Interest are met, (ii)
except in the case of Mortgaged Properties that consist of Medical Office Assets
or Clinics, the Mortgagor in respect of such Mortgage Interest is not in default
under any payment obligation or in any material respect under any other
Contractual Obligation between such Mortgagor and Borrower or any of its
Subsidiaries, including without limitation any Mortgage Interest Agreement, any
note payable by such Mortgagor to Borrower or any of its Subsidiaries or any
Lease, (iii) except in the case of Mortgaged Properties that consist of Medical
Office Assets or Clinics, there has been no Cash Flow Event with respect to such
Mortgaged Property , and in the case of Mortgaged Properties consisting of
Medical Office Assets or Clinics, the Notional Interest Cover Ratio is met, (iv)
except in the case of Mortgaged Properties that consist of Medical Office Assets
or Clinics, no Credit Support Obligor in
9
respect of such Mortgage Interest is in default under any payment obligation or
in any material respect under any other Contractual Obligation of such Credit
Support Obligor to Borrower or any of its Subsidiaries, including without
limitation any Lease, Mortgage Interest Agreement or Credit Support Agreement,
and (v) such Mortgage Interest is not subject to a Lien otherwise permitted
pursuant to Section 6.9(i) or 6.9 (iv).
"Eligible Property" means each Property which is leased to an
Operator, provided (i) the requirements of Section 2.16 in respect of such
Property are met, (ii) except in the case of Properties consisting of Medical
Office Assets or Clinics, it is not a Property the Operator of which has failed
to exercise any renewal option under the Lease thereof prior to the expiration
of the option (and no replacement Lease with that or another Operator has been
signed), (iii) except in the case of Properties consisting of Medical Office
Assets or Clinics, such Operator is not in default under any payment obligation
or in any material respect under any other Contractual Obligation between such
Operator and Borrower or any of its Subsidiaries, including without limitation
such Lease, any other Lease or any Mortgage Interest Agreement, (iv) except in
the case of Properties consisting of Medical Office Assets or Clinics, there has
been no Cash Flow Event with respect to such Property, and in the case of
Properties consisting of Medical Office Assets or Clinics, the Notional Interest
Cover Ratio is met, (v) except in the case of Properties consisting of Medical
Office Assets or Clinics, no Credit Support Obligor for the Lease of such
Property is in default under any payment obligation or in any material respect
under any other Contractual Obligation of such Credit Support Obligor to
Borrower or any of its Subsidiaries, including without limitation any Lease,
Mortgage Interest Agreement or Credit Support Agreement, and (vi) such Property
is not subject to a Lien otherwise permitted pursuant to Section 6.9(i) or
6.9(iv).
"Environmental Laws" means all statutes, ordinances, orders,
rules and regulations having effect in any domestic or foreign jurisdiction
relating to environmental matters, including, without limitation, those relating
to fines, orders, injunctions, penalties, damages, contribution, cost recovery
compensation, losses or injuries resulting from the Release or threatened
Release of Hazardous Materials and to the generation, use, storage,
transportation, or disposal of Hazardous Materials, in any manner applicable to
Borrower or any Operator or Mortgagor or any of their respective Subsidiaries or
any of their respective properties, including, without limitation, the
Comprehensive Environmental Response, Compensation, and Liability Act (42 U.S.C.
ss. 9601 et seq.), the Hazardous Material Transportation Act (49 U.S.C. ss. 1801
et seq.), the Resource Conservation and Recovery Act (42 U.S.C. ss. 6901 et
seq.), the Federal Water Pollution Control Act (33 U.S.C. ss. 1251 et seq.), the
Clean Air Act (42 U.S.C. ss. 7401 et seq.), the Toxic Substances Control Act (15
U.S.C. ss. 2601 et seq.), the Occupational Safety and Health Act (29 U.S.C. ss.
651 et seq.) and the Emergency Planning and Community Right-to-Know Act (42
U.S.C. ss. 11001 et seq.), each as amended or supplemented, and any analogous
future or present local, municipal, state and federal statutes and regulations
promulgated pursuant thereto, each as in effect as of the date of determination.
"Equivalent Amount" means the amount of a currency other than
U.S. Dollars that can be purchased with U.S. Dollars calculated on the basis of
Administrative Agent's spot rate of exchange for the purchase of such other
currency with U.S. Dollars on the date such calculation is to be made (such
calculation to be made on the occasions set forth in Section 1.3(b)).
10
"ERISA" means the Employee Retirement Income Security Act of
1974, as amended from time to time, and the regulations promulgated and rulings
issued thereunder.
"ERISA Affiliate" means (i) any corporation which is an entity
under common control with Borrower within the meaning of Section 4001 of ERISA
or a member of a controlled group of corporations within the meaning of Section
414(b) of the Code of which Borrower is a member; (ii) any trade or business
(whether or not incorporated) which is a member of a group of trades or
businesses under common control within the meaning of Section 414(c) of the Code
of which Borrower is a member; and (iii) any member of an affiliated service
group within the meaning of Section 414(m) or (o) of the Code of which Borrower,
any corporation described in clause (i) above or any trade or business described
in clause (ii) above is a member.
"Eurodollar Loans" means the portion of the Loans (which may
be denominated in U.S. Dollars or in GBP) the interest on which is computed by
reference to the LIBO Rate.
"Event of Default" means any of the events specified in
Section 7.1, provided that any requirement for the giving of notice, the lapse
of time, or both, or any other condition, has been satisfied.
"Existing Loan Agreement" has the meaning set forth in the
introduction to this Agreement.
"Existing Loans" has the meaning set forth in Section 2.1(a).
"Excluded Taxes" means taxes upon any Lender's overall net
income imposed by the United States of America or any political subdivision or
taxing authority thereof or therein or by any jurisdiction in which the Lending
Office of any Lender is located or in which any Lender is organized or has its
principal or registered office, except taxes, duties or charges imposed pursuant
to Section 1, 2 and/or 39 of the Massachusetts General Laws, Chapter 63, as
currently in effect or as amended hereafter or any analogous provisions (or
provisions having an analogous effect) of the laws, rules or regulations (or
interpretations thereof) of Massachusetts or any other Governmental Authority.
"Facility" means each operating facility offering health care
or related services or rehabilitation or retirement services or other healthcare
related income producing real property interest (including, without limitation,
the Fee Interests and/or Leasehold Interests and/or Mortgage Interests
associated with such Facility) in which Borrower or any of its Subsidiaries has
acquired or will acquire an interest as owner, lessee or mortgagee, including
without limitation each Property and Mortgaged Property.
"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 day for which
11
such rate is published, for the next preceding day for which it is published) by
the Federal Reserve Bank of New York.
"Fee Interests" means any land and any buildings, structures,
improvements and fixtures owned beneficially in fee simple by Borrower or any of
its Subsidiaries and equipment located thereon or used in connection therewith
and all personalty (including, without limitation, franchises) related thereto
and all other real estate interests, owned beneficially by Borrower or any of
its Subsidiaries.
"Final Borrowing Date" means the earlier of (i) March 15, 1999
and (ii) such date as the Commitments shall terminate as provided herein.
"Final Repayment Date" means the later of (i) the Termination
Date and (ii) such date as all Outstandings have been paid in full.
"Fixed Charges" means, for any period and any Person in
respect of one or more Properties and/or Mortgaged Properties as to which such
Person is the Operator or Mortgagor thereof, the sum (without duplication of
counting and determined in accordance with Section 1.3(a)) of (i) Interest
Charges, (ii) all payments required to be made as lessee or sublessee under the
terms of any Lease or other lease agreement, including without limitation fixed
rent, participation rent and additional rent in respect of (a) operating
expenses, (b) taxes based on the ownership of real property, (c) insurance
premiums and/or (d) any other costs or expenses of the relevant lessor or
sublessor, and (iii) scheduled payments of principal of Indebtedness or payments
of amounts equivalent to principal, in each case of such Person, for such period
and attributable to such Properties and/or Mortgaged Properties.
"GAAP" means, subject to the provisions of Section 1.2,
generally accepted accounting principles set forth in the Opinions of the
Accounting Principles Board of the American Institute of Certified Public
Accountants and statements by the Financial Accounting Standards Board or in
such other statement by such other entity as may be approved by a significant
segment of the accounting profession, which are applicable to the circumstances
as of the date in question; and the requirement that such principles be applied
on a consistent basis shall mean that the accounting principles observed in a
current period are comparable in all material respects to those applied in a
preceding period.
"GBP" shall mean the lawful currency from time to time of the
United Kingdom.
"General Corporate Loans" means Loans, the proceeds of which
are to be applied toward general corporate purposes of Borrower or its
Subsidiaries, as designated by Borrower pursuant to a Notice of Borrowing.
"Governmental Authority" means any nation or government, any
state or other political subdivision thereof, and any entity exercising
executive, legislative, judicial, regulatory or administrative functions of or
pertaining to government, and any corporation or other entity owned or
Controlled (through stock or capital ownership or otherwise) by any of the
foregoing.
12
"Hazardous Material" means (i) any chemical, material,
substance or waste defined as or included in the definition of "hazardous
substances," "hazardous wastes," "hazardous materials," "extremely hazardous
waste," "restricted hazardous waste," or "toxic substances" or any other
formulations intended to define, list or classify substances by reason of
deleterious properties under any applicable Environmental Laws, (ii) biomedical
waste, (iii) any oil, petroleum or petroleum derived substance, any drilling
fluids, produced waters and other wastes associated with the exploration,
development or production of crude oil, any flammable substances or explosives,
any radioactive materials, any toxic wastes or substances or any other materials
or pollutants which (a) pose a hazard to any property of Borrower or any
Operator or Mortgagor or any of their respective Subsidiaries or to Persons on
or about such property or (b) cause such property to be in violation of any
Environmental Laws, (iv) asbestos in any form which is or could become friable,
urea formaldehyde foam insulation, electrical equipment which contains any oil
or dielectric fluid containing levels of polychlorinated biphenyls in excess of
fifty parts per million, and (v) any other chemical, material, substance or
waste, exposure to which is prohibited, limited or regulated by any Governmental
Authority or may or could pose a hazard to the health and safety of the owners,
occupants or any Persons surrounding the Facilities.
"Hospitality Properties Trust" means Hospitality Properties
Trust, a real estate investment trust formed under the laws of the State of
Maryland.
"HRPT Advisors" means HRPT Advisors, Inc., a Delaware
corporation.
"IDFA Indebtedness" means the Indebtedness, in an aggregate
principal amount not to exceed $17,700,000 plus accrued interest thereon,
existing pursuant to (a) that certain Loan Agreement dated as of April 15, 1991
between the Illinois Development Finance Authority and Marriott Retirement
Communities, Inc. and relating to the Illinois Development Finance Authority
Revenue Refunding Bonds Series 1991A, and (b) that certain Loan Agreement dated
as of April 15, 1991 between the Illinois Development Finance Authority and
Marriott Retirement Communities, Inc. and relating to the Illinois Development
Finance Authority Revenue Refunding Bonds Series 1991B, which Indebtedness was
assumed by Borrower's wholly-owned Subsidiary Church Creek Corporation, a
Massachusetts corporation, pursuant to that certain Purchase Agreement dated
March 17, 1994 among HMC Retirement Properties, Inc., HMH Properties, Inc. and
Borrower and (without duplication) the letter of credit obligations with respect
to which such Indebtedness was guaranteed by Borrower.
"Income Before Extraordinary Items" means, for any period and
any Person in respect of one or more Properties and/or Mortgaged Properties as
to which such Person is the Operator or Mortgagor thereof, the net income (or
loss) of such Person for such period attributable to such Properties and/or
Mortgaged Properties, excluding any extraordinary items (net of taxes) and
including amounts paid or provided for income taxes or deferred income taxes by
or on behalf of such Person attributable to such Properties and/or Mortgaged
Properties, all as determined in conformity with GAAP and Section 1.3(a).
"Indebtedness" means, with respect to any Person, and without
duplication and determined in accordance with Section 1.3(a), (i) all
indebtedness, obligations and other
13
liabilities (contingent or otherwise) of such Person for borrowed money or other
extensions of credit or evidenced by bonds, debentures, notes or similar
instruments (whether or not the recourse of the lender is to the whole of the
assets of such Person or to only a portion thereof), (ii) all reimbursement
obligations and other liabilities (contingent or otherwise) of such Person with
respect to letters of credit or bankers' acceptances issued for the account of
such Person or with respect to interest rate protection agreements or securities
repurchase agreements or currency exchange agreements or similar or analogous
hedging or derivative agreements or instruments, (iii) all obligations and other
liabilities (contingent or otherwise) of such Person with respect to any
conditional sale, installment sale or other title retention agreement, purchase
money mortgage or security interest, or otherwise to pay the deferred purchase
price of property or services (except trade accounts payable and accrued
expenses arising in the ordinary course of business) or in respect of any sale
and leaseback arrangement, (iv) all Capitalized Lease Obligations of such
Person, (v) all Contingent Obligations of such Person, (vi) all surety and other
bonds and deposits, and all obligations and other liabilities secured by a Lien
or other encumbrance on any asset of such Person (even though such Person has
not assumed or otherwise become liable for the payment thereof), and (vii) all
obligations to purchase, redeem or acquire any capital stock of such Person or
its Subsidiaries that, by its terms or by the terms of any security into which
it is convertible or exchangeable, is, or upon the happening of any event or the
passage of time would be, required to be redeemed or repurchased by such Person
or its Subsidiaries, including at the option of the holder, in whole or in part,
or has, or upon the happening of an event or passage of time would have, a
redemption or similar payment due, on or prior to the fifth anniversary of the
date hereof or, if later, the date which is two years after the due date for the
final repayment of the Loans as specified in any amendment of this Agreement.
"Independent Trustees" has the meaning set forth in the
Declaration of Trust.
"Insolvency Event", with respect to any Person, means that (i)
such Person shall have suspended or discontinued its business or commenced any
case, proceeding or other action (A) under any existing or future law of any
jurisdiction, domestic or foreign, relating to bankruptcy, insolvency,
reorganization or relief of debtors, seeking to have an order for relief entered
with respect to it, or seeking to adjudicate it a bankrupt or insolvent, or
seeking reorganization, arrangement, adjustment, winding-up, liquidation,
dissolution, composition or other relief with respect to it or its debts, or (B)
seeking appointment of a receiver, trustee, custodian or other similar official
for it or for all or any substantial part of its assets, or such Person shall
have made a general assignment for the benefit of its creditors; or (ii) there
shall have been commenced against such Person any case, proceeding or other
action of a nature referred to in clause (i) above which (A) results in the
entry of an order for relief or any such adjudication or appointment or (B)
remains undismissed, undischarged or unbonded for a period of 60 days; or (iii)
there shall have been commenced against such Person any case, proceeding or
other action seeking issuance of a warrant of attachment, execution, distraint
or similar process against all or any substantial part of its assets, which
results in the entry of an order for any such relief which shall not have been
vacated, discharged, or stayed or bonded pending appeal within 60 days from the
entry thereof; or (iv) such Person shall have taken any action in furtherance
of, or indicating its consent to, approval of, or acquiescence in, any of the
acts set forth in clause (i), (ii) or (iii) above; or (v) such Person shall
generally not be paying, or shall have been unable to pay, or shall have
14
admitted in writing its inability to pay, its debts as they become due.
"Interest Charges" of a Person for any period means the sum of
(i) the aggregate interest accrued and payable in cash, securities or otherwise
on all Indebtedness of such Person and its Subsidiaries, if any, on a
consolidated basis for such period, plus (ii) the aggregate amount of debt
discount or other amounts analogous to interest accruing during or attributable
to such period, whether or not payable during such period, including without
limitation all commissions, discounts and other fees and charges owed with
respect to letters of credit and bankers' acceptance financing and net costs
under (a)(i) interest rate swap agreements, interest rate collar agreements, and
(ii) other agreements or arrangements designed to protect such Person and/or its
Subsidiaries against fluctuations in interest rates; and (b) foreign exchange
contracts and other agreements or arrangements designed to protect such Person
and/or its Subsidiaries against fluctuations in currency values, all amounts
calculated above to be determined in conformity with GAAP and in accordance with
Section 1.3(a).
"Interest Payment Date" means, subject to Section 2.10 hereof,
(i) in the case of a Eurodollar Loan, the last day of each Interest Period (or
if any such day is not a Business Day, the next succeeding Business Day),
provided that in the case of each Interest Period of more than three months
duration, "Interest Payment Date" shall also include each date that is three
months, or an integral multiple thereof, after commencement of such Interest
Period; and (ii) in the case of an Alternate Rate Loan or Base Rate Loan, the
last Business Day of March, June, September and December of each year and the
date such Loan (or any portion thereof) is converted in accordance with the
terms hereof into a Base Rate Loan or Eurodollar Loan, in the case of an
Alternate Rate Loan, or an Alternate Rate Loan or Eurodollar Loan, in the case
of a Base Rate Loan.
"Interest Period" means with respect to each Eurodollar Loan,
and subject to Section 2.10 hereof, a one, two, three or six month period (or
such other period of less than six months as shall be agreed by all the Lenders)
as selected at the option of Borrower pursuant to a Notice of Borrowing or
Notice of Continuation; provided that:
(i) no Interest Period may be selected which expires later
than the Termination Date;
(ii) any Interest Period which begins on the last Business
Day of a calendar month (or on a day with respect to which there is no
numerically corresponding day in the calendar month at the end of such
Interest Period) shall, subject to the foregoing proviso, end on the
last Business Day of a calendar month;
(iii) in the case of immediately successive Interest Periods
applicable to a Eurodollar Loan continued as such pursuant to a Notice
of Continuation, each successive Interest Period shall commence on the
day on which the next preceding Interest Period expires;
(iv) there shall be no more than eight Interest Periods
outstanding at any one time; and
15
(v) in the event Borrower fails to specify an Interest
Period for any Loan in the applicable Notice of Borrowing or Notice of
Continuation, Borrower shall be deemed to have selected an Interest
Period of one month.
"Interest Rate Determination Date" means each date for
calculating the LIBO Rate for purposes of determining the interest rate in
respect of an Interest Period. For a Eurodollar Loan, the Interest Rate
Determination Date for such Loans denominated in U.S. Dollars shall be the
second Business Day prior to the first day of the related Interest Period, while
the Interest Rate Determination Date for such Loans denominated in GBP shall be
the first day of the related Interest Period.
"Kleinwort ▇▇▇▇▇▇" means Kleinwort ▇▇▇▇▇▇ Limited, a bank
organized and existing under the laws of England.
"Lease Guarantees" means each guarantee, letter of credit or
other similar undertaking issued by any Person in respect of any of the
obligations of an Operator under a Lease.
"Lease Guarantors" means the obligors in respect of the Lease
Guarantees, and each of them.
"Leasehold Interests" means any leasehold estate in any land
and/or any buildings, structures, improvements and fixtures owned beneficially
by Borrower or any of its Subsidiaries and all equipment located thereon or used
in connection therewith and all personalty (including, without limitation,
franchises) related thereto, owned beneficially by Borrower or any of its
Subsidiaries.
"Leases" means any leases or subleases relating to the
Properties in respect of which Borrower of any of its Subsidiaries is the
lessor.
"Lender" has the meaning set forth in the first paragraph of
this Agreement.
"Lending Office" means the branch or Affiliate office or
offices of each Lender designated as the Lending Office(s) of such Lender on
Schedule 1 and each other branch or Affiliate office as such Lender may
designate as its Lending Office(s) from time to time by notice to Agent and
Borrower.
"LIBO Rate" means the average (expressed as a percentage and
rounded to the nearest one ten thousandth of one percent) of the offered rates,
if any, quoted by the Reference Banks to Administrative Agent in the London
interbank market for U.S. Dollar or GBP (as applicable) deposits of amounts
comparable to the principal amount of the Loans for which the LIBO Rate is being
determined with maturities comparable to the Interest Period for which such LIBO
Rate will apply as of approximately 11:00 A.M. (London time) on the Interest
Rate Determination Date for such Interest Period.
"Lien" means, as to any Person, any mortgage, lien (statutory
or otherwise), pledge, adverse claim, charge, security interest, assignment,
deposit agreement or other
16
encumbrance in or on, or any interest or title of any vendor, lessor, lender or
other secured party to or of such Person under any conditional sale or other
title retention agreement or Capitalized Lease Obligation with respect to any
property or asset of such Person, or the signing or filing of a financing
statement which names such Person as debtor, or the signing of any security
agreement authorizing any other party as the secured party thereunder to file
any financing statement.
"Loan Agents" has the meaning set forth in Section 8.1(a).
"Loan Documents" means, collectively, this Agreement
(including, without limitation, the guaranties in Section 9), the Notes and any
other agreements, documents or instruments delivered pursuant to or in
connection with any of the foregoing, as such agreements, documents or
instruments may be amended, modified or supplemented from time to time.
"Loans" means the Existing Loans and the revolving loans made
or to be made to Borrower by the Lenders hereunder.
"MAC" means, with respect to any Property or Mortgage
Interest, any material adverse effect on or change in (a) the business,
operations, assets, prospects or financial condition or other condition of (i)
such Property or (ii) such Mortgage Interest or (iii) any Operator of such
Property or (iv) any Mortgagor of such Mortgage Interest or (v) any Credit
Support Obligor of such Property or Mortgage Interest, (b) Agent's,
Administrative Agent's or any Lender's rights and remedies under the Loan
Documents, or (c) the ability of (i) any Operator of such Property or (ii) any
Mortgagor of such Mortgage Interest or (iii) any Credit Support Obligor of such
Property or Mortgage Interest to perform its obligations under the Loan
Documents or under the Leases, the Mortgage Interest Agreements or the Credit
Support Agreements in respect of such Property or Mortgage Interest.
"Majority Lenders" means, at any particular time, Lenders
having more than 66-2/3% of the Commitments, or if the Commitments have been
terminated at such time, Lenders having more than 66-2/3% of the aggregate
principal amount of the Loans then outstanding.
"Mandatory Liquid Asset Costs" means, in relation to each
Lender which may be subject to such requirements, the additional cost to such
Lender of complying with the relative reserve asset ratio required by the Bank
of England from time to time (if any), expressed as a percentage per annum and
calculated as set forth in Schedule 5.
"Material Adverse Effect" means a material adverse effect on
or change in (a) the business, operations, assets, prospects or financial
condition or other condition of (i) Borrower and its Subsidiaries taken as a
whole or (ii) the Advisor or (iii) the Properties and Mortgage Interests taken
as a whole, (b) Agent's, Administrative Agent's or any Lender's rights and
remedies under the Loan Documents, (c) the ability of (i) Borrower or any of its
Subsidiaries or (ii) the Advisor to perform its respective obligations under the
Loan Documents, the Advisory Agreement, the Leases, the Mortgage Interest
Agreements or the
17
Credit Support Agreements, or (d) the ability of the Operators, Mortgagors and
Credit Support Obligors (taken as a whole) to perform their obligations under
the Leases, the Mortgage Interest Agreements and the Credit Support Agreements
insofar as they relate to Eligible Properties and Eligible Mortgages.
"Medical Office Asset" means, in the case of a Property, other
than a Clinic, a Property 50% or more of the rentable area of which is leased to
one or more Operators for use as, or, in the case of a Mortgaged Property, other
than a Clinic, a Mortgaged Property 50% or more of the usable area of which is
used for, (i) offices for the practice of the medical profession (or
administrative functions related thereto), including offices of physicians or
physician practice groups, or (ii) medical research and development.
"Mortgage Guarantees" means each guarantee, letter of credit
or other similar undertaking issued by any Person in respect of any of the
obligations of a Mortgagor under a Mortgage Interest Agreement.
"Mortgage Guarantors" means the obligors in respect of the
Mortgage Guarantees, and each of them.
"Mortgage Interest" means any interest of Borrower or any of
its Subsidiaries as lender and as mortgagee or beneficiary, as applicable, in
respect of a loan secured in whole or in part by a Lien on any land or any
buildings, structures, improvements and fixtures (including any leasehold estate
with respect thereto).
"Mortgage Interest Agreement" means any agreement, note,
mortgage, deed of trust and/or other document creating, evidencing or securing a
Mortgage Interest.
"Mortgaged Property" means any land and any building,
structure, improvements and fixtures (including any leasehold estate with
respect thereto) with respect to which Borrower or any of its Subsidiaries has a
Mortgage Interest.
"Mortgagor" means, in the case of a Mortgage Interest, the
obligor or obligors in respect of such Mortgage Interest.
"Multiemployer Plan" means a "multiemployer plan" as defined
in Section 4001(a)(3) of ERISA to which Borrower or any ERISA Affiliate is
making or accruing an obligation to make contributions, or has within any of the
preceding five plan years made or accrued an obligation to make contributions.
"Multiple Employer Plan" means an employee benefit plan, other
than a Multiemployer Plan, subject to Title IV of ERISA to which Borrower or any
ERISA Affiliate, and at least one employer other than Borrower or an ERISA
Affiliate, is making or accruing an obligation to make contributions or, in the
event that any such plan has been terminated, to which Borrower or any ERISA
Affiliate made or accrued an obligation to make contributions during any of the
five plan years preceding the date of termination of such plan.
18
"Net Mortgage Proceeds" means (a) any amounts paid, other than
scheduled repayments, by a Mortgagor to Borrower or any of its Subsidiaries
under an agreement, evidencing or securing any interest of Borrower or such
Subsidiary as lender and as mortgagee or beneficiary, as applicable, in respect
of a loan secured in whole or in part by a Lien on a Facility, in respect of
principal thereunder, plus (b) the gross proceeds received by or for the account
of Borrower or such Subsidiary of any sale or other disposition of any such
agreement, minus (c) the reasonable out-of-pocket fees and expenses (including
attorneys' fees and expenses) incurred by Borrower or such Subsidiary in
connection with such sale or other disposition.
"Net Property Proceeds" means (a) the gross proceeds received
by or for the account of Borrower or any of its Subsidiaries of any sale, lease
or other disposition of any Fee Interest or Leasehold Interest or termination or
substitution of any lease or sublease with respect to any Fee Interest or
Leasehold Interest of Borrower or any of its Subsidiaries, minus the reasonable
out-of-pocket fees and expenses (including attorneys' fees and expenses)
incurred by Borrower or such Subsidiary in connection with such sale or other
disposition, (b) all insurance proceeds paid and received by or for the account
of Borrower or such Subsidiary on account of the loss of or damage of any such
Fee Interest or Leasehold Interest, to the extent such proceeds are not applied
to the replacement or restoration of such assets and (c) all proceeds received
by or for the account of Borrower or such Subsidiary, arising from the taking by
condemnation or eminent domain of any such Fee Interest or Leasehold Interest,
to the extent such proceeds are not applied to the replacement or restoration of
such assets.
"Net Securities Proceeds" with respect to any private or
public offering of securities or any borrowing from one or more financial
institutions means the gross proceeds thereof received by or for the account of
Borrower net of (a) underwriting discounts and commissions and (b) reasonable
out-of-pocket fees and expenses incurred in connection with such offering or
borrowing; provided that such proceeds shall not include proceeds from
borrowings (or from refinancing of such borrowings) from financial institutions
which are applied substantially contemporaneously with the borrowing thereof to
the acquisition of one or more Facilities but no later than two Business Days
after such borrowing.
"Notes" has the meaning set forth in Section 2.2.
"Notice of Borrowing" means a notice substantially in the form
of Exhibit B hereto delivered by Borrower to Administrative Agent (with a copy
to Agent to follow) pursuant to Section 2.3 with respect to a proposed
borrowing.
"Notice of Continuation/Conversion" means a notice
substantially in the form of Exhibit C hereto delivered by Borrower to
Administrative Agent (with a copy to Agent to follow) pursuant to Section 2.5
with respect to a continuation or conversion of one or more Loans.
"Notional Interest Cover Ratio" means, in respect of a (a)
Property that is a Medical Office Asset or a Clinic, a ratio of (i) Adjusted Net
Operating Cash Flow in respect of such Medical Office Asset or Clinic (measured
over the four most recent financial quarters
19
of Borrower or, if less, the number of full financial quarters of Borrower
during which the relevant Property has been a Property and annualized if
measured over less than four financial quarters), to (ii) a notional amount of
interest payable at a rate equal at all times to the Average Cost of Debt on a
notional amount of principal equal to 80% of the acquisition cost to Borrower of
such Medical Office Asset or Clinic (measured over the four most recent
financial quarters of Borrower), of at least 1.25:1 and (b) Mortgaged Property
that is a Medical Office Asset or a Clinic, a ratio of (i) Adjusted Net Interest
in respect of such Medical Office Asset or Clinic (measured over the four most
recent financial quarters of Borrower or, if less, the number of full financial
quarters of Borrower during which the relevant Mortgaged Property has been a
Mortgaged Property and annualized if measured over less than four financial
quarters), to (ii) a notional amount of interest payable at a rate equal at all
times to the Average Cost of Debt on a notional amount of principal equal to 80%
of the Indebtedness secured by such Medical Office Asset or Clinic (measured
over the four most recent financial quarters of Borrower), of at least 1.25:1.
"Operators" in respect of a Facility, means the lessee or
sublessee (other than Borrower or any of its Subsidiaries) thereof.
"Outstanding" means, when used with reference to the Notes as
of a particular time, all Notes theretofore issued as provided in this
Agreement, except (i) Notes theretofore reported as lost, stolen, damaged or
destroyed, or surrendered for transfer, exchange or replacement, in respect of
which replacement Notes have been issued, (ii) Notes theretofore paid in full,
and (iii) Notes theretofore duly cancelled by Borrower; and except that, for the
purpose of determining whether holders of the requisite principal amount of
Notes have made or concurred in any waiver, consent, approval, notice or other
communication or matter under this Agreement, Notes held or owned by Borrower or
any Affiliate of Borrower, shall not be deemed to be outstanding.
"PBGC" means the Pension Benefit Guaranty Corporation
established pursuant to Subtitle A of Title IV of ERISA, or any successor to the
responsibilities of such corporation.
"Permitted Exceptions" means those exceptions to title set
forth on Schedule 2.
"Person" means an individual, partnership, corporation,
business trust, joint stock company, trust, unincorporated association, joint
venture, Governmental Authority or other entity of whatever nature.
"Plan" means an employee benefit plan, other than a
Multiemployer Plan, maintained for or covering any employees of Borrower or any
ERISA Affiliate and subject to Title IV of ERISA.
"Pledges" means any pledge or grant of a Lien to secure any of
the obligations of a Mortgagor under a Mortgage Interest Agreement, an Operator
under a Lease, a Mortgage Guarantor under a Mortgage Guarantee, a Lease
Guarantor under a Lease Guarantee or a Sublessee under a Sublease Agreement,
each as amended, supplemented or
20
modified from time to time.
"Pledgors" means the obligors in respect of the Pledges, and
each of them.
"Preferred Shares" means Borrower's preferred shares of
beneficial interest authorized under the Declaration of Trust.
"Primary Credit Support Obligor" means each Credit Support
Obligor in respect of obligations of a Primary Operator/Mortgagor.
"Primary Operator/Mortgagor" means any Operator and/or
Mortgagor which is a lessee or sublessee with respect to Facilities and/or an
obligor or mortgagor with respect to Mortgage Interests or Facilities
representing, in aggregate, 10% or more of the aggregate Allowed Value of the
Properties and Mortgage Interests; provided that with respect to property
interests located in the United Kingdom, every Operator and every Mortgagor
shall be deemed to be a "Primary Operator/Mortgagor" .
"Process Agent" has the meaning set forth in Section 10.2.
"Property" or "Properties" means each of the Facilities in
which Borrower or any of its Subsidiaries has a Fee Interest or Leasehold
Interest.
"Pro Rata Share" means, with respect to each Lender as of the
date of determination, the percentage obtained by dividing (i) the Commitment of
that Lender as of such date by (ii) the Commitment of all Lenders as of such
date; provided that if the Commitments have been terminated at such time, such
Pro Rata Share shall be the percentage obtained by dividing (i) the aggregate
amount of the Loans outstanding from that Lender as of such date by (ii) the
aggregate amount of the Loans outstanding from all Lenders as of such date.
"Psychiatric Care Asset" means, in respect of any Property or
Mortgage Interest, that more than 50% of the licensed beds of the Property or,
in the case of a Mortgage Interest, of the Mortgaged Property covered thereby,
are designated for psychiatric treatment.
"Real Property" has the meaning set forth in Section 5.12.
"Real Property Permit" means, in respect of any Property or
Mortgaged Property, all certificates of occupancy, permits, licenses,
franchises, approvals and authorizations from all Governmental Authorities
having jurisdiction over such Property or Mortgaged Property or any portion
thereof, the absence of which could materially impair the use of such Property
or Mortgaged Property for the purposes for which it is currently used, and from
all insurance companies and fire rating and similar boards and organizations
required to have been issued to Borrower or any of its Subsidiaries or the
Operator (in the case of a Property) or the Mortgagor (in the case of a
Mortgaged Property) to enable such Property or Mortgaged Property or any portion
thereof to be lawfully occupied and used as currently so occupied or used.
21
"Real Property Statement" means a certificate of a Responsible
Officer providing each of the following:
(i) a list of all Facilities owned by Borrower and its
Subsidiaries or in which Borrower or any such Subsidiary has an
interest at the date of such certificate, identifying the nature of
such interest and certifying the Appraised Value, if available, and
each of the other costs, values and prices referred to in the
definition of "Allowed Value" relating to each Facility;
(ii) specification in respect of each Facility of each of the
following:
(a) whether as of the date of such certificate such
Facility is an Eligible Property or a Mortgaged
Property covered by an Eligible Mortgage;
(b) in respect of each Eligible Property, the
acquisition cost of Borrower or any of its
Subsidiaries in respect of such Eligible Property;
and
(c) in respect of each Eligible Mortgage, the then
outstanding principal amount due to Borrower or any
of its Subsidiaries from the relevant Mortgagor in
respect of such Eligible Mortgage;
(iii) with respect to each such Eligible Property or Eligible
Mortgage, certification as to the ratio of (A) the Cash Flow of the
Operator or Mortgagor thereof (as applicable) over the four most recent
financial quarters (or, (y) if financial reporting for such Cash Flow
is provided on an annual basis, over its last reported financial year,
or (z) where Marriott International, Inc. is the Operator or Mortgagor
and financial reporting for such Cash Flow is not otherwise required to
be provided to Borrower or its Subsidiaries, over the last reported
financial year as certified by an officer of Marriott International,
Inc. in a certificate described in Section 5.2(b)(iii)) attributable to
that Eligible Property or Eligible Mortgage to its (B) Fixed Charges
over the same period for such Eligible Property or Eligible Mortgage
and, further, certification that, with respect to each Eligible
Property or Eligible Mortgage, the details of cash flows of the
Operator or Mortgagor thereof used by Borrower in its calculations are
Current; provided that if such Eligible Property or Eligible Mortgage
is part of a group of Cross Guarantied Assets, in addition to the
certification required for each individual Eligible Property or
Eligible Mortgage, Borrower also shall provide certification as to the
ratio of (A) the Cash Flow of the Operators or Mortgagors (as
applicable) for such group determined on an aggregate basis over their
respective four most recent financial quarters (or last reported
financial year or last certified financial year, as the case may be)
attributable to the group of Cross Guarantied Assets to (B) their Fixed
Charges over the same period for such group of Cross Guarantied Assets;
and
(iv) certification that there has been no MAC in any of the
circumstances set forth in Section 2.16(c), other than, in each case, a
MAC which has ceased to be in effect.
22
"Recognized Appraiser" means a qualified and recognized
professional appraiser as may be selected or approved by Agent and
Administrative Agent with the consent of Borrower, which will not be
unreasonably withheld, having at least five years' prior experience in
performing real estate appraisals in the geographic area where the property
being appraised is located, having a recognized expertise in appraising
properties operated as health care or retirement facilities or hotel or other
lodging facilities; provided that if the property being appraised is located in
the United Kingdom, such appraiser will be selected or approved by Agent with
the consent of Borrower.
"Reference Banks" means Kleinwort ▇▇▇▇▇▇ Limited and ▇▇▇▇▇
Fargo Bank, National Association.
"Rehabilitation Treatment Asset" means, in respect of any
Property or Mortgage Interest, that more than 50% of the licensed beds of the
Property or, in the case of a Mortgage Interest, of the Mortgaged Property
covered thereby, are designated for rehabilitation treatment.
"Release" means any release, spill, emission, leaking,
pumping, pouring, injection, escaping, deposit, disposal, discharge, dispersal,
leaching or migration of any Hazardous Materials into the indoor or outdoor
environment (including, without limitation, the abandonment or disposal of any
barrels, containers or other closed receptacles containing any Hazardous
Materials), or into or out of any Facility, including the movement of any
Hazardous Material through the air, soil, surface water, groundwater or
property.
"Reportable Event" means a "reportable event" within the
meaning of Section 4043 of ERISA (other than a "reportable event" for which the
30-day notice to PBGC requirement has been waived by regulation of PBGC).
"Requirement of Law" means, as to any Person, any law, treaty,
rule or regulation, or judgment, order, directive or other determination of any
arbitrator or a court or other Governmental Authority, in each case applicable
to or binding upon such Person or any of its properties or to which such Person
or any of its property is subject.
"Responsible Officer" means, with respect to any matter
(including financial matters), the president, chief executive officer, chief
financial officer, executive vice president or treasurer of Borrower.
"Restricted Payment" means (a) every dividend or other
distribution of assets, properties, cash, rights, obligations or securities
paid, made, declared or authorized by Borrower or any of its Subsidiaries (other
than to Borrower) or in respect of any of the Common Shares, the Preferred
Shares or other equity securities of Borrower, or any class of Borrower's equity
securities, or for the benefit of holders of any thereof in their capacity as
such and (b) every payment by or for the account of Borrower or any of its
Subsidiaries in connection with the redemption, purchase, retirement, defeasance
or other acquisition of any Common Shares, Preferred Shares or other equity
securities of Borrower or options, warrants or other rights to acquire any of
Borrower's equity securities and (c) every payment (i) of principal, interest,
fees or other amounts in respect of any Indebtedness of Borrower or any of
23
its Subsidiaries to any Affiliate of Borrower (provided that "Restricted
Payment" shall not include or prohibit any such payment in respect of
intercompany Indebtedness of any of Borrower's Subsidiaries permitted under
Section 6.8(d)), (ii) in respect of the redemption, purchase, retirement,
defeasance, or other acquisition from an Affiliate of Borrower of any
Indebtedness of Borrower, or (iii) of fees in respect of advisory services
rendered to Borrower or any of its Subsidiaries by the Advisor and (d) every
direct or indirect investment by Borrower (by means of capital contribution,
advance, loan or otherwise) in an Affiliate or any Person which becomes an
Affiliate after or as a result of such investment (but not including investments
by Borrower in its direct wholly-owned Subsidiaries), and (e) every payment by
or for the account of Borrower or any of its Subsidiaries in connection with the
redemption, purchase, retirement, defeasance or other acquisition for value,
directly or indirectly, prior to any scheduled maturity, scheduled repayment or
scheduled sinking fund payment, of Indebtedness which is subordinate in right of
payment to the Loans or the Notes.
"Solvent" means, with respect to any Person on a particular
date, that on such date (i) the fair value of the property of such Person is
greater than the total amount of liabilities, including, without limitation,
contingent liabilities, of such Person (whether or not required to be reflected
on a balance sheet prepared in accordance with GAAP), (ii) 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, (iii) such Person is able to realize upon its
assets and pay its debts and other liabilities, contingent obligations and other
commitments as they mature in the normal course of business, (iv) 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 (v) such Person is not engaged in business or a transaction for
which such Person's property would constitute unreasonably small capital after
giving due consideration to the prevailing practice in the industry in which
such Person is engaged. In computing the amount of contingent liabilities at any
time, it is intended that such liabilities will be computed at the amount which,
in light of all the facts and circumstances existing at such time, represents
the amount that can reasonably be expected to become an actual or matured
liability.
"Specified Subordinated Indebtedness" means Indebtedness of
any Person, the terms of which prohibit the holder or any representative of the
holder from exercising any legal remedies or other creditor's rights (including
without limitation the filing of a petition in respect of such Person under the
U.S. Bankruptcy Code, 11 U.S.C. 101 et seq.) thereunder until all obligations
(contingent or otherwise) of such Person to Borrower under all Leases, Mortgage
Interest Agreements and Credit Support Agreements to which that Person is a
party have been indefeasibly satisfied in full.
"Sublease Agreement" means any agreement pursuant to which a
Person subleases all, or a material portion, of a Property from an Operator, as
such agreement is amended, supplemented or modified from time to time.
"Sublessees" means the sublessees in respect of the Sublease
Agreements, and each of them.
"Subordination Agreement" means the amended and restated
subordination agreement, dated as of June 15, 1994, among Administrative Agent,
the Advisor and
24
Borrower an executed copy of which is annexed hereto as Exhibit D, as amended,
supplemented or modified from time to time in a manner not inconsistent with the
terms of the Existing Loan Agreement or hereof.
"Subsidiary" means, as to any Person, a corporation,
partnership or other entity of which shares of stock or other ownership
interests having ordinary voting power (other than stock or other ownership
interests having such power only by reason of the happening of a contingency) to
elect a majority of the board of directors or other managers of such
corporation, partnership or other entity are at the time owned, or the
management of which is otherwise controlled, directly or indirectly, through one
or more intermediaries, or both, by such Person.
"Tangible Net Worth" means, with respect to Borrower and its
Subsidiaries, the excess of total assets over total liabilities of such Persons
on a consolidated basis, such total assets and total liabilities each to be
determined in accordance with GAAP and Section 1.3(a), consistent with those
applied in the preparation of the financial statements referred to in Section
3.1; excluding, however, from the determination of total assets (i) goodwill,
organizational expenses, capitalized software, research and development
expenses, trademarks, trade names, copyrights, patents, patent applications,
licenses and rights in any thereof, and other similar intangibles, (ii) all
prepaid expenses, deferred charges or unamortized debt discount and expense,
(iii) all reserves carried and not deducted from assets, (iv) treasury stock and
shares of beneficial interest and capital stock, obligations or other securities
of, or capital contributions to, or investments in, any Subsidiary, (v)
securities, other than the shares of stock of Hospitality Properties Trust,
which are not readily marketable, (vi) cash held in a sinking or other analogous
fund established for the purpose of redemption, purchase, retirement,
defeasance, acquisition or prepayment of Common Shares, Preferred Shares or
other equity securities, capital stock or Indebtedness, (vii) any write-up in
the book value of any asset resulting from a revaluation thereof subsequent to
December 31, 1987, (viii) leasehold improvements not recoverable at the
expiration of a Lease (to the extent that the useful life of such improvements
is greater than the term of such Lease), and (ix) any items not included in
clauses (i) through (viii) above which are treated as intangibles in conformity
with GAAP.
"Termination Date" means March 15, 2000
"Termination Event" means (i) a Reportable Event or an event
described in Section 4062(e) of ERISA, or (ii) the withdrawal of Borrower or any
ERISA Affiliate from a Multiple Employer Plan during a plan year in which it was
a "substantial employer", as such term is defined in Section 4001(a)(2) of
ERISA, or the incurrence of liability by Borrower or any ERISA Affiliate under
Section 4064 of ERISA upon the termination of a Multiple Employer Plan, (iii)
the filing of a notice of intent to terminate a Plan or the treatment of a Plan
amendment as a termination under Section 4041 of ERISA, (iv) the institution of
proceedings to terminate a Plan by the PBGC under Section 4042 of ERISA, (v) the
withdrawal of Borrower or any ERISA Affiliate from any Multiemployer Plan, or
(vi) any other event or condition which might constitute grounds under Section
4042 of ERISA for the termination of, or the appointment of a trustee to
administer, any Plan.
"Total Liabilities" of any Person means and includes, as of
any date as of
25
which the amount thereof is to be determined, without duplication (i) all items
which in accordance with GAAP would be required to be included on the
liabilities side of a consolidated balance sheet of such Person at such date and
(ii) to the extent not otherwise included in (i) above, all Indebtedness of such
Person as of such date, determined on a consolidated basis and in accordance
with Section 1.3(a).
"Trigger Date" has the meaning set forth in Section 5.14.
"United Kingdom" means the United Kingdom of Great Britain and
Northern Ireland.
"U.S. Dollars" or "$" shall mean the lawful currency of the
United States of America.
1.2. Other Definitional Provisions.
(a) All terms defined in this Agreement shall have the
meanings assigned to them herein when used in the Notes or any certificate or
other document made or delivered pursuant hereto, unless otherwise defined
therein.
(b) As used herein and in the Notes and other Loan Documents,
and any certificate or other document made or delivered pursuant hereto or
thereto, accounting terms not defined in Section 1.1, and accounting terms
partly defined in Section 1.1 to the extent not defined, shall have the
respective meanings given to them under GAAP.
(c) The words "hereof," "herein" and "hereunder" and words of
similar import when used in this Agreement shall refer to this Agreement as a
whole and not to any particular provision of this Agreement, and section,
schedule and exhibit references are to this Agreement unless otherwise specified
and, where appropriate, the singular shall include the plural.
1.3 Certain Calculations: ▇▇▇▇-to Market
(a) Except in the circumstances set forth in Section 1.3(b),
for the purposes of determining the amount of outstanding Indebtedness, Total
Liabilities or any other indebtedness, obligations or liabilities of Borrower or
any of its Subsidiaries or any other Person, or the amount or value of any
investments or assets of or obligations owed to Borrower or any of its
Subsidiaries or any other Person, or the amount of any other item included in
income or cash flow statements of Borrower or any of its Subsidiaries or any
other Person (each of the foregoing being a "Calculation Item"), if such
Calculation Item is owed or otherwise recorded or measured in GBP or any other
currency other than U.S. Dollars, the amount or value of the Calculation Item
shall be calculated in U.S. Dollars and shall be the amount of U.S. Dollars that
can be purchased with GBP or such other currency calculated on the basis of
Administrative Agent's spot rate of exchange for the purchase of U.S. Dollars
with GBP or such other currency on the date such calculation is to be made;
provided that notwithstanding the continuous nature of certain representations
and covenants in this Agreement, unless requested to do so by Agent or
Administrative Agent or unless
26
Borrower is aware of any material currency movement or other circumstance which
would be reasonably likely to have an effect on its ability to satisfy any such
representation or covenant, Borrower shall not be required to make such
calculation with respect to such representations and covenants at any time other
than in connection with the delivery of a Real Property Statement or the
delivery of the certificate of a Responsible Officer under Section 5.2(b);
provided further that even if not required to make such calculations, nothing in
this Section 1.3(a) shall be construed to in any way limit Borrower's
obligations to satisfy all such representations and covenants in accordance with
their terms.
(b) Administrative Agent shall calculate the Equivalent Amount
of Loans denominated in GBP: (i) after any Borrowing Date on which Loans are
made such that the aggregate principal amount of Loans outstanding exceeds 75%
of the Commitments and if requested by Agent or if Administrative Agent in the
reasonable exercise of its judgment considers it desirable to make such
calculation to monitor compliance by Borrower with the limits set forth in
Section 2.1, on the final Business Day of each Interest Period for each Loan
denominated in GBP or otherwise as often as Administrative Agent considers it
desirable or necessary to make such calculation and Administrative Agent shall
notify Borrower and Agent if, based on such calculation, Borrower is in
compliance with the requirements of Section 2.1 as to the maximum aggregate
outstanding principal amount of Loans denominated in GBP or whether prepayment
of the Loans is necessary as required by Section 2.8(e); (ii) on any proposed
Borrowing Date to determine whether, after giving effect to a proposed
borrowing, Borrower will be in compliance with such requirements of Section 2.1;
and (iii) on any proposed continuation/conversion date under Section 2.5 to
determine whether, after giving effect to such proposed continuation/conversion,
Borrower will be in compliance with such requirements of Section 2.1; provided
that any failure by Administrative Agent to make such calculations or provide
the information under this Section 1.3(b) shall not affect the obligations of
Borrower to comply with the limits set forth in Section 2.1 or otherwise to
satisfy all representations and covenants made by it in this Agreement.
SECTION 2. AMOUNT AND TERMS OF REVOLVING LOANS
2.1. Revolving Loans.
(a) Each Lender severally (and not jointly) agrees, subject to
the terms and conditions hereof, to continue the Existing Loans outstanding on
the Effective Date, to make Loans to Borrower from time to time during the
period from the Effective Date to and including the Final Borrowing Date, and to
maintain its Loans outstanding to Borrower on the Final Borrowing Date from such
date until the Termination Date, up to an aggregate amount (including, without
limitation, the amount of any Existing Loans) or the Equivalent Amount in GBP at
any one time not exceeding its Pro Rata Share of the aggregate Commitments (as
defined below) to be used for the purposes identified in Section 2.11 ; provided
that in no event shall the aggregate outstanding principal amount of Loans
denominated in GBP at any time exceed the Equivalent Amount of $100,000,000 (as
determined in accordance with Section 1.3(b)). Each Loan hereunder shall be made
by Lenders in accordance with their respective Pro Rata Share. Upon satisfaction
of the conditions set forth in Section 4, (i) all loans outstanding under the
Existing Loan Agreement
27
as of, and at the time of, the Effective Date ("Existing Loans") and all rights
relating to the Existing Loans and all other rights arising under the Existing
Loan Agreement and all documents relating thereto, except to the extent
specifically amended and restated by this Agreement, shall be assigned (without
any further action or authorization being required) by the lenders under the
Existing Loan Agreement to the Lenders proportionately to their respective Pro
Rata Shares of the Commitments without recourse, representation or warranty
(except for representations and warranties made in this Section 2.1(a)) of any
nature, express or implied, by any such lender and such Existing Loans shall be
continued and deemed to be Loans for all purposes under this Agreement and (ii)
each Lender shall pay to Administrative Agent its Pro Rata Share of the Existing
Loans or, if less, the amount by which such Pro Rata Share exceeds its
outstanding Existing Loans (if any), for distribution to the lenders under the
Existing Loan Agreement that are not Lenders and to the other Lenders that have
funded such Loans, in accordance with their respective Commitments, and each
Lender's share of the Existing Loans shall be adjusted accordingly. In
connection with such assignment, each Lender shall be deemed to represent and
warrant to each other Lender that (i) it is, and will be on the Effective Date,
prior to the assignment of its interests pursuant to this Section 2.1(a), the
legal and beneficial owner of the interests being assigned and such interests
are, and will be on the Effective Date, free and clear of any adverse claim and
(ii) the total aggregate principal amount and accrued interest, fees and other
amounts due to such Lender under the Existing Loan Agreement on March 29, 1996
are as set forth on Schedule 3 annexed hereto. Any amounts of accrued interest,
commitment fees or other amounts (other than principal) owed (whether or not
presently due and payable) by Borrower to the lenders under or in respect of the
Existing Loans shall, as of the Effective Date, be deemed to be due and payable
to the lenders under the Existing Loan Agreement. The continuation of the
Existing Loans hereunder shall not be deemed to be a repayment thereof, and
Borrower shall not be required to deliver any notice of prepayment or notice of
borrowing or to satisfy any condition relating to minimum amounts of prepayments
or minimum amounts of borrowings hereunder with respect to such continuance of
the Existing Loans.
(b) Each Lender's commitment to make and maintain Loans to
Borrower pursuant to this Section 2.1 is herein called its "Commitment" and such
commitments of all Lenders in the aggregate are herein called the "Commitments".
The original amount of each Lender's Commitment is set forth opposite its name
on Schedule 1 annexed hereto and the aggregate original amount of the
Commitments is $250,000,000; provided that up to an Equivalent Amount of
$100,000,000 may be made in Loans denominated in GBP (as determined in
accordance with Section 1.3(b)); provided further that the amount of the
Commitments shall be reduced from time to time by the amount of any reductions
thereto made pursuant to Section 2.7 (with a proportionate reduction of the
amount of the Commitments otherwise available for the borrowing of Loans
denominated in GBP); provided further that Lenders shall have no obligation to
make or maintain Loans hereunder to the extent any such Loan would (i) cause the
aggregate amount of the Loans then outstanding to exceed the Commitments or (ii)
cause the aggregate amount of the General Corporate Loans then outstanding to
exceed 25% of the Commitments; and provided further that Lenders shall have no
obligation to make or maintain Loans denominated in GBP hereunder to the extent
any such Loan would cause the aggregate amount of the Loans denominated in GBP
then outstanding to exceed the Equivalent Amount of $100,000,000 (as determined
in accordance with Section 1.3(b)).
28
(c) Each Lender's Commitment shall expire on the Termination
Date and all Loans and all other amounts owed hereunder with respect to the
Loans and the Commitments shall be paid in full no later than that date.
(d) Subject to the other terms and conditions hereof, Borrower
may borrow under this Section 2.1, repay Loans in accordance with Section 2.10
or prepay Loans in accordance with Section 2.8 and reborrow the amounts so
repaid under this Section 2.1.
2.2. Notes; Maturity Date. The Loans of each Lender pursuant
hereto shall be evidenced by, and be repayable with interest in accordance with
the terms of, a promissory note of Borrower substantially in the form of Exhibit
A, with appropriate insertions, payable to the order of such Lender in the
principal amount of the Commitment of such Lender (together with any
replacement, modification, renewal or substitution thereof, individually a
"Note" and collectively, the "Notes"), which shall be dated the Effective Date
and be duly completed, executed and delivered by Borrower. The Loans of each
Lender pursuant hereto shall be made and maintained by such Lender's Lending
Office(s) as designated by such Lender from time to time. All outstanding Loans
and each of the Notes shall mature and Borrower shall repay the outstanding
principal amount of such Loans and the Notes in full together with all unpaid
interest accrued thereon on the Termination Date (or earlier as hereinafter
provided) (or if such day is not a Business Day, the next preceding Business
Day) all in accordance with Section 2.10(b), and shall be subject to payment and
prepayment as provided in Section 2.8 hereof. Each Lender is authorized to
endorse at any time the date and amount of each Loan or conversion or
continuation thereof, the date and amount of each payment of principal with
respect to its Loans and whether its Loans are Base Rate Loans, Eurodollar Loans
or Alternate Rate Loans, on the schedule annexed to and constituting a part of
such Lender's Note, which endorsement shall constitute prima facie evidence of
the accuracy of the information endorsed.
2.3. Procedure for Borrowing.
(a) Whenever Borrower desires to borrow under Section 2.1, it
shall deliver both a Notice of Borrowing and a Real Property Statement to
Administrative Agent (with a copy of each to Agent) no later than 11:00 A.M.
(New York time) in the case of Base Rate Loans at least one Business Day and in
the case of Eurodollar Loans at least three Business Days in advance of the
proposed Borrowing Date. The Notice of Borrowing shall specify (i) the proposed
Borrowing Date (which shall be a Business Day), (ii) whether such Loans are to
be denominated in U.S. Dollars or, subject to the limit in Section 2.1, GBP,
(iii) the amount of the Loans requested (which amount shall be in a minimum
aggregate amount of $1,000,000 and integral multiples of $500,000 in excess of
that amount if the Loans are to be denominated in U.S. Dollars or a minimum
aggregate amount of GBP 1,000,000 and integral multiples of GBP 500,000 in
excess of that amount if the Loans are to be denominated in GBP), (iv) whether
such Loans will be Base Rate Loans or Eurodollar Loans and, if Eurodollar Loans
are specified, the initial Interest Period requested for such Eurodollar Loans,
(v) Borrower's account at Administrative Agent to which the net proceeds of the
requested Loans are to be credited, (vi) whether the requested Loans (or any
portion thereof) are to be General Corporate Loans and, if only a portion
thereof are so designated, the amount of such portion, (vii) that the
representations and warranties contained in the Loan Documents are true, correct
and accurate in all material respects to the same extent as though
29
made on and as of the date of such Notice of Borrowing unless stated in the
relevant Loan Document to relate to a specific earlier date, in which case such
representations and warranties shall be true, correct and complete in all
material respects as of such earlier date, (viii) that no event has occurred and
is continuing or would result from the proposed borrowing that would constitute
a Default or Event of Default, (ix) that the amount of the proposed borrowing
will not cause (A) the aggregate outstanding principal amount of the Loans to
exceed the Commitments currently in effect, (B) the aggregate amount of the
General Corporate Loans then outstanding to exceed 25% of the Commitments or (C)
the aggregate amount of the Loans denominated in GBP then outstanding to exceed
the Equivalent Amount of $100,000,000 (as determined in accordance with Section
1.3(b)), (x) that the proceeds of the proposed borrowing (other than any
proceeds of General Corporate Loans) shall be used to make payment on the
proposed Borrowing Date for the purchase price and costs of acquiring interests
in one or more Facilities due and payable on such Borrowing Date and (xi) with
respect to the amount of such Loans which will not be General Corporate Loans,
the following:
(x) the name of the proposed Operators and/or
Mortgagors (as applicable) of the Facility or Facilities to
which such borrowing relates and any Credit Support Obligors
in relation thereto;
(y) the name and location of such Facility or
Facilities, the Appraised Value(s) thereof and each of the
other costs, values and prices referred to in the definition
of "Allowed Value" therefor, and a description of the
interests of Borrower or any of its Subsidiaries therein to be
acquired with the proceeds of such borrowing; and
(z) if the proceeds of such Loan will be used to
acquire an interest in any Facility which interest is required
to be an Eligible Property or Eligible Mortgage included in
the calculation of Indebtedness permitted under Section 6.8(a)
after giving effect to such Loan, certification to that
effect.
In lieu of delivering the above-described Notice of Borrowing,
Borrower may give Administrative Agent telephonic notice (which
telephonic notice shall be followed immediately with a notice by
facsimile telecopy) by the time specified for a Notice of Borrowing
above; provided that such notice shall be promptly confirmed in writing
by delivery of a Notice of Borrowing and a Real Property Statement to
Administrative Agent and Agent on or before the applicable Borrowing
Date; provided further that in the event of a discrepancy between a
Notice of Borrowing and such telephonic notice, the telephonic notice
shall govern. Except as otherwise provided in Sections 2.13 and 2.14, a
Notice of Borrowing (or telephonic notice in lieu thereof as provided
above) shall be irrevocable, and Borrower shall be bound to make the
borrowing specified in such Notice of Borrowing (or telephonic notice
in lieu thereof as provided above) in accordance therewith.
None of Agent, Administrative Agent or any Lender shall incur
any liability to any Person (including Borrower or any of its Subsidiaries) in
acting upon any telephonic notice referred to above that Administrative Agent or
Agent believes in good faith to have been given by a duly authorized officer or
other Person authorized to borrow on behalf of
30
Borrower or otherwise acting in good faith under this Section 2.3, and upon
funding of Loans by Lenders in accordance with this Agreement pursuant to any
such telephonic notice Borrower shall have effected the borrowing of such Loans
hereunder.
(b) All Loans under this Agreement shall be made by Lenders
simultaneously and proportionately to their respective Pro Rata Shares of the
Commitments, it being understood that no Lender shall be responsible for any
default by any other Lender in that other Lender's obligation to make Loans
requested hereunder nor shall the Commitment of any Lender to make Loans
requested hereunder be increased or decreased as a result of a default by any
other Lender in that other Lender's obligation to make Loans requested
hereunder. Promptly after receipt by Administrative Agent of a Notice of
Borrowing pursuant to Section 2.3(a) (or telephonic notice in lieu thereof
followed immediately with a notice by facsimile telecopy) and in any event not
later than 2:00 p.m. (New York time) on the preceding Business Day (in the case
of Base Rate Loans) or at least three Business Days (in the case of Eurodollar
Loans) in advance of the proposed Borrowing Date, Administrative Agent shall
notify each Lender of the relevant details of the proposed borrowing. Each
Lender shall make the amount of its Loan available to Administrative Agent, in
immediately available funds, at the account specified by Administrative Agent to
the Lenders, not later than 11:00 A.M. (New York time) on the Borrowing Date
specified in the applicable Notice of Borrowing. Upon satisfaction or waiver of
the applicable conditions precedent specified in Sections 4.1 and 4.2,
Administrative Agent shall make the proceeds of such Loans available to Borrower
on such Borrowing Date by causing an amount of immediately available funds equal
to the proceeds of all such Loans received by Administrative Agent from Lenders
to be credited to the account at Administrative Agent as specified by Borrower
in the Notice of Borrowing.
Unless Administrative Agent shall have been notified by any
Lender prior to the Borrowing Date for any Loans that such Lender does not
intend to make available to Administrative Agent the amount of such Lender's
Loan requested on such Borrowing Date (and any such notice shall be without
prejudice to any rights of Borrower against such Lender hereunder),
Administrative Agent may assume that such Lender has made such amount available
to Administrative Agent on such Borrowing Date and Administrative Agent may, in
its sole discretion, but shall not be obligated to, make available to Borrower a
corresponding amount on such Borrowing Date. If such corresponding amount is not
in fact made available to Administrative Agent by such Lender, Administrative
Agent shall be entitled to recover such corresponding amount on demand from such
Lender together with interest thereon, for each day from such Borrowing Date
until the date such amount is paid to Administrative Agent, at the Base Rate in
the case of Loans denominated in U.S. Dollars or at the Alternate GBP Rate in
the case of Loans denominated in GBP. If such Lender does not pay such
corresponding amount forthwith upon Administrative Agent's demand therefor,
Administrative Agent shall promptly notify Borrower and Borrower shall
immediately pay such corresponding amount to Administrative Agent together with
interest thereon, for each day from such Borrowing Date until the date such
amount is paid to Administrative Agent, at the Base Rate in the case of Loans
denominated in U.S. Dollars or at the Alternate GBP Rate in the case of Loans
denominated in GBP. Nothing in this Section 2.3 shall be deemed to relieve any
Lender from its obligation to fulfill its Commitments hereunder or to prejudice
any rights that Borrower may have against any Lender as a result of any default
by such Lender hereunder.
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2.4. Interest.
(a) Generally. Each Loan shall be a Eurodollar Loan or a Base
Rate Loan as selected by Borrower initially at the time a Notice of Borrowing is
given pursuant to Section 2.3(a) or as selected pursuant to Section 2.5 (or, in
the case of any Existing Loans, as in effect on the Effective Date), except for
any portion of a Eurodollar Loan which is converted to an Alternate Rate Loan
pursuant to Section 2.13 or 2.14. Loans shall bear interest on the unpaid
principal amount thereof from the date made (or, in the case of any Existing
Loans, from the Effective Date) to maturity (whether by accelerations or
otherwise), at the interest rates specified as follows:
(i) in the case of a Eurodollar Loan, at an
interest rate per annum for and during each Interest Period
equal to the LIBO Rate for such Interest Period plus the
Applicable Margin in effect from time to time;
(ii) in the case of the Base Rate Loan, at an
interest rate per annum equal to the Base Rate in effect from
time to time plus the Applicable Margin in effect from time to
time; and
(iii) in the case of an Alternate Rate Loan
(including any Alternate GBP Rate Loan), at an interest rate
per annum equal to the Alternate Rate in effect from time to
time plus the Applicable Margin in effect from time to time,
plus, in the case of any Loan denominated in GBP and made by a
Lender subject to such requirements, Mandatory Liquid Asset Costs.
Borrower shall pay interest on the unpaid principal amount of the Loans
outstanding from time to time, in arrears, (i) on each Interest Payment Date,
(ii) on the Termination Date, (iii) in the currency required by Section 2.10(b)
and (iv) in accordance with Section 2.4(b) (where applicable). In addition,
Borrower shall pay accrued interest on the principal amount of any Loans prepaid
in accordance with Section 2.8 on the date of any such prepayment.
(b) Default Interest. If Borrower shall default in the payment
of the principal of or interest on any portion of a Loan or any other amount
becoming due hereunder or under any of the Loan Documents, Borrower shall on
demand from time to time pay interest (to the extent permitted by law in the
case of interest on overdue interest) on such defaulted amount accruing from and
including the date of such default (without reference to any period of grace) up
to and including the date of actual payment (after as well as before judgment)
at a rate per annum which is the sum of (i) two percent (2%) plus (ii) the
greatest of the LIBO Rate, the Alternate Rate or the Base Rate plus (iii) the
Applicable Margin.
Interest under this Section 2.4(b) shall be payable upon demand.
(c) Interest Determination. Upon determining the LIBO Rate for
each Interest Period, the Alternate Rate for any period or the Base Rate in
effect from time to time, Administrative Agent shall promptly notify Borrower
and Lenders thereof by telephone (confirmed promptly in writing) or in writing.
Such determination shall, in the absence of manifest error, be conclusive and
binding upon Borrower and the Lenders.
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2.5. Duration of Interest Period; Notice of
Continuation/Conversion.
(a) Borrower may, pursuant to the applicable Notice of
Borrowing or Notice of Continuation/Conversion, as the case may be, select an
Interest Period to be applicable to each Eurodollar Loan.
(b) Subject to the provisions of Sections 2.13 and 2.14,
Borrower shall have the option (i) to convert at any time all or any part of
outstanding Base Rate Loans to Eurodollar Loans or (ii) upon the expiration of
any Interest Period applicable to Eurodollar Loans, to continue all or any
portion of such Loans as Eurodollar Loans or convert all or any portion of such
Loans to Base Rate Loans, as the case may be, and the succeeding Interest
Period(s) of such continued Loans shall commence on the most recent Interest
Payment Date therefor; provided that Loans may be continued as, or converted
into, Eurodollar Loans with a particular Interest Period only in an aggregate
amount equal to $1,000,000 and integral multiples of $500,000 in excess of that
amount if the Loans are to be denominated in U.S. Dollars or a minimum aggregate
amount of GBP 1,000,000 and integral multiples of GBP 500,000 in excess of that
amount if the Loans are to be denominated in GBP (but subject always to the
determinations described in Section 1.3(b) and the limits in Section 2.1 for
Loans denominated in GBP); provided further that Eurodollar Loans or any portion
thereof may only be converted into Base Rate Loans on the expiration date of the
Interest Period(s) applicable thereto; and provided further that (i) no event
has occurred and is continuing or would result from such Loan
continuation/conversion that would constitute a Default or Event of Default, and
(ii) the representations and warranties contained in Section 3 shall be true,
correct and complete in all material respects on and as of the proposed
continuation/ conversion date to the same extent as though made on and as of
that date unless stated in such section to relate to a specific earlier date, in
which case such representations and warranties shall be true, correct and
complete in all material respects as of such earlier date. All conversions and
continuations of Loans shall be made simultaneously and on a pro rata basis by
the Lenders in accordance with their respective Pro Rata Shares.
Borrower shall deliver a Notice of Continuation/ Conversion to
Administrative Agent (with a copy to Agent to follow) no later than 11:00 A.M.
(New York City time) at least three Business Days in advance of the proposed
continuation/ conversion date (in the case of a conversion to, or a continuation
of, Eurodollar Loans) or at least three Business Days in advance of the proposed
conversion date (in the case of a conversion to Base Rate Loans). A Notice of
Continuation/Conversion shall specify (i) the proposed continuation/conversion
date (which shall be a Business Day), (ii) the amount of the Loans to be
continued/ converted, (iii) the nature of the proposed continuation/ conversion,
(iv) in the case of a continuation of, or conversion to, Eurodollar Loans, the
requested Interest Period, (v) that the representations and warranties contained
in the Loan Documents are true, correct and accurate in all material respects to
the same extent as though made on and as of the date of such Notice of
Continuation/Conversion unless stated in such Loan Documents to relate to a
specific earlier date, in which case such representations and warranties shall
be true, correct and complete in all material respects as of such earlier date,
and (vi) that no event has occurred and is continuing or would result from the
proposed continuation/conversion that would constitute a Default or Event of
Default. In lieu of delivering the above-described Notice of
Continuation/Conversion, Borrower may give Administrative Agent telephonic
notice by the time specified for delivery of a Notice of
33
Continuation/Conversion above (which telephonic notice shall be followed
immediately with a notice by facsimile telecopy); provided that in the event of
a discrepancy between a Notice of Continuation/Conversion and such telephonic
notice, such telephonic notice shall govern.
Promptly after receipt by Administrative Agent of a Notice of
Continuation/Conversion pursuant to this Section 2.5 (or telephonic notice
followed immediately with a notice by facsimile telecopy), and in any event not
later than 2:00 p.m. (New York time) at least three Business Days in advance of
the proposed continuation/conversion date, Administrative Agent shall notify
each Lender of the relevant details of the proposed continuation/conversion.
None of Agent, Administrative Agent or any Lender shall incur
any liability to any Person (including Borrower) in acting upon any telephonic
notice referred to above that Administrative Agent or Agent believes in good
faith to have been given by a duly authorized officer or other person authorized
to act on behalf of Borrower or for otherwise acting in good faith under this
Section 2.5, and upon the continuation and/or conversion (as applicable) of any
Loan in accordance with this Agreement pursuant to any such telephonic notice,
Borrower shall have effected a continuation and/or conversion (as applicable)
hereunder of such Loan.
Except as otherwise provided in Sections 2.13 and 2.14, a
Notice of Continuation/Conversion (or telephonic notice in lieu thereof) shall
be irrevocable from and after the giving thereof, and Borrower shall be bound to
effect a continuation and/or conversion (as applicable) in accordance therewith.
2.6. Fees.
(a) Borrower shall pay to Administrative Agent for the account
of each Lender, in accordance with its Pro Rata Share of the Commitments, a
facility fee in an amount equal to the Applicable Facility Fee Percentage of the
average daily balance of such Lender's Commitment in respect of each quarterly
period during the period from the date hereof to but excluding the Final
Borrowing Date. Borrower shall pay to Administrative Agent for the account of
each Lender, in accordance with its Pro Rata Share of the Commitments, a
facility fee in an amount equal to the Applicable Facility Fee Percentage of the
average daily balance of such Lender's Outstandings in respect of each quarterly
period during the period from the Final Borrowing Date to but excluding the
Final Repayment Date. Such fees shall be calculated quarterly and be payable in
arrears on (x) the last Business Day of March, June, September and December of
each year until the Final Repayment Date and (y) the Final Repayment Date, and
accrue from the Effective Date to and excluding the Final Repayment Date and be
payable in U.S. Dollars as required by Section 2.10(b).
(b) Borrower shall on the date this Agreement is delivered by
the parties hereto pay to Administrative Agent for the account of each Lender,
in accordance with its Pro Rata Share of the Commitments, an upfront fee in an
amount equal to 0.150% of the Commitments, all in accordance with the letter
agreement dated February 5, 1996 between Agent and Borrower.
(c) Borrower shall on the date this Agreement is delivered by
the parties
34
hereto pay to Administrative Agent for Administrative Agent's own account and
the account of each Lender such fees in such amount as may have been agreed in
writing between Agent and Borrower.
(d) Borrower shall pay to Administrative Agent for its account
an annual administration fee payable in such amounts and according to such terms
as are set forth in a separate letter agreement between Administrative Agent and
Borrower, the first such payment to be due on the date this Agreement is
delivered by the parties hereto.
2.7. Termination or Reduction of Commitment. Borrower shall
have the right, upon not less than five Business Days' notice to Administrative
Agent, to terminate the Commitments or, from time to time, to reduce pro rata
the amount of the Commitments, to the extent, in either case, that the
Commitments are undrawn. Any such reduction shall be in an amount of $1,000,000
or any integral multiple thereof and shall reduce permanently the aggregate
amount of the Commitments then in effect, with a proportionate reduction of the
amount of the Commitments otherwise available for the borrowing of Loans
denominated in GBP.
2.8. Optional Prepayments; Mandatory Prepayments.
(a) Subject to Sections 2.8(f) and 2.15, Borrower may, at its
option, prepay any Loans on any Business Day in whole or in part, without
premium, upon at least three Business Days', in the case of Eurodollar Loans, or
one Business Day's, in the case of Base Rate Loans, prior written notice to
Administrative Agent, specifying the amount of prepayment. Each notice of
prepayment pursuant to this clause (a) shall be irrevocable and the payment
amount specified in such notice shall be due and payable on the date specified
in the currency required by Section 2.10(b), together with accrued interest to
such date on the Loans and all amounts (if any) payable pursuant to Section
2.15. Partial prepayments of the Loans pursuant to this clause (a) shall be in
an aggregate principal amount of $1,000,000 (or GBP 1,000,000) or integral
multiples of $500,000 (or GBP 500,000) in excess of that amount.
(b) In the event of any sale or other disposition of any
interest in any Facility, any Lease termination, or any other event giving rise
to Net Property Proceeds or Net Mortgage Proceeds, on the final Business Day of
the first Interest Period to expire after the closing of such sale or other
disposition or, if such closing occurs at a time when there are no Eurodollar
Loans outstanding, on the final Business Day of the month during which such
closing occurs, Borrower shall apply an amount equal to all of such Net Property
Proceeds and Net Mortgage Proceeds (other than any amount thereof required and
used to satisfy Indebtedness secured by a Lien, not inconsistent with the terms
of this Agreement, on the relevant Properties or Mortgage Interests) to the
prepayment of the Loans; provided that with respect to a particular transaction
or a related series of transactions giving rise to Net Property Proceeds or Net
Mortgage Proceeds, prepayment of the Loans shall be required from such Net
Property Proceeds or Net Mortgage Proceeds only to the extent that the same
exceed $5,000,000; provided further that no prepayment shall be required in
respect of Loans denominated in GBP to the extent the aggregate outstanding
principal amount of such Loans does not exceed the Allowed Value of Eligible
Properties and Eligible Mortgages in respect of Properties located in the United
Kingdom acquired with or funded with GBP.
35
(c) In the event of any (i) public or private offering by or
on behalf of Borrower of debt or equity securities issued by Borrower or (ii)
incurrence by Borrower of Indebtedness to one or more financial institutions,
within thirty days after such offering or incurrence, Borrower shall apply all
Net Securities Proceeds arising from such offering or incurrence to the
prepayment of the Loans or, at the option of Borrower, to the prepayment of
other Indebtedness of Borrower outstanding on the Effective Date; provided
further that no prepayment shall be required in respect of Loans denominated in
GBP to the extent the aggregate outstanding principal amount of such Loans does
not exceed the Allowed Value of Eligible Properties and Eligible Mortgages in
respect of Properties located in the United Kingdom acquired with or funded with
GBP.
(d) The Loans shall be subject to certain mandatory
prepayments pursuant to and upon the occurrence of the events described in the
provisions of Sections 2.13 and 2.14.
(e) If at any time the principal balance of the Loans exceeds
the Commitments, Borrower shall promptly (and in any event no later than two
Business Days after becoming aware thereof) repay Loans to the extent necessary
to reduce the aggregate outstanding principal amount thereof to an amount that
is equal to or less than the Commitments. If at any time the principal balance
of the General Corporate Loans then outstanding exceeds 25% of the Commitments,
Borrower shall promptly (and in any event no later than two Business Days after
becoming aware thereof) repay General Corporate Loans to the extent necessary to
reduce the aggregate outstanding principal amount thereof to an amount that is
equal to or less than 25% of the Commitments. If at any time the principal
balance of the Loans denominated in GBP exceeds the Equivalent Amount of
$100,000,000 (as determined in accordance with Section 1.3(b)), Borrower shall
promptly (and in any event no later than two Business Days after becoming aware
thereof) repay Loans denominated in GBP to the extent necessary to reduce the
aggregate outstanding principal amount thereof to an amount that is equal to or
less than the Equivalent Amount in GBP of $100,000,000; provided that, so long
as no Default or Event of Default has occurred and is continuing, any such
repayment of the Loans denominated in GBP may be made at the end of the
applicable Interest Periods on condition that Borrower deposits with
Administrative Agent cash in an amount equal to the amount of the required
prepayment at the time otherwise required for prepayment (such amounts to be
held as cash collateral by Administrative Agent pending such repayment on terms
satisfactory to Agent, Administrative Agent and Borrower).
(f) Subject to the application of the payment provisions of
Section 2.10(a), any prepayments of the Loans pursuant to this Section, Sections
2.13 or 2.14, or any other provision of any Loan Document shall be applied first
to any amounts payable with respect thereto pursuant to Section 2.15, second to
the payment of accrued and unpaid interest on the principal amount of
outstanding General Corporate Loans up to and including the date of prepayment,
third, to the payment of accrued and unpaid interest on the principal amount of
all other outstanding Loans up to and including the date of prepayment, fourth
to the principal amount of such General Corporate Loans, and fifth to the
principal amount of all other outstanding Loans. Subject to the requirements of
the preceding sentence, Borrower may designate the application of any
prepayments, to be applied to principal on the Loans, to the Eurodollar Loans,
Base Rate Loans and/or Alternate Rate Loans, as it may select, provided that if
Borrower does not designate such application, such prepayments shall be applied
(x) first to outstanding Base Rate Loans, (y) second to outstanding Alternate
Rate
36
Loans and (z) third to outstanding Eurodollar Loans.
2.9. Computation of Interest and Fees. Fees and other amounts
other than interest calculated on the basis of a rate per annum shall be
computed on the basis of a 360-day year for the actual days elapsed. Interest on
the Base Rate Loans and on the Alternate Rate Loans, in each case, calculated by
reference to the prime rate and interest on the Eurodollar Loans denominated in
GBP shall be computed on the basis of a 365-day year for the actual days
elapsed, while interest on the Eurodollar Loans denominated in U.S. Dollars and
interest on the Alternate Rate Loans and the Base Rate Loans, in each case,
where interest is not calculated by reference to the prime rate, shall be
computed on the basis of a 360-day year for the actual days elapsed.
2.10. Payments and Currency. (a) Except as contemplated by
this Agreement, the borrowing by Borrower from the Lenders, each payment
(including each prepayment) by Borrower on account of principal, interest and
fees required under Sections 2.6(a) and (b), and any reduction of the amount of
the Commitments of the Lenders hereunder, shall be made for the account of each
Lender according to its Pro Rata Share; provided that payments to the Lenders of
interest based upon the Alternate Rate shall be allocated appropriately to give
effect to differences among the Lenders' respective costs of funds. All payments
(including prepayments) by Borrower on account of principal, interest, fees,
costs, indemnities or other amounts payable hereunder or under any of the Loan
Documents shall be made to Administrative Agent for the account of the
applicable Lenders (except for fees required under Section 2.6(c) which shall be
only for the account of Administrative Agent and Agent, respectively) at the
account of Administrative Agent specified in Section 10.3(b) and in immediately
available funds in the currency required by Section 2.10(b). Each payment or
prepayment hereunder and under the Notes and the other Loan Documents shall be
made without set-off or counterclaim and free and clear of, and without
deduction for, any present or future withholding or other taxes, duties or
charges of any nature imposed on or attributable to such payments or prepayments
by or on behalf of any Governmental Authority, except for any Excluded Taxes. If
any such taxes (other than any Excluded Taxes), duties or charges (including,
without limitation, any tax, duty or charge imposed by Sections 1, 2 and/or 39
of the Massachusetts General Laws, Chapter 63, as currently in effect or as
amended hereafter or any analogous provisions (or provisions having an analogous
effect) of the laws, rules or regulations (or interpretations thereof) of
Massachusetts or any other Governmental Authority) are so levied or imposed on
or are attributable to any such payment or prepayment, Borrower will make
additional payments in such amounts as may be necessary so that the net amount
received by a Lender, after withholding or deduction for or on account of all
such taxes, duties or charges, will be equal to the amount provided for herein
or in such Lender's Note or in any of the other Loan Documents. Whenever any
taxes, duties or charges are payable by Borrower with respect to or attributable
to any payments or prepayments hereunder or under any of the Notes or any other
Loan Document, Borrower agrees to furnish promptly to Administrative Agent for
the account of the applicable Lender official receipts or copies thereof, if
reasonably available, evidencing payment of any such taxes, duties or charges so
withheld or deducted. If Borrower fails to pay any such taxes, duties or charges
when due to the appropriate taxing authority after receipt of notice that any
such taxes, duties or charges are due, or fails to remit to Administrative Agent
for the account of the applicable Lender the customary evidence of payment of
any such taxes, duties or charges so withheld or deducted, Borrower shall
37
indemnify the affected Lender for any incremental taxes, duties, charges,
interest or penalties that may become payable by such Lender as a result of any
such failure. During the continuance of any Default, Administrative Agent may,
but shall be under no obligation to, apply all payments received by
Administrative Agent from Borrower pursuant to any of the Loan Documents in the
following order of payment regardless of the application designated by Borrower:
first to any interest owing under Section 2.4(b) or under any of the Loan
Documents other than interest owing on the Loans and the Notes referred to
below, second to any fees then payable to Agent, Administrative Agent or the
Lenders, third to any amounts owing pursuant to Section 10.7, fourth to any
amounts owing pursuant to Sections 2.13, 2.14 or 2.15, fifth to any other sums
(other than principal on the Loans and the Notes and interest thereon referred
to below) owing under any of the Loan Documents, sixth to any interest owing on
the Loans and Notes and seventh to the repayment of the principal of the Loans
and the Notes as designated by Administrative Agent; provided that if such
application is other than in accordance with any express designation by
Borrower, Administrative Agent shall promptly notify Borrower of such
application. Administrative Agent will distribute each payment to the applicable
Lenders promptly upon receipt thereof (and in any event on the same Business Day
as the date when received, if such payment is received at or prior to 12:00 noon
(New York time)). Each payment by Administrative Agent to a Lender shall be made
for the account of such Lender's Lending Office as designated by such Lender to
Administrative Agent in writing from time to time. Whenever any payment to be
made hereunder or under any Loan Document, including, without limitation, any
principal of or interest on any Loan, shall become due and payable, or whenever
the last day of any Interest Period would otherwise occur, on a day which is not
a Business Day, such payment shall be made and the last day of such Interest
Period shall occur on the next succeeding Business Day and such extension of
time shall in such case be included in computing interest on such payment;
provided that if such extension would cause any such payment to be made in the
next succeeding calendar month, or the last day of such Interest Period to occur
in the next succeeding calendar month, such payment shall be made, and the last
day of such Interest Period shall occur, on the next preceding Business Day.
(b) A repayment or prepayment of a Loan or any part of a Loan
is payable in the currency in which the Loan was denominated at the time at
which such Loan was made to Borrower by Lenders. Interest in respect of a Loan
is payable in the currency in which the principal portion of the respective Loan
in respect of which it is payable is denominated. Fees in respect of Commitments
or otherwise hereunder shall be payable in U.S. Dollars. Amounts payable in
respect of costs, expenses and taxes and the like are payable in the currency in
which they are incurred. Any other amount payable under this Agreement is,
except as otherwise provided in this Agreement, payable in U.S. Dollars.
2.11. Use of Proceeds. The proceeds of the Loans hereunder
shall be used by Borrower (either directly or indirectly through intercompany
advances of such proceeds as permitted under Section 6.8(d) to its Subsidiaries;
provided that, Church Creek Corporation may not receive any such proceeds) for
(a) the acquisition of Properties; (b) the acquisition or funding of Mortgage
Interests; and (c) the direct or indirect reimbursement of the issuing bank of
the letter of credit supporting the obligations of Church Creek Corporation in
respect of the IDFA Indebtedness; provided that the General Corporate Loans may
be used by Borrower and its Subsidiaries for their respective general corporate
purposes; provided further that the Existing Loans may be continued for the same
purposes as they were made
38
under the Existing Loan Agreement, and shall not be treated as General Corporate
Loans.
2.12. Increased Costs.
(a) If any Requirement of Law or other event or condition, or
any amendment, modification or interpretation thereof (including, without
limitation, any request, recommendation, guideline or policy, whether or not
having the force of law, of or from any central bank or other Governmental
Authority), in any such case, adopted, effective, made or issued after the date
hereof (but in any event including, without limitation, Regulation D and Section
1, 2 and/or 39 of the Massachusetts General Laws, Chapter 63 as currently in
effect or as amended hereafter or any analogous provisions (or provisions having
an analogous effect) of the laws, rules or regulations (or interpretations
thereof) of Massachusetts or any other Governmental Authority) by any authority
charged with the administration or interpretation thereof:
(i) subjects Agent, Administrative Agent or any
Lender or any branch or Affiliate of Agent, Administrative Agent or
such Lender to any tax (except Excluded Taxes), fee, deduction, duty,
withholding, levy, impost or other charge or reduction of any nature,
on or with respect to, or which Agent, Administrative Agent or such
Lender in its sole discretion deems applicable or attributable to this
Agreement, any Note, any of the other Loan Documents, its Commitment or
its pro rata share of the Loans, or interest, fees or other amounts
attributable thereto or to any of the foregoing; or
(ii) changes the basis of taxation of payments to
any Lender or any branch or Affiliate of such Lender of principal of
and/or interest on such share of the Loans and/or other fees and
amounts payable hereunder or under any of the Loan Documents or with
respect hereto or thereto (including in any event imposition of or
change in any withholding taxes, but excluding any Excluded Taxes); or
(iii) imposes upon, modifies, requires, makes or
deems applicable to any Lender, or any of its branches or Affiliates,
any regular, special, supplementary or other reserve or deposit
requirement, insurance assessment or similar requirement against or
affecting any assets held by, or liabilities of, or deposits with or
for the account of, such Lender or such branch or Affiliate, with
respect to or which Agent or such Lender in its sole discretion deems
applicable or attributable to this Agreement, any Note, any of the
other Loan Documents, its Commitment or its pro rata share of the
Loans, or interest, fees or other amounts attributable thereto or to
any of the foregoing; or
(iv) imposes, modifies or deems applicable any
condition or requirement upon or causes in any manner the addition of
any supplement to, or increase of any kind to, the capital or cost base
of Agent, Administrative Agent or any Lender or such branch or
Affiliate, for extending or maintaining its Commitment or its pro rata
share of the Loans which results in an increase in the capital
requirement supporting such Commitment or its pro rata share of the
Loans, or imposes upon, modifies, requires, makes or deems applicable
to Agent, Administrative Agent or such Lender or any such branch or
Affiliate any capital requirement, increased capital
39
requirement or similar requirement, with respect to or which Agent,
Administrative Agent or such Lender in its sole discretion deems
applicable or attributable to this Agreement, any Note, any of the
other Loan Documents, its Commitment or its pro rata share of the
Loans, or interest, fees or other amounts attributable thereto or to
any of the foregoing; or
(v) imposes upon Agent, Administrative Agent or any
Lender or any branch or Affiliate of Agent, Administrative Agent or
such Lender any other conditions with respect to, or allocable or
attributable in good faith by Agent, Administrative Agent or the Lender
to, this Agreement, any Note, any of the other Loan Documents or such
share of the Loans or its Commitment hereunder or such interest, fees
or other amounts;
and the result of any of the foregoing, based solely upon the good faith
determination and allocation by Agent, Administrative Agent or any Lender, as
the case may be, of costs, decreased benefits and/or reduced amount of payments,
is to increase the cost or decrease the benefit, in any way, to Agent,
Administrative Agent or such Lender, as the case may be, or any branch or
Affiliate of Agent, Administrative Agent or such Lender, as the case may be, of
funding or maintaining its Commitment or its share of the Loans hereunder, or to
reduce the amount of any payment (whether of principal, interest, or otherwise)
received or receivable by Agent, Administrative Agent or such Lender, as the
case may be, or any branch or Affiliate of Agent, Administrative Agent or such
Lender, as the case may be, or to require Agent, Administrative Agent or such
Lender, as the case may be, or any branch or Affiliate of Agent, Administrative
Agent or such Lender, as the case may be, to make any payment, then and in any
such case:
(1) Agent, Administrative Agent or such Lender, as the case
may be, shall promptly notify Borrower and the other Lenders in writing
of the happening of such event;
(2) Agent, Administrative Agent or such Lender, as the case
may be, shall promptly deliver to Borrower and the other Lenders a
certificate stating the change or event which has occurred or the
reserve or capital requirements or other conditions which have been
imposed on Agent, Administrative Agent or such Lender, as the case may
be, or branch or Affiliate of Agent, Administrative Agent or such
Lender, as the case may be, or the request, recommendation, guideline
or policy with which it has complied, together with the date thereof,
the amount of such increased cost, decreased benefit or reduction
payment; and
(3) Borrower shall pay Agent, Administrative Agent or such
Lender, as the case may be, promptly on demand such an amount or
amounts as:
(A) in the case of events referred to in clauses (i),
(ii), (iii) and (v) and, if applicable, clause (iv) above,
shall be sufficient to compensate it or such branch or
Affiliate for all such increased costs and/or payments and/or
decreased benefits, and/or reduced amount of payment; and/or
(B) in the case of events referred to in clause (iv)
above, shall be an
40
amount equal to the reduction, as reasonably determined by
Agent, Administrative Agent or such Lender, as the case may
be, in the after-tax rate of return on Agent's, Administrative
Agent's or such Lender's capital resulting from any such
capital or increased capital or similar requirement, all as
certified by Agent, Administrative Agent or such Lender or
Lenders, as the case may be, in said written notice to
Borrower. Such certification shall be conclusive and binding
on Borrower absent manifest error.
The certificate of Agent, Administrative Agent or such Lender
as to the additional amounts payable pursuant to this Section 2.12 delivered to
Borrower shall constitute prima facie evidence of the amount thereof. Agent,
Administrative Agent and each Lender agree to use reasonable efforts, as
determined by Agent, Administrative Agent or such Lender, as the case may be, to
avoid or minimize the payment by Borrower of any additional amounts under this
Section 2.12. The protection provided by this Section 2.12 shall be available to
Agent, Administrative Agent and each Lender regardless of any possible
contention of invalidity or inapplicability of the Requirement of Law,
interpretation, recommendation, guideline, policy or event or condition which
has been imposed or has occurred. In the event that after Borrower shall have
paid any additional amount under this Section 2.12 with respect to the Loans
Agent, Administrative Agent or such Lender shall have successfully contested
such Requirement of Law, interpretation, recommendation, guideline, policy or
event or condition then, to the extent that Agent, Administrative Agent or such
Lender will be placed in the same position it was in prior to the incurrence of
the increased cost or reduction in amount received or receivable (on an
after-tax basis), but without giving effect to interest which may have been
earned on the additional amount paid by Borrower (but with interest to the
extent actually earned by Agent, Administrative Agent or such Lender, as the
case may be, on such amount as determined by Agent, Administrative Agent or such
Lender, as the case may be), Agent, Administrative Agent or such Lender, as the
case may be, shall refund to Borrower such additional amount (with such
interest, if any).
2.13. Change in Law Rendering Eurodollar Loans or Alternate
Rate Loans Unlawful; Failure to Give Notice of Continuation.
(a) Notwithstanding anything to the contrary herein contained,
in the event that any Requirement of Law or any change in any existing
Requirement of Law or in the interpretation thereof by any Governmental
Authority charged with the administration thereof, in any case adopted, issued
or effective after the date hereof, (i) shall make it unlawful for any Lender to
fund any portion of the Eurodollar Loans or to give effect to its obligations as
contemplated hereby with respect to its making or maintaining its pro rata share
of the Eurodollar Loans, or (ii) shall make it unlawful for any Lender to fund
any portion of the Alternate Rate Loans or to give effect to its obligations as
contemplated hereby with respect to its Commitment or making or maintaining its
pro rata share of the Alternate Rate Loans, such Lender shall, upon the
happening of such event, notify Agent, Administrative Agent, the other Lenders
and Borrower thereof in writing stating the reason therefor and the effective
date of such event, and (x) upon the effectiveness of any such event referred to
in clause (i) above, the obligation of such Lender to make or maintain its pro
rata share of the Eurodollar Loans to Borrower shall forthwith be suspended for
the duration of such illegality and during such illegality such Lender shall,
upon payment of any amounts owing under Section 2.15 with respect to such
conversion, convert its share of the Eurodollar
41
Loans to Alternate Rate Loans or (upon effectiveness of any such event referred
to in clause (ii) and during the continuance of such event) Base Rate Loans in
the case of Loans denominated in U.S. Dollars or Alternate GBP Rate Loans in the
case of Loans denominated in GBP, and (y) upon the effectiveness of any such
event referred to in clause (ii), the obligation of such Lender to make or
maintain its pro rata share of the Alternate Rate Loans to Borrower shall
forthwith be suspended for the duration of such illegality and during such
illegality such Lender shall, upon payment of any amounts owing under Section
2.15 with respect to such conversion, convert its share of the Alternate Rate
Loans to Base Rate Loans in the case of Loans denominated in U.S. Dollars or
Alternate GBP Rate Loans in the case of Loans denominated in GBP. If and when
such illegality with respect thereto ceases to exist, such suspension shall
cease and such affected Lender shall similarly notify Agent, Administrative
Agent, the other Lenders and Borrower and the Alternate Rate Loan or Base Rate
Loan or Alternate GBP Rate Loan into which such share of the Eurodollar Loans or
Alternate Rate Loans (as applicable) was converted pursuant to this Section 2.13
shall be reconverted to a Eurodollar Loan or Alternate Rate Loan, respectively,
on the first day of the next succeeding Interest Period.
(b) If Borrower fails to give a valid Notice of
Continuation/Conversion in respect of any portion of a Eurodollar Loan which is
not repaid in accordance with the terms hereof at the end of the relevant
Interest Period in respect thereto, such portion shall be converted
automatically into Base Rate Loans in the case of Loans denominated in U.S.
Dollars or Alternate GBP Rate Loans in the case of Loans denominated in GBP;
provided that if Borrower subsequently gives a valid Notice of
Continuation/Conversion in respect of such Base Rate Loans or Alternate GBP Rate
Loans, such Loans shall be converted into Eurodollar Loans in accordance with
the requirements for a continuation/conversion under Section 2.5.
(c) If any Loan is converted to an Alternate Rate Loan
pursuant to this Section 2.13, Borrower and Lenders, acting through
Administrative Agent, shall enter into negotiations in good faith with a view to
agreeing upon a substitute basis for determining the rate or rates of interest
from time to time applicable to such Loan, which shall be acceptable to each
Lender, and the rate or rates so determined shall constitute the Alternate Rate
for that Loan from the date of such conversion. If, however, Borrower and
Majority Lenders fail to agree to such substitute basis within thirty (30) days
after such conversion, such Loan shall be deemed to have been converted to (i)
in the case of Loans denominated in U.S. Dollars, a Base Rate Loan, and (ii) in
the case of Loans denominated in GBP, an Alternate GBP Rate Loan effective (in
the case of clauses (i) and (ii)) from the date of such conversion.
2.14. Eurodollar Availability. (a) In the event, and on each
occasion, that on the day two Business Days prior to the commencement of any
Interest Period for any Eurodollar Loans, Administrative Agent shall have
determined (which determination shall, in the absence of manifest error, be
conclusive and binding upon Borrower) that U.S. Dollar or GBP (as the case may
be) deposits in the amount of the principal amount of the Eurodollar Loans which
is to have such Interest Period are not generally available in the London
interbank market, or that the rate at which such U.S. Dollar or GBP (as the case
may be) deposits are being offered will not accurately reflect the cost to any
of the Lenders of making or funding such principal amount of such Eurodollar
Loans during such Interest Period, or that reasonable means do not exist for
ascertaining the LIBO Rate, Administrative Agent
42
shall, as soon as practicable thereafter, give written or telephonic notice
(which telephonic notice shall be followed immediately with a notice by
facsimile telecopy) of such determination to Agent, the Lenders and Borrower and
(i) such principal amount of such Eurodollar Loans shall automatically be
converted, as of the last day of the Interest Period during which such
determination is made, to Alternate Rate Loans subject to the last sentence of
this paragraph and (ii) any request by Borrower for such Eurodollar Loans
pursuant to Section 2.3 hereof shall thereupon, and until the circumstances
giving rise to such notice no longer exist (as notified by Administrative Agent
to Borrower and the Lenders), be deemed a request for the making of Alternate
Rate Loans. If at any time Administrative Agent shall have determined (which
determination shall, in the absence of manifest error, be conclusive and binding
upon Borrower) that any contingency has occurred which adversely affects the
London interbank market or that any Requirement of Law or any change in any
existing Requirement of Law or in the interpretation thereof or other
circumstance affecting the Lenders or the London interbank market makes the
funding of the Eurodollar Loans impracticable, Administrative Agent shall, as
soon as practicable thereafter, give written or telephonic notice (which
telephonic notice shall be followed immediately with a notice by facsimile
telecopy) of such determination to Agent, the Lenders and Borrower and (i) the
Eurodollar Loans shall automatically be converted, as of the last day of each
Interest Period during which such determination is made and in each case in
respect of the principal amount of the Eurodollar Loans having an Interest
Period ending on such date, to Alternate Rate Loans, subject to the last
sentence of this paragraph, and (ii) any request by Borrower for the Eurodollar
Loans pursuant to Section 2.3 hereof shall thereupon, and until the
circumstances giving rise to such notice no longer exist (as notified by
Administrative Agent to Borrower, Agent and the Lenders), be deemed a request
for the making of Alternate Rate Loans. If, in the circumstances specified in
this paragraph or in Section 2.13, Administrative Agent determines that no
reasonable alternate source of funding for the Eurodollar Loans, or no
reasonable basis for determining the Alternate Rate, is available or
practicable, Administrative Agent shall promptly so notify the other Lenders,
Agent and Borrower thereof and any notice of borrowing under Section 2.3 shall
be deemed rescinded and each principal amount of the Eurodollar Loans, if
outstanding, having an Interest Period then current, together with all interest
thereon, shall be due and payable by Borrower on the last day of the Interest
Period then applicable to it.
(c) If any Loan is converted to an Alternate Rate Loan
pursuant to this Section 2.14, Borrower and Lenders, acting through
Administrative Agent, shall enter into negotiations in good faith with a view to
agreeing upon a substitute basis for determining the rate or rates of interest
from time to time applicable to such Loan, which shall be acceptable to each
Lender, and the rate or rates so determined shall constitute the Alternate Rate
for that Loan from the date of such conversion. If, however, Borrower and
Majority Lenders fail to agree to such substitute basis within thirty (30) days
after such conversion, such Loan shall be deemed to have been converted to (i)
in the case of Loans denominated in U.S. Dollars, a Base Rate Loan, and (ii) in
the case of Loans denominated in GBP, an Alternate GBP Rate Loan, effective (in
the case of clauses (i) and (ii)) from the date of such conversion.
2.15. Indemnities. Borrower shall indemnify each Lender on
demand for, from and against any actual loss (including, without limitation, any
loss of anticipated profits) or expense (including but not limited to any loss
or expense sustained or incurred in liquidating or employing or redeploying
deposits from third parties acquired to effect or
43
maintain any Loan or any portion thereof) which such Lender or its branch or
Affiliate may sustain or incur as a consequence of (i) any default in payment or
prepayment of the principal amount of any Loan or any portion thereof or
interest accrued thereon, as and when due and payable (at the due date thereof,
by irrevocable notice of payment or prepayment, or otherwise), (ii) the effect
of the occurrence of any Event of Default upon any Loan, (iii) the payment or
prepayment of any principal amount of any Loan or the conversion of any portion
of any Eurodollar Loan to Alternate Rate Loans or Base Rate Loans on any day
other than the last day of an Interest Period or the payment of any interest on
such Loan, or portion thereof, on a day other than an Interest Payment Date for
the Loan or (iv) any failure of Borrower to accept or make a borrowing of the
Loans or continue or convert a Loan after delivery of a notice requesting a Loan
under Section 2.3 or, as the case may be, a notice requesting a continuation or
conversion under Section 2.5 or any failure by Borrower to satisfy any of the
conditions precedent to the making of Loans hereunder after it has requested the
borrowing thereof (other than any such conditions that are waived in accordance
with the provisions hereof). The determination of each Lender of any amount
payable under this Section 2.15 shall, in the absence of manifest error, be
conclusive and binding upon Borrower.
2.16 Eligible Mortgages and Eligible Properties No Mortgage
Interest shall be an Eligible Mortgage and no Property shall be an Eligible
Property unless, on any relevant date, there has been no MAC in respect of such
(i) Property (or any Operator or Credit Support Obligor for the Lease thereof),
or (ii) Mortgaged Property (or any Mortgagor or Credit Support Obligor for the
Mortgage Interest Agreements in respect thereof), in each case since December
31, 1995 or, if later, the date on which Borrower or any of its Subsidiaries
acquired an interest in such Property or Mortgaged Property other than, in each
case, a MAC which has ceased to be in effect; provided that for the purposes of
this Section 2.16, failure to comply with clause (ii) of Section 5.5(a) in
connection with an Eligible Property or an Eligible Mortgage shall be deemed to
constitute a MAC in respect of such Eligible Property or Eligible Mortgage.
SECTION 3. REPRESENTATIONS AND WARRANTIES
In order to induce the Lenders to enter into this Agreement
and to make the Loans herein provided for, Borrower hereby covenants, represents
and warrants to Agent, Administrative Agent and each Lender that:
3.1. Financial Condition. The balance sheet of Borrower and
its Subsidiaries (if any) as at December 31, 1991, December 31, 1992, December
31, 1993, December 31, 1994 and December 31, 1995 and the related consolidated
statements of income, stockholders' equity and cash flows for the fiscal years
ended on such dates, certified by Ernst & Young, copies of which have heretofore
been furnished to Agent, are complete and correct and present fairly the
financial condition of Borrower and its Subsidiaries (if any) on a consolidated
basis as at such dates, and stockholders' equity and cash flows for the fiscal
years then ended. All such financial statements, including the related schedules
and notes thereto, have been prepared in accordance with GAAP applied
consistently throughout the periods involved (except as approved by such
accountants or Responsible Officer, as the case may be, and as disclosed
therein). Borrower and its Subsidiaries have no material Contingent
44
Obligation, contingent liabilities or liability for taxes, long-term lease or
unusual forward or long-term commitment, which is not reflected in the foregoing
statements or in the notes thereto.
3.2. No Material Adverse Effect. Since December 31, 1995 (a)
there has been no Material Adverse Effect, and no event has occurred and no
condition exists which could reasonably be expected to have a Material Adverse
Effect and (b) no dividends or other distributions have been declared the
payment of which could result in a Default or Event of Default nor have any
Common Shares, Preferred Shares or other equity securities of Borrower been
redeemed, retired, purchased or otherwise acquired for value by Borrower or any
of its Subsidiaries.
3.3. Existence; Compliance with Law. Borrower and each of its
Subsidiaries (a) is, in the case of Borrower, a real estate investment trust
duly organized, validly existing and in good standing under the laws of the
State of Maryland and, in the case of each such Subsidiary, a corporation duly
organized, validly and existing and in good standing under the laws of its
respective jurisdiction of incorporation, (b) has full power and authority and
the legal right to own its property, to lease (as lessee) the property that it
leases as lessee, to lease (as lessor) or sublease the property it owns and/or
leases (as lessee) and to conduct the business in which it is currently engaged,
(c) is duly qualified or licensed and is in good standing under the laws of each
jurisdiction where its ownership or lease of property or the conduct of its
business require such qualification, and (d) is in compliance with all
Requirements of Law except to the extent that the failure to comply therewith is
not reasonably likely to have, in the aggregate, a Material Adverse Effect.
3.4. Operator, Advisor, Credit Support Obligors; Compliance
with Law.
(a) To the best knowledge of Borrower, each Operator and
Mortgagor (i) has full power and authority and the legal right to own, lease (or
sublease) and operate (as applicable) the properties it operates and to conduct
the business in which it is currently engaged with respect to any Facility, (ii)
is duly qualified or licensed and is in good standing under the laws of each
jurisdiction where its ownership, lease (or sublease) or operation of any
Facility requires such qualification, and (iii) is in compliance with all
Requirements of Law applicable to the Facilities operated by it, or applicable
to the operation thereof except to the extent that the failure to comply
therewith is not reasonably likely to have, in the aggregate, a Material Adverse
Effect.
(b) To the best knowledge of Borrower, the Advisor (i) has
full power and authority and legal right to conduct the business in which it is
presently engaged and to perform its obligations under the Advisory Agreement,
(ii) is duly qualified or licensed and is in good standing under the laws of
each jurisdiction where the conduct of its business requires such qualification,
and (iii) is in compliance with all Requirements of Law except to the extent
that the failure to comply therewith is not reasonably likely to have, in the
aggregate, a Material Adverse Effect.
(c) To the best knowledge of Borrower, the Credit Support
Obligors (i) have full power and authority and legal right to conduct the
business in which they are presently engaged and to perform their obligations
under the Credit Support Agreements to which they
45
are parties, and (ii) are in compliance with all Requirements of Law, except, in
the case of clauses (i) and (ii), to the extent that the failure to comply
therewith is not reasonably likely to have, in the aggregate, a Material Adverse
Effect.
3.5. Power; Authorization; Enforceable Obligations. Borrower
and each of its Subsidiaries has the power and authority and the legal right to
make, deliver and perform each of the Loan Documents to which it is a party and,
in the case of Borrower, to borrow hereunder; and Borrower has taken all
necessary action to authorize the borrowings hereunder, on the terms and
conditions of the Loan Documents, and Borrower and each of its Subsidiaries has
taken all necessary action to authorize the execution, delivery and performance
of each of the Loan Documents to which it is a party. No consent or
authorization of, filing with, or other act by or in respect of any Governmental
Authority is required in connection with the borrowings hereunder or with the
execution, delivery, performance, validity or enforceability of the Loan
Documents. This Agreement has been, and each other Loan Document will be, duly
executed and delivered on behalf of Borrower and each of its Subsidiaries which
is a party thereto and this Agreement constitutes, and each other Loan Document
when executed and delivered will constitute, a legal, valid and binding
obligation of Borrower and each of its Subsidiaries which is a party thereto
enforceable against Borrower and each of its Subsidiaries which is a party
thereto in accordance with its terms, except as enforceability may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium or similar laws
affecting the enforcement of creditors' rights generally.
3.6. No Legal Bar. The execution, delivery and performance of
this Agreement and the other Loan Documents, the borrowings hereunder and the
use of the proceeds thereof, will not violate any Requirement of Law or any
Contractual Obligation of Borrower or any of its Subsidiaries, and will not
result in, or require, the creation or imposition of any Lien on any of their
respective properties or revenues pursuant to any Requirement of Law or
Contractual Obligation.
3.7. No Material Litigation. No litigation, investigation or
proceeding of or before any arbitrator or Governmental Authority is pending or,
to the best knowledge and belief of Borrower, threatened by or against Borrower
or any of its Subsidiaries or against any of their respective properties or
revenues or, to the best knowledge and belief of Borrower, by or against any of
the Operators and Mortgagors or against any of their respective properties (a)
with respect to this Agreement or the other Loan Documents, the Leases, the
Mortgage Interest Agreements, or any of the transactions contemplated hereby or
thereby, or (b) relating to the Properties, the Mortgaged Properties or the
ownership or the operation thereof or the conduct of business thereon as
presently conducted, which, in the case of (a) or (b), is reasonably likely to
have, in the aggregate, a Material Adverse Effect.
3.8. No Default. Neither Borrower nor any of its Subsidiaries
is in default under or with respect to any Contractual Obligation in any respect
which could have a Material Adverse Effect. No Default or Event of Default has
occurred and is continuing.
46
3.9. Ownership of Mortgage Interests and Property; Liens.
(a) In the case of a Mortgage Interest, Borrower or one of its
Subsidiaries has good record, marketable and indefeasible title to such Mortgage
Interest. In the case of a Property which is a Fee Interest, Borrower or one of
its Subsidiaries has good record, marketable and indefeasible fee simple
absolute title to such Fee Interest. In the case of a Property which is a
Leasehold Interest, Borrower or one of its Subsidiaries has good record and
marketable title to such Leasehold Interest. In the case of a Mortgage Interest
in respect of which all or any part of the Mortgaged Property is a fee interest
in land and/or buildings, structures, improvements and fixtures, the Mortgagor
with respect to such Mortgaged Property has good record, marketable and
indefeasible fee simple absolute title to such Mortgaged Property. In the case
of a Mortgage Interest in respect of which all or any part of the Mortgaged
Property is a leasehold estate, the Mortgagor with respect to such Mortgaged
Property has good record and marketable title to such leasehold estate. In each
of the cases described in this Section 3.9, such title shall be free and clear
of all Liens and other matters affecting title except for such other matters not
reasonably likely to have, in the aggregate, a Material Adverse Effect.
(b) The buildings, structures, and other improvements located
on each Facility are in good operating condition and repair (ordinary wear and
tear which are not such as to materially and adversely affect the operations of
the business conducted thereon, excepted), free of any material structural or
engineering defects known to Borrower or any of its Subsidiaries on the date
hereof and are suitable for their present uses, subject to such exceptions which
are not reasonably likely to have, in the aggregate, a Material Adverse Effect.
(c) All water, sewer, gas, electricity, telephone and other
utilities serving each Facility are supplied directly to such Facility by public
utilities and enter such Facility through adjoining public streets or, if they
pass through adjoining private land, do so in accordance with valid public
easements which inure to the benefit of Borrower or one of its Subsidiaries (in
the case of a Facility in which Borrower or such Subsidiary has a Fee Interest)
or a mortgagor's or beneficiary's benefit (in the case of a Facility in which
Borrower or such Subsidiary is a mortgagor or beneficiary, as applicable, of a
loan secured in whole or in part by a Lien on a Facility), subject to such
exceptions which are not reasonably likely to have, in the aggregate, a Material
Adverse Effect. All of such utilities are presently installed and operating and
are in good and safe condition, subject to such exceptions which are not
reasonably likely to have, in the aggregate, a Material Adverse Effect. All
material assessments for public improvements that have been made against the
Facilities have been paid or provided for, except that in the case of any
assessments that are payable in installments, all installments due as of the
date hereof have been paid or provided for, subject to such exceptions which are
not reasonably likely to have, in the aggregate, a Material Adverse Effect.
(d) None of Borrower or any of its Subsidiaries or to the best
knowledge and belief of Borrower, the Operators and Mortgagors, has received
notice of any pending, threatened or contemplated condemnation proceeding or
similar taking affecting the Facilities, or any portion thereof, or any sale or
other disposition of the Facilities or any portion thereof in lieu of
condemnation or similar taking, in each case, subject to such
47
exceptions which are not reasonably likely to have, in the aggregate, a Material
Adverse Effect.
(e) All Real Property Permits from all Governmental
Authorities having jurisdiction over the Facilities or any portion thereof, the
absence of which could materially impair the use of any Facility for the
purposes for which it is currently used, and from all insurance companies and
fire rating and similar boards and organizations required to have been issued to
Borrower or any of its Subsidiaries or any Operators and Mortgagors of such
Facility, as the case may be, to enable such Facility or any portion thereof to
be lawfully occupied and used as currently so occupied or used have been issued
and are in full force and effect, subject to such exceptions which are not
reasonably likely to have, in the aggregate, a Material Adverse Effect. Neither
Borrower nor any of its Subsidiaries has received or been informed by a third
party, including the Operators and Mortgagors of the Facilities, of the receipt
by it of any notice from any Governmental Authority having jurisdiction over the
Facilities or any portion thereof or from any insurance company or fire rating
or similar board or organization threatening a suspension, revocation,
modification or cancellation of any Real Property Permit, subject to such
exceptions which are not reasonably likely to have, in the aggregate, a Material
Adverse Effect.
(f) Each of the Leases, Mortgage Interest Agreements and
Credit Support Agreements relating to Properties and Mortgage Interests
(including Properties which are not Eligible Properties and Mortgage Interests
which are not Eligible Mortgages) is in full force and effect and is a legally
valid and binding obligation of Borrower or its Subsidiaries and the other
parties thereto, subject to such exceptions which are not reasonably likely to
have, in the aggregate, a Material Adverse Effect. Neither Borrower nor any of
its Subsidiaries has mortgaged, pledged or otherwise encumbered any of the
Leases or Mortgage Interest Agreements or its right to obtain rental, interest
or other payments thereunder except for the Liens permitted by Section 6.9.
Neither Borrower nor any of its Subsidiaries has collected any rents becoming
due under any Lease more than 30 days in advance (except (i) an amount equal to
one month's instalment of rent under a Lease or (ii) in the case of a lease
acquired from Host Marriott Corporation and its Affiliates pursuant to the
transaction (or one on substantially similar terms) described in the Form S-3
Registration Statement of Borrower filed with the Commission on March 29, 1994,
an amount equal to no more than three months' instalment of rent under such
lease). All rent and other sums and charges payable by any Operator under each
Lease to which it is a party are current, no notice of default or termination
under any such Lease is outstanding, no termination event or condition or
uncured default on the part of an Operator exists under any Lease, and no event
of default has occurred which, with the giving of notice or the lapse of time or
both, would constitute such a default or termination event or condition or
uncured default on the part of Borrower or its Subsidiaries or the Operators (as
the case may be), subject to such exceptions which are not reasonably likely to
have, in the aggregate, a Material Adverse Effect. Except as set forth on
Schedule 6, all payments required from any Mortgagor under any Mortgage Interest
Agreement to which it is a party are current, no notice of default or
acceleration under any such Mortgage Interest Agreement is outstanding, no
default or condition or uncured default on the part of the Mortgagor exists
under any Mortgage Interest Agreement, and no event of default has occurred
which, with the giving of notice or the lapse of time or both, would constitute
such a default or termination event or condition or uncured default on the part
of the Mortgagor, subject to such exceptions which are not reasonably likely to
have, in the
48
aggregate, a Material Adverse Effect. All payments required from any Credit
Support Obligor in respect of any Credit Support Agreement for the Lease of a
Property or for a Mortgage Interest are current, no notice of default or
acceleration under any such Credit Support Agreement is outstanding, and no
default or condition or uncured default on the part of such Credit Support
Obligor exists under any such Credit Support Agreement, subject to such
exceptions which are not reasonably likely to have, in the aggregate, a Material
Adverse Effect. As to all of the Leases, Borrower and each of its Subsidiaries
has performed all of its repair and maintenance obligations (if any) and, to the
best knowledge and belief of Borrower, each Operator and Mortgagor under each
Lease and Mortgage to which it is a party has performed all of its repair and
maintenance obligations, subject to such exceptions which are not reasonably
likely to have, in the aggregate, a Material Adverse Effect.
(g) Borrower and each of its Subsidiaries has good record and
marketable title in fee simple to or valid mortgage interests in all its real
property, other than the Properties and Mortgaged Properties, as to which
Borrower has made the representation set forth in subsection (a) of this Section
3.9, and good title to all its other property other than the Properties, and
none of such property is subject to any Lien for borrowed money as of the date
hereof, except for Liens permitted by Section 6.9.
3.10. No Burdensome Restrictions. No Contractual Obligation of
Borrower or any of its Subsidiaries or, to Borrower's best knowledge and belief,
of any of the Operators and Mortgagors and no Requirement of Law currently has a
Material Adverse Effect, or insofar as Borrower may reasonably foresee may have
a Material Adverse Effect.
3.11. Taxes. Borrower and each of its Subsidiaries has filed
or caused to be filed all tax returns which to the best knowledge and belief of
Borrower are required to be filed, and has paid or caused to be paid all taxes
shown to be due and payable on said returns or on any assessments made against
it or any of its property and all other taxes, fees or other charges imposed on
it or any of its property by any Governmental Authority (other than those the
amount or validity of which is currently being contested in good faith by
appropriate proceedings and with respect to which reserves in conformity with
GAAP have been provided on the books of Borrower or such Subsidiary); and no tax
Liens have been filed and, to the knowledge of Borrower, no claims are being
asserted with respect to any such taxes, fees or other charges.
3.12. Federal Regulations. Neither Borrower nor any of its
Subsidiaries is engaged and nor will it engage, principally or as one of its
important activities, in the business of extending credit for the purpose of
"purchasing" or "carrying" any "margin stock" within the respective meanings of
each of the quoted terms under Regulation U of the Board of Governors of the
Federal Reserve System as now and from time to time hereafter in effect. No part
of the proceeds of the Loans hereunder will be used for "purchasing" or
"carrying" "margin stock" as so defined or for any purpose which violates, or
which would be inconsistent with, the provisions of the Regulations of such
Board of Governors. If requested by Agent, Borrower will furnish to Agent and
each Lender a statement in conformity with the requirements of Federal Reserve
Form U-1 referred to in said Regulation U to the foregoing effect.
3.13. Employees. Neither Borrower nor any of its Subsidiaries
has any
49
employees and none of them has ever engaged any employees.
3.14. ERISA. No ERISA Affiliate has been, since July 1, 1974,
an "employer", as defined in Section 3(5) of ERISA, in respect of any Plan or
making contributions to any Multiemployer Plan.
3.15. Status as REIT. Borrower is organized in conformity with
the requirements for qualification as a real estate investment trust under the
Code. Borrower's failure to elect to be treated as a real estate investment
trust under the Code for its fiscal year ended December 31, 1986 has not had and
will not have any Material Adverse Effect. Borrower has met all of the
requirements for qualification as a real estate investment trust under the Code
for its fiscal years ended December 31, 1991, 1992, 1993, 1994 and 1995.
Borrower is in a position to qualify for its current fiscal year as a real
estate investment trust under the Code and its proposed methods of operation
will enable it to so qualify.
3.16. Restrictions on Incurring Indebtedness. Neither Borrower
nor any of its Subsidiaries is (a) an "investment company" or a company
"controlled" by an "investment company," within the meaning of the Investment
Company Act of 1940, as amended, or (b) a "holding company" as defined in, or
otherwise subject to, regulation under the Public Utility Holding Company Act of
1935. Neither Borrower nor any of its Subsidiaries is subject to regulation
under any federal or state statute or regulation which limits its ability to
incur the indebtedness or give the guaranties described in this Agreement.
3.17. Subsidiaries. Set forth on Schedule 4 annexed hereto is
a complete and accurate list of all of Borrower's Subsidiaries showing as of the
date hereof (as to each Subsidiary) the jurisdiction of its incorporation, the
number of shares of each class of capital stock authorized, and the number
outstanding, and the percentage of each class of capital stock owned by
Borrower, all of which capital stock is owned free and clear of all Liens; all
of the issued and outstanding shares of capital stock of such Subsidiaries have
been duly authorized and validly issued and are fully paid and non-assessable.
3.18. Compliance with Environmental Laws. Borrower and each of
its Subsidiaries and, to the best knowledge of Borrower, each Operator and each
Mortgagor of the Facilities is in compliance with all applicable statutes, laws,
rules, regulations and orders of all Governmental Authorities relating to
environmental protection, pollution control and Hazardous Materials and with
respect to the conduct of its business and the ownership of its properties,
except for such noncompliance which would not result in imposition of Liens,
fines, penalties, injunctive relief or other civil or criminal liabilities and
which, in the aggregate, could not have a Material Adverse Effect.
3.19. Pollution; Hazardous Materials. In connection with the
acquisition and ownership of its interests in the Properties and Mortgage
Interests, Borrower and each of its Subsidiaries has made and will continue to
make such inquiries, and has and will continue to cause such testing, surveying,
inspection or other action, with respect to each Facility as is necessary or
desirable in connection with Hazardous Materials which might be present in the
air, soil, surface water or groundwater at such Facility. Except for such
exceptions which are not reasonably likely to have, in the aggregate, a Material
Adverse Effect, there are not, and,
50
to the knowledge of Borrower after diligent inquiry, were not previously, any
Hazardous Materials present in the air, soil, surface water or groundwater at
any Facility and no Hazardous Materials (except Hazardous Materials maintained
in accordance with all Requirements of Law and necessary for the business
operations of any such Facility as a health care facility, including, without
limitation, petroleum used for heating oil and certain medications) are used in
the operation of any Facility. Borrower is not aware of any claim or notice of
violation, alleged violation, noncompliance, liability or potential liability
relating to any Facility nor any judicial proceedings or governmental or
administrative actions pending or, to the knowledge of Borrower, threatened, to
which Borrower or any of its Subsidiaries would be named a party in connection
with any Facility which, if adversely determined, would be reasonably likely to
result in a Material Adverse Effect.
3.20. Securities Laws. None of the Common Shares, Preferred
Shares or other equity securities of Borrower has been issued in violation of
the Securities Act of 1933, as amended, or the securities or "blue sky" or other
applicable laws or regulations of any applicable jurisdiction.
3.21. Declaration of Trust, By-Laws, Advisory Contract, etc.
The copies of the Declaration of Trust and by-laws of Borrower and the Advisory
Agreement which have been furnished to Agent are true, correct and complete
copies thereof as in effect on the date of this Agreement.
3.22. Disclosures. The financial statements referred to in
Section 3.1 do not, nor does this Agreement, the other Loan Documents, or any
other written statement furnished by or on behalf of Borrower to any Lender in
connection with the transactions contemplated hereby or thereby, contain any
untrue statement of a material fact or omit a material fact necessary to make
the statement contained therein or herein not misleading.
3.23. Medicare and Medicaid Certification. Subject to such
exceptions which, in the aggregate, are not reasonably likely to have a Material
Adverse Effect, to the best knowledge of Borrower after reasonable
investigation, each Operator with respect to each of the Properties that it
operates, and each Mortgagor with respect to each of the Mortgaged Properties
that it owns, (a) is validly licensed under applicable law to operate such
Property or Mortgaged Property and to conduct the business in which it is
currently engaged, (b) has received any applicable certificate of need,
determination of need or similar approval, and any amendments or supplements,
and such approvals are in full force and effect, (c) (except in the case of
non-healthcare Properties and Mortgaged Properties, United Kingdom located
Properties or Mortgaged Properties or otherwise where participation in Medicare
or Medicaid is deemed undesirable in the reasonable business judgment of the
Operator or Mortgagor) is validly certified or approved for participation in
Medicare and Medicaid by the applicable federal and state authorities and is a
party to provider agreements with respect to its participation in Medicare and
Medicaid, which provider agreements are in full force and effect, in each case
only to the extent that such Property or Mortgaged Property is of a character
eligible for participation in Medicare or Medicaid, and (d) no proceedings have
been initiated or notices issued to suspend or revoke any such license,
approval, certification or provider agreement, except for notices of deficiency
which are issued and corrected in the ordinary course of business.
51
3.24. Offering, Etc., of Securities. Neither Borrower nor any
agent with the authority of Borrower has offered any securities similar to the
Notes, nor solicited any offer to buy any such securities, in a manner which
would render the offering, sale or issuance of the Notes subject to the
registration requirements of the Securities Act of 1933, as amended.
SECTION 4. CONDITIONS PRECEDENT
4.1. Conditions to Effectiveness. This Agreement shall become
effective only upon satisfaction of all of the following conditions precedent:
(a) Note. Agent shall have received for the account of each
Lender a Note conforming to the requirements hereof and executed by a duly
authorized officer of Borrower.
(b) Legal Opinion. Agent shall have received, with a
counterpart for each Lender, a favorable opinion of ▇▇▇▇▇▇▇▇ & Worcester, as
counsel to Borrower and its Subsidiaries and the Advisor, addressed to Agent and
the Lenders and dated the Effective Date, and in form and substance satisfactory
to Agent.
(c) Organizational Documents. Agent shall have received
certified copies of the Declaration of Trust for Borrower and Articles of
Organization or a Certificate of Incorporation for each Subsidiary of Borrower,
by-laws of Borrower and each of its Subsidiaries and all resolutions of the
Board of Trustees of Borrower and the board of directors of each of its
Subsidiaries approving this Agreement and the other Loan Documents to which each
is a party and the transactions contemplated hereby and thereby, and of all
documents evidencing other necessary corporate action and approvals, if any, of
Governmental Authorities with respect to this Agreement and the other Loan
Documents and the transactions contemplated hereby and thereby.
(d) Good Standing and Existence. Agent shall have received
certificates of the appropriate governmental officials of the State of Maryland
and of any other State where Borrower conducts business and the State of
incorporation of each of Borrower's Subsidiaries and of any other State where
such Subsidiary conducts business, each dated a recent date prior to the
Effective Date, to the effect that Borrower or such Subsidiary (as the case may
be) is validly existing and is in good standing with respect to payment of
franchise and similar taxes and is duly qualified to transact business therein.
(e) Advisory Agreement and Subordination Agreement. Agent
shall have received copies of the Advisory Agreement and the Subordination
Agreement each certified by a Responsible Officer.
(f) Debt Rating. Agent shall have received evidence that
Borrower's long-term unsecured senior debt is rated BBB- or higher by Standard &
Poor's Ratings Group or Baa3 or higher by ▇▇▇▇▇'▇ Investors Service.
(g) Existing Loan Agreement
52
(i) Borrower shall have paid all accrued interest,
fees, commissions and other amounts (other than
principal) accrued or owed under the Existing Loan
Agreement, whether or not presently due and payable.
(ii) No Default or Event of Default (both such terms
being used as defined in the Existing Loan Agreement)
shall have occurred and be continuing under the
Existing Loan Agreement.
(h) No Material Adverse Effect. No Material Adverse Effect
specified in clause (a)(i), (b), (c)(i) or (d) of the definition
thereof shall have occurred since December 31, 1995.
(i) Compensation. All obligations of Borrower to pay fees and
provide compensation and reimbursement of costs and expenses to Agent,
Administrative Agent and the Lenders or their designees as of the Effective Date
hereunder or otherwise in connection with the financing contemplated hereby
shall have been satisfied.
(j) Real Property Statement. Agent shall have received a Real
Property Statement dated the Effective Date.
(k) Additional Matters. Agent shall have received such other
approvals, opinions or documents as it may reasonably request and all documents
and legal matters in connection with the transactions contemplated by this
Agreement and the other Loan Documents shall be satisfactory in form and
substance to Agent and its counsel.
4.2. Conditions Precedent to Loans. The obligations of Lenders
to make Loans on each Borrowing Date and to continue any Existing Loans on the
Effective Date (which, for purposes of this Section 4.2 shall be deemed to be a
Borrowing Date) are subject to the following further conditions precedent:
(a) Representations and Warranties. The representations and
warranties made by Borrower herein or made by any Person in the other Loan
Documents or which are contained in any certificate, document or financial or
other statement furnished at any time under or in connection with any of the
Loan Documents, shall be true, correct and accurate in all material respects on
and as of the Borrowing Date for the Loan as if made on and as of such date
unless stated to relate to a specific earlier date, in which case such
representations and warranties shall be true, correct and complete in all
material respects as of such earlier dates.
(b) No Default or Event of Default. No Default or Event of
Default shall have occurred and be continuing on such date either before or
after giving effect to the Loan to be made on the Borrowing Date.
(c) Legality of Loans. The making of the Loans hereunder by
the Lenders and the acquisition of the Notes shall be permitted as of the
Borrowing Date by all applicable Requirements of Law and shall not subject any
Lender to any penalty or other onerous condition in or pursuant to any such
Requirement of Law or result in a Material Adverse
53
Effect.
(d) No Material Adverse Effect. No Material Adverse Effect
specified in clause (a)(i), (b), (c)(i) or (d) of the definition thereof shall
have occurred since December 31, 1994.
(e) Solvency. Both after and immediately before the making of
any Loans on the Borrowing Date, Borrower and each of its Subsidiaries shall be
Solvent.
(f) Borrowing Certificate. Administrative Agent shall have
received, with a counterpart for each Lender, a Notice of Borrowing, dated the
Borrowing Date, substantially in the form of Exhibit B, with appropriate
insertions and attachments satisfactory in form and substance to Agent and its
counsel, executed by a Responsible Officer; provided that while no Notice of
Borrowing shall be required with respect to any Existing Loans continued on the
Effective Date, on the Effective Date Agent shall have received a certificate of
a Responsible Officer certifying as to the matters set forth in clauses
(vi)-(viii) of the Notice of Borrowing with respect to such Existing Loans.
(g) Borrowing Limits. After the making of the Loans on any
Borrowing Date, the aggregate principal amount of all Loans outstanding shall
not exceed the Commitments, the aggregate principal amount of all General
Corporate Loans outstanding shall not exceed 25% of the Commitments and the
aggregate principal amount of all Loans outstanding denominated in GBP shall not
exceed the Equivalent Amount of $100,000,000 (as determined in accordance with
Section 1.3(b)) and Agent and Administrative Agent shall have received a
certificate dated as of a date not more than five (5) Business Days prior to the
relevant Borrowing Date to such effect.
(h) Real Property Statement. Administrative Agent shall have
received a Real Property Statement dated, or dated as of, the Borrowing Date.
SECTION 5. AFFIRMATIVE COVENANTS.
Borrower hereby agrees that, so long as the Commitments remain
in effect, any Note remains Outstanding and unpaid or any other amount is owing
to any Lender, Agent or Administrative Agent hereunder or under any other Loan
Document, Borrower shall (and shall cause each of its Subsidiaries to):
5.1. Financial Statements. Furnish to Administrative Agent,
with sufficient copies for each Lender:
(a) as soon as available, but in any event within ninety days
after the end of each fiscal year of Borrower and within one hundred thirty-five
days after the end of each fiscal year of each Primary Operator/Mortgagor and
Primary Credit Support Obligor, a copy of each of the following (except for any
thereof to the extent none of the related Leases, Mortgage Interest Agreements
or Credit Support Agreements requires the provision of any of the following to
Borrower or one of its Subsidiaries within such period, in respect of which
Borrower's obligation to furnish copies to each Lender shall be satisfied by
furnishing copies
54
as soon as practicable after Borrower or such Subsidiary receives one or more
copies thereof): the audited balance sheet prepared on a consolidated basis
(and, if ever prepared on a consolidating basis, on a consolidating basis) for
Borrower and its Subsidiaries and on a consolidated basis for each Primary
Operator/Mortgagor and Primary Credit Support Obligor, each as at the end of
such year and the related statements or income, stockholders' equity and cash
flows for such year (on a consolidated basis (and, if ever prepared on a
consolidating basis, on a consolidating basis) for Borrower and its Subsidiaries
and on a consolidated basis for each Primary Operator/Mortgagor and Primary
Credit Support Obligor), setting forth in each case in comparative form the
figures for the previous year, certified without a "going concern" or like
qualification or exception, or qualification arising out of the scope of the
audit, by independent certified public accountants of nationally recognized
standing; and
(b) as soon as available, but in any event not later than
forty-five days after the end of each of the first three quarterly periods of
each fiscal year of Borrower and not later than seventy-five days after the end
of each of the first three quarterly periods of each fiscal year of each Primary
Operator/ Mortgagor and Primary Credit Support Obligor, copies of each of the
following (except for any thereof to the extent none of the related Leases,
Mortgage Interest Agreements or Credit Support Agreements requires the provision
of any of the following to Borrower or one of its Subsidiaries within such
period, in respect of which Borrower's obligation to furnish copies to each
Lender shall be satisfied by furnishing copies as soon as practicable after
Borrower or such Subsidiary receives one or more copies thereof): the unaudited
balance sheet prepared on a consolidated basis (and, if ever prepared on a
consolidating basis, on a consolidating basis) for Borrower and its Subsidiaries
and on a consolidated basis for each Primary Operator/Mortgagor and Primary
Credit Support Obligor, each as at the end of each such quarter and the related
unaudited statements of income, stockholders' equity and cash flows for such
quarterly period and the portion of the fiscal year through such date (on a
consolidated basis (and, if ever prepared on a consolidating basis, on a
consolidating basis) for Borrower and its Subsidiaries and on a consolidated
basis for each Primary Operator/Mortgagor and Primary Credit Support Obligor),
setting forth in each case in comparative form the figures for the previous
year, certified by a responsible officer of such entity as being fairly stated
and complete and correct in all material respects (subject to normal year-end
audit adjustments); all such financial statements referred to in clauses (a) and
(b) above to be complete and correct in all material respects and be prepared in
reasonable detail and in accordance with GAAP applied consistently throughout
the periods reflected therein (except as approved by such accountants or
officer, as the case may be, and disclosed therein).
5.2. Certificates; Other Information. Furnish to
Administrative Agent, with sufficient copies for each Lender:
(a) concurrently with the delivery of the financial statements
of Borrower and its Subsidiaries referred to in Section 5.1(a) above, a
certificate of Borrower's independent certified public accountants certifying
such financial statements of Borrower and its Subsidiaries stating that in
making the examination necessary therefor, no knowledge was obtained of any
Default or Event of Default, except as specified in such certificate;
(b) concurrently with the delivery of the financial statements
of Borrower and
55
its Subsidiaries referred to in Sections 5.1(a) and (b) above, (i) a certificate
of a Responsible Officer (A) stating that, to the best of such officer's
knowledge, Borrower and each of its Subsidiaries during such period has observed
or performed all of its covenants and other agreements, and satisfied every
condition, contained in the Loan Documents to be observed, performed or
satisfied by it, and that such officer has obtained no knowledge of any Default
or Event of Default except as specified in such certificate, and (B) showing in
detail the calculations supporting such statement in respect of Sections 6.1(a),
6.1(b) and 6.1(c) and 6.8 (including, without limitation, certification and
details as to all Indebtedness of Borrower and its Subsidiaries, if any), (ii) a
Real Property Statement and (iii) with respect to each Property or Mortgaged
Property for which Marriott International, Inc. is the Operator or Mortgagor, a
certificate of a senior officer of Marriott International, Inc. as to the Cash
Flow and Fixed Charges of Marriott International, Inc. attributable to that
Property or Mortgaged Property for the last reported financial year of Marriott
International, Inc.;
(c) within forty-five days after the end of each calendar
quarter following the Effective Date, a written report signed by a Responsible
Officer describing in reasonable detail any acquisitions or dispositions of any
Fee Interests or Mortgage Interests by Borrower and its Subsidiaries or any
other material property of Borrower and its Subsidiaries which shall include,
without limitation (i) in the case of acquisitions of property, a description of
(A) the geographic area and type of property, (B) the current and anticipated
cash flow from the property, (C) the operators of such property and (D)
financing of the acquisition, (ii) with respect to dispositions of property, a
description of (A) the amount and use of proceeds from such disposition and (B)
the reasons for the disposition, and (iii) a copy of any appraisals of the
property acquired or disposed of;
(d) within 30 days prior to the first day of each fiscal year
of Borrower, a copy of the projections by Borrower of the operating budget and
cash flow of Borrower and its Subsidiaries for such fiscal year, such
projections to be accompanied by a certificate of a Responsible Officer to the
effect that such projections have been prepared on the same basis as the
financial statements of Borrower and its Subsidiaries then current and that such
officer has no reason to believe they are incorrect or misleading in any
material respect;
(e) promptly after the same are sent, copies of all financial
statements and reports which Borrower sends to its holders of Common Shares,
Preferred Shares or other equity securities, and promptly after the same are
filed by Borrower copies of all financial statements and reports which Borrower
or any of its Subsidiaries may make to, or file with, the Commission or any
successor or analogous Governmental Authority; and
(f) promptly, such additional financial and other information
respecting the financial or other condition of the Primary Operators/Mortgagors,
the Primary Credit Support Obligors, the Advisor or Borrower or any of its
Subsidiaries or the status or condition of the Facilities or the operation
thereof which Borrower is entitled to or can otherwise reasonably obtain as
Agent may from time to time reasonably request.
5.3. Payment of Obligations. Pay, discharge or otherwise
satisfy at or before maturity or before they become delinquent, as the case may
be, all its Indebtedness and other obligations of whatever nature, except, in
the case of Indebtedness other than that described in Section 7.1(e), when the
amount or validity thereof is currently being contested
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in good faith by appropriate proceedings, and reserves in conformity with GAAP
with respect thereto have been provided on the books of Borrower and its
Subsidiaries.
5.4. Conduct of Business and Maintenance of Existence. (a)
Continue to engage in business of the same general type as now conducted by it
(except that Borrower and its Subsidiaries will not own, operate or finance
Psychiatric Care Assets and will not own, operate or finance hotels or other
lodging facilities; provided that nothing in this Section 5.4(a) shall prohibit
Borrower from indirectly owning hotels or other lodging facilities through
Borrower's ownership of shares in Hospitality Properties Trust, but only to the
extent that the same is permitted by Section 6.7 hereof); (b) preserve, renew
and keep in full force and effect its existence and take all reasonable action
to maintain all rights, privileges and franchises necessary or desirable in the
normal conduct of its business; and (c) comply with all Contractual Obligations
and Requirements of Law except to the extent that the failure to comply
therewith could not, in the aggregate, have a Material Adverse Effect.
5.5. Leases and Mortgage Interests; Credit Support Agreements.
(a) (i) Maintain the Leases, Mortgage Interests and Credit Support Agreements in
full force and effect and enforce the obligations of the Operators under the
Leases, the Mortgagors under the Mortgage Interests and the Credit Support
Obligors under the Credit Support Agreements in a timely manner and (ii) obtain
the consent of Agent in connection with any materially adverse change in or
waiver of any obligation of any Operator, Mortgagor or Credit Support Obligor
contained in, or any right or remedy of Borrower or any of its Subsidiaries
under, any Lease, Mortgage Interest Agreement or Credit Support Agreement,
including, without limitation, any renewal, amendment, modification or
termination thereof, except to the extent that the failure to comply with this
Section 5.5(a) could not, in the aggregate, have a Material Adverse Effect; and
(b) give notice to Agent of each waiver, renewal, amendment, modification or
termination of the Leases, Mortgage Interests and Credit Support Agreements in
respect of any Eligible Property or Eligible Mortgage, together with a copy of
such waiver, renewal, amendment, modification or termination.
5.6. Maintenance of Property, Insurance. Keep all property
useful and necessary in its business in good working order and condition;
maintain or cause the Operators of its Properties to maintain with financially
sound and reputable insurance companies insurance with respect to its property
and business of such a nature, with such terms and in such amounts, as is
customary in the case of business entities of established reputation engaged in
the same or similar business similarly situated against loss or damage of the
kinds and in the amounts customarily insured against and for by such business
entities, and to cause the Mortgagors of each of its Mortgaged Properties to
maintain comparable insurance. Borrower shall furnish to each Lender, upon
written request, full information as to the insurance carried.
5.7. Inspection of Property; Books and Records; Discussions.
Keep proper books of record and account in which full, true and correct entries
in conformity with GAAP and all Requirements of Law shall be made of all
dealings and transactions in relation to its business and activities; and permit
representatives of Agent and/or Administrative Agent and, after the occurrence
of a Default, any Lender, to visit and inspect any of its properties and examine
and make abstracts from any of its books and records at any reasonable time and
as often as may reasonably be desired, and to discuss the business,
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operations, properties, prospects and financial and other condition of Borrower
and its Subsidiaries with officers and employees of Borrower or such
Subsidiaries and the Advisor and with its independent certified public
accountants.
5.8. Notices. Promptly, and in any event within ten Business
Days after an officer of Borrower obtains knowledge thereof, give notice to
Agent, Administrative Agent and each Lender:
(a) of the occurrence of any Default or Event of Default;
(b) of (i) any default or event of default or termination
under any Lease, Credit Support Agreement, Mortgage Interest Agreement or any
other Contractual Obligation of or in favor of Borrower or any of its
Subsidiaries which could have a Material Adverse Effect and (ii) any litigation,
investigation or proceeding which may exist at any time between Borrower or any
of its Subsidiaries or any Operator, Mortgagor or Credit Support Obligor and any
Governmental Authority or other Person, which if adversely determined could have
a Material Adverse Effect;
(c) of any litigation or proceeding affecting Borrower in
which the amount involved is $1,000,000 or more and is not fully covered by
insurance or in which injunctive or similar relief is sought;
(d) of the following events, as soon as possible and in any
event within 30 days after Borrower knows or has reason to know thereof
(provided that with respect to any Multiemployer Plan in which neither Borrower
nor any ERISA Affiliate is a substantial employer Borrower shall only be deemed
to have knowledge of facts concerning which it has actual knowledge): (i) the
occurrence or expected occurrence of any Reportable Event with respect to any
Plan, or (ii) the institution of proceedings or the taking or expected taking of
any other action by PBGC or Borrower or any ERISA Affiliate to terminate or
withdraw from any Plan, and in addition to such notice, deliver to each Lender
whichever of the following may be applicable: (A) a certificate of the chief
financial officer or treasurer of Borrower setting forth details as to such
Reportable Event and the action that Borrower or ERISA Affiliate proposes to
take with respect thereto, together with a copy of any notice of such Reportable
Event that may be required to be filed with PBGC, or (B) any notice delivered by
PBGC evidencing its intent to institute such proceedings or any notice to PBGC
that such Plan is to be terminated, as the case may be;
(e) of the adoption by Borrower or any ERISA Affiliate of any
Plan or of any Plans maintained by any Person that becomes an ERISA Affiliate
after the date hereof;
(f) of any proposed transaction or event which may give rise
to Net Property Proceeds, Net Mortgage Proceeds or Net Securities Proceeds in
excess of $5,000,000;
(g) of the occurrence or existence of any event or condition
which could reasonably be expected to have, or which has had, a Material Adverse
Effect; and
(h) of the occurrence or existence of any event or condition
which would cause any of the representations and warranties set forth in Section
3.9 to be untrue if
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repeated after the occurrence, or during the existence, of such event or
condition.
Each notice pursuant to this Section shall be accompanied by a statement of a
Responsible Officer setting forth details of the occurrence referred to therein
and stating what action Borrower proposes to take with respect thereto. For all
purposes of clause (d) of this Section, Borrower shall be deemed to have all
knowledge or knowledge of all facts attributable to the administrator of such
Plan.
5.9. Appraisals and Other Valuations. (a) From time to time
during the term of this Agreement, Agent may, in its sole discretion, order an
Appraisal of one or more of the Eligible Properties and/or Mortgaged Properties
covered by Eligible Mortgages. Any such Appraisal shall be at Borrower's cost if
(i) Agent shall have obtained a letter from an expert appraiser or evaluator of
real property, health care or retirement facilities to the effect that, or Agent
shall otherwise in good faith have determined that, facts or circumstances
exist, or changes in market conditions have occurred, as a result of which there
exists a reasonable possibility that Appraisals of the Eligible Properties and
Mortgaged Properties covered by Eligible Mortgages, might result in an aggregate
valuation thereof reflecting a material loss of value as compared to the value
thereof indicated in the certificate of a Responsible Officer delivered to Agent
pursuant to Section 4.1(j) or 4.2(h), or (ii) an Event of Default has occurred.
(b) In addition to the Appraisals referred to in Section
5.9(a), from time to time during the term of this Agreement, if so requested by
Agent, in its sole discretion, Borrower shall furnish to Administrative Agent,
with sufficient copies for each Lender, a certificate of a Responsible Officer
certifying as to the value of one or more of the Eligible Properties and/or
Mortgaged Properties covered by Eligible Mortgages.
5.10. Meetings. Within one hundred days after the end of each
fiscal year of Borrower, one or more Responsible Officers of Borrower shall
attend an annual informational meeting with the Lenders, for the purpose of
answering reasonable questions of any Lender, Agent and/or Administrative Agent
relating to the Facilities and/or the Loan Documents, to be held at Borrower's
cost and at such time and place to be determined by Agent as is reasonably
requested by Agent; provided that each Lender shall bear the costs of
transportation and accommodation for any of its representatives attending such
meeting.
5.11. REIT Requirements. Operate its business at all times so
as to satisfy or be deemed to have satisfied all requirements necessary to
qualify as a real estate investment trust under Section 856 through 860 of the
Code. Borrower will maintain adequate records so as to comply with all
record-keeping requirements relating to the qualification of Borrower as a real
estate investment trust as required by the Code and applicable regulations of
the Department of the Treasury promulgated thereunder and will properly prepare
and timely file with the Internal Revenue Service all returns and reports
required thereby. Borrower will request from its shareholders all shareholder
information required by the Code and applicable regulations of the Department of
Treasury promulgated thereunder.
5.12. Indemnification. Borrower agrees to indemnify, defend
(with counsel selected by Agent) and hold Agent, Administrative Agent, Lenders
and the directors, officers,
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shareholders, employees and agents of each of them harmless for, from and
against any claims (including without limitation third party claims for personal
injury or real or personal property damage), actions, administrative
proceedings, judgments, damages, punitive damages, penalties, fines, costs,
expenses disbursements, liabilities (including sums paid in settlements of
claims), obligations, interest or losses, including attorneys' fees, consultant
fees and expert fees, that arise at any time (including, without limitation, at
any time after the payment of the Notes) directly or indirectly from or in
connection with the presence, suspected presence, release or suspected release
of any Hazardous Material in the air, soil, surface water or groundwater at or
from the real property or any portion thereof with respect to a Facility, or any
other real property in which Borrower or any of its Subsidiaries has any
interest (all of the foregoing real property shall be referred to collectively
as the "Real Property"). Without limiting the generality of the foregoing, the
indemnification provided by this Section shall specifically cover (i) costs,
including capital, operating and maintenance costs, incurred in connection with
any investigation or monitoring of site conditions or any clean-up, remedial,
removal or restoration work required or performed by any federal, state or local
governmental agency or political subdivision or performed by any
non-governmental Person, including any Operator or Mortgagor of a Facility,
because of the presence, suspected presence, release or suspected release of
Hazardous Material in the air, soil, surface water or groundwater at or from the
Real Property; and (ii) costs incurred in connection with (A) Hazardous Material
present or suspected to be present in the air, soil, surface water or
groundwater at the Real Property before the date of this Agreement, or (B)
Hazardous Material that migrates, flows, percolates, diffuses or in any way
moves onto or under or from the Real Property after the date of this Agreement,
or (C) Hazardous Material present at the Real Property as a result of any
release, discharge, disposal, dumping, spilling or leaking (accidental or
otherwise) onto or from the Property before or after the date of this Agreement
by any Person.
5.13. Changes in GAAP. Borrower and the Lenders hereby agree
that in the event of a change in GAAP which would cause the financial covenants
set forth herein to provide less protection to the Lenders than presently
provided for hereunder, such financial covenants shall be reset, in good faith,
by the Majority Lenders to maintain the protection to the Lenders equivalent to
that in place prior to such change and Borrower agrees to execute one or more
amendments to this Agreement to effect such reset.
5.14. Clean-Down Period. If at any date of determination (the
"Trigger Date"), Loans are outstanding in an aggregate principal amount equal to
or greater than 66- 2/3% of the Commitments, Borrower shall prepay the Loans
within 12 months of the Trigger Date in an amount such that the aggregate
principal amount of the Loans outstanding for a period of 30 consecutive days
commencing on such prepayment date shall be equal to or less than $100,000,000.
5.15. Further Assurances; Restrictions on Negative Pledges.
(a) At any time upon the request of Agent, Borrower will,
promptly and at its expense, execute, acknowledge and deliver such further
documents and do such other acts and things as Agent may reasonably request to
provide for payment of the Loans made hereunder and interest thereon in
accordance with the terms of this Agreement.
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(b) If Borrower or any of its Subsidiaries shall agree to any
"negative pledge" or like agreement more restrictive (or otherwise more generous
to its beneficiaries) in its scope than Section 6.9, then, without any further
action being required, the provisions of such agreement relating to the
prohibition on Liens shall be deemed incorporated by reference (with appropriate
modifications as may be necessary) into this Agreement for the benefit of
Lenders.
5.16. Currency Arrangements. (a) Borrower shall at all times
maintain agreements or other arrangements, practices or procedures in form and
substance satisfactory to Agent which will protect Borrower and its Subsidiaries
against fluctuations in foreign currency values against the U.S. Dollar.
(b) Borrower shall only enter into interest rate and currency
exchange or similar or analogous arrangements as are (in Borrower's reasonable
judgment) necessary for the hedging or other protection to exposure of Borrower
and its Subsidiaries, and not those which are of a purely speculative nature.
SECTION 6. NEGATIVE COVENANTS.
Borrower hereby agrees that, so long as the Commitments remain
in effect or any Note remains Outstanding and unpaid or any other amount is
owing to any Lender, Agent or Administrative Agent hereunder or under any other
Loan Document, Borrower shall not (and shall not permit any of its Subsidiaries
to) directly or indirectly:
6.1. Financial Covenants.
(a) Tangible Net Worth. Suffer or permit Tangible Net Worth at
any time to be less than the aggregate of (i) $609,000,000, plus (ii) 75% of the
Net Securities Proceeds of all issues of any Common Shares, Preferred Shares or
other equity securities by Borrower in one or more transactions received after
the date hereof.
(b) Interest Coverage. Suffer or permit the ratio of EBI for
any fiscal quarter to the Interest Charges of Borrower and its Subsidiaries for
such quarter to be less than 3 to 1.
(c) Debt to Net Worth. Suffer or permit the ratio of the Total
Liabilities of Borrower and its Subsidiaries to Tangible Net Worth to be greater
than 1 to 1 at any time.
6.2. Restricted Payments.
(a) Declare, make or pay any Restricted Payment except where
(i) no Default or Event of Default is continuing either before or after giving
effect to such Restricted Payment, (ii) Borrower has sufficient funds or
availability under its credit facilities (including this Agreement) to pay the
next installment of interest payable in respect of the Loans and (iii)
immediately upon declaring, making or paying any such Restricted Payment a
Responsible Officer shall certify to Administrative Agent in writing that
Borrower is in compliance with each condition hereof with respect to the
declaration, making or payment, as the case may be, of such Restricted Payment;
or
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(b) directly or indirectly make any payment of Indebtedness of
Borrower or any of its Subsidiaries in contravention of the terms of any
agreement or instrument subordinating or purporting to subordinate any rights to
receive payments in respect of any Indebtedness of Borrower or such Subsidiary
to any rights to receive payments under this Agreement.
6.3. Merger; Sale of Assets; Termination and Other Actions.
(a) Cause to be organized or assist in organizing any Person under the laws of
any jurisdiction to acquire all or substantially all of its assets, terminate,
wind up, liquidate or dissolve its affairs or enter into any reorganization,
merger or consolidation or, in the case of Borrower, take any other action
whatsoever under or pursuant to Articles 6.15, 8.1, 8.2 and 8.5 of the
Declaration of Trust or agree to do any of the foregoing at any future time,
except that Borrower or any Subsidiary of Borrower other than Church Creek
Corporation may acquire all or substantially all of the assets of a Subsidiary
of Borrower and any Subsidiary of Borrower may reorganize, merge or consolidate
with Borrower (so long as Borrower is the surviving entity) or any other
Subsidiary of Borrower other than Church Creek Corporation, or (b) convey, sell,
lease or otherwise dispose of (i) any of the Properties, the Mortgage Interests
or its other interests in Facilities or (ii) any substantial part of its
property or assets (other than the Properties) or (iii) any shares of stock in
any of its Subsidiaries; except that the foregoing will be permitted in the case
of sub-clauses (i) and (ii) of this clause (b), but only if (A) the
consideration therefor shall be equal to the fair market value thereof (or, in
the case of a Mortgage Interest where the consideration is less than fair market
value, the Board of Trustees of Borrower or the board of directors of the
relevant Subsidiary of Borrower shall have determined that the consideration
received or to be received is in an amount consistent with the best financial
interests of Borrower or such Subsidiary, as the case may be) and no default
under any other provision hereof results therefrom or (B) such conveyance, sale,
lease or other disposition is pursuant to the exercise of an option contained in
a Lease, and, in either case, the proceeds of such disposition (whether received
by Borrower or one of its Subsidiaries) are used to prepay the Loans to the
extent required by Section 2.8(b).
6.4. Transactions with Affiliates. Enter into or be a party to
any transaction directly or indirectly with or for the benefit of any Affiliate
of Borrower, other than (i) in the ordinary course of business and (ii) for fair
consideration and on terms no less favorable to Borrower or any of its
Subsidiaries than are available in an arm's-length transaction from unaffiliated
third parties and (iii) if the Independent Trustees determine in their
reasonable good faith judgment that such transaction is in the best interests of
Borrower or such Subsidiary based on full disclosure of all relevant facts and
circumstances.
6.5. Subsidiaries. (a) Without the prior written consent of
Agent, create, or permit to exist, any Subsidiary other than (i) those named on
Schedule 4 and (ii) any Subsidiary (A) one hundred percent (100%) of all of the
equity interests (except directors' qualifying shares) and voting interests of
which are owned by Borrower, (B) which has no Indebtedness other than to
Borrower or another wholly-owned Subsidiary of Borrower, (C) which has agreed to
provide the guarantee set forth in Section 9 and (D) which is formed in the
ordinary course of Borrower's business and has the same business purpose as
Borrower, (b) sell or otherwise dispose of any of the capital stock owned by
Borrower in any Subsidiary or (c) permit any Subsidiary to issue any shares of
capital stock to any Person other than Borrower.
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6.6. Accounting Changes. Make any significant change in
accounting treatment and reporting practices, except as required by GAAP or with
which Borrower's independent certified public accountants have agreed. Borrower
will advise Agent sufficiently in advance of any proposed change to permit
representatives of Agent to discuss the proposed change with the officers of
Borrower.
6.7. Change in Nature of Business. Make any material change in
the nature of its business as presently conducted (where a "material change"
shall mean any change in the type of industry then invested in in accordance
with this Section 6.7, regardless of the amount or size of such new investment);
the business of Borrower and its Subsidiaries as presently conducted being the
business of acquiring and operating, and acquiring or funding Mortgage Interests
in, income producing real property interests and facilities which offer health
care or related services or rehabilitation or retirement services, and
activities incidental to any of the foregoing, but which shall not include any
acquisition, operating or funding either of Psychiatric Care Assets or of hotels
or other lodging facilities; provided that (i) such property interests and
facilities shall be located in either the United States of America or the United
Kingdom, (ii) the aggregate Allowed Value of all Properties and Mortgage
Interests located in the United Kingdom shall not exceed 10% of the aggregate
Allowed Value of all Properties and Mortgage Interests, (iii) Church Creek
Corporation shall not engage in any business or activities other than those
engaged in by it on the Effective Date, and activities incidental thereto and
(iv) Borrower may indirectly own interests in hotels or other lodging facilities
through Borrower's ownership of shares in Hospitality Properties Trust, provided
that (y) Borrower shall not increase its equity investment in or make any other
investment in or make any loans to, guaranties for the benefit of or other
support whatsoever to or for the benefit of Hospitality Properties Trust aside
from the aggregate of 4,000,000 shares (which shall be construed to include any
substitute or replacement shares) of stock of Hospitality Properties Trust
acquired by Borrower prior to or in connection with the initial public offering
of shares in Hospitality Properties Trust and (z) Hospitality Properties Trust
shall not be or become a Subsidiary of Borrower.
6.8. Indebtedness. (a) Suffer or permit the total Indebtedness
(determined without duplication) of Borrower and its Subsidiaries (other than
the IDFA Indebtedness, Indebtedness in the nature of bridge financings described
in the exception to Section 6.8(b) and Indebtedness described in Section
6.8(c)), at any time to be greater than 50% of the aggregate Allowed Value of
all Eligible Properties and all Eligible Mortgages.
(b) Incur any Indebtedness unless, in the case of Borrower,
the earliest date for any payment of principal or other settlement thereof is at
least three months after the Termination Date, except for (i) Borrower's
guaranty of the IDFA Indebtedness, the terms of which Indebtedness provide for
mandatory redemption prior to the Termination Date upon the occurrence of
certain extraordinary events, and (ii) Indebtedness of Borrower in the nature of
bridge financings to effect acquisitions of Fee Interests or Mortgage Interests
by Borrower so long as the final date for payment or other settlement of all
such bridge financing Indebtedness is less than one year from the date of its
incurrence or issuance and Borrower promptly commences (and diligently pursues)
the refinancing thereof; provided that, at any time either after total
Indebtedness in the nature of bridge financings exceeds $100,000,000 or would as
a result of any proposed further bridge financing exceed $100,000,000, not less
than thirty days prior to the incurrence or issuance of any additional
63
bridge financing, Borrower shall provide Lenders with such details of the terms
and conditions thereof as Lenders (acting through Agent) may reasonably request
(and Borrower shall promptly advise Agent of any subsequent material changes to
such details), and if after a review of such details Majority Lenders (each in
its respective absolute discretion) determine that no further Loans may be made
and the Termination Date shall be brought forward to a date which is the earlier
of the maturity date for such additional bridge Indebtedness and a date eleven
months after the incurrence or issuance thereof, then, effective upon the
incurrence or issuance of such Indebtedness and without any further action being
required, no further Loans shall be made and the definition of "Termination
Date" shall be so amended; provided that if Majority Lenders (acting through
Agent) have not advised Borrower of such a determination within fifteen days of
receipt of all such details as they may have requested, then, subject to the
opportunity to review any subsequent material changes to the details provided
and to make a contrary determination based thereon, Majority Lenders shall be
deemed not to have made such a determination and no change to this Agreement
shall be effected pursuant to this Section 6.8(b).
(c) Suffer or permit the aggregate of Indebtedness which is
(i) secured by a Lien covering property or assets acquired by Borrower or any of
its Subsidiaries, (ii) Indebtedness of a Person acquired by Borrower or any of
its Subsidiaries or (iii) Indebtedness to which the assets of a Person acquired
by Borrower or any of its Subsidiaries are subject, which in the case of any of
clause (i), (ii) or (iii) is outstanding at the time of the relevant acquisition
and remains outstanding following such acquisition, to exceed $50,000,000 at any
time; provided that, in addition to Indebtedness otherwise permitted under this
Section 6.8(c), Borrower and Church Creek Corporation may suffer or permit to
exist the IDFA Indebtedness.
(d) In the case of Subsidiaries of Borrower, suffer or permit
to exist any Indebtedness, except for (i) intercompany Indebtedness owed to
Borrower which is incurred as the result of the direct or indirect advance by
Borrower of the proceeds of Loans and used for purposes described in Section
2.11 and (ii) in the case of Subsidiaries other than Church Creek Corporation,
the Contingent Obligations arising from the guarantees given under Section 9 and
(iii) in the case of Church Creek Corporation, the IDFA Indebtedness.
6.9. No Liens. Suffer or permit after the date hereof any Lien
on any Facility, Lease, Mortgage Interest, or Credit Support Agreement, except
(i) in the case of Borrower, Liens granted to secure Indebtedness in the nature
of bridge financings (but not any subsequent refinancing or any other
restructuring of such bridge financing) permitted under Section 6.8(b), so long
as such Liens are granted only on the properties or interests acquired with such
Indebtedness; provided that any such property or interest which is the subject
of such a Lien shall not be an Eligible Property or an Eligible Mortgage, (ii)
Permitted Exceptions, (iii) with respect to either (A) Properties that are not
Eligible Properties or (B) Mortgaged Properties that are subject to Mortgage
Interest Agreements which are not Eligible Mortgages only, Liens that are not
created or granted by Borrower or any of its Subsidiaries, which Liens, in the
aggregate, would not be reasonably likely to cause or create a Material Adverse
Effect and (iv) (A) Liens securing Indebtedness permitted by Section 6.8(c)
(other than the IDFA Indebtedness) so long as neither such Indebtedness nor such
Liens were incurred or granted in contemplation of such acquisition and such
Liens are granted only on the related properties or interests acquired by
Borrower or its Subsidiaries
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and (B) Liens existing on the Effective Date securing the IDFA Indebtedness and
any Liens in continuation thereof or replacement or substitution therefor so
long as the Allowed Value of the subject property or interest is not greater
than the Allowed Value on the Effective Date of the property or interest then
the subject of such permitted Liens; provided that any property or interest
which is the subject of a Lien permitted under this clause (iv) shall not be an
Eligible Property or an Eligible Mortgage.
6.10. Fiscal Year. Change the fiscal year end of Borrower or
any of its Subsidiaries from December 31 to any other date without the prior
written consent of Agent.
6.11. Chief Executive Office. Change the name of Borrower or
the chief executive office of Borrower unless Borrower has given Administrative
Agent at least 15 Business Days' prior written notice of any such change.
6.12. Amendment of Certain Agreements. Amend, supplement or
otherwise modify (a) the Advisory Agreement, or (b) the Declaration of Trust in
a manner which would be reasonably likely to cause a Material Adverse Effect, in
either case without the prior written consent of Agent.
6.13. Payments Not to Exceed Appraised Value. Pay
consideration in an amount greater than the Appraised Value for the acquisition
of any Facility or, in the case of a group of Facilities acquired in a single
transaction, the aggregate Appraised Value of such group of Facilities.
SECTION 7. EVENTS OF DEFAULT
7.1. Events of Default. Upon the occurrence of any of the
following events (each an "Event of Default"):
(a) Payments. Borrower shall fail to pay any principal of or
interest on any Note, or Borrower or any of its Subsidiaries shall fail to pay
any other amount payable hereunder, when due in accordance with the terms
thereof or hereof; or
(b) Representations and Warranties. Any representation or
warranty made or deemed made by Borrower or any of its Subsidiaries herein or by
any Person in any other Loan Document or which is contained in any certificate,
document or financial or other statement furnished at any time under or in
connection with this Agreement or any other Loan Document shall prove to have
been incorrect in any material respect on or as of the date made or deemed made;
or
(c) Certain Covenant Defaults. Borrower shall default in the
observance or performance of any agreement contained in Section 6 of this
Agreement, or the Advisor shall default in the observance or performance of any
material provision of the Subordination Agreement; or
(d) Certain Other Covenant Defaults. Borrower or any other
party to any of
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the Loan Documents (other than Agent, Administrative Agent and the Lenders
hereunder) shall default in the observance or performance of any other provision
of this Agreement or any of the other Loan Documents, and such default shall
continue unremedied for a period of 20 days; or
(e) Cross-Default. Borrower or any of its Subsidiaries shall
(i) default in any payment of principal of or interest on any Indebtedness
(other than the Notes) in respect of money borrowed or Capitalized Lease
Obligations or incurred for the deferred purchase price of property or services
or evidenced by a note, debenture or other similar written obligation to pay
money, or in the payment of any Contingent Obligation (other than the guarantees
of Subsidiaries of Borrower given in Section 9, which shall be subject to
Section 7.1(d)), beyond the period of grace (not to exceed 30 days), if any,
provided in the instrument or agreement under which such Indebtedness or
Contingent Obligation was created; or (ii) default in the observance or
performance of any other agreement or condition relating to any such
Indebtedness or Contingent Obligation or contained in any instrument or
agreement evidencing, securing or relating thereto, or any other event shall
occur, the effect of which default or other event is to cause, or to permit the
holder or holders of such Indebtedness or beneficiary or beneficiaries of such
Contingent Obligation (or a trustee or agent on behalf of such holder or holders
or beneficiary or beneficiaries) to cause, with the giving of notice if
required, such Indebtedness to become due prior to its stated maturity or such
Contingent Obligation to become payable; or
(f) Qualification as REIT. Either Agent or the Majority
Lenders shall have determined in good faith, and shall have so given notice to
Borrower, that Borrower has at any time ceased to be in a position to qualify,
or has not qualified, as a real estate investment trust for any of the purposes
of the provisions of the Code applicable to real estate investment trusts;
provided that no Event of Default under this Section 7.1(f) shall be deemed to
have occurred and be continuing if, within 10 days after notice of any such
determination is given to Borrower, Borrower shall have furnished each Lender
with an opinion of Borrower's tax counsel (who shall be satisfactory to the
Majority Lenders provided that the Majority Lenders may not unreasonably
withhold their approval) to the effect that Borrower is then in a position to so
qualify, or has so qualified, as the case may be, which opinion shall not
contain any material qualification unsatisfactory to the Majority Lenders; or
(g) Insolvency, Etc. There shall be an Insolvency Event with
respect to Borrower or any of its Subsidiaries or the Advisor; or
(h) ERISA. (i) Any Person shall engage in any "prohibited
transaction" (as defined in Section 406 of ERISA or Section 4975 of the Code)
involving any Plan, (ii) any "accumulated funding deficiency" (as defined in
Section 302 of ERISA), whether or not waived, shall exist with respect to any
Plan, (iii) a Termination Event shall occur or (iv) any other event or condition
shall occur or exist with respect to a Plan or a Multiemployer Plan; and in each
case in clauses (i) through (iv) above, such event or condition, together with
all other such events or conditions, if any, could subject Borrower or any of
its Subsidiaries to any tax, penalty or other liabilities in the aggregate
material in relation to the business, operations, property or financial or other
condition of Borrower and its Subsidiaries, taken as a whole; or
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(i) Certain Judgments. One or more judgments or decrees shall
be entered against Borrower or any of its Subsidiaries involving in the
aggregate a liability (not paid or fully covered by insurance) of $1,000,000 or
more, and either (x) all such judgments or decrees shall not have been vacated,
discharged, stayed or bonded pending appeal or (y) funds in the amount of the
liability thereunder (not paid or fully covered by insurance) shall not have
been deposited in escrow with Agent upon terms and conditions satisfactory to
Agent, in each case under clause (x) or (y), within 60 days from the entry
thereof; or
(j) Certain Ownership of Borrower. ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ and ▇▇▇▇▇▇
▇. ▇▇▇▇▇▇ (or any Person in respect of which either or both of them own more
than 50% of the securities having ordinary voting power for the election of
directors) shall cease at any time to hold beneficially and of record, in the
aggregate, at least 750,000 shares of the issued and outstanding Common Shares
and each other class of equity securities of Borrower (adjusted for any
division, reclassification or stock dividend in respect of Common Shares) or
such lesser amount as shall be approved by Agent; or
(k) Change of Control of Advisor. ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ and ▇▇▇▇▇▇
▇. ▇▇▇▇▇▇ shall cease at any time to have the power to direct the management and
policies of HRPT Advisors; or
(l) Investment Grade Operators and Mortgagors. More than 50%
of the aggregate Allowed Value of the Properties and Mortgage Interests shall be
attributable to Properties and Mortgage Interests having the same "investment
grade Person" (or any of that Person's Affiliates; provided that for the
purposes of this Section 7.1(l), so long as there is no material change in their
practices and procedures in place at the Effective Date to provide for
arm's-length dealings, Marriott International, Inc. and its Affiliates and Host
Marriott Corporation and its Affiliates will not be treated as Affiliates of
each other) as Mortgagor or Operator thereof (with an "investment grade Person"
being one whose long-term senior debt is rated BBB- or higher by Standard &
Poor's Ratings Group or Baa3 or higher by ▇▇▇▇▇'▇ Investors Service (or
similarly rated by any successor to either of such rating agencies)); or
(m) Operators and Mortgagors Generally. Except in the case of
Mortgagors or Operators which are "investment grade Persons" (as defined in
Section 7.1(l)), more than 40% of the aggregate Allowed Value of the Properties
and Mortgage Interests shall be attributable to Properties and Mortgage
Interests having the same Person (or any of that Person's Affiliates; provided
that for the purposes of this Section 7.1(m) so long as there is no material
change in their practices and procedures in place at the Effective Date to
provide for arm's-length dealings, Marriott International, Inc. and its
Affiliates and Host Marriott Corporation and its Affiliates will not be treated
as Affiliates of each other) as Mortgagor or Operator thereof; or
(n) Rehabilitation Treatment Assets. More than 40% of the
aggregate Allowed Value of the Properties and Mortgage Interests shall be
attributable to Properties and Mortgages consisting of Rehabilitation Treatment
Assets; or
(o) Acute Care Assets. More than 15% of the aggregate Allowed
Value of the Properties and Mortgage Interests shall be attributable to
Properties and Mortgages consisting of Acute Care Assets; or
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(p) Psychiatric Care Assets. Any of the aggregate Allowed
Value of the Properties and Mortgage Interests shall be attributable to
Properties or Mortgages consisting of Psychiatric Care Assets; or
(q) Hotels and Lodging Facilities. Any of the aggregate
Allowed Value of the Properties and Mortgage Interests shall be attributable to
Properties and Mortgages consisting of hotels or other lodging facilities; or
(r) Medical Office Assets. More than 15% of the aggregate
Allowed Value of the Properties and Mortgage Interests shall be attributable to
Medical Office Assets; or
(s) Clinics. More than 25% of the aggregate Allowed Value of
the Properties and Mortgage Interests shall be attributable to Clinics; or
(t) Advisor. HRPT Advisors shall cease to be the sole Advisor
to Borrower pursuant to and in accordance with the Advisory Agreement, without
Agent's prior written consent or the Advisory Agreement shall be materially
amended, supplemented or modified without Agent's prior written consent; or
(u) Loan Documents. From and after the Effective Date, any
guarantee given by a Subsidiary of Borrower in Section 9 or any Loan Document
shall be terminated or otherwise shall cease to be in full force and effect or
shall cease to give the Lenders the rights, powers and privileges purported to
be created thereby or any party thereto other than Agent and the Lenders shall
cease to be, or shall assert that it is not, bound thereby in accordance with
its terms;
then, and in any such event, (a) if such event is an Event of Default specified
in paragraph (g) above, automatically the Commitments shall immediately
terminate and the Loans hereunder (with accrued interest thereon) and all other
amounts owing under this Agreement, the Notes and any other Loan Document shall
immediately become due and payable, and (b) if such event is any other Event of
Default, either or both of the following actions may be taken: (i) Agent may, or
upon the request of the Majority Lenders, Agent shall, by notice to Borrower,
declare the Commitments to be terminated forthwith, whereupon the Commitments
shall immediately terminate; and (ii) Agent may, or upon the request of the
Majority Lenders, Agent shall, by notice of default to Borrower, declare the
Loans hereunder (with accrued interest thereon) and all other amounts owing
under this Agreement, the Notes and any other Loan Document to be due and
payable forthwith, whereupon the same shall immediately become due and payable.
Except as expressly provided above in this Section, presentment, demand, protest
and all other notices of any kind are hereby expressly waived.
7.2. Annulment of Acceleration. If payment on the Loans and
the Notes is accelerated in accordance with Section 7.1 of this Agreement, then
and in every such case, the Majority Lenders may, by an instrument delivered to
Borrower (and to Agent and/or Administrative Agent, as applicable, to the extent
it is or they are not participating in the giving of notice) annul such
acceleration and the consequences thereof; provided that at the time such
acceleration is annulled:
(a) all arrears or interest on the Loans and the Notes and all
other sums
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payable in respect of the Loans and pursuant to this Agreement, the Notes and
each other Loan Document (except any principal of or interest or premium on the
Loans and the Notes and other sums which have become due and payable only by
reason of such acceleration) shall have been duly paid; and
(b) every other Default or Event of Default shall have been
duly waived or otherwise cured;
provided, further, that no such annulment shall extend to or affect any
subsequent Default or Event of Default or impair any right consequent thereon.
7.3. Cooperation by Borrower. To the extent that it lawfully
may, Borrower agrees that it will not (and that it will cause its Subsidiaries
not to) at any time insist upon or plead, or in any manner whatever claim or
take any benefit or advantage of any applicable present or future stay,
extension or moratorium law, which may affect observance or performance of the
provisions of this Agreement or of any Note or any other Loan Document.
SECTION 8. THE AGENTS
8.1. Appointment of Agent and Administrative Agent.
(a) Each Lender hereby irrevocably designates and appoints
Kleinwort ▇▇▇▇▇▇ as Agent of such Lender and each of ▇▇▇▇▇ Fargo Bank, National
Association and the GBP Agent (as defined in the definition of "Administrative
Agent"), as Administrative Agent of such Lender (with their respective functions
as set forth in the definition of "Administrative Agent") (the Agent and
Administrative Agent collectively being the "Loan Agents", and, for the purposes
of Sections 8.1(c), 8.1(g), 8.1(h) and 8.1(l), Co-Agent shall also be deemed to
be a "Loan Agent") under this Agreement and the Loan Documents and the other
documents or instruments delivered pursuant to or in connection herewith or
therewith and each such Lender hereby irrevocably authorizes each Loan Agent,
for such Lender, to take such action on behalf of each Lender under the
provisions of the Loan Documents and to exercise such powers and perform such
duties as are expressly delegated to such Loan Agent by the terms of the Loan
Documents, together with such other powers as are reasonably incidental thereto.
Notwithstanding any provision to the contrary elsewhere in the Loan Documents,
no Loan Agent shall have any duties or responsibilities other than those
expressly set forth in the Loan Documents, nor any fiduciary relationship with
any Lender, and no implied covenants, functions, responsibilities, duties,
obligations or liabilities shall be read into the Loan Documents or otherwise
exist against either Loan Agent.
(b) Each Loan Agent may execute any of its duties under the
Loan Documents by or through agents or attorneys-in-fact and shall be entitled
to advice of counsel concerning all matters pertaining to such duties. No Loan
Agent shall be responsible for the negligence or misconduct of any agents or
attorneys-in-fact selected by it with reasonable care.
(c) None of the Loan Agents nor any of their respective
officers, directors, employees, agents, attorneys-in-fact or affiliates shall be
(i) liable for any action lawfully
69
taken or omitted to be taken by it under or in connection with the Loan
Documents (except for its gross negligence or willful misconduct), or (ii)
responsible in any manner to any Lender for any recitals, statements,
representations or warranties made by Borrower or any of its Subsidiaries or any
other Person contained in the Loan Documents or in any certificate, report,
statement or other document referred to or provided for in, or received by
either Loan Agent under or in connection with, the Loan Documents (including,
without limitation, any Appraisal or valuation or any certificate or other
report relating to the value of any Property or any Mortgage Interest), or for
the value, validity, effectiveness, genuineness, enforceability or sufficiency
of the Loan Documents or otherwise or for any failure of Borrower or any of its
Subsidiaries or any other Person to perform its obligations under the Loan
Documents. The Loan Agents shall not be under any obligation to any Lender to
ascertain or to inquire as to the observance or performance of any of the
agreements contained in, or conditions of, the Loan Documents, or to inspect the
properties, books or records of Borrower or any of its Subsidiaries or any other
Person or to insure, protect or preserve any of the property of Borrower or any
of its Subsidiaries or any other Person.
(d) Each Loan Agent shall be entitled to rely, and shall be
fully protected in relying, upon any Note, writing, resolution, notice, consent,
certificate, affidavit, letter, cablegram, telegram, telecopy, telex or teletype
message, statement, order or other document or conversation reasonably believed
by it to be genuine and correct and to have been signed, sent or made by the
proper Person or Persons and upon advice and statements of legal counsel
(including, without limitation, counsel to Borrower or its Subsidiaries),
independent accountants and other experts selected by such or the other Loan
Agent. Each Loan Agent may deem and treat the payee of any Note as the owner
thereof for all purposes unless a written notice of assignment, negotiation or
transfer thereof shall have been filed with such Loan Agent.
(e) Each Loan Agent shall be fully justified in failing or
refusing to take any action under the Loan Documents unless it shall first
receive such advice or concurrence of the Majority Lenders as it deems
appropriate or it shall first be indemnified to its satisfaction by the Lenders
against any and all liability and expense which may be incurred by it by reason
of taking or continuing to take any such action. Each Loan Agent shall in all
cases be fully protected in acting, or in refraining from acting, under the Loan
Documents in accordance with a request of the Majority Lenders, and such request
and any action taken or failure to act pursuant thereto shall be binding upon
all the Lenders and all future holders of the Notes.
(f) No Loan Agent shall be deemed to have knowledge or notice
of the occurrence of any Event of Default or event, act or condition which with
notice or lapse of time, or both, would constitute an Event of Default hereunder
unless such Loan Agent shall have received notice from the other Loan Agent, a
Lender or Borrower referring to this Agreement, describing such event, act or
condition or Event of Default and stating that such notice is a "notice of
default". In the event that a Loan Agent receives such a notice, such Loan Agent
shall give prompt notice thereof to the Lenders and (provided such notice is not
received from the other Loan Agent) to the other Loan Agent. Each Loan Agent
shall take such action with respect to the rights and remedies given to such
Loan Agent pursuant to the terms of the Loan Documents as shall be reasonably
directed by the Majority Lenders; provided that, unless and until such Loan
Agent shall have received such directions, such
70
Loan Agent may (but shall not be obligated to) take such action, or refrain from
taking such action, as it shall deem advisable in the best interests of the
Lenders.
(g) Each Lender expressly acknowledges that none of the Loan
Agents nor any of their officers, directors, employees, agents,
attorneys-in-fact or affiliates has made any representations or warranties to it
and that no act by either Loan Agent hereinafter taken or hereinbefore taken in
connection with the Existing Loan Agreement, including any review of the affairs
of Borrower or any of its Subsidiaries, shall be deemed to constitute any
representation or warranty by that Loan Agent to any Lender. Each Lender
represents to the Loan Agents that it has, independently and without reliance
upon either Loan Agent or any other Lender, and based on such documents and
information as it has deemed appropriate, made its own appraisal of and
investigation into the business, operations, property, financial and other
condition and creditworthiness of Borrower and its Subsidiaries, each Operator,
each Mortgagor and each Credit Support Obligor, and made its own decision to
make its loans hereunder and enter into this Agreement, and that it has
satisfied itself independently, without reliance on either of the Loan Agents or
any of their respective officers, directors, employees, agents,
attorneys-in-fact or affiliates, as to the compliance of the transactions
contemplated hereby with all legal and regulatory requirements applicable to
such Lender. Each Lender expressly acknowledges that its representation in the
previous sentence shall not be restricted or construed in any way to import any
reliance on either Loan Agent or any other Lender as a result of any duties or
other actions which may have been undertaken by that Loan Agent or other Lender
in connection with the Existing Loan Agreement, and, where such Lender is itself
also a party to the Existing Loan Agreement, that such Lender's decision to make
its Loans hereunder and enter into this Agreement is made independently of its
decisions to enter into the Existing Loan Agreement and to make any loans
thereunder. Each Lender also represents that it will, independently and without
reliance upon either Loan Agent or any other Lender, and based on such documents
and information as it shall deem appropriate at the time, continue to make its
own credit analysis, appraisals and decisions in taking or not taking action
under this Agreement, and to make such investigation as it deems necessary to
inform itself as to the business, operations, property, financial and other
condition and creditworthiness of Borrower and its Subsidiaries, any Operator,
any Mortgagor or any Credit Support Obligor. Except for notices, reports and
other documents expressly required to be furnished to the Lenders by that Loan
Agent hereunder, neither Loan Agent shall have any duty or responsibility to
provide any Lender with any credit or other information concerning the business,
operations, property, financial and other condition or credit-worthiness of
Borrower and its Subsidiaries which may come into its possession or the
possession of any of its officers, directors, employees, agents,
attorneys-in-fact or affiliates.
(h) Each Lender agrees to indemnify, defend (with counsel
selected by each Loan Agent) and hold each Loan Agent in its capacity as such
(to the extent not reimbursed by Borrower and without limiting the obligation of
Borrower to do so), and such Loan Agent's respective officers, directors,
shareholders, employees and agents, ratably according to the aggregate loan
percentages set forth opposite its name on Schedule 1 hereto, harmless for, from
and against any and all liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, costs, expenses or disbursements of any kind
whatsoever which may at any time (including without limitation at any time
following the payment of the Notes) be imposed on, incurred by or asserted
against such Loan Agent in any way relating to or arising out of the Loan
Documents or the transactions contemplated thereby or any action taken or
71
omitted by such Loan Agent under or in connection with any of the foregoing;
provided that no Lender shall be liable for the payment of any portion of such
liabilities, obligations, losses, damages, penalties, actions, judgements,
suits, costs, expenses or disbursements resulting primarily from such Loan
Agent's willful misconduct or gross negligence. The agreements in this Section
shall survive the payment of the Notes.
(i) Each Loan Agent and its affiliates may make loans to and
generally engage in any kind of business with Borrower or any of its
Subsidiaries as though such Loan Agent were not a Loan Agent hereunder. With
respect to its pro rata share of the Loan made or extended by it and any Note
issued to it, each Loan Agent shall have the same rights and powers under this
Agreement as any Lender and may exercise the same as though it were not a Loan
Agent. The terms "Lender" and "Lenders" shall include each Loan Agent in its
individual capacity.
(j) A Loan Agent may resign as Loan Agent upon 30 days'
written notice to the Lenders. In the event that a Loan Agent shall enter
receivership, then the Lenders (other than the Lender which is acting as such
Loan Agent, if applicable) may, by unanimous consent, remove such Loan Agent as
Loan Agent under this Agreement. If a Loan Agent shall resign as such Loan Agent
under this Agreement or a Loan Agent shall be removed, then the Majority Lenders
shall within 30 days of such resignation or removal or, in the absence of such
appointment, the resigning or removed Loan Agent shall, appoint a successor
agent for the Lenders, whereupon such successor agent shall succeed to the
rights, powers and duties of such Loan Agent, and the term "Agent" or
"Administrative Agent", as applicable, shall mean such successor agent effective
upon its appointment, and the former Loan Agent's rights, powers and duties as
Loan Agent shall be terminated, without any other or further act or deed on the
part of such former Loan Agent or any of the parties to this Agreement or any
holders of the Notes. After any retiring Loan Agent's resignation hereunder as
Loan Agent or any Loan Agent's removal, the provisions of this Section 8.1 shall
inure to its benefit as to any actions taken or omitted to be taken by it while
it was a Loan Agent under this Agreement.
(k) Each Lender agrees to use its best efforts promptly upon
an officer responsible for the administration of this Agreement becoming aware
of any development or other information which may have a Material Adverse Effect
or MAC to notify the other Lenders of the same. Each Loan Agent agrees that it
shall promptly deliver to each Lender copies of all notices, demands, statements
and communications which such Loan Agent gives to Borrower, except for routine
notices of payment due under the Loan Documents and other miscellaneous notices,
demands, statements and communications, the failure of delivery of which to each
Lender shall not have a material adverse effect on any Lender. The foregoing
notwithstanding, no Loan Agent shall have any liability to any Lender, nor shall
a cause of action arise against any Loan Agent, as a result of the failure of
such Loan Agent to deliver to any Lender any notice, demand, statement or
communication required to be delivered by it under this Section 8.1(k), except
to the extent such failure is due to the gross negligence or wilful misconduct
of such Loan Agent.
(l) Each Loan Agent shall endeavor to exercise the same care
in administering the Loan Documents as it exercises with respect to similar
transactions in which it is involved and where no other co-lenders or
participants are involved; provided that the liability of such
72
Loan Agent for failing to do so shall be limited as provided in the preceding
paragraphs of this Section 8.1.
(m) Each Lender agrees that, as between it and any Loan Agent,
any Loan Document or Appraisal, or other report or document with respect to
which the approval of such Lender is required hereunder, sent to it for review
shall be deemed consented to by it for purposes of any approval thereof by any
Loan Agent if such Lender does not give to such Loan Agent written notice of its
objection thereto within five Business Days of its receipt thereof. The
foregoing shall be for the benefit of such Loan Agent only and shall not be
deemed a consent under any other provision of this Agreement or to confer any
rights on Borrower or any of its Subsidiaries under this Agreement in any manner
whatsoever.
SECTION 9. SUBSIDIARY GUARANTIES
9.1 Guaranties.
In order to induce the Lenders to enter into this Agreement
and to make the Loans to Borrower hereunder, each Subsidiary of Borrower other
than Church Creek Corporation agrees as follows:
(a) Each such Subsidiary of Borrower hereby unconditionally
(subject to the next paragraph) and irrevocably guarantees, as primary obligor
and not merely as surety, the full and punctual payment (whether at stated
maturity, upon acceleration or otherwise) of the principal and interest
(including, without limitation, interest which, but for the filing of a petition
in bankruptcy with respect to Borrower would accrue hereunder) on all Loans made
to Borrower, and the full and punctual payment of all other amounts payable by
Borrower under this Agreement (including amounts that would become due but for
the operation of the automatic stay under Section 362(a) of the United States
Bankruptcy Code). Upon failure by Borrower to pay punctually any such amount,
each such Subsidiary shall forthwith on demand pay the amount not so paid as if
that Subsidiary instead of Borrower were expressed to be the principal obligor.
The obligations of each Subsidiary of Borrower under
this Section 9 shall be limited to a maximum aggregate amount equal to the
largest amount that would not render its obligations subject to avoidance as a
fraudulent transfer or conveyance under ▇▇▇▇▇▇▇ ▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
Bankruptcy Code or any applicable provisions of comparable state law, in each
case after giving effect to all other liabilities of the relevant Subsidiary
(contingent or otherwise) that are relevant under those laws.
In order to provide for just and equitable
contribution among the Subsidiaries of Borrower, each such Subsidiary agrees
that if any other Subsidiary makes payments under this Section 9 in an aggregate
amount in excess of the net value of the benefits received by such other
Subsidiary and its own Subsidiaries from extensions of credit under this
Agreement, then the Subsidiary which has made such excess payments shall have a
right of contribution against the other Subsidiaries of Borrower for such
excess. However, this right of contribution shall be subject to Section 9.1(e)
in all respects.
73
Each Subsidiary of Borrower acknowledges that the
giving by it of this guarantee is a condition precedent to the making or
maintenance of the Loans to Borrower and also acknowledges that a portion of the
proceeds of the Loans may be advanced to it by Borrower, and accordingly the
obligations guaranteed are being incurred for, and will inure to, its benefit.
(b) The obligations of each Subsidiary of Borrower hereunder
shall be unconditional, irrevocable, direct and absolute and, without limiting
the generality of the foregoing, shall not be released, discharged or otherwise
affected by (and, to the fullest extent permitted by law, each such Subsidiary
waives its rights in connection with):
(i) any extension, increase, renewal, settlement, compromise,
waiver or release in respect of any obligation of Borrower hereunder,
by operation of law or otherwise;
(ii) any modification or amendment of or supplement to this
Agreement;
(iii) any release, impairment, non-perfection or invalidity of
any direct or indirect security (if any) for any obligation of Borrower
under this Agreement;
(iv) any change in the trust existence, structure or ownership
of Borrower, or any insolvency, bankruptcy, reorganization or other
similar proceeding affecting Borrower or its assets or any resulting
release or discharge of any obligation of Borrower contained in the
Agreement;
(v) the existence of any claim, set-off or other rights which
such Subsidiary may have at any time against Borrower, any Lender or
any other Person, whether in connection herewith or any unrelated
transactions; provided that nothing herein shall prevent the assertion
of any such claim by separate suit or compulsory counterclaim;
(vi) any invalidity or unenforceability relating to or against
Borrower for any reason of this Agreement, or any provision of
applicable law or regulation purporting to prohibit the payment by
Borrower of the principal or interest on any Loan or any other amount
payable by Borrower under this Agreement; or
(vii) any other act or omission to act or delay of any kind by
Borrower, any Lender or any other Person or any other circumstance
whatsoever which might, but for the provisions of this Section 9,
constitute a legal or equitable discharge of or defense to such
Subsidiary's obligations hereunder.
(c) Each such Subsidiary's obligations hereunder shall remain
in full force and effect until this Agreement shall have terminated and the
principal and interest on all Loans and all other amounts payable by Borrower
hereunder shall have been paid in full. Each such Subsidiary further agrees that
its guarantee hereunder shall continue to be effective or be reinstated, as the
case may be, if at any time payments, or any part thereof, of principal of or
interest on any obligation of Borrower is rescinded or must otherwise be
restored by Agent or any Lender upon the bankruptcy or reorganization of
Borrower or otherwise.
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(d) Each such Subsidiary irrevocably waives acceptance hereof,
presentment, demand, protest and any notice not provided for herein, as well as
any requirement that at any time any action be taken by any Person against
Borrower or any other Person.
(e) Each Subsidiary irrevocably waives any and all rights to
which it may be entitled, by operation of law or otherwise, upon making any
payment hereunder to be subrogated to the rights of the payee against Borrower
with respect to such payment or against any direct or indirect security
therefor, or otherwise to be reimbursed, indemnified or exonerated by or for the
account of Borrower in respect thereof.
SECTION 10. GENERAL
10.1 CHOICE OF LAW. THIS AGREEMENT AND THE NOTES SHALL BE
CONTRACTS UNDER AND SHALL BE GOVERNED BY AND CONSTRUED AND INTERPRETED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.
10.2 SUBMISSION TO JURISDICTION; WAIVER OF JURY TRIAL; ETC.
NOTWITHSTANDING ANY OTHER PROVISION IN THIS AGREEMENT, THE NOTES OR ANY OTHER
LOAN DOCUMENT, EACH OF BORROWER AND EACH OF ITS SUBSIDIARIES HEREBY IRREVOCABLY
(a) SUBMITS TO THE NON-EXCLUSIVE PERSONAL JURISDICTION OF ANY STATE OR FEDERAL
COURT IN THE STATE OF NEW YORK IN ANY SUIT, ACTION OR OTHER LEGAL PROCEEDING
RELATING TO THIS AGREEMENT OR THE NOTES OR ANY OF THE OTHER LOAN DOCUMENTS; (b)
AGREES THAT ALL CLAIMS IN RESPECT OF ANY SUCH SUIT, ACTION OR OTHER LEGAL
PROCEEDING MAY BE HEARD AND DETERMINED IN, AND ENFORCED IN AND BY, ANY SUCH
COURT; (c) WAIVES ANY OBJECTION THAT IT MAY NOW OR HEREAFTER HAVE TO VENUE IN
ANY SUCH COURT OR THAT SUCH COURT IS AN INCONVENIENT FORUM; (d) AGREES TO
SERVICE OF PROCESS IN ANY SUCH PROCEEDING BY REGISTERED OR CERTIFIED MAIL,
POSTAGE PREPAID, OR IN ANY OTHER MANNER PERMITTED BY LAW, TO ANY THEN ACTIVE
AGENT FOR SERVICE OF PROCESS ("PROCESS AGENT") AT ANY SPECIFIED ADDRESS OR TO
BORROWER AT ITS ADDRESS SET FORTH HEREIN OR TO SUCH OTHER ADDRESS OF WHICH
ADMINISTRATIVE AGENT (WITH A COPY TO AGENT TO FOLLOW) SHALL HAVE BEEN NOTIFIED
IN WRITING (SUCH SERVICE TO BE EFFECTIVE ON THE EARLIER OF RECEIPT THEREOF OR,
IN THE CASE OF SERVICE BY MAIL, THE 5TH DAY AFTER DEPOSIT OF SUCH SERVICE IN THE
MAILS AS AFORESAID), AND HEREBY WAIVES ANY CLAIM OF ERROR ARISING OUT OF SERVICE
OF PROCESS BY ANY METHOD PROVIDED FOR HEREIN OR ANY CLAIM THAT SUCH SERVICE WAS
NOT EFFECTIVELY MADE; (e) AGREES THAT THE FAILURE OF ITS PROCESS AGENT TO GIVE
ANY NOTICE OF ANY SUCH SERVICE OF PROCESS TO IT SHALL NOT IMPAIR OR AFFECT THE
VALIDITY OF SUCH SERVICE OR ANY JUDGMENT BASED THEREON; (f) TO THE
75
EXTENT THAT BORROWER OR ANY SUCH SUBSIDIARY HAS ACQUIRED, OR HEREAFTER MAY
ACQUIRE, ANY IMMUNITY FROM JURISDICTION OF ANY SUCH COURT OR FROM LEGAL PROCESS
THEREIN, WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, SUCH
IMMUNITY; (g) WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, IN
CONNECTION WITH, OR WITH RESPECT TO, ANY SUIT, ACTION OR OTHER LEGAL PROCEEDING
RELATING TO THIS AGREEMENT OR THE NOTES OR ANY OF THE OTHER LOAN DOCUMENTS, (i)
ANY CLAIM THAT IT IS IMMUNE FROM ANY LEGAL PROCESS (WHETHER THROUGH SERVICE OR
NOTICE, ATTACHMENT PRIOR TO JUDGMENT, ATTACHMENT IN AID OF EXECUTION, EXECUTION
OR OTHERWISE) WITH RESPECT TO IT OR ANY OF ITS PROPERTY, (ii) ANY CLAIM THAT IT
IS NOT PERSONALLY SUBJECT TO THE JURISDICTION OF ANY SUCH COURT, AND (iii) ANY
RIGHT TO A JURY TRIAL; AND (h) AGREES THAT AGENT AND EACH LENDER SHALL HAVE THE
RIGHT TO BRING ANY LEGAL PROCEEDINGS (INCLUDING A PROCEEDING FOR ENFORCEMENT OF
A JUDGMENT ENTERED BY ANY OF THE AFOREMENTIONED COURTS) AGAINST BORROWER OR SUCH
SUBSIDIARY IN ANY OTHER COURT OR JURISDICTION IN ACCORDANCE WITH APPLICABLE LAW.
NOTWITHSTANDING THE FOREGOING, NOTHING IN THIS SECTION SHALL AFFECT THE RIGHT OF
AGENT AND EACH LENDER TO BRING ANY ACTION OR PROCEEDING RELATING TO THIS
AGREEMENT OR THE NOTES OR ANY OF THE OTHER LOAN DOCUMENTS IN THE COURTS OF ANY
OTHER JURISDICTION OR THE RIGHT, IN CONNECTION WITH ANY LEGAL ACTION OR
PROCEEDING WHATSOEVER, TO SERVE LEGAL PROCESS IN ANY OTHER MANNER PERMITTED BY
LAW. EACH OF BORROWER AND EACH OF ITS SUBSIDIARIES HEREBY IRREVOCABLY DESIGNATES
THE FIRM OF ▇▇▇▇▇▇▇▇ & WORCESTER, WITH OFFICES AT ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇,
▇▇▇ ▇▇▇▇ ▇▇▇▇▇, ATTENTION: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, AS ITS PROCESS AGENT TO RECEIVE
SERVICE OF ANY AND ALL PROCESS AND DOCUMENTS ON ITS BEHALF IN ANY LEGAL
PROCEEDING IN THE STATE OF NEW YORK AND SUCH PROCESS AGENT, BY ITS
ACKNOWLEDGEMENT BELOW, IRREVOCABLY AGREES TO SO ACT AS PROCESS AGENT FOR SERVICE
OF PROCESS. IF SUCH PROCESS AGENT SHALL FOR ANY REASON FAIL TO ACT, OR BE
PREVENTED FROM ACTING, AS PROCESS AGENT, NOTICE THEREOF SHALL IMMEDIATELY BE
GIVEN TO AGENT BY REGISTERED OR CERTIFIED MAIL AND BORROWER AGREES (FOR ITSELF
AND ITS SUBSIDIARIES) PROMPTLY TO DESIGNATE ANOTHER PROCESS AGENT IN THE CITY OF
NEW YORK, SATISFACTORY TO AGENT UNDER THIS AGREEMENT, TO SERVE IN PLACE OF SUCH
PROCESS AGENT AND DELIVER TO AGENT WRITTEN EVIDENCE OF SUCH SUBSTITUTE PROCESS
AGENT'S ACCEPTANCE OF SUCH DESIGNATION. SUCH ACTING PROCESS AGENT SHALL
NEVERTHELESS CONTINUE TO SERVE AS PROCESS AGENT UNTIL ITS SUCCESSOR IS DULY
APPOINTED.
10.3 Notices; Certain Payments. (a) All notices, consents and
other communications to Borrower or any of its Subsidiaries, Agent,
Administrative Agent or any
76
Lender relating hereto to be effective shall be in writing and shall be deemed
made (i) if by certified mail, return receipt requested, or facsimile, when
received, (ii) if by telex, when sent answerback received, and (iii) if by
courier, when receipted for, in each case addressed to them as follows or at
such other address as either of them may designate by written notice to the
other: (w) Borrower and its Subsidiaries: Health and Retirement Properties
Trust, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention: President and
Treasurer (telecopier no. (▇▇▇) ▇▇▇-▇▇▇▇) with a copy to ▇▇▇▇▇▇▇▇ & Worcester,
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention: ▇▇▇▇▇▇▇▇ ▇.
▇▇▇▇▇, Esq. (telecopier no. (▇▇▇) ▇▇▇-▇▇▇▇); (x) Agent: Kleinwort ▇▇▇▇▇▇
Limited, ▇.▇. ▇▇▇ ▇▇▇, ▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇, England,
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇▇, Loans Administration (telecopier no.
011-44-171-956-6105) with a copy to Kleinwort ▇▇▇▇▇▇ (North America),
Incorporated, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention:
▇▇▇▇▇ ▇▇▇▇▇▇ and ▇▇▇▇▇ ▇▇▇▇▇▇ (telecopier no. ▇-▇▇▇-▇▇▇-▇▇▇▇); (y)
Administrative Agent: ▇▇▇▇▇ Fargo Bank, National Association, Corporate Banking,
▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention: (in the case
of a Notice of Borrowing) ▇▇▇▇ ▇▇▇▇▇▇▇ (telecopier no. ▇-▇▇▇-▇▇▇-▇▇▇▇) or (in
all other cases) ▇▇▇▇▇ O'Melveny (telecopier no. ▇-▇▇▇-▇▇▇-▇▇▇▇); and (z) the
Lenders : to the addresses specified opposite such Lenders' respective names on
Schedule 1 hereto, with a copy to O'Melveny & ▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇
▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention: ▇▇▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇, Esq. (telecopier no. (212)
326-2061).
(b) All payments on account of the Loans and the related Notes
pursuant hereto or pursuant to the other Loan Documents shall be made to the
Borrower's account with Administrative Agent at:
▇▇▇▇▇ Fargo Bank, N.A.
San Francisco, California
ABA No. ▇▇▇▇▇▇▇▇▇
Account Name: Health and Retirement Properties Trust
Account No. 4518073184
together with irrevocable instructions to Administrative Agent to apply such
payments under this Agreement. Administrative Agent may by written notice to
Borrower specify or change its account and address for payment instructions
hereunder.
10.4 No Waivers; Cumulative Remedies; Entire Agreement;
Headings; Successors and Assigns; Counterparts; Severability. (a) No action,
failure, delay or omission by Agent, Administrative Agent or any Lender in
exercising any rights, powers, privileges and remedies under this Agreement, the
Notes or any other Loan Document, or otherwise, shall constitute a waiver of, or
impair, any of the rights, powers, privileges or remedies of Agent,
Administrative Agent or any Lender hereunder or thereunder.
(b) No single or partial exercise of any such right, power,
privilege or remedy shall preclude any other or further exercise thereof or the
exercise of any other right, power, privilege or remedy. Such rights, powers,
privileges and remedies are cumulative and not exclusive of any rights, powers,
privileges and remedies provided by law or otherwise available, including, but
not limited to, rights to specific performance (to the extent permitted by law)
or any covenant or agreement contained in this Agreement or any of the Loan
Documents. No waiver of any such right, power, privilege or remedy shall be
effective
77
unless given in writing by the Majority Lenders or as otherwise provided in
Section 10.6. No waiver of any such right, power, privilege or remedy shall be
deemed a waiver of any other right, power, privilege or remedy hereunder or
thereunder. Every right, power, privilege and remedy given by this Agreement or
by applicable law to Agent, Administrative Agent or any Lender may be exercised
from time to time and as often as may be deemed expedient by Agent,
Administrative Agent or any Lender.
(c) This Agreement, the Notes and the other Loan Documents
constitute the entire agreement of the parties relating to the subject matter
hereof and thereof and there are no verbal agreements relating hereto or
thereto. Section headings herein shall have no legal effect.
(d) This Agreement, the Notes and the other Loan Documents
(including all covenants, representations, warranties, rights, powers,
privileges and remedies made or granted herein or therein) shall inure to the
benefit of, and be enforceable by, Agent, Administrative Agent and each Lender
and their respective successors and assigns, except as otherwise expressly
provided in this Agreement. Neither Borrower nor any of its Subsidiaries may
directly or indirectly assign or transfer (whether by agreement, by operation of
law or otherwise) any of its rights or obligations and liabilities hereunder
without the prior written consent of each Lender. Each of the Lenders may make,
carry or transfer its pro rata share of the Loans at, to or for the account of,
any of its branch offices or the office of one or more of its Affiliates.
Further, each Lender may sell participations in all or any part of its pro rata
share of the Loans or its Commitments or any other interest herein or in its
Notes to another bank or Person, or with the prior written consent of Agent and
Borrower (not to be unreasonably withheld; provided that Borrower's consent
shall not be required if an Event of Default has occurred and is continuing)
each Lender may assign its rights and delegate its obligations under this
Agreement and any of the other Loan Documents and with the prior written consent
of Agent and Borrower (not to be unreasonably withheld; provided that Borrower's
consent shall not be required if an Event of Default has occurred and is
continuing) may assign all or any part of its pro rata share of the Loans or its
Commitment or any other interest herein or in its Notes to another bank or other
Person in amounts not less than $5,000,000 (or any lesser amount in the case of
an assignment by one Lender to another Lender) to any one assignee, in which
event (i) in the case of an assignment, upon notice thereof by such Lender to
Borrower, Agent and Administrative Agent, the assignee shall have, to the extent
of such assignment (unless otherwise provided therein), the same rights and
benefits as it would have if it were such Lender hereunder and the holder of a
Note and to such extent shall be deemed a "Lender" for all purposes of this
Agreement and the other Loan Documents, and (ii) in the case of a participation,
the participant shall not have any rights under this Agreement or any Note or
any other Loan Document (the participant's rights against such Lender in respect
of such participation to be those set forth in the agreement executed by such
Lender in favor of the participant relating thereto). In the case of such a
participation, the terms of the agreement or agreements pursuant to which any
such participation is created shall not confer upon the participant any right to
vote its interest as a participant in respect of any matter relating to the
Loans other than (w) the extension of the maturity of any Note or the time of
payment of interest thereon, (x) the reduction of the rate of interest payable
hereunder, (y) the reduction of any other amount payable hereunder or (z) the
increase of such participant's share of the relevant Lender's Commitment
hereunder. Each Lender may furnish any information concerning Borrower and its
Subsidiaries, the
78
Advisor, any Operator, any Mortgagor and any Credit Support Obligor in the
possession of such Lender from time to time to assignees and participants
(including prospective assignees and participants). In the event that any Lender
shall assign or sell any of its Notes, such Lender shall at the time of such
assignment or sale give written notice to Agent, Administrative Agent and
Borrower of the name and address of the assignee (including the name of the
account officer if applicable).
(e) Each Lender agrees that such Lender shall not assign or
offer to assign interests in its Notes in such a manner which would require that
the Notes be registered under applicable securities laws. Each Lender represents
that it is acquiring its respective Note for investment and not with a view to
or for sale in connection with any distribution thereof within the meaning of
the Securities Act of 1933, as amended; provided that the disposition of the
Notes in accordance with the other provisions of this Section 10.4 shall at all
times remain within the Lenders' control.
(f) This Agreement may be executed in any number of separate
counterparts, each of which shall be deemed an original and all of which taken
together shall be deemed to constitute one and the same instrument.
(g) In the event any one or more of the provisions contained
in this Agreement or any Notes or any other Loan Documents should be held
invalid, illegal or unenforceable in any respect, the validity, legality and
enforceability of the remaining provisions contained herein or therein shall not
in any way be affected or impaired thereby. The parties shall endeavor in
good-faith negotiations to replace the invalid, illegal or unenforceable
provisions with valid provisions the economic effect of which comes as close as
possible to that of the invalid, illegal, or unenforceable provisions.
10.5 Survival. The obligations of Borrower under Sections 2.6,
2.10, 2.12, 2.13, 2.14, 2.15, 5.12 and 10.7 (and all other indemnification and
expense reimbursement obligations of Borrower under this Agreement) shall
survive the repayment of the Loans and the cancellation of the Notes and the
termination of the other obligations of Borrower hereunder and under the other
Loan Documents. All representations and warranties made hereunder and in any
document, certificate or statement delivered pursuant hereto or in connection
herewith shall survive the execution and delivery of this Agreement and the
Notes and the funding of the Loans.
10.6 Amendments and Waivers. With the written consent of the
Majority Lenders, Agent and Borrower may, from time to time, enter into written
amendments, supplements or modifications hereto or to any of the other Loan
Documents and with the written consent of the Majority Lenders, Agent on behalf
of the Lenders may execute and deliver to Borrower a written instrument waiving,
on such terms and conditions as Agent may specify in such instrument, any of the
requirements of this Agreement or the Notes or any Default or Event of Default
and its consequences; provided that no such waiver and no such amendment,
supplement or modification shall (a) extend the maturity of any Note, or reduce
the rate or extend the time of payment of interest thereon, or reduce or
postpone the due date for the principal amount thereof or any other amount
payable in connection herewith, or change the amount or terms of any Lender's
Commitment or amend, modify or waive any provision of this Section or reduce the
percentage specified in the definition of Majority
79
Lenders, or consent to the assignment or transfer by Borrower or any of its
Subsidiaries of any of its rights and obligations under this Agreement, in each
case without the written consent of all the Lenders, (b) amend, modify or waive
any provision of Section 8 or otherwise change any of the rights or obligations
of either or both of the Loan Agents under any of the Loan Documents without the
written consent of the affected Loan Agent or Loan Agents (as applicable) at the
time, (c) with respect to Section 6.7, amend, modify or waive (y) any provision
thereof in a manner which permits Borrower or any of its Subsidiaries to own,
operate, acquire or fund income producing real property interests or facilities
which do not offer health care or related services or rehabilitation or
retirement services, or incidental activities to any of the foregoing, or (z)
the proviso to Section 6.7, without, in the case of both clauses (y) and (z) of
this clause (c), the written consent of the Majority Lenders, Agent, Co-Agent
and Borrower (provided that any other type of amendment, modification or waiver
of Section 6.7 shall only require the written consent of the Majority Lenders,
Agent and Borrower) or (d) amend, modify or waive any provision of this Section
10.6 without the written consent of all Lenders. In the case of any waiver,
Borrower, Agent, Administrative Agent and the Lenders shall be restored to their
former position and rights hereunder and under the Outstanding Notes, and any
Default or Event of Default waived shall be deemed to be cured and not
continuing; but no such waiver shall extend to any subsequent or other Default
or Event of Default, or impair any right consequent thereon.
10.7 Payment of Expenses and Taxes. Borrower agrees (a) to pay
or reimburse each of Agent and Administrative Agent on demand for all its
out-of-pocket costs and expenses incurred in connection with the development,
preparation and execution of, and any amendment, supplement or modification to,
this Agreement, the Notes and any other Loan Documents or other documents
prepared in connection herewith, and the consummation of the transactions
contemplated hereby and thereby, including, without limitation, the reasonable
fees and disbursements of counsel to Agent and Administrative Agent, (b) to pay
or reimburse each Lender, Agent and Administrative Agent on demand for all its
costs and expenses incurred in connection with the enforcement or preservation
of any rights under this Agreement, the Notes, the other Loan Documents and any
such other documents, or the satisfaction or review of conditions precedent to
any borrowing other than that occurring on the Effective Date, including,
without limitation, reasonable fees and disbursements of counsel to Agent and
Administrative Agent and, in the case of enforcement or preservation of any
rights under this Agreement, counsel to the several Lenders, and (c) to pay,
indemnify, and to hold each Lender, Agent and Administrative Agent and their
respective officers, directors, employees and agents harmless for, from and
against, any and all recording and filing fees and any and all liabilities with
respect to, or resulting from any delay in paying, stamp, excise and other
taxes, if any, which may be payable or determined to be payable in connection
with the execution and delivery of, or consummation or administration of any of
the transactions contemplated by, or any amendment, supplement or modification
of, or any waiver or consent under or in respect of, this Agreement, the Notes,
the other Loan Documents and any such other documents, and (d) to pay,
indemnify, and hold each Lender, Agent and Administrative Agent and their
respective officers, directors, employees and agents harmless for, from and
against any and all other liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, costs, expenses or disbursements of any kind or
nature whatsoever with respect to the execution, delivery, enforcement,
performance and administration of, or in any other way arising out of or
relating to, this Agreement, the Notes, the other Loan Documents and any such
other documents, including, without limitation, any
80
claim resulting or arising out of the presence of Hazardous Materials in any of
the Properties (all the foregoing, collectively, the "Indemnified Liabilities"),
provided that Borrower shall have no obligation hereunder with respect to
Indemnified Liabilities arising from (i) the willful misconduct of any such
Lender or (ii) legal proceedings commenced against any such Lender by any
security holder or creditor thereof arising out of and based upon rights
afforded any such security holder or creditor solely in its capacity as such.
10.8 Adjustments; Setoff.
(a) If any Lender (a "benefitted Lender") shall at any time
receive any payment of all or part of its Loan, or interest thereon, or receive
any collateral in respect thereof (whether voluntarily or involuntarily, by
set-off, pursuant to events or proceedings of the nature referred to in clause
(g) of Section 7.1, or otherwise) in a greater proportion than any such payment
to or collateral received by any other Lender, if any, in respect of such other
Lenders' Loan, or interest thereon, such benefitted Lender shall purchase for
cash from the other Lenders such portion of each such other Lender's Loan, or
shall provide such other Lenders with the benefits of any such collateral, or
the proceeds thereof, as shall be necessary to cause such benefitted Lender to
share the excess payment or benefits of such collateral or proceeds ratably with
each of the Lenders; provided that if all or any portion of such excess payment
or benefits is thereafter recovered from such benefitted Lender, such purchase
shall be rescinded, and the purchase price and benefits returned, to the extent
of such recovery, but without interest. Borrower expressly consents to the
foregoing arrangements and agrees that each Lender so purchasing a portion of
another Lender's Loan may exercise all rights of payment (including, without
limitation, rights of set-off) with respect to such portion as fully as if such
Lender were the direct holder of such portion.
(b) In addition to any rights and remedies of the Lenders
provided by law, each Lender shall have the right, without prior notice to
Borrower, any such notice being expressly waived by Borrower to the extent
permitted by applicable law, upon
(i) the filing of a petition under any of the provisions of
the federal bankruptcy act or amendments thereto, by or against;
(ii) the making of an assignment for the benefit of creditors
by;
(iii) the application for the appointment, or the appointment,
of any receiver of, or of any of the property of;
(iv) the issuance of any execution against any of the property
of;
(v) the issuance of a subpoena or order, in supplementary
proceedings, against or with respect to any of the property of; and/or
(vi) or the issuance of a warrant of attachment against any of
the property of;
Borrower to set off and apply against any indebtedness, whether matured or
unmatured, of Borrower to such Lender, any amount owing from such Lender to
Borrower, at or at any time
81
after, the happening of any of the above-mentioned events, and the aforesaid
right of set off may be exercised by such Lender against Borrower or against any
trustee in bankruptcy, debtor in possession, assignee for the benefit of
creditors, receiver, or execution, judgment or attachment creditor of Borrower,
or against anyone else claiming through or against Borrower or such trustee in
bankruptcy, debtor in possession, assignee for the benefit of creditors,
receiver, or execution, judgment or attachment creditor, notwithstanding the
fact that such right of set off shall not have been exercised by such Lender
prior to the making, filing or issuance, or service upon such Lender of, or of
notice of, any such petition; assignment for the benefit of creditors;
appointment or application for the appointment of a receiver; or issuance of
execution, subpoena or order of warrant. Each Lender agrees promptly to notify
Borrower, Agent and Administrative Agent after any such set off and application
made by such Lender, provided that the failure to give such notice shall not
affect the validity of such set off and application. The proceeds of any set off
or application pursuant to this subsection (b) of Section 10.8 shall be
distributed in accordance with the preceding subsection (a).
10.9 NONLIABILITY OF TRUSTEES. THE DECLARATION OF
TRUST ESTABLISHING BORROWER, DATED OCTOBER 9, 1986, A COPY OF
WHICH, TOGETHER WITH ALL AMENDMENTS THERETO (THE "DECLARATION"), IS DULY FILED
WITH THE DEPARTMENT OF ASSESSMENTS AND TAXATION OF THE STATE OF MARYLAND,
PROVIDES THAT THE NAME "HEALTH AND RETIREMENT PROPERTIES TRUST" REFERS TO THE
TRUSTEES UNDER THE DECLARATION COLLECTIVELY AS TRUSTEES, BUT NOT INDIVIDUALLY OR
PERSONALLY, AND THAT NO TRUSTEE, OFFICER, SHAREHOLDER, EMPLOYEE OR AGENT OF
BORROWER SHALL BE HELD TO ANY PERSONAL LIABILITY, JOINTLY OR SEVERALLY, FOR ANY
OBLIGATION OF, OR CLAIM AGAINST, BORROWER. ALL PERSONS DEALING WITH BORROWER, IN
ANY WAY, SHALL LOOK ONLY TO THE ASSETS OF BORROWER FOR THE PAYMENT OF ANY SUM OR
THE PERFORMANCE OF ANY OBLIGATION.
[Remainder of page left blank intentionally]
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IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed and delivered in New York, New York by their
proper and duly authorized officers as of the day and year first above written.
HEALTH AND RETIREMENT
PROPERTIES TRUST
By: /s/ ▇▇▇▇ ▇▇▇▇▇
Name: ▇▇▇▇ ▇▇▇▇▇
Title: Treasurer
KLEINWORT ▇▇▇▇▇▇ LIMITED, as
Agent and as a Lender
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Director
▇▇▇▇▇ FARGO BANK, NATIONAL
ASSOCIATION, as Administrative Agent
and as a Lender
By: /s/ ▇▇▇▇▇ ▇. O'Melveny
Name: ▇▇▇▇▇ ▇. O'Melveny
Title: Vice President
NATWEST BANK N.A., as Co-Agent and
as a Lender
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
Title: Vice President
FLEET BANK OF MASSACHUSETTS,
as a Lender
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇▇
Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇▇
Title: Vice President
S-1
THE SUMITOMO BANK, LIMITED,
Chicago Branch, as a Lender
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Vice President and Manager
By: /s/▇▇▇▇▇▇▇ ▇. ▇'▇▇▇▇▇▇▇▇
Name: ▇▇▇▇▇▇▇ ▇. ▇'▇▇▇▇▇▇▇▇
Title: Ass't. Vice President
MITSUI LEASING (USA) INC., as a
Lender
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇
Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇
Title: President
BANK HAPOALIM B.M., as a Lender
By: /s/ ▇▇▇▇▇ ▇▇▇▇ Raffy
Name: ▇▇▇▇▇ ▇▇▇▇ Raffy
Title: Executive Vice President
By: /s/ ▇▇▇▇▇ Breidhart
Name: ▇▇▇▇▇ Breidhart
Title: Ass't. Vice President
DRESDNER BANK AG, New York
Branch and Grand Cayman Branch, as a
Lender
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇
Title: Vice President
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Title: Ass't. Vice President
CREDIT LYONNAIS Cayman Island
Branch, as a Lender
By: /s/ Farboud Tavangar
Name: Farboud Tavangar
Title: Authorized Signature
S-2
BANK OF MONTREAL, as a Lender
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Director
▇▇▇▇▇ NATIONAL BANK, as a Lender
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Vice President
VIA BANQUE, as a Lender
By: /s/ ▇▇▇▇▇▇▇▇ Prot
Name: ▇▇▇▇▇▇▇▇ Prot
Title: Sous Directeur
By: /s/ ▇. ▇▇▇▇▇▇
Name: ▇. ▇▇▇▇▇▇
Title: Directeur
DG BANK
Deutsche Genossenschaftsbank, as a
Lender
By: /s/ ▇▇▇▇▇ ▇. ▇'▇▇▇▇▇▇▇
Name: ▇▇▇▇▇ ▇. ▇'▇▇▇▇▇▇▇
Title: Vice President
By:
Name:
Title:
S-3
SOCIETY NATIONAL BANK, as a
Lender
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇
Title: Vice President
For the purposes of Section 9:
HEALTH AND RETIREMENT
PROPERTIES INTERNATIONAL, INC.
By: /s/ ▇▇▇▇ ▇▇▇▇▇
Name: ▇▇▇▇ ▇▇▇▇▇
Title: Treasurer
CAUSEWAY HOLDINGS INC.
By: /s/ ▇▇▇▇ ▇▇▇▇▇
Name: ▇▇▇▇ ▇▇▇▇▇
Title: Treasurer
SJO CORPORATION
By: /s/ ▇▇▇▇ ▇▇▇▇▇
Name: ▇▇▇▇ ▇▇▇▇▇
Title: Treasurer
S-4
EXHIBIT A
[FORM OF PROMISSORY NOTE]
PROMISSORY NOTE
$___________ New York, New York
March ___, 1996
FOR VALUE RECEIVED, the undersigned, HEALTH AND RETIREMENT
PROPERTIES TRUST, a real estate investment trust organized under the laws of the
State of Maryland (the "Borrower"), hereby unconditionally promises to pay to
the order of ___________ (the "Lender") in lawful money of the United States of
America and in immediately available funds, the lesser of (a) ____________ or
(b) the unpaid outstanding principal amount from time to time of the Loans from
the Lender to the Borrower pursuant to the Loan Agreement hereinafter referred
to, on the Termination Date; provided that Loans denominated in GBP shall be
repaid in the currency required by and otherwise in accordance with and subject
to the terms of the Loan Agreement.
The undersigned further agrees to pay interest in like money
on the unpaid principal amount of such Loans (including, without limitation, any
interest accrued and unpaid as at the date of this Note) on the dates and at the
rate or rates and in the currency provided for in the Loan Agreement until paid
in full (both before and after judgment). The holder of this Note is authorized
to endorse from time to time the date and amount of the Loans, any conversions
or continuations thereof, each payment of principal with respect thereto and
whether such Loans are Base Rate Loans, Eurodollar Loans or Alternate Rate Loans
on the schedule annexed hereto and made a part hereof, or on a continuation
thereof which shall be attached hereto and made a part hereof, which
endorsements shall constitute prima facie evidence of the accuracy of the
information endorsed. Any failure to make any such endorsement, however, shall
not limit or otherwise affect the obligations of Borrower under this Note.
All payments of principal and interest hereunder shall be made
to the account of the Administrative Agent referred to below designated in or
pursuant to the Loan Agreement for payments thereunder for the benefit of the
Lender named herein.
This Note is one of the Notes referred to in the Third Amended
and Restated Revolving Loan Agreement dated as of March 15, 1996 among the
Borrower, the Lenders named therein, Kleinwort ▇▇▇▇▇▇ Limited, as Agent, ▇▇▇▇▇
Fargo Bank, National Association, as Administrative Agent, and NatWest Bank
N.A., as Co-Agent (as the same may be or may have been amended, restated,
supplemented or otherwise modified from time to time, the "Loan Agreement"). The
holder of this Note is entitled to the benefits of the Loan Agreement. Terms
defined in the Loan Agreement and not otherwise defined herein are used herein
with the same meanings. Reference is made to the Loan Agreement for provisions
for the prepayment hereof and the acceleration of the maturity hereof.
The Borrower promises to pay all costs and expenses, including
reasonable attorneys' fees, incurred in the collection or enforcement of this
Note. The Borrower hereby waives diligence, presentment, protest, demand and
notice of every kind and, to the full
A-1
extent permitted by law, the right to plead any statute of limitations as a
defense to any demand hereunder.
The Declaration of Trust of the Borrower provides that the
name "Health and Retirement Properties Trust" refers to the Trustees under the
Declaration of Trust (the "Trustees") collectively as Trustees, but not
individually or personally, and that no Trustee, officer, shareholder, employee
or agent of the Borrower shall be held to any personal liability, jointly or
severally, for any obligation of, as claims against, the Borrower.
This Note shall be governed by, and construed and enforced in
accordance with, the laws of the State of New York.
HEALTH AND RETIREMENT
PROPERTIES TRUST
By: __________________________________
Name: ____________________________
Title: ____________________________
A-2
Amount and Currency
Date of Loan, of Loan, Eurodollar, Base Amount of
Conversion or Conversion or Rate or Alternate Principal Notation
Continuation Continuation Rate Loan Repaid Made By
A-3
EXHIBIT B
[FORM OF NOTICE OF BORROWING]
NOTICE OF BORROWING
Pursuant to that certain Third Amended and Restated Revolving
Loan Agreement dated as of March 15, 1996 (such agreement, as it may be or may
have been amended, restated, supplemented or otherwise modified from time to
time, the "Loan Agreement"; capitalized terms used herein without definition
shall have the respective meanings assigned to those terms in the Loan
Agreement) among Health and Retirement Properties Trust (formerly known as
Health and Rehabilitation Properties Trust) ("Borrower"), the Lenders party
thereto, Kleinwort ▇▇▇▇▇▇ Limited, as Agent, ▇▇▇▇▇ Fargo Bank, National
Association, as Administrative Agent, and NatWest Bank N.A., as Co-Agent, this
certificate represents Borrower's Notice of Borrowing under Section 2.3(a) of
the Loan Agreement for the borrowing described below (the "Borrowing"). The
information relating to the Borrowing required by Section 2.3(a) of the Loan
Agreement is as follows:
(i) The proposed Borrowing Date is [date].
(ii) The proposed Borrowing is to be denominated in [U.S.$]
[GBP].
(iii) The proposed Borrowing is of $_________ [in Eurodollar
Loans] [and] [$__________ in Base Rate Loans].
[(iv) The initial Interest Period applicable to the Eurodollar
Loans, if applicable, is [one, two, three or six months][state other period].]
[(v) [$__________ of the proposed Borrowing of Eurodollar
Loans] [and] [$__________ of the proposed Borrowing of Base Rate Loans] shall be
General Corporate Loans.]
[(vi)] Borrower's representations and warranties contained in
the Loan Documents are true, correct and accurate in all material respects to
the same extent as though made on and as of the date hereof unless stated in the
relevant Loan Document to relate to a specific earlier date, in which case such
representations and warranties are true, correct and complete in all material
respects as of such earlier date.
[(vii)] No event has occurred and is continuing or would
result from the proposed Borrowing that would constitute a Default or Event of
Default.
[(viii)] The amount of the proposed Borrowing will not cause
the aggregate outstanding principal amount of the Loans to exceed the
Commitments currently in effect.
[(ix)] The amount of the proposed Borrowing will not cause the
aggregate amount of all General Corporate Loans outstanding to exceed 25% of the
Commitments currently in effect.
[(x) ]The amount of the proposed Borrowing will not cause the
aggregate
B-1
amount of the Loans outstanding denominated in GBP to exceed the Equivalent
Amount of $100,000,000 (as determined in accordance with Section 1.3(b) of the
Loan Agreement).
[(xi)] The proceeds of the proposed Borrowing (other than any
proceeds in respect of General Corporate Loans) shall be used to make
payment on the proposed Borrowing Date for the purchase price and costs
of acquiring interests in one or more Facilities due and payable on
such Borrowing Date.
[(xii)] With respect to the proceeds of the proposed Borrowing
(other than any proceeds of General Corporate Loans):
(a) the name (s) of the proposed [Operators] [and/or
Mortgagors] of the Facility or Facilities to which such
Borrowing relates are ______________, and the name (s) of any
Credit Support Obligors in relation thereto are
___________;
(b) the name (s) and location (s) of such Facility or
Facilities are ___________;
(c) (1) [with respect to each Eligible Property or Property:
the Appraised Value (s) thereof in the most recent Appraisal
(s) are $__________; the acquisition costs to Borrower or to
one of its Subsidiaries therefor are $_____________; the value
(s) attributable to any capital improvements made and financed
by such Operators are $___________; and the minimum purchase
prices which would be payable to Borrower or such Subsidiary
by such Operators or any other Person if purchased on the date
of this Notice pursuant to the exercise of any right of
purchase are $_________;] and
[with respect to each Eligible Mortgage or Mortgage Interest:
the Appraised Value (s) of the Mortgaged Properties in the
most recent Appraisal (s) are $___________; and the
outstanding principal amounts due to Borrower or one of its
Subsidiaries from Mortgagors are: $____________;] and
(2) description of interests of Borrower or one of its
Subsidiaries to be acquired with proceeds of such Borrowing:
_________________________; and
(d) the proceeds of such Loan [will/will not] be used to
acquire an interest in any Facility which interest is required
to be an [Eligible Property] [Eligible Mortgage] included in
the calculation of Indebtedness permitted under Section 6.8(a)
after giving effect to such Loan.
[Borrower confirms to you pursuant to Section 2.3(a) of the
Loan Agreement that Borrower has irrevocably given telephonic notice of such
borrowing under the Loan Agreement pursuant to the telephone conversation on
[date] between ____________ and
__________.]
Please pay the proceeds of such Loans into the account whose
details are given below:
B-2
DATED: HEALTH AND RETIREMENT PROPERTIES TRUST
By:
Its:
B-3
EXHIBIT C
[FORM OF NOTICE OF CONTINUATION/CONVERSION]
NOTICE OF CONTINUATION/CONVERSION
Pursuant to that certain Third Amended and Restated Revolving
Loan Agreement dated as of March 15, 1996 (such agreement, as it may be or may
have been amended, restated, supplemented or otherwise modified from time to
time, the "Loan Agreement"; capitalized terms used herein without definition
shall have the respective meanings assigned to those terms in the Loan
Agreement) among Health and Retirement Properties Trust ("Borrower"), the
Lenders party thereto, Kleinwort ▇▇▇▇▇▇ Limited, as Agent, ▇▇▇▇▇ Fargo Bank,
National Association, as Administrative Agent, and NatWest Bank N.A., as
co-agent, this certificate represents Borrower's Notice of
Continuation/Conversion under Section 2.5(b) of the Loan Agreement for the Loans
specified below.
Borrower hereby requests to [continue as Eurodollar Loans
$__________ in aggregate principal amount of the outstanding Eurodollar Loans,
the current Interest Period of which ends on __________, 19__][and][convert to
[Base Rate Loans][Eurodollar Loans] $__________ in aggregate principal amount of
the outstanding [Eurodollar Loans, the current Interest Period of which ends on
__________][Base Rate Loans][Alternate Rate Loans]]. The date for such
[continuation] [and] [conversion] shall be . [The Interest Period for such
continued or converted (as applicable) Eurodollar Loans is requested to be [a
__________ month period][a __________ period, if agreed by all Lenders.]
Borrower hereby certifies that:
(i) No event has occurred and is continuing or would result
from the proposed Borrowing that would constitute a Default or Event of
Default.
(ii) Borrower's representations and warranties contained in
the Loan Documents are true, correct and accurate in all material
respects to the same extent as though made on and as of the date hereof
unless stated in the relevant Loan Document to relate to a specific
earlier date, in which case such representations and warranties are
true, correct and complete in all material respects as of such earlier
date.
C-1
[Borrower confirms to you pursuant to Section 2.5(b) of the
Loan Agreement that Borrower has irrevocably given telephonic notice of such
continuation/conversion under the Loan Agreement pursuant to the telephone
conversation on [date] between ____________ and __________.]
DATED: HEALTH AND RETIREMENT PROPERTIES TRUST
By:
Its:
C-2
SCHEDULE 1
LENDERS' COMMITMENTS
LENDER COMMITMENT
Kleinwort ▇▇▇▇▇▇ Limited $ 10,000,000
▇▇▇▇▇ Fargo Bank, National Association $ 20,000,000
NatWest Bank N.A. $ 25,000,000
The Sumitomo Bank, Limited, Chicago Branch $ 20,000,000
Fleet Bank of Massachusetts $ 20,000,000
Bank Hapoalim B.M. $ 20,000,000
Dresdner Bank AG, New York Branch
and Grand Cayman Branch $ 20,000,000
Credit Lyonnais
Cayman Island Branch $ 20,000,000
Mitsui Leasing (USA) Inc. $ 12,500,000
Bank of Montreal $ 20,000,000
▇▇▇▇▇ National Bank $ 12,500,000
Via Banque $ 20,000,000
DG Bank $ 15,000,000
Society National Bank $ 15,000,000
Total $ 250,000,000
-----------
CERTAIN LENDING OFFICES
Kleinwort ▇▇▇▇▇▇ Limited
▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇
Tel: (▇▇) ▇▇▇-▇▇▇-▇▇▇▇
Fax: (▇▇) ▇▇▇-▇▇▇-▇▇▇▇
Attn: ▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇ Fargo Bank, National Association
Corporate Banking
S1-1
▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Tel: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇ ▇▇▇▇
Attn: ▇▇▇▇▇ O'Melveny
NatWest Bank N.A.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Tel: (▇▇▇) ▇▇▇ ▇▇▇▇
Fax: (▇▇▇) ▇▇▇ ▇▇▇▇
Attn: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
The Sumitomo Bank, Limited, Chicago Branch (USCBD)
▇▇▇ ▇. ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Tel: (▇▇▇) ▇▇▇ ▇▇▇▇
Fax: (▇▇▇) ▇▇▇ ▇▇▇▇
Attn: VP + Manager - Operations
Fleet Bank of Massachusetts
▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Tel: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
Attn: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇▇
Mitsui Leasing (U.S.A.) Inc.
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Tel: (▇▇▇) ▇▇▇ ▇▇▇▇
Fax: (▇▇▇) ▇▇▇ ▇▇▇▇
Attn: ▇▇▇▇ ▇▇▇▇▇▇▇
Bank Hapoalim B.M.
▇▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Tel: (▇▇▇) ▇▇▇ ▇▇▇▇
Fax: (▇▇▇) ▇▇▇ ▇▇▇▇
Attn: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Dresdner Bank, New York Branch
and Grand Cayman Branch
▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇-▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Tel: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
Attn: ▇▇▇▇▇▇ ▇▇▇▇
Credit Lyonnais
Cayman Island Branch
1301 Avenue of the ▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Tel: (▇▇▇) ▇▇▇ ▇▇▇▇
Fax: (▇▇▇) ▇▇▇ ▇▇▇▇
Attn: ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Bank of Montreal
▇▇▇ ▇. ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Tel: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
Attn: ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ National Bank
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇
▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Tel: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
Attn: ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇
▇▇ ▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇
Tel: ▇▇▇-▇▇▇-▇▇▇▇-▇▇▇▇
Fax: ▇▇▇-▇▇▇-▇▇▇▇-▇▇▇▇
Attn: ▇▇▇▇▇▇▇▇ Prot
Society National Bank
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇
▇▇ ▇▇▇▇▇-▇▇▇▇
Tel: (▇▇▇) ▇▇▇-▇▇▇▇
S1-3
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
Attn: ▇▇▇▇▇▇ ▇▇▇▇
S1-4
SCHEDULE 2
PERMITTED EXCEPTIONS
1. Liens of landlords, mechanics, materialmen and other Liens imposed by
law incurred in the ordinary course of business for sums not yet
delinquent or being contested in good faith; provided that, in each
case, any such Lien is not reasonably likely to cause a MAC; and
provided further that, in the case of any Liens being so contested, (v)
the amount secured thereby is not material in relation to the Allowed
Value of the affected Property or Mortgage Interest, (w) such Property
or any interest therein would not be in any danger of being sold,
forfeited or lost by reason of such contest; (y) no insurance coverage
required to be maintained pursuant to this Agreement shall be cancelled
or jeopardized as a result of the contest; and (z) if required by
Agent, Borrower shall have furnished to Agent a bond, or other security
satisfactory to Agent, to protect Lenders from any liability to which
it may be exposed as a result of such contest.
2. In the case of a Property, all Leases for such Property and the rights
of the Operators under such Leases and any Credit Support Agreements
relating to such Leases.
3. In the case of a Mortgaged Property, the Mortgaged Interest Agreements
for such Mortgaged Property and any Credit Support Agreements relating
thereto.
4. Liens for taxes, assessments, water rates, sewer or other governmental
charges or claims, the payment of which is not, at the time, due.
5. Easements, rights-of-way, rights of access, encroachments upon or by
any Property, in respect of which affirmative insurance, without
payment of additional premiums, has been provided by a reputable title
insurance company.
6. Easements, rights-of-way, restrictions, minor defects, encroachments or
irregularities in title and other similar charges or encumbrances that,
in respect of any Property, could not reasonably be likely to result in
a MAC.
7. Liens resulting from equipment financings or similar security
arrangements entered into by an Operator.
S2-1
SCHEDULE 3
AMOUNTS OWED UNDER THE EXISTING LOAN AGREEMENT
Kleinwort ▇▇▇▇▇▇ Limited
1. Aggregate principal amount of Existing
Loans outstanding on March 29, 1996 $5,600,000.00
-------------
2. Aggregate interest accrued (whether
or not due and payable) on March 29, 1996 $128,116.66
-----------
3. Aggregate commitment fee accrued (whether
or not due and payable) on March 29, 1996 $9,543.34
---------
▇▇▇▇▇ Fargo Bank, N.A.
1. Aggregate principal amount of Existing
Loans outstanding on March 29, 1996 $5,600,000.00
-------------
2. Aggregate interest accrued (whether
or not due and payable) on March 29, 1996 $28,116.66
----------
3. Aggregate commitment fee accrued (whether
or not due and payable) on March 29, 1996 $9,543.34
---------
NatWest Bank, N.A.
1. Aggregate principal amount of Existing
Loans outstanding on March 29, 1996 $7,000,000.00
-------------
2. Aggregate interest accrued (whether
or not due and payable) on March 29, 1996 $35,145.83
----------
3. Aggregate commitment fee accrued (whether
or not due and payable) on March 29, 1996 $11,929.16
----------
Fleet Bank of Massachusetts
S3-1
1. Aggregate principal amount of Existing
Loans outstanding on March 29, 1996 $5,600,000.00
-------------
2. Aggregate interest accrued (whether
or not due and payable) on March 29, 1996 $28,116.66
----------
3. Aggregate commitment fee accrued (whether
or not due and payable) on March 29, 1996 $9,543.34
---------
The Sumitomo Bank, Limited, Chicago Branch
1. Aggregate principal amount of Existing
Loans outstanding on March 29, 1996 $5,600,000.00
-------------
2. Aggregate interest accrued (whether
or not due and payable) on March 29, 1996 $28,116.66
----------
3. Aggregate commitment fee accrued (whether
or not due and payable) on March 29, 1996 $9,543.34
---------
Mitsui Leasing (USA) Inc.
1. Aggregate principal amount of Existing
Loans outstanding on March 29, 1996 $3,500,000.00
-------------
2. Aggregate interest accrued (whether
or not due and payable) on March 29, 1996 $17,572.91
----------
3. Aggregate commitment fee accrued (whether
or not due and payable) on March 29, 1996 $5,964.58
---------
Bank Hapoalim B.M.
1. Aggregate principal amount of Existing
Loans outstanding on March 29, 1996 $5,600,000.00
-------------
2. Aggregate interest accrued (whether
or not due and payable) on March 29, 1996 $28,116.66
----------
3. Aggregate commitment fee accrued (whether
or not due and payable) on March 29, 1996 $9,543.34
---------
Dresdner Bank
1. Aggregate principal amount of Existing
S3-2
Loans outstanding on March 29, 1996 $5,600,000.00
-------------
2. Aggregate interest accrued (whether
or not due and payable) on March 29, 1996 $28,116.66
----------
3. Aggregate commitment fee accrued (whether
or not due and payable) on March 29, 1996 $9,543.34
---------
Credit Lyonnais
1. Aggregate principal amount of Existing
Loans outstanding on March 29, 1996 $5,600,000.00
-------------
2. Aggregate interest accrued (whether
or not due and payable) on March 29, 1996 $28,116.66
----------
3. Aggregate commitment fee accrued (whether
or not due and payable) on March 29, 1996 $9,543.34
---------
Bank of Montreal
1. Aggregate principal amount of Existing
Loans outstanding on March 29, 1996 $2,800,000.00
-------------
2. Aggregate interest accrued (whether
or not due and payable) on March 29, 1996 $14,058.33
----------
3. Aggregate commitment fee accrued (whether
or not due and payable) on March 29, 1996 $4,771.67
---------
▇▇▇▇▇ National Bank
1. Aggregate principal amount of Existing
Loans outstanding on March 29, 1996 $3,500,000.00
-------------
2. Aggregate interest accrued (whether
or not due and payable) on March 29, 1996 $17,572.91
----------
3. Aggregate commitment fee accrued (whether
or not due and payable) on March 29, 1996 $5,964.58
---------
Via Banque
1. Aggregate principal amount of Existing
Loans outstanding on March 29, 1996 $5,600,000.00
-------------
S3-3
2. Aggregate interest accrued (whether
or not due and payable) on March 29, 1996 $28,116.66
----------
3. Aggregate commitment fee accrued (whether
or not due and payable) on March 29, 1996 $9,543.34
---------
DG Bank
1. Aggregate principal amount of Existing
Loans outstanding on March 29, 1996 $4,200,000.00
-------------
2. Aggregate interest accrued (whether
or not due and payable) on March 29, 1996 $21,087.50
----------
3. Aggregate commitment fee accrued (whether
or not due and payable) on March 29, 1996 $7,157.50
---------
Society National Bank
1. Aggregate principal amount of Existing
Loans outstanding on March 29, 1996 $4,200,000.00
-------------
2. Aggregate interest accrued (whether
or not due and payable) on March 29, 1996 $21,087.50
----------
3. Aggregate commitment fee accrued (whether
or not due and payable) on March 29, 1996 $7,157.50
---------
S3-4
SCHEDULE 4
BORROWER'S SUBSIDIARIES
Name of Jurisdiction of Shares Shares %
Subsidiary Incorporation Authorized Outstanding Owned
1. Church Creek Massachusetts 200,000 100 100%
Corporation common
stock
($0.01 par
value)
2. Health and Delaware 3,000 100 100%
Retirement common
Properties stock
International, ($0.01 par
Inc. value)
3. Causeway Holdings Inc. Massachusetts 200,000 100 100%
Common
Stock
($0.01 par
value)
4. SJO Corporation Massachusetts 200,000 100 100%
Common
Stock
($0.01 par
value)
S4-1
SCHEDULE 5
Calculation of the Mandatory Liquid Asset Costs
for any GBP Loans
(a) The Mandatory Liquid Asset Costs for a Loan if denominated in GBP for
each Interest Period for that Loan is calculated in accordance with the
following formula:
BY + L(Y-X) + S(Y-Z)% PER ANNUM
--------------------
100 - (B+S)
where on the day of the application of the formula:
B is the percentage of Agent's eligible liabilities which the
Bank of England then requires Agent to hold on a
non-interest-bearing deposit account in accordance with its
cash ratio requirements;
Y is the rate at which GBP deposits are offered by Agent to
leading banks in the London interbank market at or about 11.00
A.M. on that day for the relevant period;
L is the percentage of eligible liabilities which (as a result
of the requirements of the Bank of England) Agent maintains as
secured money with members of the London Discount Market
Association or in certain marketable or callable securities
approved by the Bank of England, which percentage shall (in
the absence of evidence that any other figure is appropriate)
be conclusively presumed to be 5 per cent.;
X is the rate at which secured GBP deposits may be placed by
Agent with members of the London Discount Market Association
at or about 11.00 A.M. on that day for the relevant period or,
if greater, the rate at which GBP bills of exchange (of a
tenor equal to the duration of the relevant period) eligible
for rediscounting at the Bank of England can be discounted in
the London Discount Market at or about 11.00 A.M. on that day;
S is the percentage for Agent's eligible liabilities which the
Bank of England requires Agent to place as a special deposit;
and
Z is the interest rate per annum allowed by the Bank of England
on special deposits.
(b) For the purposes of this Schedule:
(i) "eligible liabilities" and "special deposits" have the
meanings given to them at the time of application of the
formula by the Bank of England; and
(ii) "relevant period" in relation to each Interest Period means:
S5-1
(A) if it is 3 months or less, that Interest Period, or
(B) if it is more than 3 months, 3 months.
(c) In the application of the formula, B, Y, L, X, S and Z are included in
the formula as figures and not as percentages, e.g. if B=0.5% and Y =
15%, BY is calculated as 0.5 x 15.
(d) The formula is applied on the first day of each relevant period. Each
amount is rounded up to the nearest one-sixteenth of one per cent.
(e) If Agent determines that a change in circumstances has rendered, or
will render, the formula inappropriate, Agent (after consultation with
the Lenders) shall notify Borrower of the manner in which the Mandatory
Liquid Asset Costs for such Loans will subsequently be calculated. The
manner of calculation so notified by Agent shall, in the absence of
manifest error, be binding on Borrower.
S5-2
SCHEDULE 6
Health and Retirement Properties Trust
Properties Currently in Default
▇▇▇▇▇▇▇▇ ▇▇▇▇▇ River Park Health Care Valley View Retirement North
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Facility: St. ▇▇▇▇▇▇, MO Wichita, KS ▇▇▇▇▇▇, CA
Investment Type: Lease Mortgage Mortgage
Maturity: 4/30/01 8/10/95 12/01/96
Nature of Default: Non Monetary Monetary Monetary
Roof in disrepair
Current Amount to
Cure as of 2/29/96: Repair Roof 2,118,542.30 2,333,685.32
S-6