T
his
AMENDED AND RESTATED CREDIT
AGREEMENT ,
dated as of December 11, 2006, is entered into among
BREA
EMERITUS LCC ,
a Delaware limited liability company (the “
Parent ”),
and each of its subsidiaries listed on Exhibit A hereto (each an
“
SPE ”
and collectively with the Parent, the “
Borrowers ”),
the
Lenders (as defined below), GENERAL
ELECTRIC CAPITAL CORPORATION (“
GE Capital ”),
as administrative agent and collateral agent for the Lenders (in
such capacity, and together with its successors and permitted
assigns,
the
“
Administrative Agent ”)
and
GE CAPITAL MARKETS, INC., as sole lead arranger.
WHEREAS,
in order to correct certain scrivener’s errors and to
add Merrill Lynch Capital, a Division of Merrill Lynch
Business Financial Services Inc. as a Lender hereunder, the
parties have agreed to amend and restate that certain Credit
Agreement, dated as of December 1, 2006, among the Parent, the
other Borrowers, the Administrative Agent and GE Capital
Markets, Inc. (the “
Original Credit Agreement ”).
NOW,
THEREFORE
, in
consideration of the promises and covenants contained in this
Agreement, and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the
parties covenant and agree as follows:
ARTICLE
I
DEFINITIONS,
INTERPRETATION AND ACCOUNTING TERMS
Section
1.1
Defined Terms
As
used in this Agreement, the following terms have the following
meanings:
“
Acquisition ”
means the acquisition of each Facility and the assets related
thereto of the Seller and its Subsidiaries to the extent such
Facility is acquired pursuant to the terms of the Acquisition
Agreement.
“
Acquisition Agreement ”
means that certain Purchase and Sale Agreement, among the Seller
and the Borrowers.
“
Administrative Agent ”
has the meaning specified in the preamble hereto.
“
Affected Lender ”
has the meaning specified in
Section 2.12 .
“
Affiliate ”
means, with respect to any Person, each officer, director, general
partner or joint-venturer of such Person and any other Person that
directly or indirectly controls, is controlled by, or is under
common control with, such Person;
provided ,
however ,
that no Secured Party shall be an Affiliate of any Borrower. For
purpose of this definition, “
control ”
means the possession of either (a) the power to vote, or the
beneficial ownership of, 10% or more of the Voting Interests of
such Person or (b) the power to direct or cause the direction of
the management and policies of such Person, whether by contract or
otherwise.
“
Agreement ”
means this Credit Agreement.
“
Applicable Margin ”
means
2.35%;
provided ,
however ,
from and after the first five (5) Fiscal Quarters immediately
following the Closing Date and provided no Event of Default has
occurred and is continuing, the Applicable Margin will be reduced
as follows for the then current
Fiscal
Quarter if the Consolidated Project Yield (based on the
average end of quarter balance for the immediately preceding
four (4) quarters) for each of the two (2) immediately
preceding Fiscal Quarters then most recently ended for which a
Compliance Certificate has been delivered (and if no
Compliance Certificate is delivered, it shall not be reduced
as follows), (a) is greater than or equal to 10% and less than
11%, then the Applicable Margin for the period for which the
determination is being made shall be equal to 2.20%, or (b) is
greater than or equal to 11%, then the Applicable Margin for
the period for which the determination is being made shall be
equal to 2.00%.
Each
date of determination for the “
Applicable Margin ”
shall be the date that is 3 Business Days after delivery by the
Borrowers to the Administrative Agent of a new Compliance
Certificate pursuant to
Section 6.1(d) .
Notwithstanding anything to the contrary set forth in this
Agreement (including the then effective Consolidated Project
Yield), the Applicable Margin shall equal 2.35%, effective
immediately upon (x) the occurrence of any Event of Default
under
Section 9.1(e)(ii) or
(y) the delivery of a notice by the Administrative Agent to the
Parent during the continuance of any other Event of Default and, in
each case, for as long as such Event of Default shall be
continuing.
“
Approved Fund ”
means, with respect to any Lender, any Person (other than a natural
Person) that (a) is or will be engaged in making, purchasing,
holding or otherwise investing in commercial loans and similar
extensions of credit in the ordinary course of its business and (b)
is advised or managed by (i) such Lender, (ii) any Affiliate of
such Lender or (iii) any Person (other than an individual) or any
Affiliate of any Person (other than an individual) that administers
or manages such Lender.
“
Assignment ”
means an assignment agreement entered into by a Lender, as
assignor, and any prospective assignee thereof and accepted by the
Administrative Agent, in substantially the form of
Exhibit B .
“
As-Built Survey ”
shall mean an “as-built” survey of the Real Property,
showing all of the Improvements situated thereon, which shall (i)
be in the form of an ALTA/ACSM “as-built” Survey, be
made in accordance with the 2005 Minimum Standard Detailed
Requirements for such surveys, shall include items 1 through 4, 6,
7(a), 7(b)(1), 7(c), 8, 9, 10, 11(a), 13, 16, 17 and 18 of Table A,
and be in accordance with the then-current “Accuracy
Standards for ALTA/ACSM Land Title Surveys” as adopted by the
American Land Title Association, American Congress on Surveying
& Mapping and National Society of Professional Surveyors, (ii)
be certified to Lender and the Title Company, and (iii) set forth
such other information as Lender may reasonably
require.
“
Base Rate ”
means, at any time, a rate per annum equal to the higher of (a) the
rate last quoted by The Wall Street Journal as the “base rate
on corporate loans posted by at least 75% of the nation’s
largest banks” in the United States or, if The Wall Street
Journal ceases to quote such rate, the highest per annum interest
rate published by the Federal Reserve Board in Federal Reserve
Statistical Release H.15 (519) (Selected Interest Rates) as the
“bank prime loan” rate or, if such rate is no longer
quoted therein, any similar rate quoted therein (as determined by
the Administrative Agent) or any similar release by the Federal
Reserve Board (as determined by the Administrative Agent) and (b)
the sum of 0.5% per annum and the Federal Funds Rate.
“
Benefit Plan ”
means any employee benefit plan as defined in Section 3(3) of ERISA
(whether governed by the laws of the United States or otherwise) to
which any Borrower incurs or otherwise has any obligation or
liability.
“
Blackstone ”
means Blackstone Real Estate Associates V L.P.
“
Borrowers ”
has the meaning specified in the preamble hereto.
“
Borrowers’ Accountants ”
means KPMG LLP or other nationally-recognized independent
registered certified public accountants acceptable to the
Administrative Agent.
“
Boynton ”
means that certain healthcare facility known as The Gardens,
formerly known as Cypress Gardens at Boynton Village, and located
at 1935 South Federal Highway, Boynton Beach, Florida.
“
Business Day ”
means any day of the year that is not a Saturday, Sunday or a day
on which banks are required or authorized to close in New York City
and, when determined in connection with notices and determinations
in respect of any Eurodollar Rate or Eurodollar Rate Loan or any
funding, conversion, continuation, Interest Period or payment of
any Eurodollar Rate Loan, that is also a day on which dealings in
Dollar deposits are carried on in the London interbank
market.
“
Capital Expenditures ”
means, for any Person for
any period, the aggregate of all expenditures, whether or not made
through the incurrence of Indebtedness, by such Person and its
Subsidiaries during such period for the acquisition, leasing
(pursuant to a Capital Lease), construction, replacement, repair,
substitution or improvement of fixed or capital assets or additions
to equipment, in each case required to be capitalized under GAAP on
a Consolidated balance sheet of such Person, excluding (a) interest
capitalized during construction and
(b) any expenditure to the extent, for purpose of the definition of
Permitted Acquisition, such expenditure is part of the aggregate
amounts payable in connection with, or other consideration for, any
Permitted Acquisition consummated during or prior to such
period.
“
Capital Improvement Holdback ”
has the meaning given such term in
Section 2.1(b)(i).
“
Capital Lease ”
means, with respect to any Person, any lease of, or other
arrangement conveying the right to use, any property (whether real,
personal or mixed) by such Person as lessee that has been or should
be accounted for as a capital lease on a balance sheet of such
Person prepared in accordance with GAAP.
“
Cash Equivalents ”
means (a) any readily-marketable securities (i) issued by, or
directly, unconditionally and fully guaranteed or insured by the
United States federal government or (ii) issued by any agency
of the United States federal government the obligations of which
are fully backed by the full faith and credit of the United States
federal government, (b) any readily-marketable direct obligations
issued by any other agency of the United States federal government,
any state of the United States or any political subdivision of any
such state or any public instrumentality thereof, in each case
having a rating of at least “A-1” from S&P or at
least “P-1” from Moody’s, (c) any commercial
paper rated at least “
A-1 ”
by S&P or “
P-1 ”
by Moody’s and issued by any Person organized under the laws
of any state of the United States, (d) any Dollar-denominated time
deposit, insured certificate of deposit, overnight bank deposit or
bankers’
acceptance
issued or accepted by (i) any Lender or (ii) any commercial
bank that is (A) organized under the laws of the United
States, any state thereof or the District of Columbia, (B)
“adequately capitalized” (as defined in the
regulations of its primary federal banking regulators) and (C)
has Tier 1 capital (as defined in such regulations) in excess
of $250,000,000 and (e) shares of any United States money
market fund that (i) has substantially all of its assets
invested continuously in the types of investments referred to
in
clause (a) ,
(b) ,
(c) or
(d) above
with maturities as set forth in the proviso below, (ii) has net
assets in excess of $500,000,000 and (iii) has obtained from either
S&P or Moody’s the highest rating obtainable for money
market funds in the United States;
provided ,
however ,
that the maturities of all obligations specified in any of
clauses (a) ,
(b) ,
(c) and
(d) above
shall not exceed 365 days.
“
CERCLA ”
means the United States Comprehensive Environmental Response,
Compensation, and Liability Act (42 U.S.C. §§ 9601 et
seq.).
“
Change of Control ”
means the occurrence of any of the following: (a) the Permitted
Investors shall cease to own at least 51% and control legally and
beneficially all of the economic and voting rights of Parent, (b)
Parent shall cease to own and control legally and beneficially all
of the economic and voting rights any SPE, or (c) any Facility
ceases to be managed or operated by a Qualified
Manager.
“
Closing Date ”
means December 1, 2006.
“
Code ”
means the U.S. Internal Revenue Code of 1986.
“
Collateral ”
means all property and interests in property and proceeds thereof
now owned or hereafter acquired by any Borrower in or upon which a
Lien is granted or purported to be granted pursuant to any Loan
Document.
“
Commitment ”
means, with respect to each Lender, the commitment of such Lender
to make Term Loans to the Borrowers, which commitment is in the
amount set forth opposite such Lender’s name on
Schedule I under
the caption “
Commitment ”,
as amended to reflect Assignments and as such amount may be reduced
pursuant to this Agreement. The aggregate amount of the Commitments
on the date hereof equals $167,000,000.
“
Compliance Certificate ”
means a certificate substantially in the form of
Exhibit C .
“
Consolidated ”
means, with respect to any Person, the accounts of such Person and
its Subsidiaries consolidated in accordance with GAAP.
“
Consolidated Current Assets ”
means, at any date, the total Consolidated current assets of the
Parent at such date other than cash, Cash Equivalents and any
Indebtedness owing to the Parent or any of its Subsidiaries by
Affiliates of the Parent.
“
Consolidated Current Liabilities ”
means, at any date, all liabilities of the Parent and its
Subsidiaries at such date that should be classified as current
liabilities on a Consolidated balance sheet of the Parent;
provided ,
however ,
that “
Consolidated Current Liabilities ”
shall exclude the principal amount of the Loans then
outstanding.
“
Consolidated EBITDA ”
means, for any period, (a) the Consolidated Net Income of the
Parent for such period
plus (b)
the sum of, in each case to the extent included in the calculation
of such Consolidated Net Income but without duplication,
(i) any provision for United States federal income taxes or
other taxes measured by net income, (ii) Consolidated Interest
Expense, amortization
of
debt
discount and commissions and other fees and charges associated with
Indebtedness (except amortization and expenses related to the
consummation of Term Loan on the Closing Date and the Related
Transactions and the payment of all fees, costs and expenses
associated with the foregoing), (iii) Consolidated Rent Expense,
(iv) an amount equal to any Management Fee actually paid, (v) any
loss from extraordinary items, (vi) any depreciation, depletion and
amortization expense, (vii) any aggregate net loss on the Transfer
of property (other than accounts (as defined under the applicable
UCC) and inventory) outside the ordinary course of business and
(viii) any other non-cash expenditure, charge or loss for such
period (other than any non-cash expenditure, charge or loss
relating to write-offs, write-downs or reserves with respect to
accounts and inventory), including the amount of any compensation
deduction as the result of any grant of Equity Interests or Equity
Equivalents to employees, officers, directors or consultants
and
minus (c)
the sum of, in each case to the extent included in the calculation
of such Consolidated Net Income and without duplication, (i) any
credit for United States federal income taxes or other taxes
measured by net income, (ii) any interest income, (iii) a capital
replacement reserve in an amount per annum equal to $300 per bed,
(iv) management fees, which for the purposes of this definition
shall be deemed to be an amount per annum equal to five percent
(5%) of the aggregate total operating revenue generated from the
Facilities, for the full twelve (12) month period immediately
preceding the date of determination, (v) the value of any impact of
definitive Medicare/Medicaid changes imposed by any Governmental
Authority, as reasonably determined by the Administrative Agent,
(vi) any gain from extraordinary items and any other non-recurring
gain, (vii) any aggregate net gain from the Transfer of property
(other than accounts (as defined in the applicable UCC) and
inventory) out of the ordinary course of business by the Parent,
(viii) any other non-cash gain, including any reversal of a charge
referred to in
clause (b)(viii) above
by reason of a decrease in the value of any Equity Interest or
Equity Equivalent, and (vi) any other cash payment in respect of
expenditures, charges and losses that have been added to
Consolidated EBITDA of the Parent pursuant to
clause (b)(viii) above
in any prior period;
provided ,
however ,
if the actual occupancy of all of the Facilities, taken as a whole,
exceeds 95%, Consolidated Adjusted EBITDA shall be proportionately
reduced assuming an occupancy of 95%.
“
Consolidated Interest Coverage Ratio ”
means, for any period, the ratio of (a) Consolidated EBITDA for
such period to (b) Consolidated Interest Expense for such
period.
“
Consolidated Interest Expense ”
means, for any period, (a) Consolidated total interest expense of
the Parent and its Subsidiaries for such period and including, in
any event, (i) interest capitalized during such period and net
costs under Interest Rate Contracts for such period and (ii) all
fees, charges, commissions, discounts and other similar obligations
(other than reimbursement obligations) with respect to letters of
credit, bank guarantees, banker’s acceptances, surety bonds
and performance bonds (whether or not matured) payable by such
Person and its Subsidiaries during such period
minus (b)
the sum of (i) Consolidated net gains of the Parent and its
Subsidiaries under Interest Rate Contracts for such period and
(ii) Consolidated interest income of the Parent and its
Subsidiaries for such period.
“
Consolidated Project Yield ”
means, for any period, the ratio of (a) Consolidated EBITDA for
such period to (b) the Consolidated Total Debt for such
period.
“
Consolidated Net Income ”
means, for any period, the Consolidated net income (or loss) of the
Parent and its Subsidiaries for such period;
provided ,
however ,
that the following shall be excluded: (a) the net income of any
other Person in which the Parent or one of its Subsidiaries has a
joint interest with a third-party (which interest does not cause
the net income of such other Person to be Consolidated into the net
income of the Parent), except to the extent of the amount of
dividends or distributions paid to such Person or Subsidiary, (b)
the net income of any Subsidiary of the Parent that is, on the last
day of such period, subject to any restriction or limitation on the
payment of dividends or the making of other distributions, to the
extent of such restriction or limitation, except restrictions or
limitations set forth herein, and (c) the net income of any other
Person arising prior to such other Person becoming a Subsidiary of
the Parent or merging or consolidating into the Parent or its
Subsidiaries.
“
Consolidated Rent Expense ”
means the Consolidated rent expense of the Parent and its
Subsidiaries for such period.
“
Consolidated Total Debt ”
of any Person means all Indebtedness of a type described in
clause
(a) ,
(b) ,
(c)(i) ,
(d) or
(f) of
the definition thereof and all Guaranty Obligations with respect to
any such Indebtedness, in each case of such Person and its
Subsidiaries on a Consolidated basis.
“
Constituent Documents ”
means, with respect to any Person, collectively and, in each case,
together with any modification of any term thereof, (a) the
articles of incorporation, certificate of incorporation,
constitution or certificate of formation of such Person, (b) the
bylaws, operating agreement or joint venture agreement of such
Person, (c) any other constitutive, organizational or governing
document of such Person, whether or not equivalent, and (d) any
other document setting forth the manner of election or duties of
the directors, officers or managing members of such Person or the
designation, amount or relative rights, limitations and preferences
of any Equity Interest of such Person.
“
Contractual Obligation ”
means with respect to any Person, any provision of any Security
issued by such Person or of any document or undertaking to which
such Person is a party or by which it or any of its property is
bound or to which any of its property is subject, in each case,
other than a Loan Document.
“
Control Agreement ”
means, with respect to any deposit account, any securities account,
commodity account, securities entitlement or commodity contract, an
agreement, in form and substance satisfactory to the Administrative
Agent, among the Administrative Agent, the financial institution or
other Person at which such account is maintained or with which such
entitlement or contract is carried and the Borrower maintaining
such account, effective to grant “control” (as defined
under the applicable UCC) over such account to the Administrative
Agent.
“
Controlled Deposit Account ”
means each deposit account (including all funds on deposit therein)
that is the subject of an effective Control Agreement and that is
maintained by any Borrower with a financial institution approved by
the Administrative Agent.
“
Controlled Securities Account ”
means each securities account or commodity account (including all
financial assets held therein and all certificates and instruments,
if any, representing or evidencing such financial assets) that is
the subject of an effective Control Agreement and that
is
maintained by any Borrower with a securities intermediary or
commodity intermediary approved by the Administrative
Agent.
“
Copyrights ”
means all rights, title and interests (and all related IP Ancillary
Rights) arising under any Requirement of Law in or relating to
copyrights and all mask work, database and design rights, whether
or not registered or published, all registrations and recordations
thereof and all applications in connection therewith.
“
Corporate Chart ”
means a document in form reasonably acceptable to the
Administrative Agent, and the form delivered to Administrative
Agent prior to the date hereof and attached as Exhibit D hereto,
setting forth, as of a date set forth therein, for each Person that
is a Borrower, Emeritus and Blackstone and any direct or indirect
Subsidiary of Emeritus and Blackstone that owns or holds any Equity
Interest in any Borrower, but excluding any limited partners of
Blackstone or its Affiliates, (a) the full legal name of such
Person, (b) the jurisdiction of organization and any organizational
number and tax identification number of such Person, and (c) the
number of shares or percentage, as the case may be, of each class
of Equity Interests of such Person, and, with respect to Emeritus
only, the authorized, number outstanding and number and percentage
of such outstanding shares for each such class owned, directly or
indirectly, by any Borrower, such Subsidiary, Emeritus or
Blackstone.
“
Customary Permitted Liens ”
means, with respect to any Person, any of the
following:
(a)
Liens
(i) with respect to the payment of taxes, assessments or other
governmental charges or (ii) of suppliers, carriers,
materialmen, warehousemen, workmen or mechanics and other
similar Liens, in each case imposed by law or arising in the
ordinary course of business, and, for each of the Liens
in
clauses (i) and
(ii) above
for amounts that are not yet due or that are being contested in
good faith by appropriate proceedings diligently conducted and with
respect to which, if being contested, adequate reserves or other
appropriate provisions are maintained on the books of such Person
in accordance with GAAP;
(b)
Liens
of a collection bank on items in the course of collection
arising under Section 4-208 of the UCC as in effect in the
State of New York or any similar section under any applicable
UCC or any similar Requirement of Law of any foreign
jurisdiction;
(c)
pledges
or cash deposits made in the ordinary course of business
(i) in connection with workers’ compensation,
unemployment insurance or other types of social security
benefits (other than any Lien imposed by ERISA), (ii) to
secure the performance of bids, tenders, leases (other than
Capital Leases) sales or other trade contracts (other than for
the repayment of borrowed money) or (iii) made in lieu
of, or to secure the performance of, surety, customs,
reclamation or performance bonds (in each case not related to
judgments or litigation);
(d)
judgment
liens (other than for the payment of taxes, assessments or
other governmental charges) securing judgments and other
proceedings not constituting an Event of Default under
Section 9.1(e) and
pledges or cash deposits made in lieu of, or to secure the
performance of, judgment or appeal bonds in respect of such
judgments and proceedings;
(e)
Liens
(i) arising by reason of zoning restrictions, easements,
licenses, reservations, restrictions, covenants,
rights-of-way, encroachments, minor defects or irregularities
in title (including leasehold title) and other similar
encumbrances on the use of real property or
(ii)
consisting of leases, licenses or subleases granted by a
lessor, licensor or sublessor on its property (in each case
other than Capital Leases) otherwise permitted under
Section 8.4(b) that,
for each such Liens, do not, in the aggregate, materially (x)
impair the value or marketability of such real property or (y)
interfere with the ordinary conduct of the business conducted and
proposed to be conducted at such real property; and
(f)
the
title and interest of a lessor or sublessor in and to personal
property leased or subleased (other than through a Capital
Lease), in each case extending only to such personal
property.
“
Default ”
means any Event of Default and any event that, with the passing of
time or the giving of notice or both, would become an Event of
Default.
“
Disclosure Documents ”
means, collectively, (a) all confidential information memoranda and
related materials prepared in connection with the syndication of
the Facilities and (b) all other documents filed by any Borrower
with the United States Securities and Exchange
Commission.
“
Dollars ”
and the sign “
$ ”
each mean the lawful money of the United States of
America.
“
Domestic Person ”
means any “
United States person ”
under and as defined in Section 770l(a)(30) of the
Code.
“
Electronic Fax ”
means any system used to receive or transmit faxes
electronically.
“
Electronic Signature ”
means the process of attaching to or logically associating with an
Electronic Transmission an electronic symbol, encryption, digital
signature or process (including the name or an abbreviation of the
name of the party transmitting the Electronic Transmission) with
the intent to sign, authenticate or accept such Electronic
Transmission.
“
Electronic System ”
means any electronic system, including Intralinks
® and
any other Internet or extranet-based site, whether such electronic
system is owned, operated or hosted by the Administrative Agent,
any of its Related Persons or any other Person, providing for
access to data protected by passcodes or other security
system.
“
Electronic Transmission ”
means each document, instruction, authorization, file, information
and any other communication transmitted, posted or otherwise made
or communicated by electronic mail or Electronic Fax, or otherwise
to or from an Electronic System or other equivalent
service.
“
Emeritus ”
means Emeritus Corporation, a Washington corporation.
“
Environmental Indemnity ”
means one or more agreements pursuant to which Emeritus and the
Borrowers provide an environmental indemnity, (i) recourse to
Emeritus with such recourse limited to the top 10% of the Loan
Amount ($16,700,000) and (ii) which indemnity is fully recourse to
the Borrowers.
“
Environmental Laws ”
means all Requirements of Law and Permits imposing liability or
standards of conduct for or relating to the regulation and
protection of human health, safety, the environment and natural
resources, including CERCLA, the SWDA, the Hazardous
Materials
Transportation
Act (49 U.S.C. §§ 5101 et seq.), the Federal
Insecticide, Fungicide, and Rodenticide Act (7 U.S.C.
§§ 136 et seq.), the Toxic Substances Control Act
(15 U.S.C. §§ 2601 et seq.), the Clean Air Act (42
U.S.C. §§ 7401 et seq.), the Federal Water Pollution
Control Act (33 U.S.C. §§ 1251 et seq.), the
Occupational Safety and Health Act (29 U.S.C. §§ 651
et seq.), the Safe Drinking Water Act (42 U.S.C.
§§ 300(f) et seq.), all regulations promulgated
under any of the foregoing, all analogous Requirements of Law
and Permits and any environmental transfer of ownership
notification or approval statutes, including the Industrial
Site Recovery Act (N.J. Stat. Ann.
§§ 13:1K-6 et seq.).
“
Environmental Liabilities ”
means all Liabilities (including costs of Remedial Actions, natural
resource damages and costs and expenses of investigation and
feasibility studies) that may be imposed on, incurred by or
asserted against any Borrower as a result of, or related to, any
claim, suit, action, investigation, proceeding or demand by any
Person, whether based in contract, tort, implied or express
warranty, strict liability, criminal or civil statute or common law
or otherwise, arising under any Environmental Law or in connection
with any Release and resulting from the ownership, lease, sublease
or other operation or occupation of property by any Borrower,
whether on, prior or after the date hereof.
“
Equity Equivalents ”
means all securities convertible into or exchangeable for any
Equity Interest or any other Equity Equivalent and all warrants,
options or other rights to purchase, subscribe for or otherwise
acquire any Equity Interest or any other Equity Equivalent, whether
or not presently convertible, exchangeable or
exercisable.
“
Equity Interest ”
means all shares of capital stock (whether denominated as common
stock or preferred stock), equity interests, beneficial,
partnership or membership interests, joint venture interests,
participations or other ownership or profit interests in or
equivalents (regardless of how designated) of or in a Person (other
than an individual), whether voting or non-voting.
“
ERISA ”
means the United States Employee Retirement Income Security Act of
1974.
“
ERISA Affiliate ”
means, collectively, any Borrower, and any Person under common
control, or treated as a single employer, with any Borrower, within
the meaning of Section 414(b), (c), (m) or (o) of the
Code.
“
ERISA Event ”
means any of the following: (a) a reportable event described
in Section 4043(b) of ERISA (or, unless the 30-day notice
requirement has been duly waived under the applicable regulations,
Section 4043(c) of ERISA) with respect to a Title IV Plan,
(b) the withdrawal of any ERISA Affiliate from a Title IV Plan
subject to Section 4063 of ERISA during a plan year in which it was
a substantial employer, as defined in Section 4001(a)(2) of ERISA,
(c) the complete or partial withdrawal of any ERISA Affiliate
from any Multiemployer Plan, (d) with respect to any
Multiemployer Plan, the filing of a notice of reorganization,
insolvency or termination (or treatment of a plan amendment as
termination) under Section 4041A of ERISA, (e) the filing of a
notice of intent to terminate a Title IV Plan (or treatment of a
plan amendment as termination) under Section 4041 of ERISA, (f) the
institution of proceedings to terminate a Title IV Plan or
Multiemployer Plan by the PBGC, (g) the failure to make any
required contribution to any Title IV Plan or Multiemployer Plan
when due, (h) the imposition of a lien under Section 412 of the
Code or Section 302 or 4068 of ERISA on any property (or rights to
property, whether real or personal) of any ERISA Affiliate, (i) the
failure of a Benefit Plan or any trust thereunder intended to
qualify for tax exempt status under Section 401 or 501 of the Code
or
other
Requirements of Law to qualify thereunder and (j) any other
event or condition that might reasonably be expected to
constitute grounds under Section 4042 of ERISA for the
termination of, or the appointment of a trustee to administer,
any Title IV Plan or Multiemployer Plan or for the imposition
of any liability upon any ERISA Affiliate under Title IV of
ERISA other than for PBGC premiums due but not
delinquent.
“
Eurodollar Base Rate ”
means, with respect to any Interest Period for any Eurodollar Rate
Loan, the rate determined by the Administrative Agent to be the
offered rate for deposits in Dollars for the applicable Interest
Period appearing on the Dow Jones Markets Telerate Page 3750 as of
11:00 a.m. (London time) on the second full Business Day next
preceding the first day of each Interest Period. In the event that
such rate does not appear on the Dow Jones Markets Telerate Page
3750 (or otherwise on the Dow Jones Markets screen) at such time,
the “
Eurodollar Base Rate ”
shall be determined by reference to such other comparable publicly
available service for displaying the offered rate for deposit in
Dollars in the London interbank market as may be selected by the
Administrative Agent and, in the absence of availability, such
other method to determine such offered rate as may be selected by
the Administrative Agent in its sole discretion.
“
Eurodollar Rate ”
means, with respect to any Interest Period and for any Eurodollar
Rate Loan, an interest rate per annum determined as the ratio of
(a) the Eurodollar Base Rate with respect to such Interest Period
for such Eurodollar Rate Loan to (b) the difference between the
number one and the Eurodollar Reserve Requirements with respect to
such Interest Period and for such Eurodollar Rate
Loan.
“
Eurodollar Rate Loan ”
means any Loan that bears interest based on the Eurodollar
Rate.
“
Eurodollar Reserve Requirements ”
means, with respect to any Interest Period and for any Eurodollar
Rate Loan, a rate per annum equal to the aggregate, without
duplication, of the maximum rates (expressed as a decimal number)
of reserve requirements in effect 2 Business Days prior to the
first day of such Interest Period (including basic, supplemental,
marginal and emergency reserves) under any regulations of the
Federal Reserve Board or other Governmental Authority having
jurisdiction with respect thereto dealing with reserve requirements
prescribed for eurocurrency funding (currently referred to as
“eurocurrency liabilities” in Regulation D of the
Federal Reserve Board) maintained by a member bank of the United
States Federal Reserve System.
“
Event of Default ”
has the meaning specified in
Section 9.1 .
“Excess Cash Escrow” has
the meaning specified in
Section 2.2(a) .
“
Excess Cash Flow ”
means, for any period, (a) Consolidated EBITDA for such
period,
minus (b)
without duplication, (i) any principal payments made in cash on the
Loans during such period other than any mandatory prepayment
required pursuant to
Section 2.4(a) because
of the existence of Excess Cash Flow paid during such period but
applicable to the prior period, (ii) any scheduled or other
cash principal payment made by any Borrower during such period on
any Indebtedness, (iii) any Capital Expenditure made by any
Borrower during such period to the extent permitted by this
Agreement, excluding (A) any long-term Indebtedness other than
the Obligations and (B) any Capital Expenditure to the extent
reimbursed from the Capital Improvement Holdback, (iv) the
Consolidated Interest Expense for such period, (v) any cash losses
from extraordinary items, (vi) any cash payment made during such
period by any Borrower
to
satisfy obligations for United States federal income taxes or
other taxes measured by net income and (vii) any increase in
the Working Capital of Parent during such period (measured on
a Consolidated basis as the excess of such Working Capital at
the end of such period over such Working Capital at the
beginning of such period) and
plus (c)
without duplication, (i) to the extent included in the calculation
of Consolidated EBITDA pursuant to
clause (b)(i) of
the definition thereof, any provision for United States federal
income taxes or other taxes measured by net income, (ii) any
decrease in the Working Capital of Parent during such period
(measured on a Consolidated basis as the excess of such Working
Capital at the beginning of such period over such Working Capital
at the end thereof), and (iii) provided no Event of Default as set
forth in
Section 9.1(a) shall
have occurred and is continuing, management fees, which for the
purposes of this definition shall be deemed to be an amount per
annum equal to five percent (5%) of the aggregate total operating
revenue generated from the Facilities for the full twelve (12)
month period immediately preceding the date of
determination.
“
Excluded Property ”
means each healthcare facility (and its allocated loan amount)
identified on
Schedule 8.7 .
“
Facilities ”
means, collectively, all long term care facilities, nursing homes,
rehabilitation facilities, assisted living facilities, independent
living facilities, hospice facilities or other healthcare
facilities owned and operated by any Borrower, as listed on
Schedule 4.16 hereto.
“
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
determined by the Administrative Agent in its sole
discretion.
“
Federal Reserve Board ”
means the Board of Governors of the United States Federal Reserve
System and any successor thereto.
“
Fee Letter ”
means the letter agreement, dated as of the date hereof, addressed
to the Borrowers from the Administrative Agent and accepted by the
Borrowers, with respect to certain fees to be paid from time to
time to the Administrative Agent and its Related
Persons.
“
Financial Statement ”
means each financial statement delivered pursuant to
Section 4.4 or
6.1 .
“
First Extension Notice ”
has the meaning specified in
Section 2.2(b) .
“
First Extension Period ”
has the meaning specified in
Section 2.2(b) .
“
Fiscal Quarter ”
means each 3 calendar month period ending on March 31, June 30,
September 30 or December 31.
“
Fiscal Year ”
means the twelve month period ending on December 31.
“
GAAP ”
means generally accepted accounting principles in the United States
of America, as in effect from time to time, set forth in the
opinions and pronouncements of the Accounting Principles Board and
the American Institute of Certified Public Accountants, in the
statements and pronouncements of the Financial Accounting Standards
Board and in such other
statements
by such other entity as may be in general use by significant
segments of the accounting profession that are applicable to
the circumstances as of the date of determination. Subject
to
Section 1.3 ,
all references to “
GAAP ”
shall be to GAAP applied consistently with the principles used in
the preparation of the Financial Statements described in
Section 4.4(a) .
“
GE Capital ”
has the meaning specified in the preamble hereto.
“
Governmental Authority ”
means any nation, sovereign or government, any state or other
political subdivision thereof, any agency, authority or
instrumentality thereof and any entity or authority lawfully
exercising executive, legislative, taxing, judicial, regulatory or
administrative functions of or pertaining to government, including
any central bank, stock exchange, regulatory body, arbitrator,
public sector entity, supra-national entity (including the European
Union and the European Central Bank) and any self-regulatory
organization (including the National Association of Insurance
Commissioners).
“
Guaranty Obligation ”
means, as applied to any Person, any direct or indirect liability,
contingent or otherwise, of such Person for any Indebtedness,
lease, dividend or other obligation (the “
primary obligation ”)
of another Person (the “
primary obligor ”),
if the purpose or intent of such Person in incurring such
liability, or the economic effect thereof, is to guarantee such
primary obligation or provide support, assurance or comfort to the
holder of such primary obligation or to protect or indemnify such
holder against loss with respect to such primary obligation,
including (a) the direct or indirect guaranty, endorsement (other
than for collection or deposit in the ordinary course of business),
co-making, discounting with recourse or sale with recourse by such
Person of any primary obligation, (b) the incurrence of
reimbursement obligations with respect to any letter of credit or
bank guarantee in support of any primary obligation, (c) the
existence of any Lien, or any right, contingent or otherwise, to
receive a Lien, on the property of such Person securing any part of
any primary obligation and (d) any liability of such Person for a
primary obligation through any Contractual Obligation (contingent
or otherwise) or other arrangement (i) to purchase, repurchase or
otherwise acquire such primary obligation or any security therefor
or to provide funds for the payment or discharge of such primary
obligation (whether in the form of a loan, advance, stock purchase,
capital contribution or otherwise), (ii) to maintain the solvency,
working capital, equity capital or any balance sheet item, level of
income or cash flow, liquidity or financial condition of any
primary obligor, (iii) to make take-or-pay or similar payments, if
required, regardless of non-performance by any other party to any
Contractual Obligation, (iv) to purchase, sell or lease (as lessor
or lessee) any property, or to purchase or sell services, primarily
for the purpose of enabling the primary obligor to satisfy such
primary obligation or to protect the holder of such primary
obligation against loss or (v) to supply funds to or in any other
manner invest in, such primary obligor (including to pay for
property or services irrespective of whether such property is
received or such services are rendered);
provided ,
however ,
that “
Guaranty Obligations ”
shall not include (x) endorsements for collection or deposit in the
ordinary course of business and (y) product warranties given in the
ordinary course of business. The outstanding amount of any Guaranty
Obligation shall equal the outstanding amount of the primary
obligation so guaranteed or otherwise supported or, if lower, the
stated maximum amount for which such Person may be liable under
such Guaranty Obligation.
“
Hazardous Material ”
means any substance, material or waste that is classified,
regulated or otherwise characterized under any Environmental Law as
hazardous, toxic, a contaminant or a
pollutant
or by other words of similar meaning or regulatory effect,
including petroleum or any fraction thereof, asbestos,
polychlorinated biphenyls and radioactive
substances.
“
Healthcare Laws ”
has the meaning specified in
Section 7.2 .
“
Hedging Agreement ”
means any Interest Rate Contract, foreign exchange, swap, option or
forward contract, spot, cap, floor or collar transaction, any other
derivative instrument and any other similar speculative transaction
and any other similar agreement or arrangement designed to alter
the risks of any Person arising from fluctuations in any underlying
variable.
“
HIPAA ”
has the meaning specified in
Section 7.2 .
“
HIPAA Compliance Date ”
has the meaning specified in
Section 7.2 .
“
HIPAA Compliance Plan ”
has the meaning specified in
Section 7.2 .
“
HIPAA Compliant ”
has the meaning specified in
Section 7.2 .
“
Indebtedness ”
of any Person means, without duplication, any of the following,
whether or not matured: (a) all indebtedness for borrowed money,
(b) all obligations evidenced by notes, bonds, debentures or
similar instruments, (c) all reimbursement and all obligations with
respect to (i) letters of credit, bank guarantees or bankers’
acceptances or (ii) surety, customs, reclamation or performance
bonds (in each case not related to judgments or litigation) other
than those entered into in the ordinary course of business, (d) all
obligations to pay the deferred purchase price of property or
services, other than trade payables incurred in the ordinary course
of business, (e) all obligations created or arising under any
conditional sale or other title retention agreement, regardless of
whether the rights and remedies of the seller or lender under such
agreement in the event of default are limited to repossession or
sale of such property, (f) all obligations, whether or not
contingent, to purchase, redeem, retire, defease or otherwise
acquire for value any of its own Equity Interests or Equity
Equivalents (or any Equity Interest or Equity Equivalent of a
direct or indirect parent entity thereof) prior to the date that is
180 days after the Scheduled Maturity Date, valued at, in the case
of redeemable preferred Equity Interest, the greater of the
voluntary liquidation preference and the involuntary liquidation
preference of such Equity Interest plus accrued and unpaid
dividends, (g) all payments that would be required to be made in
respect of any Hedging Agreement in the event of a termination
(including an early termination) on the date of determination and
(h) all Guaranty Obligations for obligations of any other Person
constituting Indebtedness of such other Person;
provided ,
however ,
that the items in each of
clauses (a) through
(h) above
shall constitute “
Indebtedness ”
of such Person solely to the extent, directly or indirectly, (x)
such Person is liable for any part of any such item, (y) any such
item is secured by a Lien on such Person’s property or (z)
any other Person has a right, contingent or otherwise, to cause
such Person to become liable for any part of any such item or to
grant such a Lien.
“
Indemnified Matter ”
has the meaning specified in
Section 11.4 .
“
Indemnitee ”
has the meaning specified in
Section 11.4 .
“
Independent Director ”,
“
Independent Manager ”,
or “
Independent Member ”
shall mean a Person who is not and will not be while serving and
has never been (i) a member, Partner, Equity Interest holder,
manager, director, employee, attorney, or counsel of any Borrower
or its
Affiliates,
(ii) a customer, supplier or other Person who derives
more than 1% of its purchases or revenues from its activities
with any Borrower or its Affiliates, (iii) a direct or
indirect legal or beneficial owner in such entity or any of
its Affiliates, (iv) a member of the immediate family of
any member, manager, employee, attorney, customer, supplier or
other Person referred to above, or (v) a person
Controlling or under the Common Control of anyone listed in
(i) through (iv) above. A Person that otherwise
satisfies the foregoing shall not be disqualified from serving
as an Independent Director or Independent Manager or
Independent Member if such individual is at the time of
initial appointment, or at any time while serving as such, is
an Independent Director or Independent Manager or Independent
Member, as applicable, of a Single Purpose Entity affiliated
with any Borrower. Additionally, a natural person who
satisfies the foregoing definition other than clause (ii)
above shall not be disqualified from serving as an Independent
Director, Independent Manager or Independent Manager if such
individual is an independent director, manager or member
provided by a nationally-recognized company that provides
professional independent directors, managers and members and
that also provides other corporate services in the ordinary
course of its business. For the purpose of this definition,
“
Control ”
shall mean (i) the possession, directly or indirectly, of the power
to direct or cause the direction of the management and policies of
a Person, whether through ownership of voting interests, by
contract or otherwise and (ii) the ownership, direct or indirect,
of no less than 51% of the voting interests of such Person, and the
terms Controlled, Controlling and Common Control shall have
correlative meanings.
“
Initial Projections ”
means those financial Projections, dated September 1, 2006,
covering the Fiscal Years ending in 2006 through 2009 and delivered
to the Administrative Agent by the Parent prior to the date
hereof.
“
Intellectual Property ”
means all rights, title and interests in or relating to
intellectual property and industrial property arising under any
Requirement of Law and all IP Ancillary Rights relating thereto,
including all Copyrights, Patents, Trademarks, Internet Domain
Names, Trade Secrets and IP Licenses.
“
Interest Holdback ”
has the meaning given such term in
Section 2.1(b)(i) .
“
Interest Period ”
means, with respect to any Eurodollar Rate Loan, the period
commencing on the Closing Date or on the day after the last day of
the immediately preceding Interest Period and, in each case, except
with respect to clause (c) below, ending on the day before the 1
month anniversary of the applicable commencement date;
provided ,
however ,
that (a) if any Interest Period would otherwise end on a day
that is not a Business Day, such Interest Period shall be extended
to the next succeeding Business Day, unless the result of such
extension would be to extend such Interest Period into the next
calendar month, in which case such Interest Period shall end on the
immediately preceding Business Day, (b) any Interest Period that
begins on the last Business Day of a calendar month (or on a day
for which there is no numerically corresponding day in the calendar
month at the end of such Interest Period) shall end on the last
Business Day of the immediately succeeding a calendar month, (c) no
Interest Period shall end after the Scheduled Maturity
Date.
“
Interest Rate Contracts ”
means all interest rate swap agreements, interest rate cap
agreements, interest rate collar agreements and interest rate
insurance.
“
Internet Domain Names ”
means all rights, title and interests (and all related IP Ancillary
Rights) arising under any Requirement of Law in or relating to
Internet domain names.
“
Investment ”
means, with respect to any Person, directly or indirectly, (a) to
own, purchase or otherwise acquire, in each case whether
beneficially or otherwise, any investment in, including any
interest in, any Security of any other Person (other than any
evidence of any Obligation), (b) to purchase or otherwise acquire,
whether in one transaction or in a series of transactions, all or a
significant part of the property of any other Person or a business
conducted by any other Person or all or substantially all of the
assets constituting the business of a division, branch, brand or
other unit operation of any other Person, (c) to incur, or to
remain liable under, any Guaranty Obligation for Indebtedness of
any other Person, to assume the Indebtedness of any other Person or
to make, hold, purchase or otherwise acquire, in each case directly
or indirectly, any deposit, loan, advance, commitment to lend or
advance, or other extension of credit (including by deferring or
extending the date of, in each case outside the ordinary course of
business, the payment of the purchase price for Transfers of
property or services to any other Person, to the extent such
payment obligation constitutes Indebtedness of such other Person),
excluding deposits with financial institutions available for
withdrawal on demand, prepaid expenses, accounts receivable and
similar items created in the ordinary course of business, (d) to
make, directly or indirectly, any contribution to the capital of
any other Person or (e) to Transfer any property for less than fair
market value (including a disposition of cash or Cash Equivalents
in exchange for consideration of lesser value);
provided ,
however ,
that such Investment shall be valued at the difference between the
value of the consideration for such Transfer and the fair market
value of the property Transferred.
“
IP Ancillary Rights ”
means, with respect to any other Intellectual Property, as
applicable, all foreign counterparts to, and all divisionals,
reversions, continuations, continuations-in-part, reissues,
reexaminations, renewals and extensions of, such Intellectual
Property and all income, royalties, proceeds and Liabilities at any
time due or payable or asserted under or with respect to any of the
foregoing or otherwise with respect to such Intellectual Property,
including all rights to sue or recover at law or in equity for any
past, present or future infringement, misappropriation, dilution,
violation or other impairment thereof, and, in each case, all
rights to obtain any other IP Ancillary Right.
“
IP License ”
means all Contractual Obligations (and all related IP Ancillary
Rights), whether written or oral, granting any right title and
interest in or relating to any Intellectual Property.
“
IRS ”
means the Internal Revenue Service of the United States and any
successor thereto.
“
Leases ”
means all leases and subleases or similar document affecting the
use, enjoyment or occupancy of the Real Property, including without
limitation, resident care agreements and service agreements that
include an occupancy agreement, whether now existing or hereafter
arising.
“
Lender ”
means any financial institution or other Person that (a) is
listed on the signature pages hereof as a “
Lender ”
or (b) from time to time becomes a party hereto by execution of an
Assignment, in each case together with its successors.
“
Liabilities ”
means all claims, actions, suits, judgments, actual damages (not
consequential damages), actual losses, liability, obligations,
responsibilities, fines, penalties, sanctions, costs, fees, taxes,
commissions, charges, disbursements and expenses, in each case of
any kind or nature (including interest accrued thereon or as a
result thereto and fees, charges and disbursements of financial,
legal and other advisors and consultants), whether joint or
several, whether or not indirect, contingent, consequential,
actual, punitive, treble or otherwise.
“
Licenses ”
has the meaning specified in
Section 7.2 .
“
Lien ”
means any mortgage, deed of trust, pledge, hypothecation,
assignment, charge, deposit arrangement, encumbrance, easement (or
other Agreement granting rights or restricting the use of any Real
Property or Facility), lien (statutory or other), security interest
or other security arrangement and any other preference, priority or
preferential arrangement of any kind or nature whatsoever,
including any conditional sale contract or other title retention
agreement, the interest of a lessor under a Capital Lease and any
synthetic or other financing lease having substantially the same
economic effect as any of the foregoing.
“
Limited Recourse Guaranty ”
means that certain Limited Guaranty, dated as of December 1, 2006,
between Emeritus and Administrative Agent, as it may be amended,
restated or modified from time to time, pursuant to which the Loan
is (i) fully recourse for losses attributable to (A) fraud or
intentional misrepresentation by Borrowers under and in connection
with the Loan Documents; (B) Borrowers’ misappropriation or
intentional misapplication of rents received by Borrowers in
violation of the Loan Documents; (C) Borrowers’ intentional
misapplication or misappropriation of security deposits or rents
collected in advance; (D) Borrowers’ misappropriation or
intentional misapplication of insurance proceeds or condemnation
awards in violation of the Loan Documents; (E) Borrowers’
failure to pay real estate taxes (except to the extent that sums
sufficient to pay such amounts have been deposited in escrow with
Lender pursuant to the terms of the Loan Documents), but only to
the extent that the Facilities are generating income sufficient to
permit Borrowers to pay the same when due; (F) any act of actual
intentional physical waste by Borrowers; (G) the failure of
Borrowers to keep each Facility insured in accordance with the
terms of the Loan Documents; and (H) Borrowers’ failure to
comply with the single purpose entity provisions contained in the
Loan Documents; (ii) fully recourse for (x) any Borrower’s
voluntary (or involuntary that is not duly contested by the
Borrower) bankruptcy or assignment for the benefit of creditors, or
similar event or proceedings; and (y) Borrowers’ failure to
comply with the transfer provisions contained in the Loan
Documents.
“
Loan ”
means any loan made or deemed made by any Lender
hereunder.
“
Loan Documents ”
means, collectively, this Agreement, any Notes, the Security
Agreement, the Mortgages, the Control Agreements, the Fee Letter,
the Secured Hedging Agreements, the Limited Recourse Guaranty,
Environmental Indemnities and, when executed, each document
executed by a Borrower and delivered to the Administrative Agent,
any Lender in connection with or pursuant to any of the foregoing
or the Obligations, together with any modification of any term, or
any waiver with respect to, any of the foregoing.
“
Management Agreement ”
means each property management agreement, dated on or before the
date hereof, between the applicable SPE, as owner, and Emeritus or
a replacement Qualified Manager (or an interim manager with respect
to any Facility acquired pursuant to a
sale/leaseback
or similar temporary arrangement), as manager, in form and
substance reasonably acceptable to the Administrative Agent,
as it may be amended, supplemented, restated or otherwise
modified from time to time with the prior consent of the
Administrative Agent.
“
Management Fee ”
means any and all fees, expenses and other monies due and payable
(other than reimbursement of reasonable out-of-pocket third party
expenses as contemplated by the applicable Management Agreement),
from time to time, by any Borrower to the manager under the
applicable Management Agreement, which shall not, in the aggregate,
exceed 5% of the gross operating revenue of the Facilities per
Fiscal Year.
“
Material Adverse Effect ”
means an effect that results in or causes, or could reasonably be
expected to result in or cause, a material adverse change in any of
(a) the condition (financial or otherwise), business, performance,
prospects, operations or property of the Borrowers, taken as a
whole, (b) the ability of any Borrower to perform its obligations
in any material respect under any Loan Document and (c) the
validity or enforceability of any Loan Document or the rights and
remedies of the Administrative Agent, the Lenders and the other
Secured Parties under any Loan Document.
“
Material Environmental Liabilities ”
means Environmental Liabilities exceeding $100,000 in the
aggregate.
“
Maturity Date ”
means, subject to certain extension options set forth in
Section 2.2(b) ,
the earlier to occur of (i) Scheduled Maturity Date, (ii) the date
on which the Obligations otherwise become due as a result of
acceleration of the Obligations as provided for under this
Agreement or any other Loan Document, and (iii) the effective date
of any earlier termination of this Agreement in accordance with its
terms.
“
MLC ”
means Merrill Lynch Capital, a Division of Merrill Lynch Business
Financial Services Inc.
“
Moody’s ”
means Moody’s Investors Service, Inc.
“
Mortgage ”
means any mortgage, deed of trust or other document executed or
required herein to be executed by any Borrower and granting a
security interest over real property in favor of the Administrative
Agent as security for the Obligations.
“
Mortgage Supporting Documents ”
means, with respect to any Mortgage for a parcel of real property,
each document (including assignments of leases and rents,
subordination agreements, title policies or marked-up unconditional
insurance binders (in each case, together with copies of all
documents referred to therein), maps, ALTA (or TLTA, if
applicable), environmental assessments, As-Built Surveys, and
evidence regarding recording and payment of fees, insurance premium
and taxes) that the Administrative Agent may reasonably request, to
create, register, perfect, maintain, evidence the existence,
substance, form or validity of or enforce a valid lien on such
parcel of real property in favor of the Administrative Agent for
the benefit of the Secured Parties, subject only to such Liens as
the Administrative Agent may approve, provided that any Mortgage
Supporting Documents related to any Permitted Acquisition that are
substantially similar in form and content to those delivered in
connection with the initial funding of the Loan, modified to
reflect the particulars of the applicable Facility, shall be deemed
approved by Lender.
“
Multiemployer Plan ”
means any multiemployer plan, as defined in Section 400l(a)(3)
of ERISA, to which any ERISA Affiliate incurs or otherwise has any
obligation or liability.
“
Net Cash Proceeds ”
means proceeds received in cash from any Transfer of, or Property
Loss Event with respect to, any real or personal property, net of
(a) actual third-party out-of-pocket costs, fees and expenses paid
or required to be paid in connection therewith and (b) taxes paid
or reasonably estimated to be payable as a result thereof
.
“
Non-Funding Lender ”
has the meaning specified in
Section 2.1(a) .
“
Non-U.S. Lender Party ”
means each of the Administrative Agent, each Lender, each SPV and
each participant, in each case that is not a Domestic
Person.
“
Note ”
means a promissory note of the Borrowers, in substantially the form
of
Exhibit E ,
payable
to the order of a Lender in a principal amount equal to the amount
of such Lender’s Commitment.
“
Notice of Borrowing ”
has the meaning specified in
Section 2.1(a) .
“
Obligations ”
means, with respect to any Borrower, all amounts, obligations,
liabilities, covenants and duties of every type and description
owing by such Borrower to the Administrative Agent, any Lender, any
other Indemnitee, any participant, any SPV or, in the case of any
Secured Hedging Agreement, any Affiliate of any of them arising out
of, under, or in connection with, any Loan Document, whether direct
or indirect (regardless of whether acquired by assignment),
absolute or contingent, due or to become due, whether liquidated or
not, now existing or hereafter arising and however acquired, and
whether or not evidenced by any instrument or for the payment of
money, including, without duplication, (a) if such Borrower is the
Borrower, all Loans, (b) all interest, whether or not accruing
after the filing of any petition in bankruptcy or after the
commencement of any insolvency, reorganization or similar
proceeding, and whether or not a claim for post-filing or
post-petition interest is allowed in any such proceeding, and (c)
all other fees, expenses (including fees, charges and disbursement
of counsel), interest, commissions, charges, costs, disbursements,
indemnities and reimbursement of amounts paid and other sums
chargeable to such Borrower under any Loan Document.
“
Original Credit Agreement ”
has the meaning specified in the preamble hereto.
“
Other Taxes ”
has the meaning specified in
Section 2.11(c) .
“
Parent ”
has the meaning specified in the preamble hereto.
“
Patents ”
means all rights, title and interests (and all related IP Ancillary
Rights) arising under any Requirement of Law in or relating to
letters patent and applications therefor.
“
PBGC ”
means the United States Pension Benefit Guaranty Corporation and
any successor thereto.
“
Permit ”
means, with respect to any Person, any permit, approval,
authorization, license, registration, certificate (including
certificates of need and certificates of occupancy), concession,
grant, franchise, variance or permission from, and any other
Contractual Obligations with, any
Governmental
Authority, in each case whether or not having the force of law
and applicable to or binding upon such Person or any of its
property or to which such Person or any of its property is
subject.
“
Permitted Acquisition ”
means any acquisition of any Excluded Property;
provided such
acquisition satisfies each of the following conditions: (a) the
aggregate amounts payable in connection with such acquisition (in
each case, excluding all related transaction costs) shall not
exceed the allocated purchase price as set forth on
Schedule 8.7 for
the respective Excluded Property, (b) such acquisition shall occur
on or before the earlier of (i) 30 days following the Westlake
Facility Closing Date, as such term is defined in the Acquisition
Agreement and (ii) the six (6) month anniversary of the
Closing Date, (c) the Administrative Agent and MLC shall have
received reasonable advance notice of such Permitted Acquisition
including a reasonably detailed description thereof at least 5
Business Days prior to the consummation of such acquisition (or
such later date as may be agreed by the Administrative Agent and
MLC), (d) as of the date of consummation of any transaction as part
of such acquisition and after giving effect to all transactions to
occur on such date as part of such acquisition, all conditions set
forth in
Section 3.1(a) shall
be satisfied in all material respects or duly waived and, after
giving effect to such Permitted Acquisition, Parent shall be in
compliance with the financial covenants set forth in
Article V on
a Pro Forma Basis as of the relevant period, and (e) there shall be
no Event of Default then existing under this Agreement. Upon the
closing of such Permitted Acquisition,
Schedule 4.16 shall
be deemed updated to include such Excluded Facility.
“
Permitted Acquisition Closing Date ”
has the meaning given such term in
Section 2.1(a) .
“
Permitted Investors ”
means, collectively Emeritus and Blackstone, or any direct or
indirect Subsidiary thereof.
“
Permitted Indebtedness ”
means any Indebtedness of any Borrower that is not prohibited
by
Section 8.1 or
any other provision of any Loan Document.
“
Permitted Investment ”
means any Investment of any Borrower that is not prohibited
by
Section 8.3 or
any other provision of any Loan Document.
“
Permitted Lien ”
means any Lien on or with respect to the property of any Borrower
that is not prohibited by
Section 8.2 or
any other provision of any Loan Document.
“
Permitted Refinancing ”
means Indebtedness constituting a refinancing or extension of
Permitted Indebtedness that (a) has an aggregate outstanding
principal amount not greater than the aggregate principal amount of
such Permitted Indebtedness outstanding at the time of such
refinancing or extension, (b) has a weighted average maturity
(measured as of the date of such refinancing or extension) and
maturity no shorter than that of such Permitted Indebtedness, (c)
is not secured by any property or any Lien other than those
securing such Permitted Indebtedness and (d) is otherwise on terms
no less favorable to the Borrowers, taken as a whole, than those of
such Permitted Indebtedness;
provided ,
however ,
that, notwithstanding the foregoing, (x) the terms of such
Permitted Indebtedness may be modified as part of such Permitted
Refinancing if such modification would have been permitted pursuant
to
Section 8.11 and
(y) no Guaranty Obligation for such Indebtedness shall constitute
part of such Permitted Refinancing unless similar Guaranty
Obligations with respect to such Permitted Indebtedness existed and
constituted Permitted Indebtedness prior to such refinancing or
extension.
“
Permitted Reinvestment ”
means, with respect to the Net Cash Proceeds of any Transfer or
Property Loss Event, to acquire (or make Capital Expenditures to
finance the acquisition, repair, improvement or construction of),
to the extent otherwise permitted hereunder, property useful in the
business of any Borrower (including through a Permitted
Acquisition) or, if such Property Loss Event involves loss or
damage to property, to repair such loss or damage.
“
Person ”
means any individual, partnership, corporation (including a
business trust and a public benefit corporation), joint stock
company, estate, association, firm, enterprise, trust, limited
liability company, unincorporated association, joint venture and
any other entity or Governmental Authority.
“
Pro Forma Basis ”
means, with respect to any determination for any period and any Pro
Forma Transaction, that such determination shall be made by
giving
pro forma effect
to each such Pro Forma Transaction, as if each such Pro Forma
Transaction had been consummated on the first day of such period,
based on historical results accounted for in accordance with GAAP
and, to the extent applicable, reasonable assumptions that are
specified in detail in the relevant Compliance Certificate,
Financial Statement or other document provided to the
Administrative Agent or any Lender in connection herewith in
accordance with Regulation S-X of the Securities Act of
1933.
“
Pro Forma Transaction ”
means any transaction consummated as part of the Acquisition or any
Permitted Acquisition, together with each other transaction
relating thereto and consummated in connection therewith, including
any incurrence or repayment of Indebtedness.
“
Projections ”
means, collectively, the Initial Projections and any document
delivered pursuant to
Section 6.1(f) .
“
Property Loss Event ”
means, with respect to any property, any loss of or damage to such
property or any taking of such property or condemnation
thereof.
“
Pro Rata Outstandings ”,
of any Lender at any time, means the outstanding principal amount
of the Term Loans owing to such Lender.
“
Pro Rata Share ”
means, with respect to any Lender at any time, the percentage
obtained by dividing (a) the sum of the Commitments (or, if such
Commitments are terminated, the Pro Rata Outstandings therein) of
such Lender then in effect by (b) the sum of the Commitments (or,
if such Commitments are terminated, the Pro Rata Outstandings
therein) of all Lenders then in effect;
provided ,
however ,
that, if there are no Commitments and no Pro Rata Outstandings,
such Lender’s Pro Rata Share shall be determined based on the
Pro Rata Share most recently in effect, after giving effect to any
subsequent assignment and any subsequent non-pro rata payments of
any Lender pursuant to
Section 2.12 .
“
Qualified Manager ”
means a reputable and experienced professional management
organization that (a) manages, together with its affiliates, at
least ten (10) senior housing facilities and with no less than an
aggregate of 1500 units in such senior housing facilities of
similar quality to the applicable Facility in the State in which
the applicable Facility is located and (b) is approved by the
Lenders in accordance with their reasonable standards with respect
to (i) previous relationships between such Lender and the proposed
manager and its principals, (ii) the reputation for integrity,
honesty and veracity of the proposed manager and its principals,
owners, officers and directors, and (ii) OFAC, money-laundering,
anti-terrorism, SEC, healthcare laws
and
regulations, and other similar regulations and activities,
which approval shall not be unreasonably withheld, conditioned
or delayed (provided that the Borrowers provide timely
information reasonably requested by Lenders with respect to
such proposed manager), it being understood that Emeritus
shall be deemed to be a Qualified Manager.
“
Real Property ”
means any “property” (including improvements thereon)
subject to, and described in, a Mortgage from any Borrower in favor
of the Administrative Agent.
“
Register ”
has the meaning specified in
Section 2.8(b) .
“
Reinvestment Prepayment Amount ”
means, with respect to any Net Cash Proceeds on the Reinvestment
Prepayment Date therefor, the amount of such Net Cash
Proceeds
less any
amount paid or required to be paid by any Borrower to make
Permitted Reinvestments with such Net Cash Proceeds pursuant to a
Contractual Obligation entered into prior to such Reinvestment
Prepayment Date with any Person that is not an Affiliate of any
Borrower.
“
Reinvestment Prepayment Date ”
means, with respect to any portion of any Net Cash Proceeds of any
Transfer or Property Loss Event, the earliest of (a) the 180
th day
after the completion of the portion of such Transfer or Property
Loss Event corresponding to such Net Cash Proceeds, (b) the date
that is 5 Business Days after the date on which any Borrower shall
have notified the Administrative Agent of such Borrower’s
determination not to make Permitted Reinvestments with such Net
Cash Proceeds, (c) the occurrence of any Event of Default set forth
in
Section 9.1(e)(ii) and
(d) 5 Business Days after the delivery of a notice by the
Administrative Agent to the Parent during the continuance of any
other Event of Default.
“
Related Documents ”
means, collectively, the Acquisition Agreement, each document
executed in connection with the Required Investors’ Equity
Investment and each other document executed with respect to the
foregoing.
“
Related Person ”
means, with respect to any Person, each Affiliate of such Person
and each director, officer, employee, agent, trustee,
representative, attorney, accountant and each insurance,
environmental, legal, financial and other advisor (including those
retained in connection with the satisfaction or attempted
satisfaction of any condition set forth in
Article III )
and other consultants and agents of or to such Person or any of its
Affiliates, together with, if such Person is the Administrative
Agent, each other Person or individual designated, nominated or
otherwise mandated by or helping the Administrative Agent pursuant
to and in accordance with
Section 10.4 or
any comparable provision of any Loan Document.
“
Related Transactions ”
means, collectively, the consummation of the Acquisition, the
consummation of the Required Investors’ Equity Investment,
the execution and delivery of all Related Documents and the payment
of all related fees, costs and expenses.
“
Release ”
means any release, threatened release, spill, emission, leaking,
pumping, pouring, emitting, emptying, escape, injection, deposit,
disposal, discharge, dispersal, dumping, leaching or migration of
Hazardous Material into or through the environment.
“
Remedial Action ”
means all actions required to (a) clean up, remove, treat or in any
other way address any Hazardous Material in the indoor or outdoor
environment, (b) prevent or minimize any Release so that a
Hazardous Material does not migrate or endanger or threaten
to
endanger
public health or welfare or the indoor or outdoor environment
or (c) perform pre-remedial studies and investigations and
post-remedial monitoring and care with respect to any
Hazardous Material.
“
Required Investors’ Equity Investment ”
means the cash equity contribution from the Permitted Investors and
certain co-investors disclosed to the Administrative Agent and the
Lenders to the Borrowers in Dollars in an aggregate amount equal to
$35,320,000.
“
Required Lenders ”
means, at any time, Lenders having at such time in excess of
66 2/3% of the aggregate Term Loan Commitments (or, if such
Commitments are terminated, the Pro Rata Outstandings) then in
effect, ignoring, in such calculation, the Commitments and Pro Rata
Outstandings of any Non-Funding Lender.
“
Requirements of Law ”
means, with respect to any Person, collectively, the common law and
all federal, state, local, foreign, multinational or international
laws, statutes, codes, treaties, standards, rules and regulations,
guidelines, ordinances, orders, judgments, writs, injunctions,
decrees (including administrative or judicial precedents or
authorities) and the interpretation or administration thereof by,
and other determinations, directives, requirements or requests of,
any Governmental Authority published or otherwise
publicly-announced or of which Borrowers have received notice or
have actual knowledge, in each case whether or not having the force
of law and that are applicable to or binding upon such Person or
any of its property or to which such Person or any of its property
is subject.
“
Responsible Officer ”
means, with respect to any Person, any of the president, chief
executive officer, treasurer, assistant treasurer, controller,
managing member or general partner of such Person, or its member or
general partner, or its member’s or general partner’s
member or general partner, as the case may be, but, in any event,
with respect to financial matters, any such natural person that is
responsible for preparing and approving the Financial Statements
delivered hereunder and, with respect to the Corporate Chart and
other documents delivered pursuant to
Section 6.1(e) ,
documents delivered on the Closing Date and documents delivered
pursuant to
Section 7.10 ,
the secretary or assistant secretary of such Person or any other
such natural person responsible for maintaining the corporate and
similar records of such Person.
“
Restatement Closing Date ”
means December 11, 2006.
“
Restricted Payment ”
means (a) any dividend, return of capital, distribution or any
other payment or Transfer of property for less than fair market
value, whether direct or indirect (including through the use of
Hedging Agreements, the making, repayment, cancellation or
forgiveness of Indebtedness and similar Contractual Obligations)
and whether in cash, securities or other property, on account of
any Equity Interest or Equity Equivalent of any Borrower, in each
case now or hereafter outstanding, including with respect to a
claim for rescission of a Transfer of such Equity Interest or
Equity Equivalent and (b) any redemption, retirement, termination,
defeasance, cancellation, purchase or other acquisition for value,
whether direct or indirect (including through the use of Hedging
Agreements, the making, repayment, cancellation or forgiveness of
Indebtedness and similar Contractual Obligations), of any Equity
Interest or Equity Equivalent of any Borrower, now or hereafter
outstanding, and any payment or other transfer setting aside funds
for any such redemption, retirement, termination, cancellation,
purchase or other acquisition, whether directly or indirectly and
whether to a sinking fund, a similar fund or
otherwise.
“
S&P ”
means Standard & Poor’s Rating Services.
“
Scheduled Maturity Date ”
means the 5
th anniversary
of the Closing Date.
“
Second Extension Notice ”
has the meaning specified in
Section 2.2(b) .
“
Second Extension Period ”
has the meaning specified in
Section 2.2(b) .
“
Secured Hedging Agreements ”
means any Hedging Agreement that is entered into by any Borrower
and any Person that, at the time such Person entered into such
Hedging Agreement, was the Administrative Agent, a Lender or an
Affiliate of a Lender.
“
Secured Parties ”
means the Lenders, the Administrative Agent, each other Indemnitee
and any other holder of any Obligation of any
Borrower.
“
Security ”
means all Equity Interests, Equity Equivalents, voting trust
certificates, bonds, debentures, instruments and other evidence of
Indebtedness, whether or not secured, convertible or subordinated,
all certificates of interest, share or participation in, all
certificates for the acquisition of, and all warrants, options and
other rights to acquire, any Security.
“
Security Agreement ”
means that certain Pledge and Security Agreement, dated as of
December 1, 2006, among the Administrative Agent and each Borrower
from time to time party thereto as it may be amended, restated or
otherwise modified from time to time.
“
Seller ”
means, collectively, PITA General Corporation, a Illinois
corporation, AHC Tenants, Inc, a Delaware corporation, and their
Affiliates.
“
Single Purpose Entity ”
shall
mean a Person, other than an individual, which (i) is formed
or organized solely for the purpose of owning, holding, developing,
using, operating and financing, directly a Facility, or, in the
case of Parent, indirectly, an ownership interest in a Facility,
(ii) does not engage in any business unrelated to such
Facility or with respect to the Parent, indirectly, all of the
Facilities and the ownership, development, use, operation and
financing thereof, (iii) has not and will not have any assets
other than those related to its interest in such Facility or with
respect to the Parent, indirectly, all of the Facilities or the
operation, management and financing thereof or any Indebtedness
other than the Permitted Indebtedness, (iv) except if
Consolidated with other Borrowers, maintains its own separate books
and records and its own accounts, in each case, which are separate
and apart from the books and records and accounts of any other
Person, (v) holds itself out as being a Person, separate and
apart from any other Person, (vi) does not and will not
commingle its funds or assets with those of any other Person,
(vii) conducts its own business in its own name,
(viii) except if Consolidated with other Borrowers, maintains
separate financial statements, (ix) pays its own liabilities
out of its own funds, (x) observes all limited liability
company formalities, (xi) pays the salaries of its own
employees, if any, and maintains a sufficient number of employees,
if any, in light of its contemplated business operations,
(xii)
except
as expressly permitted under the Loan Documents, or to the other
Borrowers with respect to the Loan, does not guarantee or otherwise
obligate itself with respect to the debts of any other Person
(other than by endorsements of negotiable instruments for deposit
or collection in the ordinary course of business) or hold out its
credit as being available to satisfy the obligations of any other
Person, (xiii) does not acquire obligations or securities of
its partners, members or shareholders, (xiv) allocates fairly
and reasonably shared
expenses,
including, without limitation, any overhead for shared office
space, if any, (xv) uses separate stationery, invoices,
and checks, (xvi) maintains an arm’s length
relationship with its Affiliates, (xvii) other than
pursuant to the Loan Documents does not and will not pledge
its assets for the benefit of any other Person or make any
loans or advances to any other Person, (xviii) does and
will continue to use commercially reasonable efforts to
correct any known misunderstanding regarding its separate
identity, (xix) maintains adequate capital in light of
its contemplated business operations;
provided ,
however ,
this provision shall not require any member of any Borrower, or any
other party, to make any capital contributions to any Borrower, and
(xx) has not and will not engage in, seek, or consent to the
dissolution, winding up, liquidation, consolidation or merger and
except as otherwise permitted in this Agreement, has not and will
not engage in, seek or consent to any asset sale, transfer or
partnership, membership or shareholder interests, or amendments of
its Constituent Documents. In addition, if such Person is a
partnership, (1) all general partners of such Person shall be
Single Purpose Entities (owning nothing other than its general
partnership interests); and (2) if such Person has more than
one general partner, then the Constituent Documents shall provide
that such Person shall continue (and not dissolve) for so long as a
solvent general partner exists. In addition, if such Person is a
corporation, then, at all times: (a) such Person shall have at
least one (1) Independent Director and (b) the board of
directors of such Person may not take any action requiring the
unanimous affirmative vote of 100% of the members of the board of
directors unless all of the directors, including the Independent
Directors, shall have participated in such vote. In addition, if
such Person is a limited liability company, (A) such Person
shall have at least one (1) Independent Manager or Independent
Member, (B) if such Person is managed by a board of managers,
the board of managers of such Person may not take any action
requiring the unanimous affirmative vote of 100% of the members of
the board of managers unless all of the managers, including the
Independent Managers, shall have participated in such vote,
(C) if such Person is not managed by a board of managers, the
members of such Person may not take any action requiring the
affirmative vote of 100% of the members of such Person unless all
of the members, including the Independent Members, shall have
participated in such vote, (D) except in the case of the Parent,
each managing member shall be a Single Purpose Entity and, in the
case of the Parent, shall own nothing other than the Equity
Interests in the SPEs, and (E) its Constituent Documents shall
provide that until all of the Indebtedness and Obligations are paid
in full such entity will not dissolve. In addition, the Constituent
Documents of such Person shall provide that such Person without the
unanimous consent of all of the partners, managers, directors or
members, as applicable, shall not with respect to itself or to any
other Person in which it has a direct or indirect legal or
beneficial interest (A) seek or consent to the appointment of
a receiver, liquidator, assignee, trustee, sequestrator, custodian
or other similar official for the benefit of the creditors of such
Person or all or any portion of such Person’s properties,
(B) take any action that could reasonably be expected to cause
such Person to become insolvent, petition or otherwise institute
insolvency proceedings or otherwise seek any relief under any laws
relating to the relief from debts or the protection of debtors
generally, “or” (C) take any action that would cause
such Person not to satisfy the requirements set forth herein for a
Single Purpose Entity.
“
Solvent ”
means, with respect to any Person as of any date of determination,
that, as of such date, (a) the value of the assets of such Person
(both at fair value and present fair saleable value) is greater
than the total amount of liabilities (including contingent and
unliquidated liabilities) of such Person, (b) such Person is able
to pay its aggregate liabilities of such Person, as such
liabilities mature and (c) such Person does not have unreasonably
small capital in light of its intended operations. In computing the
amount of contingent or unliquidated liabilities at any time, such
liabilities shall be computed at the amount that, 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.
“
SPE ”
has the meaning specified in the preamble hereto.
“
SPV ”
means any special purpose funding vehicle identified as such in a
writing by any Lender to the Administrative Agent.
“
Subordinated Debt ”
means any Indebtedness that is subordinated to the payment in full
of the Obligations on terms and conditions satisfactory to the
Administrative Agent.
“
Subsidiary ”
means, with respect to any Person, any corporation, partnership,
joint venture, limited liability company, association or other
entity, the management of which is, directly or indirectly,
controlled by, or of which an aggregate of more than 50% of the
outstanding Voting Interest is, at the time, owned or controlled
directly or indirectly by, such Person or one or more Subsidiaries
of such Person.
“
Substitute Lender ”
has the meaning specified in
Section 2.12(a) .
“
SWDA ”
means the Solid Waste Disposal Act (42 U.S.C. §§ 6901 et
seq.).
“
Tax Affiliate ”
means, (a) any Borrower and (b) any Affiliate of any Borrower with
which any Borrower files or is eligible to file consolidated,
combined or unitary tax returns.
“
Tax Return ”
has the meaning specified in
Section 4.8 .
“
Taxes ”
has the meaning specified in
Section 2.11(a) .
“
Term Loan ”
has the meaning specified in
Section 2.1(a) .
“
Terrorism ”
has the meaning specified in
Section 7.5(b) .
“
Third-Party Payor Program ”
has the meaning specified in
Section 4.1(b) .
“
Title IV Plan ”
means a pension plan subject to Title IV of ERISA, other than a
Multiemployer Plan, to which any ERISA Affiliate incurs or
otherwise has any obligation or liability.
“
Trademarks ”
means all rights, title and interests (and all related IP Ancillary
Rights) arising under any Requirement of Law in or relating to
trademarks, trade names, corporate names, company names, business
names, fictitious business names, trade styles, service marks,
logos and other source or business identifiers and, in each case,
all goodwill associated therewith, all registrations and
recordations thereof and all applications in connection
therewith.
“
Trade Secrets ”
means all right, title and interest (and all related IP Ancillary
Rights) arising under any Requirement of Law in or relating to
trade secrets.
“
Transfer ”
means, with respect to any property, to sell, convey, transfer,
assign, license, lease or otherwise dispose of, any interest
therein or to permit any Person to acquire any such interest,
including, in each case, through a sale, factoring at maturity,
collection of or other
disposal,
with or without recourse, of any notes or accounts receivable.
Conjugated forms thereof and the noun “
Transfer ”
have correlative meanings.
“
UCC ”
means the Uniform Commercial Code of any applicable jurisdiction
and, if the applicable jurisdiction shall not have any Uniform
Commercial Code, the Uniform Commercial Code as in effect in the
State of New York.
“
United States ”
means the United States of America.
“
U.S. Lender Party ”
means each of the Administrative Agent, each Lender, each SPV and
each participant, in each case that is a Domestic
Person.
“
Voting Interest ”
means Equity Interests of any Person having ordinary power to vote
in the election of members of the board of directors, managers,
trustees or other controlling Persons, of such Person (irrespective
of whether, at the time, Equity Interests of any other class or
classes of such entity shall have or might have voting power by
reason of the occurrence of any contingency).
“
Westlake ”
means that certain healthcare facility known as The Gardens at
Westlake and formerly known as Cypress Gardens at Westlake and
located at 27569 Detroit Road, Westlake, Ohio.
“
Whittier Residence ”
means that certain single family home located at the Facility known
as The Gardens at Whittier and formerly known as Cypress Gardens at
Whittier located in Whittier California.
“
Withdrawal Liability ”
means, at any time, any liability incurred (whether or not
assessed) by any ERISA Affiliate and not yet satisfied or paid in
full at such time with respect to any Multiemployer Plan pursuant
to Section 4201 of ERISA.
“
Working Capital ”
means, for any Person at any date, its Consolidated Current Assets
at such date
minus its
Consolidated Current Liabilities at such date.
Section
1.2
UCC Terms .
The following terms have the meanings given to them in the
applicable UCC: “commodity account”, “commodity
contract”, “commodity intermediary”,
“deposit account”, “entitlement holder”,
“entitlement order”, “equipment”,
“financial asset”, “general intangible”,
“goods”, “instruments”,
“inventory”, “securities account”,
“securities intermediary” and “security
entitlement”.
Section 1.3
Accounting Terms and Principles .
(a) GAAP. All accounting determinations required to be made
pursuant hereto shall, unless expressly otherwise provided herein,
be made in accordance with GAAP. No
change in the accounting principles used in the preparation of any
Financial Statement hereafter adopted by Parent shall be given
effect if such change would affect a calculation that measures
compliance with any provision of Article V or VIII unless the
Borrowers, the Administrative Agent and the Required Lenders agree
to modify such provisions to reflect such changes in GAAP and,
unless such provisions are modified, all Financial Statements,
Compliance Certificates and similar documents provided hereunder
shall be provided together with a reconciliation between the
calculations and amounts set forth therein before and after giving
effect to such change in GAAP.
Section
1.4
Payments. The
Administrative Agent may set up standards and procedures to
determine or redetermine the equivalent in Dollars of any amount
expressed in any currency other than Dollars and otherwise may, but
shall not be obligated to, rely on any determination made by any
Borrower. Any such determination or redetermination by the
Administrative Agent shall be conclusive and binding for all
purposes, absent manifest error. No determination or
redetermination by any Secured Party or Borrower and no other
currency conversion shall change or release any obligation of any
Borrower or of any Secured Party (other than the Administrative
Agent and its Related Persons) under any Loan Document, each of
which agrees to pay separately for any shortfall remaining after
any conversion and payment of the amount as converted. The
Administrative Agent may round up or down to the nearest
1,000
th ,
and may set up appropriate mechanisms to round up or down to the
nearest 1,000
th .
Section
1.5
Interpretation. (a)
Certain Terms. Except as set forth in any Loan Document, all
accounting terms not specifically defined herein shall be construed
in accordance with GAAP (except for the term
“property”, which shall be interpreted as broadly as
possible, including, in any case, cash, securities, other assets,
rights under Contractual Obligations and Permits and any right or
interest in any property). The terms “herein”,
“hereof” and similar terms refer to this Agreement as a
whole. In the computation of periods of time from a specified date
to a later specified date in any Loan Document, the terms
“from” means “from and including” and the
words “to” and “until” each mean “to
but excluding” and the word “through” means
“to and including.” In any other case, the term
“including” when used in any Loan Document means
“including without limitation.” The term
“documents” means all writings, however evidenced and
whether in physical or electronic form, including all documents,
instruments, agreements, notices, demands, certificates, forms,
financial statements, opinions and reports. The term
“incur” means incur, create, make, issue, assume or
otherwise become directly or indirectly liable in respect of or
responsible for, in each case whether directly or indirectly, and
the terms “incurrence” and “incurred” and
similar derivatives shall have correlative meanings.
The
word “will” shall be construed to have the same meaning
and effect as the word “shall”. The definitions in this
Agreement shall apply equally to singular and plural forms of the
defined terms and, whenever the context may require, any pronoun
shall include the corresponding masculine feminine and neuter
forms.
(b)
Certain References .
Unless otherwise expressly indicated, references (i) in this
Agreement to an Exhibit, Schedule, Article, Section or clause refer
to the appropriate Exhibit or Schedule to, or Article, Section or
clause in, this Agreement and (ii) in any Loan Document, to (A) any
agreement shall include, without limitation, all exhibits,
schedules, appendixes and annexes to such agreement and, unless the
prior consent of any Secured Party required therefor is not
obtained, any modification to any term of such agreement, (B) any
statute shall be to such statute as modified from time to time and
to any successor legislation thereto, in each case as in effect at
the time any such reference is operative and (C) any time of
day shall be a reference to New York time. Titles of articles,
sections, clauses, exhibits, schedules and annexes contained in any
Loan Document are without substantive meaning or content of any
kind whatsoever and are not a part of the agreement between the
parties hereto. Unless otherwise expressly indicated, the meaning
of any term defined (including by reference) in any Loan Document
shall be equally applicable to both the singular and plural forms
of such term.
ARTICLE
II
THE
FACILITIES
Section
2.1
Term Loan Commitment, Borrowing Procedures and Escrow
Requirement.
(a) Term Loan Commitment and Borrowing Procedures. (i) On the
terms and subject to the conditions contained in this Agreement,
each Lender severally, but not jointly, agrees to make loans (each
a “Term Loan”) in Dollars to the Borrowers in a maximum
amount not to exceed such Lender’s Term Loan Commitment, and
the aggregate of all Commitments in a maximum aggregate amount not
to exceed $167,000,000. An initial advance was made by
Administrative Agent on the Closing Date in an amount equal to
$139,940,000. Upon any Permitted Acquisition, subject to the
Interest Holdback and the Capital Improvement Holdback, advances
shall be made in an amount not to exceed the amount set forth on
Schedule 8.7 for each respective healthcare facility being
acquired .
Advances related to the Interest Holdback and the Capital
Improvement Holdback shall be made pursuant to Section 2.1(b)(i).
Amounts of Term Loans repaid may not be reborrowed.
Amounts
over-advance shall be immediately repaid by Borrowers.
(ii)
Borrowing Procedures .
Each advance under the Term Loan shall be made on notice given by
the Borrowers to the Administrative Agent not later than
11:00 a.m. on the third Business Day prior to the date of the
proposed advance. Each such notice may be made in a writing
substantially in the form of
Exhibit F (a
“
Notice of Borrowing ”)
duly completed or by telephone if confirmed promptly. Loans shall
be made as Eurodollar Rate Loans.
The
Administrative Agent shall give to each Lender prompt notice
of the Administrative Agent’s receipt of a Notice of
Borrowing and including the applicable interest rate not later
than 11:00 a.m. on the second Business Day prior to the
proposed advance. Each Lender shall, before 11:00 a.m. on
the date of the proposed Borrowing, make available to the
Administrative Agent at its address referred to in
Section 11.11 ,
such Lender’s Pro Rata Share of such proposed Borrowing. Upon
fulfillment or due waiver (i) on the Closing Date, or (ii) on
the date of the closing of any Permitted Acquisition (a
“
Permitted Acquisition Closing Date ”),
of the applicable conditions set forth in
Section 3.1 ,
the Administrative Agent shall make such funds available to the
Borrower.
Non-Funding Lenders .
Unless the Administrative Agent shall have received notice from any
Lender prior to the date such Lender is required to make any
payment hereunder with respect to any Loan that such Lender will
not make such payment (or any portion thereof) available to the
Administrative Agent, the Administrative Agent may assume that such
Lender has made such payment available to the Administrative Agent
on the date such payment is required to be made in accordance with
this
Article II and
the Administrative Agent may, in reliance upon such assumption,
make available to the Borrower on such date a corresponding amount.
Any Lender that shall not have made available to the Administrative
Agent any portion of any payment described above (any such Lender,
a “
Non-Funding Lender ”)
agrees to pay such amount to the Administrative Agent on demand
together with interest thereon (such amount plus such interest, the
“
Non-Funded Amount ”),
for each day from the date such amount is made available to the
Borrower until the date such amount is repaid to the Administrative
Agent (either by such Non-Funding Lender or by a Substitute Lender
under
Section 2.12 ),
at the Federal Funds
Rate
for the first Business Day and thereafter at the interest rate
applicable at the time to such Term Loan. Such repayment shall
then constitute the funding of the corresponding Term Loan
(including any Loan deemed to have been made hereunder with
such payment) or participation. In the event a Non-Funding
Lender fails to pay the Non-Funded Amount, the Administrative
Agent shall have the right, but not the obligation, to become
a Substitute Lender pursuant to
Section 2.12 and
increase its Commitment by the Non-Funded Amount, in which case
such Non-Funded Amount shall constitute a funding by Administrative
Agent of the corresponding Term Loan. If Administrative Agent
chooses not to become a Substitute Lender for the Non-Funded
Amount, it shall notify Borrowers of such Lender’s failure to
make payment hereunder. Borrower agrees to repay to the
Administrative Agent the Non-Funded Amount together with interest
thereon for each day from the date such amount is made available to
the Borrower until the date such amount is repaid to the
Administrative Agent, at the interest rate applicable to the
Obligation that would have been created when the Administrative
Agent made available such amount to the Borrower had such Lender
made a corresponding payment available;
provided ,
however ,
that such payment shall not relieve such Lender of any obligation
it may have to the Borrower.
Such
repayment by Borrower shall be made not later than 30 days
following the receipt of such notice. The existence of any
Non-Funding Lender shall not relieve any other Lender of its
obligations under any Loan Document, but no other Lender shall be
responsible for the failure of any Non-Funding Lender to make any
payment required under any Loan Document.
(b)
Holdbacks, Reserves and Escrows .
(i)
Holdbacks .
(A) A portion of the proceeds of the Term Loan in an amount equal
to Three Million Two Hundred Thousand Dollars and No/100 Dollars
($3,200,000) (the “
Interest Holdback
” )
shall be retained by the Administrative Agent as a holdback, which
amount shall be advanced by Administrative Agent to pay any
shortfall in the interest due hereunder that cannot be paid out of
Consolidated EBITDA;
provided ,
however ,
at such time as the Consolidated Interest Coverage Ratio on any
date of documentation shall be greater than or equal 1.10 to 1.00
for each of the immediately preceding twelve (12) months, the
Interest Holdback shall no longer be required and, provided no
Event of Default has occurred and is continuing, the balance of the
Interest Holdback shall be refunded to Borrowers. Absent the
existence of any Event of Default hereunder or under any of the
other Loan Documents, to the extent any such shortfall exists,
Administrative Agent shall make disbursements on the applicable due
date for the payment of interest due on the Loan, in accordance
with
Sections 2.2(b) .
Such disbursements under the Interest Holdback shall not exceed, in
the aggregate, the amount of the Interest Holdback set forth above
and shall be deemed to be a Term Loan made hereunder. Nothing in
this
Section 2.1(b)(i)(A) shall
be deemed to relieve Borrowers of their obligation to timely pay
all principal and interest which comes due.
(B)
A portion of the proceeds of the Term Loan in an amount equal
to Five Million One Hundred Thirty Thousand Dollars and No/100
Dollars ($5,130,000) (the “
Capital Improvement Holdback
” )
shall be retained by the Administrative Agent, which amount shall
be advanced by Administrative Agent to pay costs and expenses
related to the repairs, improvements, and replacements identified
on
Schedule 2.1 .
Absent the existence of any Event of Default hereunder or under any
of the other Loan Documents, upon evidence of the completion of,
and verification of the cost associated with, such repair,
improvement or replacement (whether authorized for
payment
or actually paid by Borrowers), Administrative Agent shall
make disbursements under the Term Loan in an amount not to
exceed 82.5% of such cost to reimburse Borrowers for such
repair, improvement or replacement. To the extent any payment
is authorized for payment or actually paid by Borrowers prior
to completion of any repair, improvement or replacement, upon
submittal of invoices associated with such partial payments
and absent the existence of any Event of Default hereunder,
Administrative Agent shall reimburse Borrowers no more
frequently than on time per month, in an amount not to exceed
82.5% (less customary holdbacks to ensure completion) of such
partial cost to reimburse Borrowers for such repair,
improvement or replacement. Disbursements under the Capital
Improvement Holdback shall not exceed, in the aggregate, the
amount of the Capital Improvement Holdback set forth above and
shall be deemed to be a Term Loan made hereunder. To the
extent funds are advanced for invoices not already paid by
Borrowers, (i) Borrowers shall provide Administrative Agent
with evidence that each such invoice was paid in full and (ii)
until such time as the paid invoices are received by
Administrative Agent, Administrative Agent shall only, upon
Borrowers’ request, reimburse Borrowers for invoices
actually paid. Borrowers shall be obligated to make the
repairs, improvements and replacements identified on
Schedule 2.1 on
the respective dates set forth therein. Upon completion of all
items on
Schedule 2.1 ,
the balance of the Capital Improvement Holdback shall be refunded
to Borrowers.
(ii)
Replacement Reserve .
At or before the initial advance under the Term Loan, the Borrowers
shall deposit with the Administrative Agent a sum of money in an
amount equal to TWENTY FIVE DOLLARS ($25) per bed (the
“
Monthly Replacement Reserve Deposit ”),
and shall thereafter make a deposit equal to the Monthly
Replacement Reserve Deposit each month, contemporaneously with its
payment of interest due hereunder,
provided ,
however ,
at such time as the amount in such replacement reserve is equal to
or greater than 12 times the Monthly Replacement Reserve Deposit
(the “
Maximum Reserve Amount ”),
the Borrowers shall not be obligated to make any further Monthly
Replacement Reserve Deposits until such time as the amount in such
reserve is less than the Maximum Reserve Amount. Administrative
Agent shall release funds from this reserve to reimburse the
Borrowers, or pay directly if a request is made for an amount in
excess of $20,000, for capital expenditures for, and replacement of
furniture, fixtures and equipment used in connection with, the
Facilities, promptly following the Borrowers’ request
therefore, which request shall be accompanied by invoices or other
reasonable evidence of the payment or obligations for which a
release is being requested.
(iii)
Tax Escrow .
The Borrowers shall deposit monthly with the Administrative Agent
or the Administrative Agent’s designee, a sum of money equal
to equal to one-twelfth (1/12th) of the annual charges for real
estate taxes, assessments and impositions relating to the
Facilities as reasonably estimated by Administrative Agent. At or
before the initial advance under the Term Loan, the Borrowers shall
deposit with the Administrative Agent a sum of money which together
with such monthly installments will be sufficient to make such tax
payments thirty (30) days prior to the date any delinquency or
penalty becomes due. Provided sufficient funds are available in the
foregoing tax reserve, Administrative Agent shall use such funds to
pay real estate taxes, assessments and impositions relating to the
Facilities prior to the date same are due, and
any
obligations of the Borrowers hereunder to pay same shall be
deemed satisfied if sufficient funds to pay same are in such
reserve.
(iv)
Insurance Escrow .
To the extent non-captive insurance is utilized and a third party
collects a premium for such insurance coverage, the Borrowers shall
deposit monthly with the Administrative Agent or Administrative
Agent’s designee, a sum of money equal to equal to
one-twelfth (1/12th) of the annual charges for insurance premiums
relating to the insurance coverages required by this Agreement as
reasonably estimated by Administrative Agent. At or before the
initial advance under the Loan, the Borrowers shall deposit with
the Administrative Agent a sum of money which together with such
monthly installments will be sufficient to make such insurance
payments thirty (30) days prior to the date any delinquency or
penalty becomes due. Provided sufficient funds are available in the
foregoing insurance reserve, Administrative Agent shall use such
funds to pay insurance premiums relating to the Facilities prior to
the date same are due, and any obligations of the Borrowers
hereunder to pay same shall be deemed satisfied if sufficient funds
to pay same are in such reserve.
(v)
Disbursement and Interest .
After the Closing Date, deposits in respect of the escrows
described in
clauses (iii) - (iv) above
shall be made on the basis of the Administrative Agent’s
reasonable estimate from time to time of the charges for the
current year (or other applicable period). All funds deposited
pursuant to
clause (iii) - (iv) shall
be held by the Administrative Agent. These sums may be commingled
with the general funds of the Administrative Agent and shall not be
deemed to be held in trust for the benefit of the Borrowers. So
long as no Event of Default exists hereunder, the Administrative
Agent shall credit for the Borrowers’ account interest on
such funds held by the Administrative Agent from time to time at
the money market account rate announced from time to time by The
Northern Trust Company or any other national banking association
selected by the Administrative Agent in its sole discretion (the
“
Money Market Rate ”).
All interest paid on such funds shall be deemed to be a part of the
respective escrow and shall be applied in accordance with
this
Section 2.1(b) .
The Borrowers hereby grant to the Administrative Agent for the
benefit of Lender and the Administrative Agent a security interest
in all funds so deposited with the Administrative Agent for the
purpose of securing the Obligations. While an Event of Default
exists, the funds deposited may be applied in payment of the
charges for which such funds have been deposited, or to the payment
of the Obligations or any other charges affecting the security of
the Administrative Agent, as the Administrative Agent may elect,
but no such application shall be deemed to have been made by
operation of law or otherwise until actually made by the
Administrative Agent. The Borrowers shall furnish the
Administrative Agent with bills for the charges for which such
escrows are required promptly upon the Borrowers’ receipt
thereof. If at any time the amount in escrow with the
Administrative Agent, together with amounts to be deposited by the
Borrowers before such charges are payable, is insufficient to pay
such charges, the Borrowers shall deposit any deficiency with the
Administrative Agent immediately upon demand. The Administrative
Agent shall promptly pay such charges, when the amount in escrow
with the Administrative Agent is sufficient to pay such charges and
the Administrative Agent has received a bill for such charges, if
applicable.
Section
2.2
Termination of the Commitments, Maturity Date and Repayment of
Loans .
(a) Termination
of Term Loan Commitments. Outstanding
Term Loan Commitments in an amount equal to the amount of any Term
Loan actually advanced shall terminate on the date of such advance
(after giving effect to the Term Loan occurring on such date). The
balance of all outstanding Term Loan Commitments shall terminate on
the six (6) month anniversary of the Closing Date.
(b)
Maturity Date and Repayment of the Term Loans
.
Commencing on January 2, 2007, the Borrowers shall pay interest in
arrears on the first day of each month until all amounts due under
the Loan Documents are paid in full. If the first day of the month
is not a Business Day, then the applicable payment due hereunder
shall be made on the first Business Day of such month. The
Borrowers promise to repay all outstanding principal and accrued
but unpaid interest, costs, expenses and fees under or related to
the Term Loans on the Maturity Date.
The
Borrowers may extend the Maturity Date to the first
anniversary of the Scheduled Maturity Date (the “
First Extension Period ”)
provided the following conditions are satisfied: (i) Borrowers
have given the Administrative Agent written notice (the
“
First Extension Notice ”)
of such extension not less than thirty (30) days nor more than
ninety (90) days prior to the Scheduled Maturity Date; (ii) no
Event of Default has occurred and is continuing at the time of, or
at any time after the delivery of, the First Extension Notice;
(iii) if the Consolidated Project Yield as of the commencement of
the First Extension Period would not be greater than or equal to
10%, the Borrowers shall, prior to the commencement of the First
Extension Period, deposit with Administrative Agent, to be held in
escrow (the “
Cash Collateral Escrow ”),
an amount which, if applied against to the outstanding principal
balance of the Term Loan would cause the Consolidated Project Yield
as of the commencement of the First Extension Period to be equal to
10%; (iv) an Interest Rate Contract, reasonably acceptable to the
Administrative Agent, shall be in full force and effect and (v)
there shall have been no material adverse change in the business or
financial condition of the Borrowers taken as a whole, which
determination shall be made in the sole and absolute discretion of
the Administrative Agent.
In
addition to the First Extension Period, the Borrowers may
further extend the Loan for the twelve (12) month period
ending on the second anniversary of the Scheduled Maturity
Date (the “
Second Extension Period ”),
provided the following conditions are satisfied: (i) Borrowers
has given the Administrative Agent written notice (the
“
Second Extension Notice ”)
of such extension not less than thirty (30) days nor more than
ninety (90) days prior to the expiration of First Extension Period;
(ii) no Event of Default has occurred and is continuing at
the time of, or at any time after the delivery of, the Second
Extension Notice; (iii) if the Consolidated Project Yield as of the
commencement of the Second Extension Period would not be greater
than or equal to 10%, the Borrowers shall, prior to the
commencement of the Second Extension Period, deposit into the Cash
Collateral Escrow, an amount which, if applied against to the
outstanding principal balance of the Term Loan would cause the
Consolidated Project Yield as of the commencement of the Second
Extension Period to be equal to 10%; and (iv) an Interest Rate
Contract, reasonably acceptable to the Administrative Agent, shall
be in full force and effect and (v) there shall have been no
material adverse change in the business or financial condition of
the Borrowers taken as a whole, which determination shall be made
in the sole and absolute discretion of the Administrative
Agent.
Section
2.3
Optional Prepayments .
The
Borrowers may not prepay any of the outstanding principal balance
of the Term Loans in whole or in part prior to the 1
st anniversary
of the
Closing Date other than as may be permitted pursuant to Section
8.4(d) in respect of the sale of Westlake or Boynton or the
Whittier Residence. From and after the first anniversary
of
the Closing Date,
the Borrowers may prepay the outstanding principal amount of
the Term Loans and other Obligations in whole but not in part
at any time ,
without premium or penalty, other than as set forth in Section
2.10(a).
Section
2.4
Mandatory Payments. (a)
Excess
Cash Flow. For any quarter ending after the 2
nd anniversary
of the Closing Date, if the Consolidated Project Yield shall be
less than 10% (for the relevant period as set forth in Section
5.1), the Borrowers shall pay or cause to be paid to the
Administrative Agent, within five (5) Business Days after the last
date Financial Statements can be delivered pursuant to
Section 6.1
( b
) for
such quarter, an amount equal to 100% of the Excess Cash Flow for
such quarter and continuing thereafter on the last Business Day of
each calendar month, which amount shall be held in the Cash
Collateral Escrow; provided, however, if the Consolidated Project
Yield shall, for two (2) consecutive quarters, be equal to or
greater than 10% (for the relevant period as set forth in Section
5.1), the mandatory payment of Excess Cash Flow required pursuant
to this Section 2.4 shall be suspended, but only for so long as the
Consolidated Project Yield shall remain equal to or greater than
10% (for the relevant period as set forth in Section
5.1).
(c)
Cash Collateral Escrow .
All funds held in the Cash Collateral Escrow shall be additional
collateral to secure the Borrowers Obligations hereunder.
Notwithstanding the other provisions of this Agreement, the
Borrowers shall have the right, but not the obligation, at any time
when there shall exist a positive balance in the Cash Collateral
Escrow, to repay a portion of the outstanding principal balance of
the Term Loan, subject to
Section 2.3 ,
up to the amount held in the Cash Collateral Escrow. In such event,
within ten (10) days of such repayment, Administrative Agent shall
cause an amount equal to the amount so repaid to be released to the
Borrowers from the Cash Collateral Escrow.
(d)
Asset Sales and Property Loss Events .
Upon
receipt on or after the Closing Date by any Borrower of Net Cash
Proceeds arising from (i) any
Transfer by any Borrower of any of its property other than
Transfers of its own Equity Interests and Transfers of property
permitted hereunder in reliance upon any of
clauses (a) through
(c) of
Section 8.4 or
(ii)
any Property Loss Event with respect to any property of any
Borrower to the extent resulting, in the aggregate with all other
such Property Loss Events, in the receipt by any of them of Net
Cash Proceeds in excess of $50,000,
such Borrower shall immediately pay or cause to be paid to the
Administrative Agent an amount equal to 100% of such Net Cash
Proceeds;
provided ,
however ,
that, in the case of
clause (ii) above,
upon any such receipt, as long as no Event of Default shall be
continuing, any Borrower may make Permitted Reinvestments with such
Net Cash Proceeds and such Borrower shall not be required to make
or cause such payment to the extent (x) such Net Cash Proceeds are
intended to be or are actually used to make Permitted Reinvestments
and (y) on each Reinvestment Prepayment Date for such Net Cash
Proceeds, such Borrower shall pay or cause to be paid to the
Administrative Agent an amount equal to the Reinvestment Prepayment
Amount applicable to such Reinvestment Prepayment Date
.
(e)
Application of Payments .
Any payments made to the Administrative Agent pursuant to
this
Section 2.4 shall
be applied to the Obligations in accordance with
Section 2.6(b) .
Section
2.5
Interest .
(a)
Rate. The Term Loans and the outstanding amount of all other
Obligations (other than pursuant to Secured Hedging Agreements)
shall bear interest, in the case of the Term Loans, on the unpaid
principal amount thereof from the date such Term Loan is made, and,
in the case of such other Obligations, from the date such other
Obligations are due and payable until, in each case, paid in full,
except as otherwise provided in clause (c) below,
as
follows: (i) in the case of Eurodollar Rate Loans, at a rate per
annum equal to the sum of the Eurodollar Rate plus the Applicable
Margin, each as in effect for the applicable Interest Period, and
(iii) in the case of other Obligations, at a rate per annum equal
to the Base Rate as in effect from time to time.
(b)
Default Interest .
Notwithstanding the rates of interest specified in
clause (a) above
or elsewhere in any Loan Document, effective immediately upon (A)
the occurrence of any Event of Default under
Section 9.1(e)(ii) or
(B) the delivery of a notice by the Administrative Agent at the
direction of the Required Lenders to any Borrower during the
continuance of any other Event of Default and, in each case, for as
long as such Event of Default shall be continuing, the principal
balance of all Obligations (including any Obligation that bears
interest by reference to the rate applicable to any other
Obligation) then due and payable shall bear interest at a rate that
is 4% per annum in excess of the interest rate applicable to such
Obligations from time to time, payable on demand or, in the absence
of demand, on the date that would otherwise be applicable.
(c)
Additional Fees .
The Borrowers shall pay to the Administrative Agent and its Related
Persons its reasonable and customary fees and expenses in
connection with any payments made pursuant to
Section 2.10(a) (
Breakage Costs )
and have agreed to pay the additional fees described in the Fee
Letter.
Section
2.6
Application of Payments .
(a)
Application
of Voluntary Prepayments. Unless otherwise provided in this
Section 2.6 or elsewhere in any Loan Document, all payments
and any other amounts received by the Administrative Agent from or
for the benefit of the Borrowers shall be applied to repay the
Obligations the Borrowers designate, and shall be paid pro rata by
the Administrative Agent to the Lenders.
(b)
Application of Mandatory Prepayments .
Subject to the provisions of
clause (c) below
with respect to the application of payments during the continuance
of an Event of Default, any payment made by any Borrower to the
Administrative Agent pursuant to
Section 2.4 or
any other prepayment of the Obligations required to be applied in
accordance with this
clause (b) shall
be applied to repay the outstanding principal balance of the Term
Loans.
(c)
Application of Payments During an Event of Default
.
Each Borrower hereby irrevocably waives, and agrees to cause each
other Borrower and each other Borrower to waive, the right to
direct the application during the continuance of an Event of
Default of any and all payments in respect of any Obligation and
any proceeds of Collateral and agrees that, during the continuance
of an Event of Default, notwithstanding the provisions of
clause (a) above,
the Administrative Agent may, and, upon either (A) the direction of
the Required Lenders or (B) the termination of any Commitment or
the acceleration of any Obligation pursuant to
Section 9.2 as
a result of such Event of Default, shall, apply all payments in
respect of any Obligation, all funds on deposit in any escrow
established pursuant to
Section 2.1(b) and
all other proceeds of Collateral (i)
first ,
to pay Obligations in respect of any cost or expense
reimbursements, fees or indemnities then due to the Administrative
Agent ,
(ii)
second ,
to pay Obligations in respect of
any
cost or expense reimbursements, fees or indemnities then due
to the Lenders ,
(iii)
third ,
to pay interest then due and payable in respect of the Loans
,
and (iv)
fourth ,
to repay the outstanding principal amounts of the Loans, (v)
fifth ,
to pay amounts owing with respect to Secured Hedging Agreements
and (vi)
sixth ,
to the ratable payment of all other Obligations .
(d)
Application of Payments Generally .
All repayments of Term Loans shall be applied
first ,
to repay such Loans outstanding as Base Rate Loans and
then ,
to repay such Loans outstanding as Eurodollar Rate Loans. All
repayments of Term Loans shall be applied to reduce the remaining
installments of such outstanding principal amounts of the Term
Loans in the order of their maturities. Any priority level set
forth in this
Section 2.6 that
includes interest shall include all such interest, whether or not
accruing after the filing of any petition in bankruptcy or the
commencement of any insolvency, reorganization or similar
proceeding, and whether or not a claim for post-filing or
post-petition interest is allowed in any such
proceeding.
Section
2.7
Payments and Computations .
(a)
Procedure. The Borrowers shall make each payment under any Loan
Document not later than 2:00 p.m. on the day when due to the
Administrative Agent by wire transfer to the following account (or
at such other account or by such other means to such other address
as the Administrative Agent shall have notified the Borrowers in
writing within a reasonable time prior to such payment) in
immediately available Dollars and without setoff or
counterclaim:
ABA
No. 021-001-033
Account
Number 502-695-34
Deutsche
Bank Trust Company Americas, New York, New York
Account
Name: GECC/Healthcare Financial Collections
Depository,
Reference:
BREA Emeritus LLC
The
Administrative Agent shall promptly thereafter cause to be
distributed immediately available funds relating to the
payment of principal, interest or fees to the Lenders, in
accordance
