uht-8k_20200603.htm
false 0000798783 0000798783 2020-06-03 2020-06-03

 

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

 

FORM 8-K

 

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): June 3, 2020

 

UNIVERSAL HEALTH REALTY INCOME TRUST

(Exact name of Registrant as Specified in Its Charter)

 

 

Maryland

1-9321

23-6858580

(State or Other Jurisdiction

of Incorporation)

(Commission File Number)

(IRS Employer

Identification No.)

 

 

 

Universal Corporate Center

367 South Gulph Road

King of Prussia, Pennsylvania

 

19406

(Address of Principal Executive Offices)

 

(Zip Code)

Registrant’s Telephone Number, Including Area Code: (610265-0688

Not Applicable

(Former Name or Former Address, if Changed Since Last Report)

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instructions A.2. below):

Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§ 230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§ 240.12b-2 of this chapter).

Securities registered pursuant to Section 12(b) of the Act:

 

Title of each class

 

 

Trading Symbol(s)

 

Name of each exchange on which registered

Shares of beneficial interest, $0.01 par value

 

UHT

 

New York Stock Exchange

Emerging growth company 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. 

 

 

 



 

Item 1.01 Entry into a Material Definitive Agreement.

As previously disclosed, on March 27, 2018, Universal Health Realty Income Trust (the “Trust”) entered into a credit agreement with a syndicate of lenders and Wells Fargo Bank, National Association, as Administrative Agent, Bank of America, N.A., as Syndication Agent and Fifth Third Bank, JPMorgan Chase Bank, N.A. and SUNTRUST Bank as Co-Documentation Agents (the “Credit Agreement”). The Credit Agreement provides  for a revolving credit facility in an aggregate principal amount of $300 million, including a $40 million sublimit for the issuance of standby letters of credit and a $30 million sublimit for Swingline loans. Borrowings under the facility are guaranteed by certain subsidiaries of the Trust and  are secured by first priority security interests in and liens on equity interests in certain of the Trust’s wholly-owned subsidiaries. On June 5, 2020, the Trust, certain subsidiaries of the Trust listed therein, the Administrative Agent and the required lenders under the Credit Agreement entered into the first amendment (the “First Amendment”) to the Credit Agreement, pursuant to which, among other things, an additional tranche of revolving credit commitments in the amount of $50,000,000, designated as the “Revolving B Facility,” was established, thereby increasing the aggregate revolving credit commitment under the Credit Agreement to $ 350,000,000.

Borrowings under the new Revolving B Facility will bear interest annually at a rate equal to, at the Trust’s option, either LIBOR (for one, two, three, or six months) (subject to certain restrictions therein) or the Base Rate (as defined below), plus, in either case, a specified margin depending on the Trust’s total leverage ratio, as determined by the formula set forth in the Credit Agreement. The applicable margin ranges from 1.85% to 2.10% for LIBOR loans and .85% to 1.10% for Base Rate loans. The initial applicable margin is 1.95% for LIBOR loans and .95% for Base Rate loans. The Credit Agreement defines “Base Rate” as the greatest of (a) the Administrative Agent’s prime rate, (b) the federal funds effective rate plus 1/2 of 1% and (c) one month LIBOR plus 1%. The Trust will also pay a quarterly facility fee ranging from 0.15% to 0.35% (depending on the Trust’s total leverage ratio) on the aggregate principal amount of the Revolving B Facility.  

The remainder of the revolving credit commitments provided under the Credit Agreement that were in effect prior to giving effect to the First Amendment, has been designated as the “Revolving A Facility,” and borrowings under the Revolving A Facility will continue to bear interest annually at a rate equal to, at the Trust’s option, either LIBOR (for one, two, three, or six months) (subject to certain restrictions therein) or the Base Rate (), plus, in either case, a specified margin depending on the Trust’s total leverage ratio, as determined by the formula set forth in the Credit Agreement. The applicable margin ranges from 1.10% to 1.35% for LIBOR loans and .10% to .35% for Base Rate loans. The current applicable margin is 1.20% for LIBOR loans and .20% for Base Rate loans. The Credit Agreement defines “Base Rate” as the greatest of (a) the Administrative Agent’s prime rate, (b) the federal funds effective rate plus 1/2 of 1% and (c) one month LIBOR plus 1%. The Trust will also pay a quarterly facility fee ranging from 0.15% to 0.35% (depending on the Trust’s total leverage ratio) on the aggregate principal amount of the Tranche A Facility of the Credit Agreement.

In connection with the execution of the First Amendment, the Trust paid an upfront fee for the lenders under the Revolving B Facility equal to 0.25% of the Revolving B Facility, as well as modification fees and certain customary fees and expenses of Administrative Agent in connection with the First Amendment.

The foregoing description of the First Amendment and the transactions contemplated thereby does not purport to be complete and is subject to, and qualified in its entirety by reference to, the full text of the First Amendment, which is attached as Exhibit 10.1 and is incorporated herein by reference.

 


Item 2.03

Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant.

The information provided in “Item 1.01 — Entry into a Material Definitive Agreement” is hereby incorporated into this Item 2.03 by reference.

 

 

Item 5.07 Submission of Matters to a Vote of Security Holders.

 

On June 3, 2020, Universal Health Realty Income Trust (the “Trust”) held its 2020 Annual Meeting of Stockholders.  Due to the unprecedented public health impact of the novel coronavirus (COVID-19) outbreak, and to support the health and well-being of our communities, employees, stockholders and other stakeholders, this year’s Annual Meeting of Stockholders was conducted completely virtually via a live audio webcast.  

At the Annual Meeting, the Trust’s stockholders: (i) voted to elect two Class I members of the Board of Trustees for three-year terms scheduled to expire at the Trust’s 2023 Annual Meeting of Stockholders; (ii) voted in favor of the nonbinding advisory vote on named executive officer compensation; (iii) voted to approve an amendment to the Trust’s Amended and Restated 2007 Restricted Stock Plan, and; (iv) voted to ratify the selection of KPMG LLP, as the Trust’s independent registered public accounting firm for the fiscal year ending December 31, 2020.

The final voting results were as follows:

 

Proposal No. 1: Election of Trustees:

 

Alan B. Miller

Robert F. McCadden

Votes cast in favor

9,130,213

9,267,712

Votes withheld

358,700

221,201

Non votes

2,336,992

2,336,992

 

Proposal No. 2: The nonbinding advisory vote on named executive officer compensation:

Votes cast in favor

8,747,081

Votes cast against

676,811

Votes abstained

65,022

Non votes

2,336,992

 

Proposal No. 3: Approval of the amendment to the Amended and Restated 2007 Restricted Stock Plan:

Votes cast in favor

9,196,945

Votes cast against

237,989

Votes abstained

53,979

Non votes

2,336,992

 

Proposal No. 4: Ratification of the selection of KPMG, LLP, as the Trust’s independent registered public accounting firm for the fiscal year ending December 31, 2020:

Votes cast in favor

11,552,784

Votes cast against

231,734

Votes abstained

41,387

Non votes

0

 


 

 

 

Item 9.01 Financial Statements and Exhibits.

 

(d)  Exhibits

Exhibit

Number

 

Description

10.1

 

First Amendment, dated as of June 5, 2020 to Credit Agreement, dated as of March 27, 2018 between Universal Health Realty Income Trust, certain subsidiaries of Universal Health Realty Income Trust, certain banks and financial institutions from time to time party thereto, and Wells Fargo Bank, National Association, as administrative agent.

 

 

 

104

 

Cover Page Interactive Data File (embedded within the Inline XBRL document).

 

 

 

 

 

 

 


Exhibit Index

 

Exhibit

Number

 

Description

10.1

 

 

 

 

First Amendment, dated as of June 5, 2020  to Credit Agreement, dated as of March 27, 2018 between Universal Health Realty Income Trust, certain subsidiaries of Universal Health Realty Income Trust, certain banks and financial institutions from time to time party thereto, and Wells Fargo Bank, National Association, as administrative agent.

104

 

Cover Page Interactive Data File (embedded within the Inline XBRL document).



SIGNATURES

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

UNIVERSAL HEALTH REALTY INCOME TRUST

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 Date: June 5, 2020

 

 

 

 

 

By:

 

/s/ Charles F. Boyle

 

 

 

 

 

 

Name:

 

Charles F. Boyle

 

 

 

 

 

 

Title:

 

Vice President and Chief Financial Officer

 

 

uht-ex101_6.htm

EXECUTION VERSION

Exhibit 10.1

 

FIRST AMENDMENT TO CREDIT AGREEMENT

 

THIS FIRST AMENDMENT TO CREDIT AGREEMENT (this “Amendment”), dated as of June 5, 2020, is by and among UNIVERSAL HEALTH REALTY INCOME TRUST, a real estate investment trust organized under the laws of the State of Maryland (the “Company”), the Subsidiary Guarantors party hereto, the Lenders party hereto and WELLS FARGO BANK, NATIONAL ASSOCIATION, as administrative agent for the Lenders hereunder (in such capacity, the “Agent”).  Capitalized terms used herein and not otherwise defined herein shall have the meanings ascribed thereto in the Credit Agreement (as hereinafter defined).

 

W I T N E S S E T H

 

WHEREAS, the Company, certain banks and financial institutions from time to time party thereto (the “Lenders”) and the Agent are parties to that certain Credit Agreement, dated as of March 27, 2018 (as amended, modified, extended, restated, replaced or supplemented from time to time, the “Credit Agreement”);

 

WHEREAS, the Company has requested that (a) the Agent and the Lenders amend the Credit Agreement to make certain modifications as more specifically set forth in this Amendment and (b) certain Lenders (individually, a “Revolving B Lender” and collectively, the “Revolving B Lenders”) provide a Revolving Facility Increase in the form of a separate tranche of Revolving Loans in an aggregate principal amount equal to $50,000,000 (the “Revolving B Commitments”); and

WHEREAS, (a) the Agent and the Lenders are willing to amend the Credit Agreement and (b) the Revolving B Lenders are willing to provide the Revolving B Commitments, in each case in accordance with and subject to the terms and conditions set forth herein.

 

NOW, THEREFORE, in consideration of the agreements hereinafter set forth, and for other good and valuable consideration, the receipt and adequacy of which are hereby acknowledged, the parties hereto agree as follows:

 

ARTICLE I

AMENDMENTS TO CREDIT AGREEMENT

 

1.1Amendment to Credit Agreement.   From and after the First Amendment Effective Date, the Credit Agreement is amended to delete the stricken text (indicated textually in the same manner as the following example:  stricken text) and to add the double-underlined text (indicated textually in the same manner as the following example:  double-underlined text) as set forth in the pages of the Credit Agreement attached as Annex A to this Amendment (the “Amended Credit Agreement”).

 

1.2Amendment to Schedules and Exhibits. The Schedules and Exhibits to the Credit Agreement are hereby amended and restated as set forth on Annex B attached to this Amendment. All other Schedules and Exhibits to the Credit Agreement shall not be modified or otherwise affected.

 

36927258

1


 

ARTICLE II

CONDITIONS TO EFFECTIVENESS

 

2.1Closing Conditions.  This Amendment shall become effective as of the day and year set forth above (the “First Amendment Effective Date”) upon satisfaction of the following conditions (in each case, in form and substance reasonably acceptable to the Agent):

 

(a)Executed Amendment.  The Agent shall have received a copy of this Amendment duly executed by the Company, the Subsidiary Guarantors, the Revolving B Lenders, the Lenders (immediately prior to giving effect to this Amendment) and the Agent.  

(b)Authority Documents.  The Agent shall have received, in form and substance reasonably satisfactory to the Agent, an officer’s certificate (i) certifying that the articles of incorporation or other organizational documents, as applicable, of each Credit Party that were delivered on the Closing Date remain true and complete as of the First Amendment Effective Date (or certified updates as applicable), (ii) attaching the articles of incorporation or other organizational documents, as applicable, of any Credit Party that were not delivered on the Closing Date, and certifying that they are true and complete as of the First Amendment Effective Date, (iii) certifying that the bylaws, operating agreements or partnership agreements of each Credit Party that were delivered on the Closing Date remain true and complete as of the First Amendment Effective Date (or certified updates as applicable), (iv) attaching the bylaws, operating agreements or partnership agreements of any Credit Party that were not delivered on the Closing Date and certifying that they are true and correct and in force and effect as of the First Amendment Effective Date, (v) attaching copies of the resolutions of the board of directors of each Credit Party approving and adopting this Amendment (including the Revolving B Commitments), the transactions contemplated herein and authorizing execution and delivery hereof, and certifying such resolutions to be true and correct and in force and effect as of the First Amendment Effective Date, (vi) attaching, unless waived by the Agent, certificates of good standing, existence or its equivalent with respect to each Credit Party certified as of a recent date by the appropriate Governmental Authorities of the state of incorporation or organization and (vii) certifying that each officer listed in the incumbency certification contained in such officer’s certificate is a duly elected and qualified officer of such Credit Party and such officer is duly authorized to execute and deliver on behalf of such Credit Party the Amendment.  

(c)Fees and Expenses.  (i) The Agent shall have received from the Company (A) for the account of each of the Revolving B Lenders, an upfront fee for each Revolving B Lender equal to 0.25% of the principal amount of the Revolving B Commitments provided by such Revolving B Lender on the First Amendment Effective Date, (B) for the account of each of the Lenders party hereto, an amendment fee for such Lender party hereto equal to $10,000 and (C) such other fees and expenses that are payable in connection with the consummation of the transactions contemplated hereby and (ii) King & Spalding LLP shall have received from the Company payment of all outstanding fees and expenses previously incurred and all fees and expenses incurred in connection with this Amendment.

(d)Legal Opinion.  The Agent shall have received an opinion or opinions of counsel for the Credit Parties, dated the First Amendment Effective Date and addressed to the Agent and the Lenders (including the Revolving B Lenders), in form and substance satisfactory to the Agent.

(e)Notes.  To the extent requested by a Revolving B Lender, each such Lender shall have received Notes in accordance with Sections 2.1(e) and 2.9(d) of the Credit Agreement, each duly executed by the Company and dated the First Amendment Effective Date.

2

2


 

(f)Solvency.  The Agent shall have received a certificate from the Company executed by the Chief Financial Officer as to the financial condition, solvency and related matters of the Company and its Subsidiaries taken as a whole, in each case after giving effect to the any borrowings of the Revolving B Loans under the Revolving B Commitments made on the First Amendment Effective Date, in substantially the form of Exhibit 4.1(p) to the Amended Credit Agreement.

(g)Compliance with Laws.  The financings and other transactions contemplated by the Amendment and the Amended Credit Agreement shall be in compliance with all applicable laws and regulations (including all applicable securities and banking laws, rules and regulations).

(h)Bankruptcy.  There shall be no bankruptcy or insolvency proceedings pending or threatened with respect to the Company, any of its Subsidiaries or any Unconsolidated Affiliate.

(i)Officer’s Certificate.  The Agent shall have received a certificate executed by the President, Chief Financial Officer or Treasurer of the Company as of the First Amendment Effective Date stating that (i) no action, suit, investigation or proceeding is pending or, to the knowledge of the Company, threatened in any court or before any arbitrator or governmental instrumentality that purports to affect the Company, its Subsidiaries, any Unconsolidated Affiliate or any transaction contemplated by the Loan Documents, if such action, suit, investigation or proceeding could reasonably be expected to have a Material Adverse Effect and (ii) immediately after giving effect to this Amendment (including the initial borrowings of the Revolving B Commitments), the other Loan Documents and all the transactions contemplated herein and therein to occur on such date, (A) no Default or Event of Default exists, (B) all representations and warranties contained herein, the Amended Credit Agreement and in the other Loan Documents are true and correct in all material respects (other than any representations and warranties that contain a materiality qualification, which shall be true and correct), and (C) the Company is in compliance with each of the financial covenants set forth in Section 5.5 of the Amended Credit Agreement, and demonstrating compliance with such financial covenants.

(j)Patriot Act Certificate; Beneficial Ownership.  The Agent shall have received a certificate satisfactory thereto, substantially in the form of Exhibit 4.1(u) to the Amended Credit Agreement, for benefit of itself and the Lenders (including the Revolving B Lenders), provided by the Company that sets forth information required by the Anti-Money Laundering Laws, (including, without limitation, the Patriot Act) including, without limitation, the identity of the Company and the Guarantors, the name and address of the Company and the Guarantors and other information that will allow the Agent or any Lender (including any Revolving B Lender), as applicable, to identify the Company and the Guarantors in accordance with the Anti-Money Laundering Laws.  And any Credit Party that qualifies as a “legal entity customer” under the Beneficial Ownership Regulation shall have delivered to each Lender (including any Revolving B Lender) that so requests, a Beneficial Ownership Certification in relation to such Credit Party.

 

ARTICLE III
MISCELLANEOUS

 

3.1Amended Terms.  On and after the First Amendment Effective Date, all references to the Credit Agreement in each of the Loan Documents shall hereafter mean the Amended Credit Agreement.  Except as specifically amended hereby or otherwise agreed, the Credit Agreement is hereby ratified and confirmed and shall remain in full force and effect according to its terms. For the avoidance of doubt, the Lenders party hereto waive, on a one-time basis and with respect to the Revolving B Loans only, the “most favored nation” provision contained in Section 2.2(c) of the Amended Credit Agreement.

 

3

3


 

3.2Representations and Warranties of Credit Parties.  Each of the Credit Parties represents and warrants as follows:

 

(a)It has taken all necessary action to authorize the execution, delivery and performance of this Amendment.

(b)This Amendment has been duly executed and delivered by such Person and constitutes such Person’s legal, valid and binding obligation, enforceable in accordance with its terms, except as such enforceability may be subject to (i) bankruptcy, insolvency, reorganization, fraudulent conveyance or transfer, moratorium or similar laws affecting creditors’ rights generally and (ii) general principles of equity (regardless of whether such enforceability is considered in a proceeding at law or in equity).

(c)No consent, approval, authorization or order of, or filing, registration or qualification with, any court or governmental authority or third party is required in connection with the execution, delivery or performance by such Person of this Amendment.

(d)The representations and warranties made by the Credit Parties in the Loan Documents (i) with respect to representations and warranties that contain a materiality qualification, are true and correct and (ii) with respect to representations and warranties that do not contain a materiality qualification, are true and correct in all material respects, in each case on and as of the date hereof as if made on and as of such date except for any representation or warranty made as of an earlier date, which representation and warranty shall remain true and correct as of such earlier date.

(e)After giving effect to this Amendment and any funding of the Revolving B Commitment, no Default or an Event of Default shall have occurred and be continuing.

(f)The Security Documents continue to create a valid security interest in, and Lien upon, the Collateral, in favor of the Agent, for the benefit of the Lenders, which security interests and Liens are perfected in accordance with the terms of the Security Documents and prior to all Liens other than Permitted Liens.

(g)Other than as set forth herein, the Credit Party Obligations are not reduced or modified by this Amendment and are not subject to any offsets, defenses or counterclaims.

3.3Reaffirmation of Credit Party Obligations.  Each Credit Party hereby ratifies the Credit Agreement and other Loan Documents and acknowledges and reaffirms (a) that it is bound by all terms of the Credit Agreement and other Loan Documents applicable to it and (b) that it is responsible for the observance and full performance of its respective Credit Party Obligations.  Furthermore, each Subsidiary Guarantor consents to the execution and delivery by the Company of this Amendment and acknowledges that, notwithstanding anything to the contrary contained herein or in any other document evidencing any Obligations of the Company to the Lenders or any other obligation of the Company, or any actions now or hereafter taken by the Lenders with respect to any obligation of the Company, (i) the Subsidiary Guaranty (A) is and shall continue to be a primary obligation of the Subsidiary Guarantors, (B) is and shall continue to be an absolute, unconditional, joint and several, continuing and irrevocable guaranty of payment, and (C) is and shall continue to be in full force and effect in accordance with its terms and (ii) the Pledge Agreement and the liens created thereunder shall continue in full force and effect to secure the Credit Party Obligations after giving effect to this Amendment.  Nothing contained herein to the contrary shall release, discharge, modify, change or affect the original liability of the Subsidiary Guarantors under the Subsidiary Guaranty or the Pledge Agreement.

 

4

4


 

3.4Guarantor Accession.  The parties hereto acknowledge that (a) the Credit Parties failed to cause the Subsidiaries listed on Annex C hereto (the “Additional Subsidiaries”) to join the Subsidiary Guaranty and Pledge Agreement and deliver the pledges and other deliverables, in each case, as required under Section 5.33(a) of the Credit Agreement and (b) as of the First Amendment Effective Date, such Additional Subsidiaries have executed and delivered to the Agent, (i) a joinder to the Subsidiary Guaranty and the Pledge Agreement in substantially in the form of the Guarantor Accession (as defined in the Subsidiary Guaranty) and (ii) such organizational documents, secretary’s certificates and legal opinions in connection therewith as reasonably requested by the Agent. The Agent and the Lenders hereby waive any Default or Event of Default arising from such failure.

 

3.5Loan Document.  This Amendment shall constitute a Loan Document under the terms of the Credit Agreement.

 

3.6Expenses.  The Company agrees to pay all reasonable costs and fees and expenses of the Agent in connection with the preparation, execution and delivery of this Amendment, including without limitation the reasonable fees and expenses of the Agent’s legal counsel.

 

3.7Further Assurances.  The Credit Parties agree to promptly take such action, upon the request of the Agent, as is necessary to carry out the intent of this Amendment.

 

3.8Entirety.  This Amendment and the other Loan Documents embody the entire agreement among the parties hereto and supersede all prior agreements and understandings, oral or written, if any, relating to the subject matter hereof.

 

3.9Counterparts; Telecopy.  This Amendment may be executed in any number of counterparts, each of which when so executed and delivered shall be an original, but all of which shall constitute one and the same instrument.  Delivery of an executed signature page counterpart hereof by telecopy, emailed pdf. or any other electronic means that reproduces an image of the actual executed signature page shall be effective as delivery of a manually executed counterpart hereof. The words “execution,” “signed,” “signature,” “delivery,” and words of like import in or relating to this Amendment or any document to be signed in connection with this Amendment and the transactions contemplated hereby shall be deemed to include electronic signatures, the electronic association of signatures and records on electronic platforms, deliveries or the keeping of records in electronic form, each of which shall be of the same legal effect, validity or enforceability as a manually executed signature, physical delivery thereof or the use of a paper-based recordkeeping system, as the case may be, to the extent and as provided for in any applicable law, including the Federal Electronic Signatures in Global and National Commerce Act, the New York State Electronic Signatures and Records Act, any other similar state laws based on the Uniform Electronic Transactions Act or the Uniform Commercial Code, each as amended, and the parties hereto hereby waive any objection to the contrary, provided that (x) nothing herein shall require the Agent to accept electronic signature counterparts in any form or format and (y) the Agent reserves the right to require, at any time and at its sole discretion, the delivery of manually executed counterpart signature pages to this Amendment and the parties hereto agree to promptly deliver such manually executed counterpart signature pages.

 

3.10No Actions, Claims, Etc.  As of the date hereof, each of the Credit Parties hereby acknowledges and confirms that it has no knowledge of any actions, causes of action, claims, demands, damages and liabilities of whatever kind or nature, in law or in equity, against the Agent, the Lenders, or the Agent’s or the Lenders’ respective officers, employees, representatives, agents, counsel or directors arising from any action by such Persons, or failure of such Persons to act under the Credit Agreement on or prior to the date hereof.  

 

5

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3.11GOVERNING LAW.  THIS AMENDMENT SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK (INCLUDING SECTIONS 5-1401 AND 5-1402 OF THE NEW YORK GENERAL OBLIGATIONS LAW).

 

3.12Successors and Assigns.  This Amendment shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns.

 

3.13Consent to Jurisdiction; Service of Process and Venue; Waiver of Jury Trial.  The jurisdiction, service of process, venue and waiver of jury trial provisions set forth in Sections 9.13 and 9.16 of the Credit Agreement are hereby incorporated by reference, mutatis mutandis.

 

 

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

 

 

6

6


UNIVERSAL HEALTH REALTY INCOME TRUST

FIRST AMENDMENT TO CREDIT AGREEMENT

 

IN WITNESS WHEREOF the parties hereto have caused this Amendment to be duly executed on the date first above written.

 

COMPANY:

UNIVERSAL HEALTH REALTY INCOME TRust, a real estate investment trust organized under the laws of the State of Maryland

 

 

By: /s/ Cheryl K. Ramagano

Name: Cheryl K. Ramagano

Title: Vice President, Treasurer and Secretary

 

 

 

 


UNIVERSAL HEALTH REALTY INCOME TRUST

FIRST AMENDMENT TO CREDIT AGREEMENT

 

GUARANTORS:3811 Bell Medical Properties, LLC

ApaMed Properties, LLC

DesMed, LLC

Auburn Medical Properties II, LLC

HNV Medical Properties, LLC

Juniper Medical Properties, LLC

Madison Station Medical Properties, LLC

Osage Medical Properties, LLC

Santa Fe Scottsdale, LLC

Sheffield Properties, L.L.C.

Sierra Medical Properties, LLC

Riverdale Realty, L.L.C.

Spring Valley Medical Properties, LLC

Spring Valley Medical Properties II, LLC

653 Town Center Investments, LLC

653 Town Center Phase II, LLC

Sparks Medical Properties, LLC

73 Medical Building, LLC

Shiloh Medical Properties, LLC

Eagle Medical Properties, LLC

Hanover Medical Properties, LLC

DTX Medical Properties, LLC

UHT TRS, LLC

Palmdale Medical Properties, LLC

Paseo Medical Properties II, LLC

NWTX Medical Properties, LLC

Cimarron Medical Properties, LLC

Ottumwa Medical Properties, LLC

NSHE TX Bay City, LLC

NSHE TX Cedar Park, LLC

Centennial Medical Properties, LLC

Des Moines Medical Properties, LLC

Escanaba Medical Properties, LLC

southfield medical properties, LLC



By: Universal Health Realty Income Trust
Its sole member


By: /s/ Cheryl K. Ramagano    

Name: Cheryl K. Ramagano
Title: Vice President, Treasurer and Secretary

 

 

 

 


UNIVERSAL HEALTH REALTY INCOME TRUST

FIRST AMENDMENT TO CREDIT AGREEMENT

 

Cypresswood Investments, L.P.

By: Universal Health Realty Income Trust

Its general partner



By:
/s/ Cheryl K. Ramagano    

Name: Cheryl K. Ramagano
Title: Vice President, Treasurer and Secretary

 

 

Oneida Medical Properties, LP
5004 Pool Road Properties, LP

By: Universal Health Realty Income Trust
Its limited partner


By:
/s/ Cheryl K. Ramagano    

Name: Cheryl K. Ramagano
Title: Vice President, Treasurer and Secretary

 

 

UHT/Ensemble Properties I, LLC

Deerval Properties, LLC

Cobre Properties, LLC

Willetta Medical Properties, LLC

 


By: Universal Health Realty Income Trust
Its member

 

By: /s/ Cheryl K. Ramagano    

Name: Cheryl K. Ramagano
Title: Vice President, Treasurer and Secretary

 

By: UH/TRS, LLC
Its member

By: Universal Health Realty Income Trust
Its sole member

By: /s/ Cheryl K. Ramagano    

Name: Cheryl K. Ramagano
Title: Vice President, Treasurer and Secretary


 


UNIVERSAL HEALTH REALTY INCOME TRUST

FIRST AMENDMENT TO CREDIT AGREEMENT

 


Pax Medical Holdings, LLC

 

 

By: Paseo Medical Properties II, LLC
Its sole member

By: Universal Health Realty Income Trust
Its sole member

By: /s/ Cheryl K. Ramagano    

Name: Cheryl K. Ramagano
Title: Vice President, Treasurer and Secretary

 

 

Forney Deerval, LLC

By: Deerval Properties, LLC
Its sole member

By: Universal Health Realty Income Trust
Its member

 

By: /s/ Cheryl K. Ramagano    

Name: Cheryl K. Ramagano
Title: Vice President, Treasurer and Secretary

 

By: UH/TRS, LLC
Its member

By: Universal Health Realty Income Trust
Its sole member

 

By: /s/ Cheryl K. Ramagano    

Name: Cheryl K. Ramagano
Title: Vice President, Treasurer and Secretary

 

 

Forney Willetta, LLC

By: Willetta Medical Properties, LLC
Its sole member

By: Universal Health Realty Income Trust
Its member

 

 


UNIVERSAL HEALTH REALTY INCOME TRUST

FIRST AMENDMENT TO CREDIT AGREEMENT

 

By: /s/ Cheryl K. Ramagano    

Name: Cheryl K. Ramagano
Title: Vice President, Treasurer and Secretary

 

By: UH/TRS, LLC
Its member

By: Universal Health Realty Income Trust
Its sole member

 

By: /s/ Cheryl K. Ramagano    

Name: Cheryl K. Ramagano
Title: Vice President, Treasurer and Secretary

 

 

GULPH INVESTMENTS

 

By: /s/ Cheryl K. Ramagano    

Name: Cheryl K. Ramagano
Title: Trustee

 

 

 

Monocacy Medical Properties, LLC

Hamburg Medical Building, LLC

LPDS MEDICAL PROPERTIES, LLC

 

 

By: Arlington Medical Properties, LLC

Its sole member

 

By: Universal Health Realty Income Trust
Its member

 

By: /s/ Cheryl K. Ramagano    

Name: Cheryl K. Ramagano
Title: Vice President, Treasurer and Secretary

 

 

By: UH/TRS, LLC
Its member

By: Universal Health Realty Income Trust
Its sole member

 

By: /s/ Cheryl K. Ramagano    

 


UNIVERSAL HEALTH REALTY INCOME TRUST

FIRST AMENDMENT TO CREDIT AGREEMENT

 

Name: Cheryl K. Ramagano
Title: Vice President, Treasurer and Secretary

 

 

RESLER MEDICAL PROPERTIES, LP

 

By: Arlington Medical Properties, LLC

Its limited partner

 

By: Universal Health Realty Income Trust
Its member

 

By: /s/ Cheryl K. Ramagano    

Name: Cheryl K. Ramagano
Title: Vice President, Treasurer and Secretary

 

 

By: UH/TRS, LLC
Its member

By: Universal Health Realty Income Trust
Its sole member

 

By: /s/ Cheryl K. Ramagano    

Name: Cheryl K. Ramagano
Title: Vice President, Treasurer and Secretary

 

 

By: LPDS Medical Properties, LLC

Its general partner

 

By: Arlington Medical Properties, LLC

Its sole member

 

By: Universal Health Realty Income Trust
Its member

 

By: /s/ Cheryl K. Ramagano    

Name: Cheryl K. Ramagano
Title: Vice President, Treasurer and Secretary

 

 

By: UH/TRS, LLC
Its member

By: Universal Health Realty Income Trust
Its sole member

 


UNIVERSAL HEALTH REALTY INCOME TRUST

FIRST AMENDMENT TO CREDIT AGREEMENT

 

 

By: /s/ Cheryl K. Ramagano    

Name: Cheryl K. Ramagano
Title: Vice President, Treasurer and Secretary

 

 

Saratoga hospital properties, Lp  

By: Cimarron Medical Properties, LLC

Its general partner

 

By: Universal Health Realty Income Trust
Its sole member

 

By: /s/ Cheryl K. Ramagano    

Name: Cheryl K. Ramagano
Title: Vice President, Treasurer and Secretary

 

 

 


 


UNIVERSAL HEALTH REALTY INCOME TRUST

FIRST AMENDMENT TO CREDIT AGREEMENT

 

AGENT:

WELLS FARGO BANK, NATION ASSOCIATION, as Agent, on behalf of the Lenders, Swingline Lender and Issuing Lender, Lender and Revolving B Lender

 

 

By: /s/ Andrea S. Chen

Name: Andrea S. Chen

Title: Managing Director

 

 

 


 

UNIVERSAL HEALTH REALTY INCOME TRUST

FIRST AMENDMENT TO CREDIT AGREEMENT

 

LENDERS:

 

Bank of America, N.A., as a Lender and Revolving B Lender

 

 

By: /s/ Joseph L. Corah

Name: Joseph L. Corah

Title: Director

 


 


UNIVERSAL HEALTH REALTY INCOME TRUST

FIRST AMENDMENT TO CREDIT AGREEMENT

 

LENDERS:

 

PNC Bank, National Association, as a Lender and Revolving B Lender

 

 

By: /s/ Emad N. Antoan

Name: Emad N. Antoan

Title: Senior Vice President

 

 


 


UNIVERSAL HEALTH REALTY INCOME TRUST

FIRST AMENDMENT TO CREDIT AGREEMENT

 

LENDERS:

 

Truist Bank., as a Lender and Revolving B Lender

 

 

By: /s/ Anton Brykalin

Name: Anton Brykalin

Title: Vice President

 


 


UNIVERSAL HEALTH REALTY INCOME TRUST

FIRST AMENDMENT TO CREDIT AGREEMENT

 

LENDERS:

 

Fifth Third Bank National Association, as a Lender and Revolving B Lender

 

 

By: /s/ Thomas Avery

Name: Thomas Avery

Title: Director

 


 


UNIVERSAL HEALTH REALTY INCOME TRUST

FIRST AMENDMENT TO CREDIT AGREEMENT

 

LENDERS:

 

JPMorgan Chase Bank, N.A., as a Lender and Revolving B Lender

 

 

By: /s/ Dawn Lee Lum

Name: Dawn Lee Lum

Title: Executive Director

 


 


UNIVERSAL HEALTH REALTY INCOME TRUST

FIRST AMENDMENT TO CREDIT AGREEMENT

 

LENDERS:

 

CREDIT AGRICOLE CORPORATE AND INVESTMENT BANK, as a Lender and Revolving B Lender

 

 

By: /s/ Gordon Yip

Name:Gordon Yip

Title: Director

 

By: /s/ Jill Wong

Name:Jill Wong

Title: Director

 

 

 

 


 

Annex A

 

PUBLISHEDRevolving A Commitments CUSIP NUMBER: 91359FAG7  

Revolving B Commitments CUSIP NUMBER: _______                    

 

CREDIT AGREEMENT

(as amended by that certain First Amendment to Credit Agreement, dated as of June 5, 2020)

Dated as of March 27, 2018

by and among

UNIVERSAL HEALTH REALTY INCOME TRUST,

THE LENDERS PARTY HERETO

and

WELLS FARGO BANK, NATIONAL ASSOCIATION,

as Administrative Agent

BANK OF AMERICA, N.A.,

as Syndication Agent

FIFTH THIRD BANK,

JPMORGAN CHASE BANK, N.A.

and

SUNTRUST BANK,

as Co-Documentation Agents

WELLS FARGO SECURITIES, LLC,

 

and

 

MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED

BOFA SECURITIES, INC.,

as Joint Lead Arrangers and Joint Bookrunners

 

 

 

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TABLE OF CONTENTS

Page

ARTICLE I  DEFINITIONS1

 

Section 1.1

Defined Terms.1

 

Section 1.2

Other Definitional Provisions.2630

 

Section 1.3

Accounting Terms.2631

 

Section 1.4

Execution of Documents.2731

 

Section 1.5

Time References.2731

 

Section 1.6

Rates.32

 

Section 1.7

Divisions.32

ARTICLE II  LOANS; AMOUNTS AND TERMS2732

 

Section 2.1

Revolving Loans.2732

 

Section 2.2

Revolving Facility Increase.2934

 

Section 2.3

Letters of Credit.3036

 

Section 2.4

Fees.3440

 

Section 2.5

Commitment Reductions.3540

 

Section 2.6

Prepayments.3541

 

Section 2.7

Default Rate and Payment Dates.3642

 

Section 2.8

Conversion Options.3743

 

Section 2.9

Swingline Loan Subfacility.3743

 

Section 2.10

Computation of Interest and Fees; Usury.3945

 

Section 2.11

Pro Rata Treatment and Payments.4046

 

Section 2.12

Non-Receipt of Funds by the Agent.4248

 

Section 2.13

Inability to Determine Interest Rate.4350

 

Section 2.14 Yield Protection.

51

 

Section 2.15

Compensation for Losses.4552

 

Section 2.16

Taxes.4653

 

Section 2.17

Indemnification; Nature of Issuing Lender’s Duties.4956

 

Section 2.18

Illegality.5057

 

Section 2.19

Mitigation; Replacement of Lenders5157

 

Section 2.20

Cash Collateral.5258

 

Section 2.21

Defaulting Lenders.5359

 

Section 2.22

Extension of Maturity Date.5562

ARTICLE III  REPRESENTATIONS AND WARRANTIES5663

 

Section 3.1

Corporate Existence.5663

 

Section 3.2

Subsidiaries; Unconsolidated Affiliates.5663

 

Section 3.3

Authority, Etc.5664

 

Section 3.4

Binding Effect Of Documents, Etc.5764

 

Section 3.5

No Events Of Default, Etc.5764

 

Section 3.6

Title to Properties; Leases.5764

 

Section 3.7

Financial Statements.5765

 

Section 3.8

No Material Changes; No Internal Control Event, Full Disclosure, Etc.5865

 

Section 3.9

Permits; Patents; Copyrights.5865

 

Section 3.10

Litigation.5865

 

Section 3.11

Compliance With Other Instruments, Laws, Etc.5865

 

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Section 3.12

Tax Status; REIT Status.5866

 

Section 3.13

Investment Company Act.5966

 

Section 3.14

Absence of Financing Statements, Etc.5966

 

Section 3.15

Certain Transactions.5966

 

Section 3.16

Pension Plans.5967

 

Section 3.17

Margin Regulations.5967

 

Section 3.18

Environmental Matters.6067

 

Section 3.19

Use of Proceeds.6068

 

Section 3.20

Indebtedness.6168

 

Section 3.21

Solvency.6168

 

Section 3.22

Investments.6168

 

Section 3.23

Labor Matters.6169

 

Section 3.24

Accuracy and Completeness of Information.6169

 

Section 3.25

Material Contracts.6269

 

Section 3.26

Insurance.6269

 

Section 3.27

Anti-Terrorism; Anti-Corruption and Sanctions.6269

 

Section 3.28

Security Documents.6270

ARTICLE IV  CONDITIONS PRECEDENT6270

 

Section 4.1

Conditions Precedent to Closing.6270

 

Section 4.2

Conditions To Loans.6573

ARTICLE V  COVENANTS OF THE COMPANY6674

 

Section 5.1

Punctual Payment.6674

 

Section 5.2

Legal Existence, Etc.6774

 

Section 5.3

Financial Statements, Etc.6774

 

Section 5.4

Health Care Facilities ‑ Financial Statements, Etc.6976

 

Section 5.5

Financial Covenants.7077

 

Section 5.6

[Reserved].7078

 

Section 5.7

[Reserved].7078

 

Section 5.8

[Reserved].7078

 

Section 5.9

Indebtedness.7078

 

Section 5.10

Security Interests and Liens; Negative Pledge.7279

 

Section 5.11

No Further Negative Pledge; No Restrictive Agreements.7280

 

Section 5.12

Guarantees.7380

 

Section 5.13

Notice of Litigation And Judgments.7381

 

Section 5.14

Notice of Defaults; Material Adverse Effect.7381

 

Section 5.15

Notices With Regard to Health Care Operators.7481

 

Section 5.16

Books and Records.7482

 

Section 5.17

Maintenance of Properties.7482

 

Section 5.18

Insurance.7482

 

Section 5.19

Taxes.7582

 

Section 5.20

Compliance With Laws, Contracts, and Licenses; Beneficial Ownership Regulation.7582

 

Section 5.21

Access.7583

 

Section 5.22

ERISA Compliance.7583

 

Section 5.23

Reserves.7683

 

Section 5.24

Distributions.7684

 

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Section 5.25

Investments.7684

 

Section 5.26

Mortgage Loans.7785

 

Section 5.27

Construction Loans.7785

 

Section 5.28

Environmental Audits.7885

 

Section 5.29

Merger, Consolidation and Disposition of Assets.7886

 

Section 5.30

Sale and Leaseback.7886

 

Section 5.31

Use of Proceeds.7986

 

Section 5.32

Fiscal Year; Organizational Documents; Material Contracts.7987

 

Section 5.33

Guarantors.7987

 

Section 5.34

Pledged Assets.8087

 

Section 5.35

Further Assurances.8088

 

Section 5.36

Transactions with Affiliates.8088

ARTICLE VI  [RESERVED]8088

ARTICLE VII  EVENTS OF DEFAULT; ACCELERATION8088

 

Section 7.1

Events of Default.8088

 

Section 7.2

Acceleration; Remedies.8390

ARTICLE VIII  THE ADMINISTRATIVE AGENT8391

 

Section 8.1

Appointment and Authority.8391

 

Section 8.2

Nature of Duties.8391

 

Section 8.3

Exculpatory Provisions.8491

 

Section 8.4

Reliance by Agent.8492

 

Section 8.5

Notice of Default.8592

 

Section 8.6

Non-Reliance on Agent and Other Lenders.8593

 

Section 8.7

Indemnification.8593

 

Section 8.8

Agent in Its Individual Capacity.8693

 

Section 8.9

Successor Agent.8694

 

Section 8.10

Collateral and Guaranty Matters.8694

 

Section 8.11

Bank Products.8795

ARTICLE IX  MISCELLANEOUS8795

 

Section 9.1

Amendments, Waivers and Consents.8795

 

Section 9.2

Notices.8997

 

Section 9.3

No Waiver; Cumulative Remedies.9199

 

Section 9.4

Survival of Representations and Warranties.91100

 

Section 9.5

Payment of Expenses and Taxes; Indemnity.92100

 

Section 9.6

Successors and Assigns; Participations.93102

 

Section 9.7

Right of Set‑off; Sharing of Payments.97105

 

Section 9.8

Table of Contents and Section Headings.98107

 

Section 9.9

Counterparts; Effectiveness; Electronic Execution.98107

 

Section 9.10

Severability.99107

 

Section 9.11

Integration.99107

 

Section 9.12

Governing Law.99107

 

Section 9.13

Consent to Jurisdiction; Service of Process and Venue.99108

 

Section 9.14

Confidentiality.100108

 

Section 9.15

Acknowledgments.101109

 

Section 9.16

Waivers of Jury Trial.101109

 

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Section 9.17

Patriot Act Notice.101110

 

Section 9.18

Resolution of Drafting Ambiguities.101110

 

Section 9.19

Continuing Agreement.102110

 

Section 9.20

Press Releases and Related Matters.102110

 

Section 9.21

No Advisory or Fiduciary Responsibility.102110

 

Section 9.22

Responsible Officers.103111

 

Section 9.23

Acknowledgment and Consent to Bail-In of EEAAffected Financial Institutions.103111

 

Section 9.24

Certain ERISA Matters.103112

 

Section 9.26

Acknowledgement Regarding Any Supported QFCs113

 


 

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EXHIBITS AND SCHEDULES

Exhibit 1.1(a)Form of Account Designation Letter

Exhibit 1.1(b)Form of Assignment and Assumption

Exhibit 1.1(c)Form of Bank Product Provider Notice

Exhibit 1.1(d)Form of Notice of Borrowing

Exhibit 1.1(e)Form of Notice of Conversion/Extension

Exhibit 1.1(f)Form of Subsidiary Guaranty

Exhibit 2.1(a)Form of Funding Indemnity Letter

Exhibit 2.1(e)Form of Revolving Note

Exhibit 2.6(a)Form of Notice of Prepayment

Exhibit 2.9(d)Form of Swingline Note

Exhibit 4.1(p)Form of Solvency Certificate

Exhibit 4.1(tu)Form of Patriot Act Certificate

Exhibit 5.3(d)Form of Compliance Certificate

Schedule 1.1Existing Letters of Credit

Schedule 2.1(a)Commitments

Schedule 3.1Corporate Existence

Schedule 3.2

Subsidiaries; Unconsolidated Affiliates; Capital Structure

Schedule 3.6

Title to Properties; Leases

Schedule 3.18

Environmental Matters

Schedule 3.25

Material Contracts

Schedule 3.26

Insurance

Schedule 5.9

Indebtedness

Schedule 5.10(f)Liens

Schedule 5.25(e)

Existing Investments

 

 

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CREDIT AGREEMENT

This CREDIT AGREEMENT is made as of March 27, 2018 among UNIVERSAL HEALTH REALTY INCOME TRUST, a real estate investment trust organized under the laws of the State of Maryland and having its principal place of business at 367 South Gulph Road, King of Prussia, Pennsylvania 19406 (the “Company”), the financial institutions from time to time party hereto (individually, a “Lender” and collectively, the “Lenders”) and WELLS FARGO BANK, NATIONAL ASSOCIATION, as administrative agent for the Lenders (the “Agent”).

BACKGROUND

AA.The Company has requested that the Lenders provide a $300 million revolving credit facility for the purposes hereinafter set forth;

BB.The Lenders have agreed to make the requested revolving credit facility available to the Company on the terms and conditions hereinafter set forth;

NOW, THEREFORE, IN CONSIDERATION of the premises and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:

ARTICLE II

DEFINITIONS

Section 1.11.1Defined Terms.

The following terms shall have the meanings set forth in this Article I or elsewhere in the provisions of this Agreement referred to below:

Account Designation Letter” shall mean the Notice of Account Designation Letter dated as of the Closing Date from the Company to the Agent substantially in the form of Exhibit 1.1(a).

Acquisition Property” shall mean any improved, income producing Property owned by the Company or any of its Subsidiaries for fewer than four complete fiscal quarters, unless the Company has made a one-time election in writing to the Agent to treat such Property as a Health Care Facility (and no longer treat such Property as an Acquisition Property).

Administrative Questionnaire” shall mean an Administrative Questionnaire in a form supplied by the Agent.

“Affected Financial Institution” shall mean (a) any EEA Financial Institution or (b) any UK Financial Institution.

Affiliate” shall mean as to any Person, any other Person (excluding any Subsidiary) which, directly or indirectly, is in control of, is controlled by, or is under common control with, such Person.  For purposes of this definition, (i) a Person shall be deemed to be “controlled by” a Person if such Person possesses, directly or indirectly, power either (a) to vote 10% or more of the securities having ordinary voting power for the election of directors of such Person or (b) to direct or cause the direction of the

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management and policies of such Person whether by contract or otherwise and (ii) any Unconsolidated Affiliate shall be deemed an Affiliate.  Notwithstanding the foregoing, neither the Agent nor any Lender shall be deemed an affiliate of the Company solely by reason of the relationship created by the Loan Documents.

Agent” shall have the meaning set forth in the preamble hereto and shall include any successors in such capacity.

Agreement” shall mean this Credit Agreement, including the Exhibits and Schedules hereto, as originally executed, or if this Agreement is amended, restated, modified, varied or supplemented from time to time, as so amended, restated, modified, varied or supplemented.

Anti-Corruption Laws” shall mean all laws, rules, and regulations of any jurisdiction applicable to the Company or its Subsidiaries from time to time concerning or relating to bribery or corruption, including, without limitation, the United States Foreign Corrupt Practices Act of 1977, as amended, and the rules and regulations thereunder and the U.K. Bribery Act 2010 and the rules and regulations thereunder.

Anti-Money Laundering Laws” shall mean any and all laws, statutes, regulations or obligatory government orders, decrees, ordinances or rules applicable to a Credit Party, its Subsidiaries or Affiliates related to terrorism financing or money laundering, including any applicable provision of the Patriot Act and The Currency and Foreign Transactions Reporting Act (also known as the “Bank Secrecy Act,” 31 U.S.C. §§ 5311-5330 and 12 U.S.C. §§ 1818(s), 1820(b) and 1951-1959).

Applicable Law” shall mean all applicable provisions of constitutions, laws, statutes, ordinances, rules, treaties, regulations, permits, licenses, approvals, interpretations and orders of courts or Governmental Authorities and all orders and decrees of all courts and arbitrators.

Applicable Margin” shall mean, for any day,

 

(a)with respect to any Revolving A Loans, the rate per annum set forth below opposite the applicable Level then in effect, it being understood that the Applicable Margin for (a(i) Loans that are Base Rate Loans shall be the percentage set forth under the column “Base Rate Margin”, (bii) Loans that are LIBOR Rate Loans or Swingline Loans shall be the percentage set forth under the column “LIBOR Rate Margin”, (ciii) the Letter of Credit Fee shall be the percentage set forth under the column “Letter of Credit Fee” and (div) the Revolving A Facility Fee shall be the percentage set forth under the column “Revolving A Facility Fee”:

Level

Total Leverage Ratio

Base Rate

Margin

LIBOR Rate

Margin

Letter of

Credit Fee

Revolving A Facility

Fee

 

 

 

 

 

 

I

less than 35%

10.0 bps

110.0 bps

110.0 bps

15.0 bps

II

greater than or equal to 35%

but less than 40%

15.0 bps

115.0 bps

115.0 bps

20.0 bps

III

greater than or equal to 40%

but less than 45%

20.0 bps

120.0 bps

120.0 bps

20.0 bps

IV

greater than or equal to 45%

but less than 50%

25.0 bps

125.0 bps

125.0 bps

25.0 bps

V

greater than or equal to 50%

but less than 55%

30.0 bps

130.0 bps

130.0 bps

30.0 bps

VI

greater than or equal to 55%

35.0 bps

135.0 bps

135.0 bps

35.0 bps

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(b)with respect to any Revolving B Loans, the rate per annum set forth below opposite the applicable Level then in effect, it being understood that the Applicable Margin for (i) Loans that are Base Rate Loans shall be the percentage set forth under the column “Base Rate Margin”, (ii) Loans that are LIBOR Rate Loans shall be the percentage set forth under the column “LIBOR Rate Margin”, and (iii) the Revolving B Facility Fee shall be the percentage set forth under the column “Revolving B Facility Fee”:

Level

Total Leverage Ratio

Base Rate

Margin

LIBOR Rate

Margin

Letter of

Credit Fee

 

Revolving B Facility

Fee

 

 

 

 

 

 

I

less than 35%

10.085.0 bps

110.0 bps

110.0185.0 bps

15.0 bps

II

greater than or equal to 35%

but less than 40%

15.090.0 bps

115.0 bps

115.0190.0 bps

20.0 bps

III

greater than or equal to 40%

but less than 45%

20.095.0 bps

120.0 bps

120.0195.0 bps

20.0 bps

IV

greater than or equal to 45%

but less than 50%

25.0100.0 bps

125.0 bps

125.0200.0 bps

25.0 bps

V

greater than or equal to 50%

but less than 55%

30.0105.0 bps

130.0 bps

130.0205.0 bps

30.0 bps

VI

greater than or equal to 55%

35.0110.0 bps

135.0 bps

135.0210.0 bps

35.0 bps

 

 

 

 

 

 

 

 

The Applicable Margin shall, in each case, be determined and adjusted quarterly on the date five (5) Business Days after the date on which the Agent has received from the Company the financial information and the certifications required to be delivered to the Agent and the Lenders in accordance with the provisions of Sections 5.3(a), (b), (d) and (e) (each an “Interest Rate Determination Date”).  Such Applicable Margin shall be effective from such Interest Rate Determination Date until the next such Interest Rate Determination Date.  The initial Applicable Margins for Revolving B Loans shall be based on Level III and shall remain at such level until the first Interest Rate Determination Date occurring after the delivery of the officer’s compliance certificate pursuant to Section 5.3(d) for the quarter ended March 31June 30, 20182020.  After the Closing Date, if the Company shall fail to provide the financial information or certifications in accordance with the provisions of Sections 5.3(a), (b), (d) and (e), the Applicable Margin shall, on the date five (5) Business Days after the date by which the Company was so required to provide such financial information or certifications to the Agent and the Lenders, be based on Level VI until such time as such information or certifications or corrected information or corrected certificates are provided, whereupon the Level shall be determined by the then current Total Leverage Ratio.  In the event that any financial information or certification provided to the Agent in accordance with the provisions of Sections 5.3(a), (b), (d) and (e) is shown to be inaccurate (regardless of whether this Agreement or the Commitments are in effect when such inaccuracy is discovered), and such inaccuracy, if corrected, would have led to the application of a higher Applicable Margin for any period (an “Applicable Period”) than the Applicable Margin applied for such Applicable Period, the Company shall immediately (aa) deliver to the Agent a corrected compliance certificate for such Applicable Period,

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(bb) determine the Applicable Margin for such Applicable Period based upon the corrected compliance certificate, and (cc) immediately pay to the Agent for the benefit of the Lenders the accrued additional interest and other fees owing as a result of such increased Applicable Margin for such Applicable Period, which payment shall be promptly distributed by the Agent to the Lenders entitled thereto.  It is acknowledged and agreed that nothing contained herein shall limit the rights of the Agent and the Lenders under the Loan Documents, including their rights under Sections 2.7 and 7.1.

Applicable Percentage” shall mean, with respect to any Lender, (a) with respect to such Lender’s Revolving A Commitment at any time, the percentage of the total Revolving A Commitments represented by such Lender’s Revolving A Commitment.;  Ifprovided if the Revolving A Commitments have terminated or expired, the Applicable Percentage of each Lender with respect to its Revolving A Commitment shall be determined based on the Revolving A Commitments most recently in effect, giving effect to any assignments and (b) with respect to such Lender’s Revolving B Commitment at any time, the percentage of the total Revolving B Commitments represented by such Lender’s Revolving B Commitment;  provided if the Revolving B Commitments have terminated or expired, the Applicable Percentage of each Lender with respect to its Revolving B Commitment shall be determined based on the Revolving B Commitments most recently in effect, giving effect to any assignments.

Applicable Swingline Lender” shall mean one of the Swingline Lenders chosen by the Company for a specific Swingline Loan.

Approved Fund” shall mean any Fund that is administered, managed or underwritten by (aa) a Lender, (bb) an Affiliate of a Lender or (cc) an entity or an Affiliate of an entity that administers or manages a Lender.

Arrangers” shall mean WFS and Merrill Lynch, Pierce, Fenner & Smith IncorporatedBofA Securities, Inc. or its designated affiliate, in their capacity as joint lead arrangers and joint bookrunners, and their respective successors.

Assignment and Assumption” shall mean an assignment and assumption entered into by a Lender and an Eligible Assignee (with the consent of any party whose consent is required by Section 9.6), and accepted by the Agent, in substantially the form of Exhibit 1.1(b) or any other form approved by the Agent.

Bail-In Action” shall mean the exercise of any Write-Down and Conversion Powers by the applicable EEA Resolution Authority in respect of any liability of an EEAAffected Financial Institution.

 

Bail-In Legislation” shall mean, (a) with respect to any EEA Member Country implementing Article 55 of Directive 2014/59/EU of the European Parliament and of the Council of the European Union, the implementing law, regulation or requirement for such EEA Member Country from time to time which is described in the EU Bail-In Legislation Schedule and (b) with respect to the United Kingdom, Part I of the United Kingdom Banking Act 2009 (as amended from time to time) and any other law, regulation or rule applicable in the United Kingdom relating to the resolution of unsound or failing banks, investment firms or other financial institutions or their affiliates (other than through liquidation, administration or other insolvency proceedings).

 

Bank of America” shall mean Bank of America, N.A., a national banking association, together with its successors and/or assigns.

Bank Product” shall mean any of the following products, services or facilities extended to any Credit Party or any Subsidiary by any Bank Product Provider:  (a) Cash Management Services; (b)

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products under any Hedging Agreement; and (c) commercial credit card, purchase card and merchant card services; provided, however, that for any of the foregoing to be included as “Credit Party Obligations” for purposes of a distribution under Section 2.11(b), the applicable Bank Product Provider must have previously provided a Bank Product Provider Notice to the Agent which shall provide the following information:  (i) the existence of such Bank Product and (ii) the maximum dollar amount (if reasonably capable of being determined) of obligations arising thereunder (the “Bank Product Amount”).  The Bank Product Amount may be changed from time to time upon written notice to the Agent by the Bank Product Provider.  Any Bank Product established from and after the time that the Lenders have received written notice from the Company or the Agent that an Event of Default exists, until such Event of Default has been waived in accordance with Section 9.1, shall not be included as “Credit Party Obligations” for purposes of a distribution under Section 2.11(b).

Bank Product Provider” shall mean any Person that provides Bank Products to a Credit Party or any Subsidiary to the extent that (aa) such Person is a Lender, an Affiliate of a Lender or any other Person that was a Lender (or an Affiliate of a Lender) at the time it entered into the Bank Product but has ceased to be a Lender (or whose Affiliate has ceased to be a Lender) under this Agreement or (bb) such Person is a Lender or an Affiliate of a Lender on the Closing Date and the Bank Product was entered into on or prior to the Closing Date (even if such Person ceases to be a Lender or such Person’s Affiliate ceased to be a Lender).

Bank Product Provider Notice” shall mean a notice substantially in the form of Exhibit 1.1(c).

Bankruptcy Code” shall mean the Bankruptcy Code in Title 11 of the United States Code, as amended, modified, succeeded or replaced from time to time.

Bankruptcy Event” shall mean any of the events described in Section 7.1(f).

Base Rate” shall mean, for any day, a rate per annum equal to the greatest of (a) the Prime Rate in effect on such day, (b) the Federal Funds Effective Rate in effect on such day plus 1/2 of 1% and (c) the sum of (i) LIBOR (as determined pursuant to the definition of LIBOR), for an Interest Period of one (1) month commencing on such day plus (ii) 1.00%, in each instance as of such date of determination.  For purposes hereof: “Prime Rate” shall mean, at any time, the rate of interest per annum publicly announced or otherwise identified from time to time by Wells Fargo at its principal office in Charlotte, North Carolina as its prime rate.  Each change in the Prime Rate shall be effective as of the opening of business on the day such change in the Prime Rate occurs.  The parties hereto acknowledge that the rate announced publicly by Wells Fargo as its Prime Rate is an index or base rate and shall not necessarily be its lowest or best rate charged to its customers or other banks; and “Federal Funds Effective Rate” shall meanmeans, for any day, the rate per annum equal to the weighted average of the rates on overnight federal funds transactions with members of the Federal Reserve System arranged by federal funds brokers, as published on the next succeeding Business Day by the Federal Reserve Bank of New York, or, on the Business Day next succeeding such day, provided that if such rate is not so published on the next succeedingfor any day which is a Business Day, the Federal Funds Rate for such day shall be the average of the quotationsquotation for thesuch day ofon such transactions received by the Agent from three federal funds brokers of recognized standing selected by itthe Agent.  If for any reason the Agent shall have determined (which determination shall be conclusive in the absence of manifest error) (A) that it is unable to ascertain the Federal Funds Effective Rate, for any reason, including the inability or failure of the Agent to obtain sufficient quotations in accordance with the terms above or (B) that the Prime Rate or LIBOR no longer accurately reflects an accurate determination of the prevailing Prime Rate or LIBOR, the Agent may select a reasonably comparable replacement index or source to use as one of the bases for determining the Base Rate, until the circumstances giving rise to such inability no longer exist.  Any change in the Base Rate due to a change in any of the foregoing will become effective on the effective

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date of such change in the Federal Funds Effective Rate, the Prime Rate or LIBOR for an Interest Period of one (1) month.  Notwithstanding anything contained herein to the contrary, (x) to the extent that the provisions of Section 2.13 shall be in effect in determining LIBOR, the Base Rate shall be the greater of (ii) the Prime Rate in effect on such day and (iiii) the Federal Funds Effective Rate in effect on such day plus 1/2 of 1% and (y) in the event that the Base Rate is less than zero (0), the Base Rate shall be deemed to be zero (0).

Base Rate Loans” shall mean Revolving Loans that bear interest based on the Base Rate.

“Benchmark Replacement” shall mean the sum of: (a) the alternate benchmark rate (which may include Term SOFR) that has been selected by the Agent and the Company giving due consideration to (i) any selection or recommendation of a replacement rate or the mechanism for determining such a rate by the Relevant Governmental Body or (ii) any evolving or then-prevailing market convention for determining a rate of interest as a replacement to LIBOR for U.S. dollar-denominated syndicated credit facilities and (b) the Benchmark Replacement Adjustment; provided that, if the Benchmark Replacement as so determined would be less than zero, the Benchmark Replacement will be deemed to be zero for the purposes of this Agreement.

“Benchmark Replacement Adjustment” shall mean, with respect to any replacement of LIBOR with an Unadjusted Benchmark Replacement for each applicable Interest Period, the spread adjustment, or method for calculating or determining such spread adjustment, (which may be a positive or negative value or zero) that has been selected by the Agent and the Company giving due consideration to (a) any selection or recommendation of a spread adjustment, or method for calculating or determining such spread adjustment, for the replacement of LIBOR with the applicable Unadjusted Benchmark Replacement by the Relevant Governmental Body or (b) any evolving or then-prevailing market convention for determining a spread adjustment, or method for calculating or determining such spread adjustment, for the replacement of LIBOR with the applicable Unadjusted Benchmark Replacement for U.S. dollar-denominated syndicated credit facilities at such time.

“Benchmark Replacement Conforming Changes” shall mean, with respect to any Benchmark Replacement, any technical, administrative or operational changes (including changes to the definition of “Base Rate,” the definition of “Interest Period,” timing and frequency of determining rates and making payments of interest and other administrative matters) that the Agent decides may be appropriate to reflect the adoption and implementation of such Benchmark Replacement and to permit the administration thereof by the Agent in a manner substantially consistent with market practice (or, if the Agent decides that adoption of any portion of such market practice is not administratively feasible or if the Agent determines that no market practice for the administration of the Benchmark Replacement exists, in such other manner of administration as the Agent decides is reasonably necessary in connection with the administration of this Agreement).

“Benchmark Replacement Date” shall mean the earlier to occur of the following events with respect to LIBOR:

(a)in the case of clause (a) or (b) of the definition of “Benchmark Transition Event,” the later of (i) the date of the public statement or publication of information referenced therein and (ii) the date on which the administrator of LIBOR permanently or indefinitely ceases to provide LIBOR; and

(b)in the case of clause (c) of the definition of “Benchmark Transition Event,” the date of the public statement or publication of information referenced therein.

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“Benchmark Transition Event” shall mean the occurrence of one or more of the following events with respect to LIBOR:

(a)a public statement or publication of information by or on behalf of the administrator of LIBOR announcing that such administrator has ceased or will cease to provide LIBOR, permanently or indefinitely; provided that, at the time of such statement or publication, there is no successor administrator that will continue to provide LIBOR;

(b)a public statement or publication of information by the regulatory supervisor for the administrator of LIBOR, the U.S. Federal Reserve System, an insolvency official with jurisdiction over the administrator for LIBOR, a resolution authority with jurisdiction over the administrator for LIBOR or a court or an entity with similar insolvency or resolution authority over the administrator for LIBOR, which states that the administrator of LIBOR has ceased or will cease to provide LIBOR permanently or indefinitely; provided that, at the time of such statement or publication, there is no successor administrator that will continue to provide LIBOR; or

(c)a public statement or publication of information by the regulatory supervisor for the administrator of LIBOR announcing that LIBOR is no longer representative.

“Benchmark Transition Start Date” shall mean (a) in the case of a Benchmark Transition Event, the earlier of (i) the applicable Benchmark Replacement Date and (ii) if such Benchmark Transition Event is a public statement or publication of information of a prospective event, the 90th day prior to the expected date of such event as of such public statement or publication of information (or if the expected date of such prospective event is fewer than 90 days after such statement or publication, the date of such statement or publication) and (b) in the case of an Early Opt-in Election, the date specified by the Agent or the Required Lenders, as applicable, by notice to the Company, the Agent (in the case of such notice by the Required Lenders) and the Lenders.

“Benchmark Unavailability Period” shall mean, if a Benchmark Transition Event and its related Benchmark Replacement Date have occurred with respect to LIBOR and solely to the extent that LIBOR has not been replaced with a Benchmark Replacement, the period (a) beginning at the time that such Benchmark Replacement Date has occurred if, at such time, no Benchmark Replacement has replaced LIBOR for all purposes hereunder in accordance with Section 2.13(b) and (b) ending at the time that a Benchmark Replacement has replaced LIBOR for all purposes hereunder pursuant to Section 2.13(b).

“Beneficial Ownership Certification” shall mean a certification regarding beneficial ownership as required by the Beneficial Ownership Regulation.

“Beneficial Ownership Regulation” shall mean 31 CFR § 1010.230.

Business” shall have the meaning set forth in Section 3.18.

Business Day” shall mean any day other than a Saturday, Sunday or other day on which commercial banks in Charlotte, North Carolina or New York, New York are authorized or required by law to close, it being recognized that a Business Day relating to interest calculated or payable by the reference to the LIBOR Rate shall also exclude any day on which banks in London, England are not open for dealings in Dollar deposits in the London interbank market.

Capital Lease” shall mean any lease of property, real or personal, the obligations with respect to which are required to be capitalized on a balance sheet of the lessee in accordance with GAAP.

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Cash Collateralize” shall mean to pledge and deposit with or deliver to the Agent, for the benefit of the Agent, the applicable Issuing Lender or Applicable Swingline Lender, as the case may be, and the Lenders, as collateral for LOC Obligations, obligations in respect of Swingline Loans, or obligations of Lenders to fund participations in respect of either thereof (as the context may require), cash or deposit account balances or, if the applicable Issuing Lender or Applicable Swingline Lender benefiting from such collateral shall agree in its sole discretion, other credit support, in each case pursuant to documentation in form and substance satisfactory to (a) the Agent and (b) the applicable Issuing Lender or the Applicable Swingline Lender, as the case may be.  “Cash Collateral” shall have a meaning correlative to the foregoing and shall include the proceeds of such cash collateral and other credit support.

Cash Management Services” shall mean any services provided from time to time to any Credit Party or Subsidiary in connection with operating, collections, payroll, trust, or other depository or disbursement accounts, including automatic clearinghouse, controlled disbursement, depository, electronic funds transfer, information reporting, lockbox, stop payment, overdraft and/or wire transfer services and all other treasury and cash management services.

CERCLA” shall mean the Comprehensive Environmental Response, Compensation, and Liability Act of 1980.

Change in Law” shall mean the occurrence, after the date of this Agreement, of any of the following:  (a) the adoption or taking effect of any law, rule, regulation or treaty, (b) any change in any law, rule, regulation or treaty or in the administration, interpretation, implementation or application thereof by any Governmental Authority or (c) the making or issuance of any request, rule, guideline or directive (whether or not having the force of law) by any Governmental Authority; provided that notwithstanding anything herein to the contrary, (x) the Dodd-Frank Wall Street Reform and Consumer Protection Act and all requests, rules, guidelines or directives thereunder or issued in connection therewith and (y) all requests, rules, guidelines or directives promulgated by the Bank for International Settlements, the Basel Committee on Banking Supervision (or any successor or similar authority) or the United States or foreign regulatory authorities, in each case pursuant to Basel III, shall in each case be deemed to be a “Change in Law”, regardless of the date enacted, adopted or issued.

“Class” means, when used in reference to any Revolving Loan, whether such Loan is a Revolving A Loan or Revolving B Loan and, when used in reference to any Commitment, whether such Commitment is a Revolving A Commitment or a Revolving B Commitment.

Closing Date” shall mean the date of this Agreement.

Code” shall mean the Internal Revenue Code of 1986, as amended.

Collateral” shall mean a collective reference to the collateral which is identified in, and at any time will be covered by, the Security Documents.

Company” shall have the meaning set forth in the preamble hereto.

Commitment” shall mean the Revolving A Commitments, the Revolving B Commitments, the LOC Commitment and the Swingline Commitment, individually or collectively, as appropriate.

Commitment Period” shall mean (aa) with respect to Revolving A Loans and Swingline Loans, the period from and including the Closing Date to but excluding the Maturity Date andfor Revolving A Loans, (bb) with respect to Letters of Credit, the period from and including the Closing Date to but excluding the Letter of Credit Expiration Date and (c) with respect to Revolving B Loans, the period from

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and including the First Amendment Effective Date to but excluding the Maturity Date for Revolving B Loans.

Commodity Exchange Act” shall mean the Commodity Exchange Act (7 U.S.C. § 1 et seq.).

“Communications” shall have the meaning set forth in Section 9.2(d)(ii).

Connection Income Taxes” shall mean Other Connection Taxes that are imposed on or measured by net income (however denominated) or that are franchise Taxes or branch profits Taxes.

Consolidated Subsidiaryshall mean, as of any date, any Subsidiary or other entity the results of whose operations are, for financial accounting purposes, consolidated with the results of the operations of the Company and its other Consolidated Subsidiaries in accordance with GAAP.

Construction-in-Process” shall mean cash expenditures for land and improvements with respect to Development Properties determined in accordance with GAAP.

Construction Loans” shall mean secured loans from time to time made by the Company or any of its Consolidated Subsidiaries to various borrowers the proceeds of which are designated for the construction of Health Care Facilities or for the acquisition of real estate and the construction thereon of Health Care Facilities.

Contractual Obligation” shall mean, as to any Person, any provision of any security issued by such Person or of any contract, agreement, instrument or undertaking to which such Person is a party or by which it or any of its property is bound.

Credit Party” shall mean any of the Company or the Guarantors.

Credit Party Obligations” shall mean, without duplication, (aa) the Obligations and (bb) for purposes of the Security Documents and the Subsidiary Guaranty and all provisions under the other Loan Documents relating to the Collateral, the sharing thereof and/or payments from proceeds of the Collateral, all Bank Product Debt (other than any Excluded Swap Obligation).

Debtor Relief Laws” shall mean the Bankruptcy Code and all other liquidation, conservatorship, bankruptcy, assignment for the benefit of creditors, moratorium, rearrangement, receivership, insolvency, reorganization, or similar debtor relief laws of the United States or other applicable jurisdictions from time to time in effect.

Default” shall mean any event which but for the giving of notice or the lapse of time or both would constitute an Event of Default.

Default Rate” shall mean (aa) when used with respect to the Obligations, other than Letter of Credit Fees, an interest rate equal to (ii) for Base Rate Loans (AA) the Base Rate plus (BB) the Applicable Margin, then in effect, applicable to Base Rate Loans plus (CC) 2.00% per annum and (iiii) for LIBOR Rate Loans, (AA) the LIBOR Rate plus (BB) the Applicable Margin, then in effect, applicable to LIBOR Rate Loans plus (CC) 2.00% per annum, (bb) when used with respect to Letter of Credit Fees, a rate equal to the Applicable Margin, then in effect, applicable to Letter of Credit Fees plus 2.00% per annum and (cc) when used with respect to any other fee or amount due hereunder, a rate equal to the Applicable Margin, then in effect, applicable to Base Rate Loans plus 2.00% per annum.

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Defaulting Lender” shall mean, subject to Section 2.21(g), any Lender that (a) has failed to (i) fund all or any portion of its Loans within two Business Days of the date such Loans were required to be funded hereunder unless such Lender notifies the Agent and the Company in writing that such failure is the result of such Lender’s determination that one or more conditions precedent to funding (each of which conditions precedent, together with any applicable default, shall be specifically identified in such writing) has not been satisfied, or (ii) pay to the Agent, any Issuing Lender, any Swingline Lender or any other Lender any other amount required to be paid by it hereunder (including in respect of its participation in Letters of Credit or Swingline Loans) within two Business Days of the date when due unless subject to a good faith dispute, (b) has notified the Company, the Agent or any Issuing Lender or Swingline Lender in writing that it does not intend to comply with its funding obligations hereunder, or has made a public statement to that effect (unless such writing or public statement relates to such Lender’s obligation to fund a Loan hereunder and states that such position is based on such Lender’s determination that a condition precedent to funding (which condition precedent, together with any applicable default, shall be specifically identified in such writing or public statement) cannot be satisfied), (c) has failed, within three Business Days after written request by the Agent or the Company, to confirm in writing to the Agent and the Company that it will comply with its prospective funding obligations hereunder (provided that such Lender shall cease to be a Defaulting Lender pursuant to this clause (c) upon receipt of such written confirmation by the Agent and the Company), or (d) has, or has a direct or indirect parent company that has, (i) become the subject of a proceeding under any Debtor Relief Law, (ii) had appointed for it a receiver, custodian, conservator, trustee, administrator, assignee for the benefit of creditors or similar Person charged with reorganization or liquidation of its business or assets, including the Federal Deposit Insurance Corporation or any other state or federal regulatory authority acting in such a capacity or (iii) become the subject of a Bail-In Action; provided that a Lender shall not be a Defaulting Lender solely by virtue of the ownership or acquisition of any Equity Interest in that Lender or any direct or indirect parent company thereof by a Governmental Authority so long as such ownership interest does not result in or provide such Lender with immunity from the jurisdiction of courts within the United States or from the enforcement of judgments or writs of attachment on its assets or permit such Lender (or such Governmental Authority) to reject, repudiate, disavow or disaffirm any contracts or agreements made with such Lender. Any determination by the Agent that a Lender is a Defaulting Lender under clauses (a) through (d) above shall be conclusive and binding absent manifest error, and such Lender shall be deemed to be a Defaulting Lender (subject to Section 2.21(g)) upon delivery of written notice of such reasonable determination to the Company, each Issuing Lender, each Swingline Lender and each Lender.

Development Property” shall mean any Property owned by the Company or any of its Consolidated Subsidiaries on which the construction of new buildings constituting a Health Care Facility has been commenced and is continuing (or has recently been completed until such time as the Company has made an election in writing to the Agent to treat such Property as a Health Care Facility (and no longer treat such Property as a Development Property)).

Distribution” shall mean (ii) the declaration or payment of any dividend on or in respect of any shares of any class of capital stock of the Company or any Subsidiary other than dividends payable solely in shares of common stock of the Company or such Subsidiary; (iiii) the purchase, redemption, or other retirement of any shares of any class of capital stock of the Company or any Subsidiary directly or indirectly or otherwise; (iiiiii) the return of capital by the Company or any Subsidiary to its shareholders as such; or (iviv) any other distribution on or in respect of any shares of any class of capital stock of the Company or any Subsidiary.

Dollars” or “$” shall mean dollars in lawful currency of the United States of America.

Domestic Subsidiary” shall mean any Subsidiary that is organized and existing under the laws of the United States or any state or commonwealth thereof or under the laws of the District of Columbia.

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Drawdown Date” shall mean (i) with respect to a Loan, the date on which any Loan is made or is to be made and (ii) with respect to a Letter of Credit, the date any Letter of Credit is issued or extended.

“Early Opt-in Election” shall mean the occurrence of:

(a)(i) a determination by the Agent or (ii) a notification by the Required Lenders to the Agent (with a copy to the Company) that the Required Lenders have determined that U.S. dollar-denominated syndicated credit facilities being executed at such time, or that include language similar to that contained in Section 2.13(b) are being executed or amended, as applicable, to incorporate or adopt a new benchmark interest rate to replace LIBOR, and

(b)(i) the election by the Agent or (ii) the election by the Required Lenders to declare that an Early Opt-in Election has occurred and the provision, as applicable, by the Agent of written notice of such election to the Company and the Lenders or by the Required Lenders of written notice of such election to the Agent.

EBITDA” shall mean, for any fiscal period, with respect to the Company and its Consolidated Subsidiaries, the sum of (i) Net Income for such period plus (ii) expenses for interest on Indebtedness and for Facility Fees, Letter of Credit Fees and any other fees in connection with the borrowing of money or the maintenance of letters of credit by such Person, plus (iii) depreciation and amortization plus (iv) transaction costs and write-offs of fees and expenses relating to the transactions contemplated under this Agreement, in each case determined for such period in accordance with GAAP but excluding, in any event, the impact of gains and losses from extraordinary items, write-offs of straight-line rent related to sold assets, asset sales (including the sale of real estate) or write-ups/write-downs and forgiveness of indebtedness. The Company’s and its Consolidated Subsidiaries’ pro rata share (based on their percentage ownership interest) of the foregoing components for Unconsolidated Affiliates will be included in the calculation of EBITDA.

EEA Financial Institution” shall mean (a) any credit institution or investment firm established in any EEA Member Country which is subject to the supervision of an EEA Resolution Authority, (b) any entity established in an EEA Member Country which is a parent of an institution described in clause (a) of this definition, or (c) any financial institution established in an EEA Member Country which is a subsidiary of an institution described in clauses (a) or (b) of this definition and is subject to consolidated supervision with its parent.

EEA Member Country” shall mean any of the member states of the European Union, Iceland, Liechtenstein, and Norway.

EEA Resolution Authority” shall mean any public administrative authority or any Person entrusted with public administrative authority of any EEA Member Country (including any delegee) having responsibility for the resolution of any credit institution or investment firm established in any EEA Member Country.

Eligible Assignee” shall mean (aa) a Lender, (bb) an Affiliate of a Lender, (cc) an Approved Fund and (dd) any other Person (other than a natural person) approved by (ii) the Agent, (iiii) in the case of any assignment of a Revolving A Commitment, the applicable Issuing Lender and (iiiiii) unless an Event of Default has occurred and is continuing, the Company (each such approval not to be unreasonably withheld or delayed); provided that notwithstanding the foregoing, “Eligible Assignee” shall not include (AA) any Credit Party or any of the Credit Party’s Affiliates or Subsidiaries or (BB) any Defaulting Lender or any Subsidiary of a Defaulting Lender or any Person who, upon becoming a Lender hereunder would constitute a Defaulting Lender.

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Eligible Ground Lease” shall mean, at any time, a lease (a) under which the Company or a Guarantor is the lessee or holds equivalent rights and is the fee owner of the improvements or has a valid lease in existing improvements located thereon, (b) except as otherwise noted in the proviso below, that has a remaining term of not less than thirty (30) years (including the initial term and any additional extension options that are solely at the option of such Credit Party), (c) under which any required rental payment, principal or interest payment or other payment due under such lease from the Company or from such Guarantor to the ground lessor is not more than sixty (60) days past due and any required rental payment, principal or interest payment or other payment due to the Company or such Guarantor under any sublease of the applicable real property lessor is not more than sixty (60) days past due, (d) where no party to such lease is subject to a then continuing Bankruptcy Event, and (e) such ground lease (or a related document executed by the applicable ground lessor) contains customary provisions protective of any lender to the lessee; provided that, a ground lease with a remaining term of less than thirty (30) years but greater than twenty (20) years (in each case, including the initial term and any additional extension options that are solely at the option of such Credit Party) (each a “Specified Ground Lease”) shall nonetheless be deemed to satisfy the requirement of clause (b) above but in no event shall the portion of Unencumbered Asset Value attributable to all Unencumbered Assets which are subject to Specified Ground Leases exceed 10% of Unencumbered Asset Value at any time.

Environmental Laws” shall mean any and all applicable foreign, Federal, state, local or municipal laws, rules, orders, regulations, statutes, ordinances, codes, decrees, requirements of any Governmental Authority or other Requirement of Law (including common law) regulating, relating to or imposing liability or standards of conduct concerning protection of human health or the environment, as now or may at any time be in effect during the term of this Agreement.

Equity Interests” shall mean (aa) in the case of a corporation, capital stock, (bb) in the case of an association or business entity, any and all shares, interests, participations, rights or other equivalents (however designated) of capital stock, (cc) in the case of a partnership, partnership interests (whether general, preferred or limited), (dd) in the case of a limited liability company, membership interests and (ee) any other interest or participation that confers or could confer on a Person the right to receive a share of the profits and losses of, or distributions of assets of, the issuing Person, without limitation, options, warrants and any other “equity security” as defined in Rule 3a11-1 of the Exchange Act.

Equity Issuance” shall mean any issuance by the Company or any Subsidiary to any Person of (a) shares of its Equity Interests, (b) any shares of its Equity Interests pursuant to the exercise of options or warrants, (c) any shares of its Equity Interests pursuant to the conversion of any debt securities to equity or (d) any options or warrants relating to its Equity Interests.

ERISA” shall mean the Employee Retirement Income Security Act of 1974, and the rules and regulations thereunder, as amended from time to time.

ERISA Affiliate” shall mean any Person which is treated as a single employer with the Company under Section 414 of the Code.

Eurodollar Reserve Percentage” shall mean for any day, the percentage (expressed as a decimal and that shall in no case be rounded upwards, if necessary, to the next higher 1/100th of 1%) which is in effect for such day as prescribed by the Board of Governors of the Federal Reserve System (or any successor) for determining the maximum reserve requirement (including, without limitation, any basic, supplemental or emergency reserves) in respect of Eurocurrency liabilities, as defined in Regulation D of such Board as in effect from time to time, or any similar category of liabilities for a member bank of the Federal Reserve System in New York City.

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EU Bail-In Legislation Schedule” shall mean the EU Bail-In Legislation Schedule published by the Loan Market Association (or any successor thereto), as in effect from time to time.

 

Event of Default” shall mean any event described in Article VII hereof.

Exchange Act” shall mean the Securities Exchange Act of 1934, as amended.

Excluded Swap Obligation” shall mean, with respect to any Credit Party, any Swap Obligation if, and to the extent that, all or a portion of the liability of such Credit Party for or the guarantee of such Credit Party of, or the grant by such Credit Party of a security interest to secure, such Swap Obligation (or any liability or guarantee thereof) is or becomes illegal under the Commodity Exchange Act or any rule, regulation or order of the Commodity Futures Trading Commission (or the application or official interpretation of any thereof) by virtue of such Credit Party’s failure for any reason to constitute an “eligible contract participant” as defined in the Commodity Exchange Act and the regulations thereunder at the time the liability for or the guarantee of such Credit Party or the grant of such security interest becomes effective with respect to such Swap Obligation (such determination being made after giving effect to any applicable keepwell, support or other agreement for the benefit of the applicable Credit Party, including under Section 15 of the Subsidiary Guaranty).  If a Swap Obligation arises under a master agreement governing more than one swap, such exclusion shall apply only to the portion of such Swap Obligation that is attributable to swaps for which such guarantee or security interest is or becomes illegal for the reasons identified in the immediately preceding sentence of this definition.

Excluded Subsidiary” shall mean (a) each of those Subsidiaries identified as an Excluded Subsidiary on sub-part A of Schedule 3.2 attached hereto, (b) any other Subsidiary that is acquired or formed following the Closing Date and designated by the Company at any time thereafter as an Excluded Subsidiary or (c) any Subsidiary that was a Subsidiary Guarantor but is subsequently designated by the Company as an Excluded Subsidiary pursuant to the terms of Section 5.33(b), in the case of each of clauses (a), (b) and (c) only to the extent such Subsidiary (i) is organized as a single purpose entity, (ii) owns directly one or more Health Care Facilities and (iii) is a party to, or in connection with being designated as an Excluded Subsidiary will incur, Non-Recourse Debt (including Non-Recourse Debt of the type described in clause (y) of the definition thereof) the terms of which do (or will) not permit such Subsidiary to be a Guarantor hereunder or would cause such Subsidiary to be in default of such obligation as a result of becoming a Guarantor hereunder; provided, further that, upon any Subsidiary Guarantor being designated as an Excluded Subsidiary in accordance with the provisions of Section 5.33(b), (x) such Subsidiary shall be released from all of its obligations under the Subsidiary Guaranty and the Pledge Agreement and shall no longer be a Subsidiary Guarantor hereunder or under the other Loan Documents and (y) the Equity Interests of such Subsidiary shall be released from the pledge under the Pledge Agreement.

Excluded Taxes” shall mean any of the following Taxes imposed on or with respect to a Recipient or required to be withheld or deducted from a payment to a Recipient, (a) Taxes imposed on or measured net income (however denominated), franchise Taxes, and branch profits Taxes, in each case (i) imposed as a result of such Recipient being organized under the laws of, or having its principal office or, in the case of any Lender, its applicable Lending Office located in, the jurisdiction imposing such Tax (or any political subdivision thereof) or (ii) that are Other Connection Taxes, (b) backup withholding tax imposed under Section 3406 of the Code on amounts payable to a Lender other than a Foreign Lender, (c) in the case of a Foreign Lender (other than an assignee pursuant to a request by the Company under Section 2.19(b)), any withholding tax that is imposed on amounts payable to such Foreign Lender pursuant to an Applicable Law in effect at the time such Foreign Lender becomes a party hereto (or designates a new Lending Office), except to the extent that such Foreign Lender (or its assignor, if any) was entitled, at the time of designation of a new Lending Office (or assignment), to receive additional

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amounts from the Company with respect to such withholding tax pursuant to Section 2.16, (d) is attributable to such Foreign Lender’s failure or inability (other than as a result of a Change in Law) to comply with Section 2.16(e) and (e) any United States federal withholding Taxes imposed under FATCA.

Existing Letters of Credit” shall mean those certain letters of credit set forth on Schedule 1.01 attached hereto.

Extension of Credit” shall mean, as to any Lender, the making of a Loan by such Lender, any conversion of a Loan from one Type to another Type, any extension of any Loan or the issuance, extension or renewal of, or participation in, a Letter of Credit or Swingline Loan by such Lender.

Facility Fee” shall havemean the meaning set forth in Section 2.4(a)Revolving A Facility Fee and the Revolving B Facility Fee, individually or collectively, as appropriate.

FATCA” shall mean Sections 1471 through 1474 of the Code, as of the date of this Agreement (or any amended or successor version that is substantively comparable and not materially more onerous to comply with) and any current or future regulations or official interpretations thereof, any agreements entered into pursuant to Section 1471(b)(1) of the Code, and any applicable intergovernmental agreements entered into in connection with the implementation of the foregoing (including any legislation, rules or practices adopted pursuant to any such intergovernmental agreement).

 

FCPAhasshall have the meaning set forth in Section 3.27(b).

 

Facility Cash Flow Available for Debt Service” shall mean for any fiscal period of an owner or operator of a Health Care Facility, the Net Income of such Person plus (i) expenses for interest on Indebtedness and for Facility Fees, Letter of Credit Fees and any other fees in connection with the borrowing of money by such person plus (ii) depreciation and amortization plus (iii) rental expenses plus (iv) management fees plus (v) intercompany interest expenses, in each case to the extent attributable to such Health Care Facility and determined for such period and in accordance with GAAP.

 

Facility Coverage Ratio” shall mean for any fiscal period of an owner or operator of a Health Care Facility, the ratio of (a) Facility Cash Flow Available for Debt Service attributable to such Health Care Facility to (b) interest expense plus current maturities of long‑term Indebtedness plus rental expense, in each case to the extent attributable to such Health Care Facility and determined for such period and in accordance with GAAP.

 

Federal Funds Effective Rate” shall have the meaning set forth in the definition of Base Rate.

 

Fee Letters” shall mean each of (i) the letter agreement dated February 16, 2018, addressed to the Company from Wells Fargo and WFS, as amended, modified, extended, restated, replaced, or supplemented from time to time and, (ii) the letter agreement dated February 16, 2018, addressed to the Company from  Bank of America and BofA Securities, Inc. (f/k/a Merrill Lynch, Pierce, Fenner & Smith Incorporated), as amended, modified, extended, restated, replaced, or supplemented from time to time and (iii) the letter agreement dated June 3, 2020, addressed to the Company from Wells Fargo and WFS, as amended, modified, extended, restated, replaced, or supplemented from time to time.

“First Amendment Effective Date” shall mean June 5, 2020.

Fixed Charge Coverage Ratio” shall mean, as of any date of determination, the ratio of (i) EBITDA for the four consecutive fiscal quarter period then ended to (ii) Total Fixed Charges for the four consecutive fiscal quarter period then ended.

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Foreign Lender” shall mean any Lender that is organized under the laws of a jurisdiction other than that in which the Company is resident for tax purposes.  For purposes of this definition, the United States, each State thereof and the District of Columbia shall be deemed to constitute a single jurisdiction.

Foreign Subsidiary” shall mean any Subsidiary that is not a Domestic Subsidiary.

Fronting Exposure” shall mean, at any time there is a Defaulting Lender under the Revolving A Facility, (aa) with respect to any Issuing Lender, such Defaulting Lender’s Applicable Percentage of the outstanding LOC Obligations with respect to Letters of Credit issued by such Issuing Lender other than LOC Obligations as to which such Defaulting Lender’s participation obligation has been reallocated to other Lenders or Cash Collateralized in accordance with the terms hereof, and (bb) with respect to any Swingline Lender, such Defaulting Lender’s Applicable Percentage of outstanding Swingline Loans made by such Swingline Lender other than Swingline Loans as to which such Defaulting Lender’s participation obligation has been reallocated to other Lenders or Cash Collateralized in accordance with the terms hereof.

Fund” shall mean any Person (other than a natural person) that 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.

GAAP” shall mean generally accepted accounting principles as in effect from time to time in the United States, applied in a manner consistent with those used in preparing the financial statements delivered to the Agent prior to the Closing Date, subject, however, in the case of determination of compliance with the financial covenants set forth in Section 5.5 to the provisions of Section 1.3.

Government Acts” shall have the meaning set forth in Section 2.17(a).

Governmental Authority” shall mean the government of the United States of America or any other nation, or of any political subdivision thereof, whether state or local, and any agency, authority, instrumentality, regulatory body, court, central bank or other entity exercising executive, legislative, judicial, taxing, regulatory or administrative powers or functions of or pertaining to government (including any supra-national bodies such as the European Union or the European Central Bank).

Guarantor” shall mean each Subsidiary of the Company that executes the Subsidiary Guaranty on the Closing Date and any Subsidiary that executes and/or joins the Subsidiary Guaranty from time to time.

Health Care Facility” or “Health Care Facilities” shall mean, individually or collectively as appropriate, real estate and improvements thereon used exclusively or primarily for the delivery of health or human services, including but not limited to hospitals, clinics, long term care facilities, custodial care facilities (including but not limited to childcare centers), congregate care facilities, assisted living facilities, surgery centers and medical office buildings.

Hedging Agreements” shall mean, with respect to any Person, any agreement entered into to protect such Person against fluctuations in interest rates, or currency or raw materials values, including, without limitation, any interest rate swap, cap or collar agreement or similar arrangement between such Person and one or more counterparties, any foreign currency exchange agreement, currency protection agreements, commodity purchase or option agreements or other interest or exchange rate or commodity price hedging agreements.

Incremental Increase Amount” shall have the meaning set forth in Section 2.2(a).

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Indebtedness” shall mean, without duplication, with respect to any Person, all indebtedness, liabilities and other obligations of such Person which would, in accordance with GAAP, be classified upon a balance sheet of such Person as liabilities but in any event including:

(aa)all debt and similar monetary obligations, whether direct or indirect, including, without limitation, all obligations of such Person for borrowed money or with respect to deposits or advances of any kind and all obligations of such Person evidenced by bonds, debentures, notes or similar instruments;

(bb)all guaranties of such Person, endorsements and other contingent liabilities and other obligations of such Person, whether direct or indirect in respect of indebtedness of others, to purchase indebtedness, or to assure the owner of indebtedness against loss, through an agreement to purchase goods, supplies or services for the purpose of enabling the debtor to make payment of the indebtedness held by such owner or otherwise, and any obligations to reimburse the issuer in respect of any letters of credit;

(cc)all liabilities and other obligations to the extent not, included in clause (a) above secured by any mortgage, lien, pledge, charge, security interest or other encumbrance in respect of property owned by such Person, whether or not such Person has assumed or become liable for the payment of such obligations;

(dd)all indebtedness, liabilities and other obligations of such Person arising under any conditional sale or other title retention agreement, whether or not 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;

(ee)all indebtedness, liabilities and other obligations of such Person in respect of capitalized leases of real and personal property;

(ff)all cash obligations of such Person then due under Hedging Agreements;

(gg)the principal balance outstanding under any synthetic lease, tax retention operating lease, off-balance sheet loan or similar off-balance sheet financing product plus any accrued interest thereon (excluding operating leases);

(h)all obligations of such Person in respect of the deferred purchase price of property or services (excluding current accounts payable incurred in the ordinary course of business); and

(i)all obligations of such Person to purchase, redeem, retire, defease or otherwise make any payment in respect of any Equity Interest in such Person or any other Person or any warrant, right or option to acquire such Equity Interest, valued, in the case of a redeemable preferred interest, at the greater of its voluntary or involuntary liquidation preference plus accrued and unpaid dividends.

Indemnified Taxes” shall mean (a) Taxes, other than Excluded Taxes, imposed on or with respect to any payment made by or on account of any obligation of the Company under any Loan Document and (b) to the extent not otherwise described in (a), Other Taxes.

Indemnitee” shall have the meaning set forth in Section 9.5(b).

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Interest Expense” shall mean for any fiscal period for the Company and its Consolidated Subsidiaries on a consolidated basis, an amount equal to the sum of the following with respect to Total Indebtedness: (i) total interest expense, accrued in accordance with GAAP plus (ii) all capitalized interest determined in accordance with GAAP (but excluding costs in connection with development projects until such time as such costs are expensed in accordance with GAAP), plus (iii) the amortization of deferred financing costs.

Interest Payment Date” shall mean (aa) as to any Base Rate Loan or any Swingline Loan, the last Business Day of each March, June, September and December during the term of this Agreement and on the applicable Maturity Date, (bb) as to any LIBOR Rate Loan having an Interest Period of three months or less, the last day of such Interest Period, (cc) as to any LIBOR Rate Loan having an Interest Period longer than three months, (ii) each day which is three months after the first day of such Interest Period and (iiii) the last day of such Interest Period and (dd) as to any Loan which is the subject of a mandatory prepayment required pursuant to Section 2.6(b), the date that such prepayment is due.

Interest Period” shall mean, with respect to any LIBOR Rate Loan,

(aa)initially, the period commencing on the Drawdown Date or conversion date, as the case may be, with respect to such LIBOR Rate Loan and ending one, two, three, or six months thereafter as selected by the Company in the Notice of Borrowing or Notice of Conversion/Extension given with respect thereto; and

(bb)thereafter, each period commencing on the last day of the immediately preceding Interest Period applicable to such LIBOR Rate Loan and ending one, two, three, or six months thereafter as selected by the Company by irrevocable notice to the Agent not less than three Business Days prior to the last day of the then current Interest Period with respect thereto; provided that the foregoing provisions are subject to the following:

(ii)if any Interest Period pertaining to a LIBOR Rate Loan 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 carry such Interest Period into another calendar month in which event such Interest Period shall end on the immediately preceding Business Day;

(iiii)any Interest Period pertaining to a LIBOR Rate Loan that begins on the last Business Day of a calendar month (or on a day for which there is no numerically corresponding day in the calendar month at the end of such Interest Period) shall end on the last Business Day of the relevant calendar month;

(iiiiii)if the Company shall fail to give notice as provided above, the Company shall be deemed to have selected a Base Rate Loan to replace the affected LIBOR Rate Loan;

(iviv)no Interest Period in respect of any Loan shall extend beyond the Maturity Date for such Loan; and

(vv)no more than ten (10) LIBOR Rate Loans may be in effect at any time as a sum total under the Revolving A Facility and the Revolving B Facility; provided that, for purposes hereof, LIBOR Rate Loans with different Interest Periods shall be considered as separate LIBOR Rate Loans, even if they shall begin on the same date and have the same duration, although borrowings, extensions and conversions may, in

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accordance with the provisions hereof, be combined at the end of existing Interest Periods to constitute a new LIBOR Rate Loan with a single Interest Period.

Internal Control Event” shall mean a material weakness in, or fraud that involves management or other employees who have a significant role in the Company’s internal controls over financial reporting, in each case as described in the Securities Laws.

Investments” shall mean all expenditures made and all liabilities incurred (contingently or otherwise) for the acquisition of stock, partnership or limited liability company interests or Indebtedness of, and including loans, advances, capital contributions or transfers of property to, or in respect of any guaranties (or other commitments as described under Indebtedness), or obligations of, any Person, or for the acquisition of real estate or interests therein.  In determining the aggregate amount of Investments outstanding at any particular time: (a) the amount of any Investment represented by a guaranty shall be taken at not less than the principal amount of the obligations guaranteed; (b) there shall be included as an Investment all interest accrued with respect to Indebtedness constituting an Investment unless and until such interest is paid; (c) there shall be deducted in respect of each such investment any amount received as a return of capital (but only by repurchase, redemption, retirement, repayment, liquidating dividend or liquidating distribution); (d) there shall not be deducted in respect of any Investment any amounts received as earnings on such Investment, whether as dividends, interest or otherwise, except that interest included as provided in the foregoing clause (b) may be deducted when paid; and (e) there shall not be deducted from the aggregate amount of Investments any decrease in the value thereof.

Issuing Lenders” shall mean Wells Fargo and Bank of America, in each case, together with any successor.

Issuing Lender Fees” shall have the meaning set forth in Section 2.4(c).

Lender” shall mean any of the several banks and other financial institutions as are, or may from time to time become parties to this Agreement (including, for the avoidance of doubt, each Revolving B Lender); provided that notwithstanding the foregoing, “Lender” shall not include any Credit Party or any of the Credit Party’s Affiliates or Subsidiaries.

Lending Office” shall mean, with respect to any Lender, the office of such Lender maintaining such Lender’s Extensions of Credit.

 

Letter of Credit” shall mean (aa) any letter of credit issued by an Issuing Lender pursuant to the terms hereof, as such letter of credit may be amended, modified, restated, extended, renewed, increased, replaced or supplemented from time to time in accordance with the terms of this Agreement and (bb) any Existing Letter of Credit, in each case as such letter of credit may be amended, modified, extended, renewed or replaced from time to time in accordance with the terms of this Agreement.

Letter of Credit Expiration Date shall have the meaning set forth in Section 2.3(a).

Letter of Credit Facing Fee” shall have the meaning set forth in Section 2.4(c).

Letter of Credit Fee” shall have the meaning set forth in Section 2.4(b).

LIBOR” shall mean, subject to the implementation of a Benchmark Replacement Rate in accordance with Section 2.13(b), for any interest rate calculation with respect to a LIBOR Rate Loan, the rate of interest per annum determined on the basis of the rate for deposits in Dollars for a period equal to the applicable Interest Period as published by the ICE Benchmark Administration Limited, a United

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Kingdom company, or a comparable or successor quoting service approved by the Agent, at approximately 11:00 a.m. (London time) two (2) London Banking Days prior to the first day of the applicable Interest Period.  If, for any reason, such rate is not so published then “LIBOR” shall be determined by the Agent to be the arithmetic average of the rate per annum at which deposits in Dollars would be offered by first class banks in the London interbank market to the Agent at approximately 11:00 a.m. (London time) two (2) London Banking Days prior to the first day of the applicable Interest Period for a period equal to such Interest Period.  Each calculation by the Agent of LIBOR shall be conclusive and binding for all purposes, absent manifest error.  

Notwithstanding the foregoing, (x) in no event shall LIBOR (including, without limitation, any Benchmark Replacement Rate with respect thereto) be less than 0% and (y) unless otherwise specified in any amendment to this Agreement entered into in accordance with Section 2.13(b), in the event that a Benchmark Replacement Rate with respect to LIBOR is implemented then all references herein to LIBOR shall be deemed references to such Benchmark Replacement Rate.

LIBOR Rate” shall mean a rate per annum (rounded upwards, if necessary, to the next higher 1/100th of 1%) determined by the Agent pursuant to the following formula:

LIBOR Rate = LIBOR

1.00 - Eurodollar Reserve Percentage

LIBOR Rate Loans” shall mean Loans that bear interest at an interest rate based on the LIBOR Rate.

LIBOR Reference Rate” shall mean a rate determined by reference to the LIBOR Rate for a one (1) month interest period that would be applicable for a Loan at the LIBOR Rate, as such rate may fluctuate in accordance with changes in the LIBOR Rate on a daily basis.  If such rate is not available at such time for any reason, then the rate for that interest period will be determined by an alternate method as reasonably selected by the Lender.

LIBOR Tranche” shall mean the collective reference to LIBOR Rate Loans whose Interest Periods begin and end on the same day.

Lien” shall mean any mortgage, pledge, hypothecation, assignment, deposit arrangement, encumbrance, lien (statutory or other), charge or other security interest or any preference, priority or other security agreement or preferential arrangement of any kind or nature whatsoever (including, without limitation, (aa) any conditional sale or other title retention agreement and any Capital Lease having substantially the same economic effect as any of the foregoing, (bb) the filing of, or the agreement to give, any UCC financing statement) and (c) in the case of securities, any purchase option, call or similar right of a third party with respect to such securities.

Loans” shall mean the Revolving A Loans, the Revolving B Loans and/or the Swingline Loans, as appropriate, and “Loan” shall mean any one of them.

Loan Documents” shall mean collectively, this Agreement, the Notes, the Subsidiary Guaranty, the LOC Documents, the Fee Letters and the Security Documents and any document or instrument delivered pursuant to or in connection with this Agreement or the LOC Documents (including, without limitation, any guaranty delivered in connection with this Agreement), each as amended and in effect from time to time.

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LOC Commitment” shall mean the commitment of the Issuing Lenders to issue Letters of Credit and with respect to each Revolving A Lender, the commitment of such Lender to purchase Participation Interests in the Letters of Credit up to such Lender’s Revolving A Commitment Percentage of the LOC Committed Amount.

LOC Commitment Percentage” shall mean, with respect to Wells Fargo, 50% of the LOC Committed Amount, and with respect to Bank of America, 50% of the LOC Committed Amount.

LOC Committed Amount” shall have the meaning set forth in Section 2.3(a).

LOC Documents” shall mean, with respect to any Letter of Credit, such Letter of Credit, any amendments thereto, any documents delivered in connection therewith, any application therefor, and any agreements, instruments, guarantees or other documents (whether general in application or applicable only to such Letter of Credit) governing or providing for (aa) the rights and obligations of the parties concerned or (bb) any collateral for such obligations.

LOC Obligations” shall mean, at any time, the sum of (aa) the maximum amount which is, or at any time thereafter may become, available to be drawn under Letters of Credit then outstanding, assuming compliance with all requirements for drawings referred to in such Letters of Credit plus (bb) the aggregate amount of all drawings under Letters of Credit honored by the Issuing Lenders but not theretofore reimbursed.

London Banking Daymeansshall mean any day on which dealings in Dollar deposits are conducted by and between banks in the London interbank Eurodollar market.

Mandatory LOC Borrowing” shall have the meaning set forth in Section 2.3(e).

Mandatory Swingline Borrowing” shall have the meaning set forth in Section 2.9(b)(ii).

Material Acquisition” shall mean any acquisition with total consideration in excess of 10% of Total Asset Value (measured prior to giving effect to such acquisition).

Material Adverse Effect” shall mean (A) a material adverse change in, or a material adverse effect on, the operations, business, assets, properties, liabilities (actual or contingent) or condition (financial or otherwise) of the Company and its Subsidiaries, taken as a whole, (B)  a material impairment of the rights and remedies of the Agent or any Lender under any Loan Document, or of the ability of the Credit Parties, taken as a whole, to perform their obligations, when such obligations are required to be performed, under any Loan Document to which it is a party or (C) a material adverse effect upon the legality, validity, binding effect or enforceability against any Credit Party of any Loan Document to which it is a party.

Material Contract” shall mean any contract or other arrangement, whether written or oral, to which the Company or any of its Subsidiaries (other than Excluded Subsidiaries) is a party as to which the breach, nonperformance, cancellation or failure to renew by any party thereto could reasonably be expected to have a Material Adverse Effect.

Materials of Environmental Concern” shall mean any gasoline or petroleum (including crude oil or any extraction thereof) or petroleum products or any hazardous or toxic substances, materials or wastes, defined or regulated as such in or under any Environmental Law, including, without limitation, asbestos, perchlorate, polychlorinated biphenyls and urea-formaldehyde insulation.

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Maturity Date” shall mean, the date that is four (4) years following the Closing DateMarch 27, 2022; provided that, if the Company elects the extension option under Section 2.22 with respect to the Revolving A Loans, upon satisfaction of the conditions set forth in such Section 2.22, the Maturity Date with respect to the Revolving A Loans shall be extended as set forth in Section 2.22; provided, however, if such date is not a Business Day, the Maturity Date with respect to the Revolving A Loans shall be the next preceding Business Day.

 

Maximum Leverage Level” shall have the meaning set forth in Section 5.5(b).

 

Maximum Unencumbered Leverage Level” shall have the meaning set forth in Section 5.5(e).

 

Moody’s” shall mean Moody’s Investors Service, Inc.

Mortgage Loans” shall mean loans from time to time made by the Company or any Consolidated Subsidiary, in each case secured by a first mortgage lien on a Health Care Facility.

Net Cash Proceeds” shall mean the aggregate cash or Cash Equivalents proceeds received by the Company or any Subsidiary in respect of any Equity Issuance, net of (a) direct costs (including, without limitation, legal, accounting and investment banking fees, and sales commissions) (b) taxes paid or payable as a result thereof; it being understood that “Net Cash Proceeds” shall include, without limitation, any cash or Cash Equivalents received upon the sale or other disposition of any non-cash consideration received by the Company or any Subsidiary in any Equity Issuance.

Net Income” shall mean for any fiscal period of the Company, the net income (or loss), after income taxes, of the Company and its Consolidated Subsidiaries on a consolidated basis as determined in accordance with GAAP.

Non-Defaulting Lender” shall mean, at any time, each Lender that is not a Defaulting Lender at such time.

Non‑Recourse Debt” shall mean (x) in the case of any Person other than an Excluded Subsidiary or an Unconsolidated Affiliate, Indebtedness of the Company or its Subsidiaries which is at all times non‑recourse in nature to the Company or any of its Subsidiaries, except to the extent of any recourse to an asset of the Company or a Subsidiary purchased or otherwise financed by such Indebtedness (including, without limitation, Indebtedness of multi‑member limited liability companies in which the Company or any of its Subsidiaries has an ownership interest, but only to the extent that such Indebtedness remains non-recourse to the Company or any of its Subsidiaries (other than, in the event such multi-member limited liability company is a Subsidiary, such Subsidiary)), (y) in the case of an Excluded Subsidiary, Indebtedness of such Excluded Subsidiary which is at all times non-recourse in nature to the Company or its Subsidiaries (except such Excluded Subsidiary or assets of such Excluded Subsidiary) or (z) in the case of an Unconsolidated Affiliate, Indebtedness of such Unconsolidated Affiliate which is at all times non-recourse in nature to the Company or its Subsidiaries.

Normalized Adjusted FFO” shall mean, for any fiscal period with respect to the Company, “funds from operations” as defined in accordance with the resolutions adopted by the Board of Governors of the National Association of Real Estate Investment Trusts as in effect from time to time; provided that Normalized Adjusted FFO shall at all times exclude (a) charges for impairment losses from property sales, (b) stock-based compensation, (c) write-offs or reserves of straight-line rent related to sold assets, (d) amortization of debt costs, and (e) non-recurring charges, including without limitation acquisition expenses, non-cash charges related to the write-off of deferred equity and financing costs.

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Notes” shall mean the Revolving Notes and/or the Swingline Notes, as applicable.

Notice of Borrowing” shall mean a request for a Revolving Loan borrowing pursuant to Section 2.1(b)(i) or a request for a Swingline Loan borrowing pursuant to Section 2.9(b)(i), as appropriate.  A Form of Notice of Borrowing is attached as Exhibit 1.1(d).

Notice of Conversion/Extension” shall mean the written notice of conversion of a LIBOR Rate Loan to a Base Rate Loan or a Base Rate Loan to a LIBOR Rate Loan, or extension of a LIBOR Rate Loan, in each case substantially in the form of Exhibit 1.1(e).

Notice of Prepayment” shall have the meaning set forth in Section 2.6(a).

Obligations” shall mean, collectively, all of the obligations, Indebtedness and liabilities of the Credit Parties to the Lenders (including the Issuing Lenders) and the Agent, whenever arising, under this Agreement, the Notes or any of the other Loan Documents, including principal, interest, fees, costs, charges, expenses, professional fees, reimbursements, all sums chargeable to the Credit Parties or for which any Credit Party is liable as an indemnitor and whether or not evidenced by a note or other instrument and indemnification obligations and other amounts (including, but not limited to, any interest accruing after the occurrence of a filing of a petition of bankruptcy under the Bankruptcy Code with respect to any Credit Party, regardless of whether such interest is an allowed claim under the Bankruptcy Code); provided that, anything to the contrary contained in the foregoing notwithstanding, the Obligations shall exclude any Excluded Swap Obligation.

OFAC” shall mean the U.S. Department of the Treasury’s Office of Foreign Assets Control.

Other Non-Guarantor Subsidiary” shall mean any Subsidiary of the Company which is not required to be a Guarantor hereunder pursuant to Section 5.33(a).

Other Connection Taxes” shall mean, with respect to any Recipient, Taxes imposed as a result of a present or former connection between such Recipient and the jurisdiction imposing such Tax (other than connections arising from such Recipient having executed, delivered, become a party to, performed its obligations under, received payments under, received or perfected a security interest under, engaged in any other transaction pursuant to or enforced any Loan Document, or sold or assigned an interest in any Loan or Loan Document).

Other Taxes” shall mean all present or future stamp or documentary taxes or any other excise or property taxes, charges or similar levies arising from any payment made hereunder or under any other Loan Document or from the execution, delivery or enforcement of, or otherwise with respect to, this Agreement or any other Loan Document, except any such Taxes that are Other Connection Taxes imposed with respect to an assignment (other than an assignment made pursuant to Section 2.19).

Participanthasshall have the meaning assigned to such term in clause (d) of Section 9.6.

Participant Registerhasshall have the meaning assigned to such term in clause (d) of Section 9.6.

Participation Interest” shall mean a participation interest purchased by a Revolving A Lender in LOC Obligations as provided in Section 2.3(c) and in Swingline Loans as provided in Section 2.9.

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Patriot Act” shall mean the Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism (USA PATRIOT ACT) Act of 2001 (Title III of Pub. L. No. 107-56 (signed into law October 26, 2001)), as amended or modified from time to time.

Payment Event of Default” shall mean an Event of Default specified in Section 7.1(a).

PBGC” shall mean the Pension Benefit Guaranty Corporation or any successor agency.

Permitted Liens” shall have the meaning set forth in Section 5.10(g).

Pension Plan” shall mean pension plan shall include (a) any multi employer plan within the meaning of Section 3(37) of ERISA, (b) any employee benefit plan within the meaning of Section 3(3) of ERISA, other than plans described in (a) above and (c) any employee pension benefit plan within the meaning of Section 3(2) of ERISA the benefits of which are guaranteed on termination in full or in part by PBGC pursuant to Title IV of ERISA, other than plans described in (a) above, each as maintained or contributed to by the Company or any ERISA Affiliate.

Person” shall mean any corporation, unincorporated association, partnership, trust, organization, business, individual or other legal entity and any government or any governmental agency or political subdivision thereof.

Pledge Agreement” shall mean the Pledge Agreement dated as of the Closing Date executed by the Credit Parties in favor of the Agent, for the benefit of the Secured Parties, as the same may from time to time be amended, modified, extended, restated, replaced, or supplemented from time to time in accordance with the terms hereof and thereof.

Prime Rate” shall have the meaning set forth in the definition of Base Rate.

Pro Forma Basis” shall mean, with respect to any transaction, that such transaction shall be deemed to have occurred as of the first day of the four-quarter period ending as of the most recent quarter end preceding the date of such transaction for which financial statement information is available; provided, for purposes of Section 5.9(c), 5.9(h) and 5.25(e), the rental income for any newly-acquired Health Care Facility which is used for purposes of such calculation shall be based on the amounts contractually due under any related leases that are then in effect; provided, further, that any such calculations made on a Pro Forma Basis shall be adjusted by (A) excluding from Total Asset Value and Unencumbered Asset Value, the actual value of any assets sold by the Company or any of its Subsidiaries since the last day of the prior fiscal quarter and (B) adding to Total Asset Value and Unencumbered Asset Value, the undepreciated GAAP book value (after any impairments) of any Acquisition Properties  acquired (or to be acquired with any borrowing) by (x) in the case of Total Asset Value, the Company or any of its Subsidiaries or (y) in the case of Unencumbered Asset Value, the Company or any Guarantor, in each case since the last day of the most recently ended fiscal quarter for which financial statement information is available.

Property” shall mean any parcel of real property, and improvements thereon, which is owned, leased or operated by the Company or its Consolidated Subsidiaries and which is located in the United States of America or the District of Columbia or any Specified Jurisdiction.

Recipient” shall mean (a) the Agent, (b) any Lender or (c) any Issuing Lender, as applicable.

Register” shall have the meaning set forth in Section 9.6(c).

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Reimbursement Obligation” shall mean the obligation of the Company to reimburse the Issuing Lenders pursuant to Section 2.3(d) for amounts drawn under Letters of Credit.

Related Parties” shall mean, with respect to any Person, such Person’s Affiliates and the partners, directors, officers, employees, agents and advisors of such Person and of such Person’s Affiliates.

 

Replacement Rate” shall have the meaning set forth in Section 2.13(b)Relevant Governmental Body” shall mean the Federal Reserve Board and/or the Federal Reserve Bank of New York, or a committee officially endorsed or convened by the Federal Reserve Board and/or the Federal Reserve Bank of New York or any successor thereto.

“Required Facility Lenders” shall mean (a) for the Revolving A Facility, the Required Revolving A Lenders or (b) for the Revolving B Facility, the Required Revolving B Lenders, as applicable.

Required Lenders” shall mean, as of any date of determination, Lenders holding at least a majority of the Revolving Commitments or, if the Revolving Commitments have been terminated or there are no Revolving Commitments then outstanding, the outstanding Loans and Participation Interests; provided, however, that if any Lender shall be a Defaulting Lender at such time, then there shall be excluded from the determination of Required Lenders, Obligations (including Participation Interests) owing to such Defaulting Lender and such Defaulting Lender’s Commitments.

“Required Revolving A Lenders” shall mean, as of any date of determination, Lenders holding at least a majority of the Revolving A Commitments or, if the Revolving A Commitments have been terminated or there are no Revolving A Commitments then outstanding, the outstanding Revolving A Loans and Participation Interests; provided, however, that if any Revolving A Lender shall be a Defaulting Lender at such time, then there shall be excluded from the determination of Required Revolving A Lenders, Obligations (including Participation Interests) owing to such Defaulting Lender and such Defaulting Lender’s Commitments.

“Required Revolving B Lenders” shall mean, as of any date of determination, Lenders holding at least a majority of the Revolving B Commitments or, if the Revolving B Commitments have been terminated or there are no Revolving B Commitments then outstanding, the outstanding Revolving B Loans; provided, however, that if any Revolving B Lender shall be a Defaulting Lender at such time, then there shall be excluded from the determination of Required Revolving B Lenders, Obligations owing to such Defaulting Lender and such Defaulting Lender’s Commitments.

Requirement of Law” shall mean, as to any Person, (aa) the articles or certificate of incorporation, trust documents and by-laws or other organizational or governing documents of such Person, and (bb) all international, foreign, Federal, state and local statutes, treaties, rules, guidelines, regulations, ordinances, codes, executive orders, and administrative or judicial precedents or authorities, including the interpretation or administration thereof by any Governmental Authority charged with the enforcement, interpretation or administration thereof, and all applicable administrative orders, directed duties, requests, licenses, authorizations and permits of, and agreements with, any Governmental Authority (in each case whether or not having the force of law); in each case applicable to or binding upon such Person or any of its property or to which such Person or any of its property is subject.

“Resolution Authority” shall mean an EEA Resolution Authority or, with respect to any UK Financial Institution, a UK Resolution Authority.

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Responsible Officer” shall mean, for any Credit Party, the chief executive officer, the president or chief financial officer of such Credit Party and any additional responsible officer that is designated as such to the Agent.

Revolving A Commitment” shall mean, with respect to each Revolving A Lender, the commitment of such Lender to make Revolving A Loans in an aggregate principal amount at any time outstanding up to an amount equal to such Lender’s Revolving A Commitment Percentage of the Revolving A Committed Amount.

Revolving A Commitment Percentage” shall mean, for each Revolving A Lender, the percentage identified as its Revolving A Commitment Percentage on Schedule 2.1(a) or in the Assignment and Assumption pursuant to which such Lender became a Lender hereunder, as such percentage may be modified in connection with any assignment made in accordance with the provisions of Section 9.6(b).

Revolving A Committed Amount” shall meanhave the amount of eachmeaning set forth in Section 2.1(a)(i).

“Revolving A Facility” shall have the meaning set forth in Section 2.1(a)(i).

“Revolving A Facility Fee” shall have the meaning set forth in Section 2.4(a)(i).

“Revolving A Lender” shall mean a Lender with a Revolving A Commitment.

“Revolving A Loans” shall have the meaning set forth in Section 2.1(a)(i).

“Revolving B Commitment” shall mean, with respect to each Revolving B Lender, the commitment of such Lender to make Revolving B Loans in an aggregate principal amount at any time outstanding up to an amount equal to such Lender’s Revolving B Commitment Percentage of the Revolving B Committed Amount.

“Revolving B Commitment as specified Percentage” shall mean, for each Revolving B Lender, the percentage identified as its Revolving B Commitment Percentage on Schedule 2.1(a) or in the Assignment and Assumption pursuant to which such Lender became a Lender hereunder, as such amountpercentage may be reduced or increased from time to timemodified in connection with any assignment made in accordance with the provisions hereofof Section 9.6(b).

Revolving B Committed Amount” shall have the meaning set forth in Section 2.1(a)(ii).

“Revolving B Facility” shall have the meaning set forth in Section 2.1(a)(ii).

“Revolving B Facility Fee” shall have the meaning set forth in Section 2.4(a)(i).

“Revolving B Lender” shall mean a Lender with a Revolving B Commitment.

“Revolving B Loans” shall have the meaning set forth in Section 2.1(a)(ii).

“Revolving Commitment” shall mean the Revolving A Commitment and the Revolving B Commitment, individually or collectively, as appropriate.

“Revolving Commitment Percentage” shall mean the Revolving A Commitment Percentage and the Revolving B Commitment Percentage, individually or collectively, as appropriate.

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“Revolving Credit Facility” shall mean the Revolving A Facility and the Revolving B Facility, individually or collectively, as appropriate.

Revolving Facility Increase” shall have the meaning set forth in Section 2.2(a).

Revolving Loan” shall mean any Revolving A Loan and any Revolving B Loan, individually or collectively, as the context may require.

“Revolving Note” or “Revolving Notes” shall mean the promissory notes of the Company provided pursuant to Section 2.1(e) in favor of any of the Lenders evidencing theany Revolving Loan provided by any such Lender pursuant to Section 2.1(a), individually or collectively, as appropriate, as such promissory notes may be amended, modified, extended, restated, replaced, or supplemented from time to time.

Revolving Loans” shall have the meaning set forth in Section 2.1(a).

S&P” shall mean Standard & Poor’s Ratings Services, a division of The McGraw Hill Companies, Inc.

Sanctions” shall mean any and all economic or financial sanctions, sectoral sanctions, secondary sanctions, trade embargoes and anti-terrorism laws, including but not limited to those imposed, administered or enforced from time to time by the U.S. government (including those administered by OFAC or the U.S. Department of State), the United Nations Security Council, the European Union, Her Majesty’s Treasury, or other relevant sanctions authority with jurisdiction over any Lender, the Company or any of its Subsidiaries or Affiliates.

Sanctioned Country” shall mean at any time, a country or territory which is itself the subject or target of any Sanctions (including, as of the Closing Date, Cuba, Iran, North Korea, Sudan, Syria and Crimea).

Sanctioned Person” shall mean, at any time, (a) any Person listed in any Sanctions-related list of designated Persons maintained by OFAC (including, without limitation, OFAC’s Specially Designated Nationals and Blocked Persons List and OFAC’s Consolidated Non-SDN List), the U.S. Department of State, the United Nations Security Council, the European Union, Her Majesty’s Treasury, or other relevant sanctions authority, (b) any Person operating, organized or resident in a Sanctioned Country or (c) any Person owned or controlled by any such Person or Persons described in clauses (a) and (b), including a Person that is deemed by OFAC to be a Sanctions target based on the ownership of such legal entity by Sanctioned Peron(s).

Sarbanes‑Oxley” shall mean the Sarbanes‑Oxley Act of 2002.

SEC” shall mean the Securities and Exchange Commission or any successor Governmental Authority.

Secured Leverage Ratio” shall mean, as of any date of determination, the ratio of (i) the portion of Total Indebtedness outstanding as of such date which is secured in any manner by a Lien but excluding, in any event, (x) Indebtedness of Unconsolidated Affiliates and (y) the Obligations hereunder to (ii) Total Asset Value as of such date but excluding, in any event, the Company’s and its Consolidated Subsidiaries’ pro rata share (based on their percentage ownership interest) of assets held by Unconsolidated Affiliates.

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Secured Parties” shall mean the Agent, the Lenders and the Bank Product Providers.

Securities Act” shall mean the Securities Act of 1933, together with any amendment thereto or replacement thereof and any rules or regulations promulgated thereunder.

Securities Laws” shall mean the Securities Act, the Exchange Act, Sarbanes-Oxley and the applicable accounting and auditing principles, rules, standards and practices promulgated, approved or incorporated by the SEC or the Public Company Accounting Oversight Board, as each of the foregoing may be amended and in effect on any applicable date hereunder.

Security Documents” shall mean the Pledge Agreement and all other agreements, documents and instruments relating to, arising out of, or in any way connected with any of the Pledge Agreement or granting to the Agent, for the benefit of the Secured Parties, Liens or security interests to secure, inter alia, the Credit Party Obligations whether now or hereafter executed and/or filed, each as may be amended from time to time in accordance with the terms hereof, executed and delivered in connection with the granting, attachment and perfection of the Agent’s security interests and liens arising thereunder, including, without limitation, UCC financing statements.

“SOFR” with respect to any day shall mean the secured overnight financing rate published for such day by the Federal Reserve Bank of New York, as the administrator of the benchmark, (or a successor administrator) on the Federal Reserve Bank of New York’s Website.

Specified Jurisdiction” shall mean any of Germany, the United Kingdom, Australia, Canada and Puerto Rico or such other countries or such other territories of the United States as are proposed from time to time in writing by the Company to the Agent and approved by the Agent.

 

Subsidiary” shall mean, with respect to any Person (the “parent”) at any date, any corporation, partnership, joint venture, limited liability company, association or other entity the accounts of which would be consolidated with those of the parent in the parent’s consolidated financial statements if such financial statements were prepared in accordance with GAAP as of such date, as well as any other corporation, partnership, joint venture, limited liability company, association or other entity (i) of which securities or other ownership interests representing more than fifty percent (50%) of the equity or more than fifty percent (50%) of the ordinary voting power or, in the case of a partnership, more than fifty percent (50%) of the general partnership interests are, as of such date, owned, controlled or held, or (ii) that is, as of such date, otherwise controlled by the parent or one or more subsidiaries of the parent or by the parent and one or more subsidiaries of the parent but excluding, in any event, any Unconsolidated Affiliate.

Subsidiary Guaranty” shall mean the guaranty executed by the Guarantors in substantially the form of Exhibit 1.1(f).

Swap Obligation” shall mean, with respect to any Guarantor, any obligation to pay or perform under any agreement, contract or transaction that constitutes a “swap” within the meaning of section 1a(47) of the Commodity Exchange Act.

Swingline Commitment” shall mean the commitment of each Swingline Lender to make Swingline Loans in an aggregate principal amount at any time outstanding up to the Swingline Committed Amount, and the commitment of the Revolving A Lenders to purchase participation interests in the Swingline Loans as provided in Section 2.9(b)(ii), as such amounts may be reduced from time to time in accordance with the provisions hereof.

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Swingline Commitment Percentage” shall mean, with respect to Wells Fargo, 50% of the Swingline Committed Amount, and with respect to Bank of America, 50% of the Swingline Committed Amount.

Swingline Committed Amount” shall mean the amount of each Swingline Lender’s Swingline Commitment as specified in Section 2.9(a).

Swingline Lenders” shall mean Wells Fargo and Bank of America, in each case, together with any successor..

Swingline Loan” shall have the meaning set forth in Section 2.9(a).

Swingline Notes” shall mean the promissory notes of the Company in favor of the Swingline Lenders evidencing the Swingline Loans provided pursuant to Section 2.9(d), as such promissory note may be amended, modified, extended, restated, replaced, or supplemented from time to time.

Tangible Net Worthshall mean the aggregate of the capital stock (but excluding treasury stock and capital stock subscribed and unissued) and surplus (including earned surplus, capital surplus and the balance of the current profit and loss account not transferred to surplus) of the Company and its Consolidated Subsidiaries as the same properly appears on a balance sheet of the Company prepared in accordance with GAAP, less the sum of the total book value of all assets of the Company and its Consolidated Subsidiaries which would be treated as intangibles under GAAP including without limitation, such items as good will, leasehold improvements, trademarks, trade names, service marks, brand names, copyrights, patents and licenses, and rights with respect to the foregoing.

Taxes” shall mean all present or future taxes, levies, imposts, duties, deductions, withholdings, assessments, fees or other charges imposed by any Governmental Authority, including any interest, additions to tax or penalties applicable thereto.

“Term SOFR” shall mean the forward-looking term rate based on SOFR that has been selected or recommended by the Relevant Governmental Body.

Total Asset Valueshall mean as of any date of determination, the sum of all of the following of the Company and its Consolidated Subsidiaries on a consolidated basis determined in accordance with GAAP applied on a consistent basis, without duplication: (a) the undepreciated cost (after taking into account any impairments) of the Health Care Facilities (other than a Development Property or an Acquisition Property), plus (b) the undepreciated cost (after taking into account any impairments) of all Construction-in-Process for Development Properties plus (c) the undepreciated cost (after taking into account any impairments) of all Acquisition Properties; provided that (i) not more than 5% of Total Asset Value, in the aggregate, may be attributable to Properties located in Specified Jurisdictions; (ii) the portion of Total Asset Value that is attributable to all Development Properties pursuant to clause (b) above shall not exceed 20% of Total Asset Value; and (iii) the portion of Total Asset Value that is attributable to Development Properties pursuant to clause (b) above that are less than 50% (by rentable area) pre-leased to one or more tenants which will occupy such space (x) shall not exceed 7.5% of Total Asset Value and (y) shall only be included in Total Asset Value if such Development Properties are being developed in conjunction with a UHS hospital request to develop a building and which are located on a UHS hospital campus or a UHS satellite campus. The Company’s and its Consolidated Subsidiaries’ pro rata share (based on their percentage ownership interest) of assets held by Unconsolidated Affiliates will be included in Total Asset Value calculations consistent with the above described treatment for assets owned by the Company and its Consolidated Subsidiaries.

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Total Fixed Charges” shall mean for any fiscal period for the Company and its Consolidated Subsidiaries on a consolidated basis, an amount equal to the sum of (i) Interest Expense, plus (ii) regularly scheduled installments of principal payable with respect to Total Indebtedness (excluding balloon payments due at maturity), plus (iii) all dividend payments due to the holders of any preferred Equity Interests in the Company and all distributions due to the holders of any limited partnership interests in the Company other than limited partner distributions based on the per share dividend paid on the common shares of beneficial interest of the Company (including in each case (i) through (iii), without duplication, the Company’s and its Consolidated Subsidiaries’ pro rata share (based on their percentage ownership interest) thereof for Unconsolidated Affiliates).

Total Indebtedness” shall mean all Indebtedness of the Company and its Consolidated Subsidiaries on a consolidated basis (including, without limitation, Non-Recourse Debt of the Company and its Consolidated Subsidiaries) plus, without duplication, the Company’s and its Consolidated Subsidiaries’ pro rata share (based on their percentage ownership interest) of all Indebtedness of Unconsolidated Affiliates determined in accordance with GAAP. Notwithstanding the use of GAAP, the calculation of Total Indebtedness shall not include any fair value adjustments to the carrying value of liabilities to record such liabilities at fair value pursuant to electing the fair value option election under FASB 825-10-25 (formerly known as FAS 159, The Fair Value Option for Financial Assets and Financial Liabilities) or other FASB standards allowing entities to elect fair value option for financial liabilities. Therefore, the amount of liabilities that is included in the calculation of Total Indebtedness shall be the historical cost basis, which generally is the contractual amount owed adjusted for amortization or accretion of any premium or discount (but without any fair value adjustments).

Total Leverage Ratioshall mean, as of any date of determination, the ratio of Total Indebtedness as of such date to Total Asset Value as of such date.

Tranche” shall mean the collective reference to (aa) LIBOR Rate Loans whose Interest Periods begin and end on the same day and (bb) Base Rate Loans made on the same day.

Transactions” shall mean the closing of this Agreement and the other Loan Documents and the other transactions contemplated hereby and pursuant to the other Loan Documents (including, without limitation, the initial borrowings under the Loan Documents and the payment of fees and expenses in connection with all of the foregoing).

Type” shall mean, as to any Loan, its nature as a Base Rate Loan or LIBOR Rate Loan, as the case may be.

UCC” shall mean the Uniform Commercial Code from time to time in effect in any applicable jurisdiction.

“UK Financial Institution” shall mean any BRRD Undertaking (as such term is defined under the PRA Rulebook (as amended form time to time) promulgated by the United Kingdom Prudential Regulation Authority) or any person subject to IFPRU 11.6 of the FCA Handbook (as amended from time to time) promulgated by the United Kingdom Financial Conduct Authority, which includes certain credit institutions and investment firms, and certain affiliates of such credit institutions or investment firms.

“UK Resolution Authority” shall mean the Bank of England or any other public administrative authority having responsibility for the resolution of any UK Financial Institution.

UHS” Universal Health Services, Inc., a Delaware corporation.

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UHS Subsidiaries” shall mean, as of any date of determination, any Subsidiary or other entity the accounts of which would be consolidated with those of Universal Health Services, Inc. in its consolidated financial statements if such statements were prepared as of such date.

“Unadjusted Benchmark Replacement” shall mean the Benchmark Replacement excluding the Benchmark Replacement Adjustment.

Unconsolidated Affiliate” shall mean, in respect of the Company and its Consolidated Subsidiaries, any other Person in whom the Company or such Consolidated Subsidiary holds an Investment in the Equity Interests of such Person, which Investment is accounted for in the financial statements of the Company and its Consolidated Subsidiaries on an equity basis of accounting and whose financial results would not be consolidated under GAAP with the financial results of the Company.

Unencumbered Asset” shall mean a Property that meets each of the following criteria and is designated as an Unencumbered Asset by the Company (i) the Property is either 100% fee owned or ground leased under an Eligible Ground Lease by the Company or a Guarantor; (ii) the Property is improved as a Health Care Facility with one or more completed buildings of a type generally consistent with the Company’s business strategy and is not a Development Property (except as provided in clause (vii) below); (iii) the Property (and the Equity Interests therein, if owned by the Company or a Guarantor) is not directly or indirectly subject to any Lien (other than certain permitted encumbrances to be agreed upon) or any negative pledge; (iv) to the best of the Company’s knowledge, the Property is free of any material environmental liabilities and is in material compliance with all Environmental Laws; (v) the Property is free of any material defects, (vi) the Property is located in the United States or, subject to the limitations set forth in the definition of Unencumbered Asset Value, any Specified Jurisdiction , and (vii) if such Property is a Development Property and construction of improvements has commenced, there has been no interruption of construction for more than ninety (90) consecutive days (other than as a result of a force majeure event that has not continued for more than one hundred and eighty (180) days).

Unencumbered Asset Valueshall mean, as to the Company and the Guarantors, with respect to Unencumbered Assets, the sum, without duplication, of (a)  the undepreciated cost (after taking into account any impairments) of each Unencumbered Asset (other than a Development Property or an Acquisition Property), plus (b) the undepreciated cost (after taking into account any impairments) of all Construction-in-Process for Development Properties that are Unencumbered Assets plus (c) the undepreciated cost (after taking into account any impairments) of all Acquisition Properties that are Unencumbered Assets; provided that (i) not more than 5% of Unencumbered Asset Value, in the aggregate, may be attributable to Properties located in Specified Jurisdictions; (ii) the portion of Unencumbered Asset Value that is attributable to all Development Properties pursuant to clause (b) above shall not exceed 20% of Unencumbered Asset Value; and (iii) the portion of Unencumbered Asset Value that is attributable to Development Properties pursuant to clause (b) above that are less than 50% (by rentable area) pre-leased to one or more tenants which will occupy such space (x) shall not exceed 7.5% of Unencumbered Asset Value and (y) shall only be included in Unencumbered Asset Value if such Development Properties are being developed in conjunction with a UHS hospital request to develop a building and which are located on a UHS hospital campus or a UHS satellite campus,

Unencumbered Leverage Ratio” shall mean, as of any date of determination  the ratio of (i) the sum of (a) that portion of Total Indebtedness which is not secured in any manner by any Lien (but excluding Indebtedness of Unconsolidated Affiliates) plus (b) the Obligations owing hereunder to (ii) Unencumbered Asset Value of the Company and the Guarantors.

Wells Fargo” shall mean Wells Fargo Bank, National Association, a national banking association, together with its successors and/or assigns.

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WFS” shall mean Wells Fargo Securities, LLC, together with its successors and assigns.

Write-Down and Conversion Powers” shall mean, (a) with respect to any EEA Resolution Authority, the write-down and conversion powers of such EEA Resolution Authority from time to time under the Bail-In Legislation for the applicable EEA Member Country, which write-down and conversion powers are described in the EU Bail-In Legislation Schedule, and (b) with respect to the United Kingdom, any powers of the applicable Resolution Authority under the Bail-In Legislation to cancel, reduce, modify or change the form of a liability of any UK Financial Institution or any contract or instrument under which that liability arises, to convert all or part of that liability into shares, securities or obligations of that person or any other person, to provide that any such contract or instrument is to have effect as if a right had been exercised under it or to suspend any obligation in respect of that liability or any of the powers under that Bail-In Legislation that are related to or ancillary to any of those powers.

Section 1.21.2Other Definitional Provisions.

The definitions of terms herein shall apply equally to the singular and plural forms of the terms defined.  Whenever the context may require, any pronoun shall include the corresponding masculine, feminine and neuter forms.  The words “include,” “includes” and “including” shall be deemed to be followed by the phrase “without limitation.”  The word “will” shall be construed to have the same meaning and effect as the word “shall.”  Unless the context requires otherwise (aa) any definition of or reference to any agreement, instrument or other document herein shall be construed as referring to such agreement, instrument or other document as from time to time amended, restated, supplemented, amended and restated or otherwise modified (subject to any restrictions on such amendments, supplements or modifications set forth herein), (bb) any reference herein to any Person shall be construed to include such Person’s successors and assigns, (cc) the words “herein,” “hereof” and “hereunder,” and words of similar import, shall be construed to refer to this Agreement in its entirety and not to any particular provision hereof, (dd) all references herein to Articles, Sections, Exhibits and Schedules shall be construed to refer to Articles and Sections of, and Exhibits and Schedules to, this Agreement, (ee) any reference to any law or regulation herein shall, unless otherwise specified, refer to such law or regulation as amended, modified or supplemented from time to time, (ff) the words “asset” and “property” shall be construed to have the same meaning and effect and to refer to any and all tangible and intangible assets and properties, including cash, securities, accounts and contract rights and (gg) all terms defined in this Agreement shall have the defined meanings when used in any other Loan Document or any certificate or other document made or delivered pursuant hereto.

Section 1.31.3Accounting Terms.

(aa)Generally.  All accounting terms not specifically or completely defined herein shall be construed in conformity with, and all financial data (including financial ratios and other financial calculations) required to be submitted pursuant to this Agreement shall be prepared in conformity with, GAAP applied on a consistent basis, as in effect from time to time, applied in a manner consistent with that used in preparing the most recently delivered audited consolidated financial statements of the Company, except as otherwise specifically prescribed herein.

(bb)Changes in GAAP.  If at any time any change in GAAP (including with respect to the consolidation of subsidiaries and rules related to lease accounting) would affect the computation of any financial ratio or requirement set forth in any Loan Document, and either the Company or the Required Lenders shall so request, the Agent, the Lenders and the Company shall negotiate in good faith to amend such ratio or requirement to preserve the original intent thereof in light of such change in GAAP (subject to the approval of the Required Lenders); provided that, until so amended, (ii) such ratio or requirement shall continue to be computed in

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accordance with GAAP prior to such change therein and (iiii) the Company shall provide to the Agent and the Lenders financial statements and other documents required under this Agreement or as reasonably requested hereunder setting forth a reconciliation between calculations of such ratio or requirement made before and after giving effect to such change in GAAP.

Section 1.41.4Execution of Documents.

Unless otherwise specified, all Loan Documents and all other certificates executed in connection therewith must be signed by a Responsible Officer.

Section 1.51.5Time References.

Unless otherwise specified, all references herein to times of day shall be references to Eastern time (daylight or standard, as applicable).

 

Section 1.6Rates.

The Agent does not warrant or accept responsibility for, and shall not have any liability with respect to, the administration, submission or any other matter related to the rates in the definition of “LIBOR” or with respect to any rate that is an alternative or replacement for or successor to any such rate (including, without limitation, any Benchmark Replacement) or the effect of any of the foregoing, or of any Benchmark Replacement Conforming Changes.  

 

Section 1.7Divisions.

For all purposes under the Loan Documents, in connection with any division or plan of division under Delaware law (or any comparable event under a different jurisdiction’s laws): (a) if any asset, right, obligation or liability of any Person becomes the asset, right, obligation or liability of a different Person, then it shall be deemed to have been transferred from the original Person to the subsequent Person, and (b) if any new Person comes into existence, such new Person shall be deemed to have been organized on the first date of its existence by the holders of its Equity Interests at such time.

 

ARTICLE IIII

LOANS; AMOUNTS AND TERMS

Section 2.12.1Revolving Loans.

(aa)Revolving Commitment.  

(i)Revolving A Loans.  During the Commitment Period, subject to the terms and conditions hereof, each Revolving A Lender severally, but not jointly, agrees to make revolving credit loans in Dollars (“Revolving A Loans”) to the Company from time to time in an aggregate principal amount of up to THREE HUNDRED MILLION DOLLARS ($300,000,000) (as increased from time to time as provided in Section 2.2 and as such aggregate maximum amount may be reduced from time to time as provided in Section 2.6, the “Revolving A Committed Amount”) for the purposes hereinafter set forth (such facility, the “Revolving A Facility”); provided, however, that (ii) with regard to each Revolving A Lender individually, the sum of such Lender’s Revolving A Commitment Percentage of the aggregate principal amount of outstanding Revolving A

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Loans plus such Lender’s Revolving A Commitment Percentage of outstanding Swingline Loans plus such Lender’s Revolving A Commitment Percentage of outstanding LOC Obligations shall not exceed such Lender’s Revolving A Commitment and (iiii) with regard to the Revolving A Lenders collectively, the sum of the aggregate principal amount of outstanding Revolving A Loans plus outstanding Swingline Loans plus outstanding LOC Obligations shall not exceed the Revolving A Committed Amount then in effect.  Revolving A Loans may consist of Base Rate Loans or LIBOR Rate Loans, or a combination thereof, as the Company may request, and may be repaid and reborrowed in accordance with the provisions hereof; provided, however, the Revolving A Loans made on the Closing Date or any of the three (3) Business Days following the Closing Date, may only consist of Base Rate Loans unless the Company delivers a funding indemnity letter, substantially in the form of Exhibit 2.1(a), reasonably acceptable to the Agent not less than three (3) Business Days prior to the Closing Date.

 

(ii)Revolving B Loans.  During the Commitment Period, subject to the terms and conditions hereof, each Revolving B Lender severally, but not jointly, agrees to make revolving credit loans in Dollars (“Revolving B Loans”) to the Company from time to time in an aggregate principal amount of up to FIFTY MILLION DOLLARS ($50,000,000) (as such aggregate maximum amount may be reduced from time to time as provided in Section 2.6, the “Revolving B Committed Amount”) for the purposes hereinafter set forth (such facility, the “Revolving B Facility”); provided, however, that (i) with regard to each Revolving B Lender individually, such Lender’s Revolving B Commitment Percentage of the aggregate principal amount of outstanding Revolving B Loans shall not exceed such Lender’s Revolving B Commitment and (ii) with regard to the Revolving B Lenders collectively, the aggregate principal amount of outstanding Revolving B Loans shall not exceed the Revolving B Committed Amount then in effect.  Revolving B Loans may consist of Base Rate Loans or LIBOR Rate Loans, or a combination thereof, as the Company may request, and may be repaid and reborrowed in accordance with the provisions hereof.

(bb)Revolving Loan Borrowings.

(ii)Notice of Borrowing.  The Company shall request a Revolving Loan borrowing by delivering a written Notice of Borrowing (or telephone notice promptly confirmed in writing by delivery of a written Notice of Borrowing, which delivery may be by fax or electronic mail) to the Agent not later than 11:00 A.M. (Charlotte, North Carolina time) on the Business Day of the requested borrowing in the case of Base Rate Loans, and on the third Business Day prior to the date of the requested borrowing in the case of LIBOR Rate Loans.  Each such Notice of Borrowing shall be irrevocable and shall specify (AA) that a Revolving Loan is requested, (BB) the date of the requested borrowing (which shall be a Business Day), (CC) the aggregate principal amount to be borrowed and, (DD) whether the borrowing shall be comprised of Base Rate Loans, LIBOR Rate Loans or a combination thereof, and if LIBOR Rate Loans are requested, the Interest Period(s) therefor and (E) whether the Loans to be borrowed are Revolving A Loans or Revolving B Loans.  If the Company shall fail to specify in any such Notice of Borrowing (11) an applicable Interest Period in the case of a LIBOR Rate Loan, then such notice shall be deemed to be a request for an Interest Period of one month, or (22) the Type of Revolving Loan requested, then such notice shall be deemed to be a request for a Base Rate Loan hereunder.  The Agent shall give notice to each applicable Lender

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promptly upon receipt of each Notice of Borrowing, the contents thereof and each such Lender’s share thereof.

(iiii)Minimum Amounts.  Each Revolving Loan that is made as a Base Rate Loan shall be in a minimum aggregate amount of $100,000 and in integral multiples of $100,000 in excess thereof (or the remaining amount of the Revolving Committed Amount, if less).  Each Revolving Loan that is made as a LIBOR Rate Loan shall be in a minimum aggregate amount of $100,000 and in integral multiples of $100,000 in excess thereof (or the remaining amount of the Revolving Committed Amount, if less).

(iiiiii)Advances.  Each Lender will make its applicable Revolving Commitment Percentage of each Revolving Loan borrowing available to the Agent for the account of the Company at the office of the Agent specified in Section 9.2, or at such other office as the Agent may designate in writing, by 1:00 P.M. (Charlotte, North Carolina time) on the date specified in the applicable Notice of Borrowing, in Dollars and in funds immediately available to the Agent.  Such borrowing will then be made available to the Company by the Agent by crediting the account of the Company on the books of such office (or such other account that the Company may designate in writing to the Agent) with the aggregate of the amounts made available to the Agent by the Lenders and in like funds as received by the Agent.

(cc)Repayment.  Subject to the terms of this Agreement, Revolving Loans may be borrowed, repaid and reborrowed during the Commitment Period, subject to Section 2.6(a).  The principal amount of all Revolving Loans shall be due and payable in full on the Maturity Date, unless accelerated sooner pursuant to Section 7.2.

(dd)Interest.  Subject to the provisions of Section 2.7, Revolving Loans shall bear interest as follows:

(ii)Base Rate Loans.  During such periods as any Revolving Loans shall be comprised of Base Rate Loans, each such Base Rate Loan shall bear interest at a per annum rate equal to the sum of the Base Rate plus the Applicable Margin; and

(iiii)LIBOR Rate Loans.  During such periods as Revolving Loans shall be comprised of LIBOR Rate Loans, each such LIBOR Rate Loan shall bear interest at a per annum rate equal to the sum of the LIBOR Rate plus the Applicable Margin.

Interest on Revolving Loans shall be payable in arrears on each Interest Payment Date.

(ee)Revolving Notes; Covenant to Pay.  The Company’s obligation to pay each Lender shall be evidenced by this Agreement and, upon such Lender’s request, by a duly executed promissory note of the Company to such Lender in substantially the form of Exhibit 2.1(e).  The Company covenants and agrees to pay the Revolving Loans in accordance with the terms of this Agreement.

Section 2.22.2Revolving Facility Increase.

(aa)Revolving Facility Increases.  Subject to the terms and conditions set forth herein, the Company shall have the right at any time and from time to time prior to the Maturity Date, to increase the Revolving A Committed Amount (each, a “Revolving Facility Increase”) by an aggregate principal amount for all such Revolving Facility Increases of up to $50,000,000

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(“Incremental Increase Amount”). As of the First Amendment Effective Date, the available Incremental Increase Amount is $0.

(bb)Terms and Conditions.  The following terms and conditions shall apply to any Revolving Facility Increase:  (ii) no Default or Event of Default shall exist immediately prior to or after giving effect to such Revolving Facility Increase, (iiii) the terms and documentation of such Revolving Facility Increase (other than the Applicable Margin and fees, which shall be determined as set forth below in clause (c)) shall be the same as the existing Revolving A Facility, (iiiiii) any loans made pursuant to a Revolving Facility Increase shall constitute Credit Party Obligations and will be secured and guaranteed with the other Credit Party Obligations on a pari passu basis, (iviv) any Lenders providing such Revolving Facility Increase shall be entitled to the same voting rights as the existing Lenders and shall be entitled to receive proceeds of prepayments on the same basis as the existing Lenders, (vv) any such Revolving Facility Increase shall be in a minimum principal amount of $10,000,000 and integral multiples of $1,000,000 in excess thereof (or the remaining amount of the Incremental Increase Amount, if less), (vivi) the proceeds of any such Revolving Facility Increase will be used for the purposes set forth in Section 3.19, (viivii) the Company shall execute a Revolving Note, in favor of any new Lender or any existing Lender requesting a Revolving Note, to evidence its Revolving Commitment to the extent increased pursuant to this Section, (viiiviii) the conditions to Extensions of Credit in Section 4.2 shall have been satisfied, (ixix) the Agent shall have received (AA) upon request of the Agent, an opinion or opinions of counsel for the Credit Parties, addressed to the and the Lenders, in form and substance acceptable to the Agent substantially similar to those opinions delivered to the Agent on the Closing Date, (BB) any authorizing corporate documents as the Agent may reasonably request and (CC) if applicable, a duly executed Notice of Borrowing, and (xx) the Agent shall have received from the Company an officer’s certificate, in form and substance reasonably satisfactory to the Agent, demonstrating that, after giving effect to any such Revolving Facility Increase on a Pro Forma Basis, the Company will be in compliance with the financial covenants set forth in Section 5.5.

(cc)Applicable Margin and Fees.  The Applicable Margin and any other fees (including upfront fees and commitment fees) on the Revolving Facility Increase will be determined by the Company and the Lenders providing such Revolving Facility Increase at the time such Revolving Facility Increase is made; provided that in the event that the Applicable Margin, Facility Fee, upfront fees or other fees, taken as a whole, for any Revolving Facility Increase are higher than the Applicable Margin, Facility Fee, upfront fees or other fees, taken as a whole, for the existing Revolving A Facility, then the Applicable Margin, Facility Fee, upfront fees or other fees for the existing Revolving A Facility shall be increased to the extent necessary so that such Applicable Margin, Facility Fee, upfront fees or other fees, as applicable, are equal to Applicable Margin, Facility Fee, upfront fees or other fees, as applicable, for such Revolving Facility Increase; provided, further, that in determining the interest rate margins applicable to the Revolving Facility Increase and the Revolving A Facility, (i) upfront fees payable by the Company to the Lenders under the Revolving A Facility or any Revolving Facility Increase in the initial primary syndication thereof (with such upfront fees being equated to interest based on assumed four-year life to maturity) and the effects of any and all interest rate floors shall be included and (ii) customary arrangement or commitment fees payable to the Arrangers (or their affiliates) in connection with the Revolving A Facility or to one or more arrangers (or their affiliates) of any Revolving Facility Increase shall be excluded.

(dd)Revolving Facility Increase.  In connection with the closing of any Revolving Facility Increase, the outstanding Revolving A Loans and Participation Interests shall be reallocated by causing such fundings and repayments (which shall not be subject to any

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processing and/or recordation fees) among the Lenders (which the Company shall be responsible for any costs arising under Section 2.15 resulting from such reallocation and repayments) of Revolving A Loans as necessary such that, after giving effect to such Revolving Facility Increase, each Revolving A Lender will hold Revolving Loans and Participation Interests based on its Revolving A Commitment Percentage (after giving effect to such Revolving Facility Increase).

(ee)Participation.  Participation in any Revolving Facility Increase may be offered to each of the existing Revolving A Lenders, but each such Lender shall have no obligation to provide all or any portion of such Revolving Facility Increase.  The Company may invite other banks and financial institutions reasonably acceptable to the Agent (such consent not to be unreasonably withheld or delayed) to join this Agreement as Lenders hereunder for any portion of such Revolving Facility Increase; provided that such other banks and financial institutions shall enter into such joinder agreements to give effect thereto as the Agent may reasonably request.

(ff) Amendments.The Agent is authorized to enter into, on behalf of the Lenders, any amendment to this Agreement or any other Loan Document as may be necessary to incorporate the terms of any such Revolving Facility Increase.

 

Section 2.32.3Letters of Credit.

(aa)Issuance.  Subject to the terms and conditions hereof and of the LOC Documents, if any, and any other terms and conditions which each Issuing Lender may reasonably require which are not inconsistent with this Agreement, during the Commitment Period the applicable Issuing Lender shall issue, and the Revolving A Lenders shall participate in, Letters of Credit for the account of the Company from time to time upon request in a form acceptable to the applicable Issuing Lender; provided, however, that (ii) the aggregate amount of LOC Obligations shall not at any time exceed FORTY MILLION DOLLARS ($40,000,000) (the “LOC Committed Amount”), (iiii) the sum of the aggregate principal amount of outstanding Revolving A Loans plus outstanding Swingline Loans plus outstanding LOC Obligations shall not at any time exceed the Revolving A Committed Amount then in effect, (iiiiii) all Letters of Credit shall be denominated in Dollars, (iviv) Letters of Credit shall be issued for any lawful corporate purposes and may be issued as standby letters of credit, including in connection with workers’ compensation and other insurance programs, (vv) no Letter of Credit shall be issued after the occurrence and during the continuance of a Default or an Event of Default, (vi) the beneficiary of any Letter of Credit shall not be a Sanctioned Person, and (vii) the sum of the aggregate amount of an Issuing Lender’s outstanding LOC Obligations shall not exceed such Issuing Lender’s respective share of the LOC Committed Amount according to such Issuing Lender’s LOC Commitment Percentage.  Except as otherwise expressly agreed in writing upon by all the Revolving A Lenders, no Letter of Credit shall have an original expiry date more than one year from the date of issuance; provided, however, so long as no Default or Event of Default has occurred and is continuing and subject to the other terms and conditions to the issuance of Letters of Credit hereunder, the expiry dates of Letters of Credit may be extended annually or periodically from time to time on the request of the Company or by operation of the terms of the applicable Letter of Credit to a date not more than one  year from the date of extension; provided, further, except as otherwise set forth in clause (k) hereof, no Letter of Credit, as originally issued or as extended, shall have an expiry date extending beyond the date that is five (5) Business Days prior to the applicable Maturity Date (the “Letter of Credit Expiration Date”).  Each Letter of Credit shall comply with the related LOC Documents.  The issuance and expiry date of each Letter of Credit shall be a Business Day.  Each Letter of Credit issued hereunder shall be in a minimum original face amount of $50,000, or such lesser amount as approved by the applicable Issuing Lender.  The Company’s Reimbursement Obligations in respect of each Existing Letter of Credit, and each Revolving A Lender’s

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participation obligations in connection therewith, shall be governed by the terms of this Agreement.  The Existing Letters of Credit shall, as of the Closing Date, be deemed to have been issued as Letters of Credit hereunder and subject to and governed by the terms of this Agreement.

(bb)Notice and Reports.  The request for the issuance of a Letter of Credit shall be submitted to the applicable Issuing Lender at least five (5) Business Days prior to the requested date of issuance.  The applicable Issuing Lender will promptly upon request provide to the Agent for dissemination to the Revolving A Lenders a detailed report specifying the Letters of Credit which are then issued and outstanding and any activity with respect thereto which may have occurred since the date of any prior report, and including therein, among other things, the account party, the beneficiary, the face amount, expiry date as well as any payments or expirations which may have occurred.  The applicable Issuing Lender will further provide to the Agent promptly upon request copies of the Letters of Credit.  The applicable Issuing Lender will provide to the Agent at the end of each calendar month a summary report of the nature and extent of LOC Obligations then outstanding.

(cc)Participations.  Each Revolving A Lender, (i) on the Closing Date with respect to each Existing Letter of Credit and (ii) upon issuance of a Letter of Credit, shall be deemed to have purchased without recourse a risk participation from the applicable Issuing Lender in such Letter of Credit and the obligations arising thereunder and any Collateral relating thereto, in each case in an amount equal to its Revolving A Commitment Percentage of the obligations under such Letter of Credit and shall absolutely, unconditionally and irrevocably assume, as primary obligor and not as surety, and be obligated to pay to the applicable Issuing Lender therefor and discharge when due, its Revolving A Commitment Percentage of the obligations arising under such Letter of Credit; provided that any Person that becomes a Revolving A Lender after the Closing Date shall be deemed to have purchased a Participation Interest in all outstanding Letters of Credit on the date it becomes a Revolving A Lender hereunder and any Letter of Credit issued on or after such date, in each case in accordance with the foregoing terms.  Without limiting the scope and nature of each Revolving A Lender’s participation in any Letter of Credit, to the extent that the applicable Issuing Lender has not been reimbursed as required hereunder or under any LOC Document, each such Lender shall pay to the applicable Issuing Lender its Revolving A Commitment Percentage of such unreimbursed drawing in same day funds pursuant to and in accordance with the provisions of subsection (d) hereof.  The obligation of each Revolving A Lender to so reimburse the applicable Issuing Lender shall be absolute and unconditional and shall not be affected by the occurrence of a Default, an Event of Default or any other occurrence or event.  Any such reimbursement shall not relieve or otherwise impair the obligation of the Company to reimburse the applicable Issuing Lender under any Letter of Credit, together with interest as hereinafter provided.

(dd)Reimbursement.  In the event of any drawing under any Letter of Credit, the applicable Issuing Lender will promptly notify the Company and the Agent.  The Company shall reimburse the applicable Issuing Lender on the day of drawing under any Letter of Credit if notified prior to 3:00 P.M. (Charlotte, North Carolina time) on a Business Day or, if after 3:00 P.M. (Charlotte, North Carolina time), on the following Business Day (either with the proceeds of a Revolving A Loan obtained hereunder or otherwise) in same day funds as provided herein or in the LOC Documents.  If the Company shall fail to reimburse the applicable Issuing Lender as provided herein, the unreimbursed amount of such drawing shall automatically bear interest at a per annum rate equal to the Default Rate.  Unless the Company shall immediately notify the applicable Issuing Lender and the Agent of its intent to otherwise reimburse the applicable Issuing Lender, the Company shall be deemed to have requested a Mandatory LOC Borrowing in the amount of the drawing as provided in subsection (e) hereof, the proceeds of which will be

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used to satisfy the Reimbursement Obligations.  The Company’s Reimbursement Obligations hereunder shall be absolute and unconditional under all circumstances irrespective of any rights of set-off, counterclaim or defense to payment the Company may claim or have against the applicable Issuing Lender, the Agent, the Revolving A Lenders, the beneficiary of the Letter of Credit drawn upon or any other Person, including, without limitation, any defense based on any failure of the Company to receive consideration or the legality, validity, regularity or unenforceability of the Letter of Credit.  The Agent will promptly notify the other Revolving A Lenders of the amount of any unreimbursed drawing and each Revolving A Lender shall promptly pay to the Agent for the account of the applicable Issuing Lender, in Dollars and in immediately available funds, the amount of such Lender’s Revolving Commitment Percentage of such unreimbursed drawing.  Such payment shall be made on the Business Day such notice is received by such Lender from the Agent if such notice is received at or before 2:00 P.M. (Charlotte, North Carolina time), otherwise such payment shall be made at or before 12:00 Noon (Charlotte, North Carolina time) on the Business Day next succeeding the Business Day such notice is received.  If such Lender does not pay such amount to the Agent for the account of the applicable Issuing Lender in full upon such request, such Lender shall, on demand, pay to the Agent for the account of the applicable Issuing Lender interest on the unpaid amount during the period from the date of such drawing until such Lender pays such amount to the Agent for the account of the applicable Issuing Lender in full at a rate per annum equal to, if paid within two (2) Business Days of the date of drawing, the Federal Funds Effective Rate and thereafter at a rate equal to the Base Rate.  Each Revolving A Lender’s obligation to make such payment to the applicable Issuing Lender, and the right of the applicable Issuing Lender to receive the same, shall be absolute and unconditional, shall not be affected by any circumstance whatsoever and without regard to the termination of this Agreement or the Commitments hereunder, the existence of a Default or Event of Default or the acceleration of the Obligations hereunder and shall be made without any offset, abatement, withholding or reduction whatsoever.

(ee)Repayment with Revolving A Loans.  On any day on which the Company shall have requested, or been deemed to have requested, a Revolving A Loan to reimburse a drawing under a Letter of Credit, the Agent shall give notice to the Revolving A Lenders that a Revolving A Loan has been requested or deemed requested in connection with a drawing under a Letter of Credit, in which case a Revolving A Loan borrowing comprised entirely of Base Rate Loans (each such borrowing, a “Mandatory LOC Borrowing”) shall be made (without giving effect to any termination of the Revolving A Commitments pursuant to Section 7.2) pro rata based on each Revolving A Lender’s respective Revolving A Commitment Percentage (determined before giving effect to any termination of the Revolving A Commitments pursuant to Section 7.2) and the proceeds thereof shall be paid directly to the Agent for the account of the applicable Issuing Lender for application to the respective LOC Obligations.  Each Revolving A Lender hereby irrevocably agrees to make such Revolving A Loans on the day such notice is received by the Revolving A Lenders from the Agent if such notice is received at or before 2:00 P.M. (Charlotte, North Carolina time), otherwise such payment shall be made at or before 12:00 Noon (Charlotte, North Carolina time) on the Business Day next succeeding the day such notice is received, in each case notwithstanding (ii) the amount of Mandatory LOC Borrowing may not comply with the minimum amount for borrowings of Revolving A Loans otherwise required hereunder, (iiii) whether any conditions specified in Section 4.2 are then satisfied, (iiiiii) whether a Default or an Event of Default then exists, (iviv) failure for any such request or deemed request for Revolving A Loan to be made by the time otherwise required in Section 2.1(b), (vv) the date of such Mandatory LOC Borrowing, or (vivi) any reduction in the Revolving A Committed Amount after any such Letter of Credit may have been drawn upon; provided, however, that in the event any such Mandatory LOC Borrowing should be less than the minimum amount for borrowings of

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Loans otherwise provided in Section 2.1(b), the Company shall pay to the Agent for its own account an administrative fee of $500.  In the event that any Mandatory LOC Borrowing cannot for any reason be made on the date otherwise required above (including, without limitation, as a result of the occurrence of a Bankruptcy Event), then each such Revolving A Lender hereby agrees that it shall forthwith fund its Participation Interests in the outstanding LOC Obligations on the Business Day such notice to fund is received by such Lender from the Agent if such notice is received at or before 2:00 P.M. (Charlotte, North Carolina time), otherwise such payment shall be made at or before 12:00 Noon (Charlotte, North Carolina time) on the Business Day next succeeding the Business Day such notice is received; provided, further, that in the event any Revolving A Lender shall fail to fund its Participation Interest as required herein, then the amount of such Lender’s unfunded Participation Interest therein shall automatically bear interest payable by such Lender to the Agent for the account of the applicable Issuing Lender upon demand, at the rate equal to, if paid within two (2) Business Days of such date, the Federal Funds Effective Rate, and thereafter at a rate equal to the Base Rate.

(ff)Modification, Extension.  The issuance of any supplement, modification, amendment, renewal, or extension to any Letter of Credit shall, for purposes hereof, be treated in all respects the same as the issuance of a new Letter of Credit hereunder.

(gg)ISP98 and UCP.  Unless otherwise expressly agreed by the applicable Issuing Lender and the Company, when a Letter of Credit is issued, (ii) the rules of the “International Standby Practices 1998,” published by the Institute of International Banking Law & Practice (or such later version thereof as may be in effect at the time of issuance) shall apply to each standby Letter of Credit, and (iiii) the rules of The Uniform Customs and Practice for Documentary Credits, as most recently published by the International Chamber of Commerce at the time of issuance, shall apply to each documentary Letter of Credit.

(hh)Conflict with LOC Documents.  In the event of any conflict between this Agreement and any LOC Document (including any letter of credit application and any LOC Documents relating to the Existing Letters of Credit), this Agreement shall control.

(ii)Designation of Subsidiaries as Account Parties.  Notwithstanding anything to the contrary set forth in this Agreement, including, without limitation, Section 2.3(a), a Letter of Credit issued hereunder may contain a statement to the effect that such Letter of Credit is issued for the account of a Subsidiary of the Company; provided that, notwithstanding such statement, the Company shall be the actual account party for all purposes of this Agreement for such Letter of Credit and such statement shall not affect the Company’s Reimbursement Obligations hereunder with respect to such Letter of Credit.

 

(jj)Cash Collateral.  At any point in time in which there is a Defaulting Lender, the applicable Issuing Lender may require the Company to Cash Collateralize the LOC Obligations pursuant to Section 2.20.

(kk)Letters of Credit.  The applicable Issuing Lender shall, at the request of the Company, issue one or more Letters of Credit hereunder, with expiry dates that would occur after the Letter of Credit Expiration Date (and after the Maturity Date), based upon the Company’s agreement to fully Cash Collateralize the LOC Obligations relating to such Letters of Credit on the Letter of Credit Expiration Date pursuant to the terms of Section 2.20(a)(ii).  In the event the Company fails to fully Cash Collateralize the outstanding LOC Obligations on the Letter of Credit Expiration Date, each outstanding Letter of Credit shall automatically be deemed to be drawn in full, and the Company shall be deemed to have requested a Base Rate Loan to be funded

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by the Revolving A Lenders on the Letter of Credit Expiration Date to reimburse such drawing (with the proceeds of such Base Rate Loan being used to Cash Collateralize outstanding LOC Obligations as set forth in Section 2.20).  In the event a Mandatory LOC Borrowing cannot for any reason be made on such date (including, without limitation, as a result of the occurrence of a Bankruptcy Event) then each such Lender hereby agrees that it shall fund its Participation Interests in the outstanding LOC Obligations on such day (with the proceeds of such funded Participation Interests being used to Cash Collateralize outstanding LOC Obligations as set forth in Section 2.20).  Each Revolving A Lender’s obligation to make such payment to the applicable Issuing Lender, and the right of the applicable Issuing Lender to receive the same, shall be absolute and unconditional, shall not be affected by any circumstance whatsoever and without regard to the termination of this Agreement or the Commitments hereunder, the existence of a Default or Event of Default or the acceleration of the Obligations hereunder and shall be made without any offset, abatement, withholding or reduction whatsoever.

Section 2.42.4Fees.

(aa)Facility FeeFees.  Subject to Section 2.21, (i) in consideration of the Revolving A Commitments, the Company agrees to pay to the Agent, for the ratable benefit of the Revolving A Lenders, a facility fee (the “Revolving A Facility Fee”) in an amount equal to the Applicable Margin for the Revolving A Facility Fee per annum on the Revolving A Committed Amount. The, which such Facility Fee shall be calculated quarterly in arrears.  The and shall be payable quarterly in arrears on the last Business Day of each calendar quarter; and (ii) in consideration of the Revolving B Commitments, the Company agrees to pay to the Agent, for the ratable benefit of the Revolving B Lenders, a facility fee (the “Revolving B Facility Fee”) in an amount equal to the Applicable Margin for the Revolving B Facility Fee per annum on the Revolving B Committed Amount, which such Facility Fee shall be calculated quarterly in arrears and shall be payable quarterly in arrears on the last Business Day of each calendar quarter.

(bb)Letter of Credit Fees.  Subject to Section 2.21, in consideration of the LOC Commitments, the Company agrees to pay to the Agent, for the ratable benefit of the Revolving A Lenders, a fee (the “Letter of Credit Fee”) equal to the Applicable Margin for Letter of Credit Fee per annum on the average daily maximum amount available to be drawn under each Letter of Credit from the date of issuance to the date of expiration.  The Letter of Credit Fee shall be payable quarterly in arrears on the last Business Day of each calendar quarter.

(cc)Issuing Lender Fees.  In addition to the Letter of Credit Fees payable pursuant to subsection (b) hereof, the Company shall pay to the applicable Issuing Lender for its own account without sharing by the other Revolving A Lenders the reasonable and customary charges from time to time of such Issuing Lender with respect to the amendment, transfer, administration, cancellation and conversion of, and drawings under, such Letters of Credit (collectively, the “Issuing Lender Fees”).  Each Issuing Lender may charge, and retain for its own account without sharing by the other Revolving A Lenders, an additional facing fee (the “Letter of Credit Facing Fee”) as described in the respective Fee Letters of Wells Fargo and Bank of America.  The Issuing Lender Fees and the Letter of Credit Facing Fee shall be payable quarterly in arrears on the last Business Day of each calendar quarter.

(dd)Administrative Fee.  The Company agrees to pay to the Agent the annual administrative fee as described in the Fee Letter of Wells Fargo.

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Section 2.52.5Commitment Reductions.

(aa)Voluntary Reductions.  The Company shall have the right to terminate or permanently reduce the unused portion of the Revolving A Committed Amount and/or the Revolving B Committed Amount at any time or from time to time upon not less than five (5) Business Days’ prior written notice to the Agent (which shall notify the Lenders thereofRevolving A Lenders and/or the Revolving B Lenders, as applicable, as soon as practicable) of each such termination or reduction, which notice shall specify whether the Revolving A Committed Amount or the Revolving B Committed Amount is being reduced, the effective date thereof and the amount of any such reduction which shall be in a minimum amount of $500,000 or a whole multiple of $250,000 in excess thereof and shall be irrevocable and effective upon receipt by the Agent; provided that no such reduction or termination shall be permitted if after giving effect thereto, (i) and after giving effect to any prepayments of the Revolving A Loans made on the effective date thereof, the sum of the aggregate principal amount of outstanding Revolving A Loans plus outstanding Swingline Loans plus outstanding LOC Obligations would exceed the Revolving A Committed Amount then in effect and (ii) and after giving effect to any prepayments of the Revolving B Loans made on the effective date thereof, the aggregate principal amount of outstanding Revolving B Loans would exceed the Revolving B Committed Amount then in effect.  Any reduction in the Revolving A Committed Amount shall be applied to the Revolving A Commitment of each Revolving A Lender in according to its Revolving A Commitment Percentage.  Any reduction in the Revolving B Committed Amount shall be applied to the Revolving B Commitment of each Revolving B Lender in according to its Revolving B Commitment Percentage.

(bb)LOC Committed Amount.  If the Revolving A Committed Amount is reduced below the then current LOC Committed Amount, the LOC Committed Amount shall automatically be reduced by an amount such that the LOC Committed Amount equals the Revolving A Committed Amount.

(cc)Swingline Committed Amount.  If the Revolving A Committed Amount is reduced below the then current Swingline Committed Amount, the Swingline Committed Amount shall automatically be reduced by an amount such that the Swingline Committed Amount equals the Revolving A Committed Amount.

(dd)Maturity Date.  The Revolving Commitments, the Swingline Commitment and the LOC Commitment shall automatically terminate on the applicable Maturity Date.

Section 2.62.6Prepayments.

(aa)Optional Prepayments.  The Company shall have the right to prepay Loans in whole or in part from time to time; provided, however, that (i) each partial prepayment of any Base Rate Loan shall be in a minimum principal amount of (i) $100,000 and integral multiples of $100,000 in excess thereof, (ii) each partial prepayment of a Swingline Loan shall be in a minimum principal amount of $100,000 and integral multiples of $100,000 in excess thereof and (iii) each partial prepayment of a LIBOR Rate Loan shall be in a minimum principal amount of $100,000 and integral multiples of $100,000 in excess thereof.  The Company shall notify the Agent of such prepayment by written notice in the form of Exhibit 2.6(a) (a “Notice of Prepayment”).  The Company shall give (x) three Business Days’ irrevocable notice in the case of LIBOR Rate Loans and, (y) one Business Day’s irrevocable notice in the case of Base Rate Loans and (z) notice on the same Business Day on or prior to 3:00 p.m. in the case of Swingline Loans, to the Agent (which shall notify the Lenders thereof as soon as practicable).  Amounts prepaid

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under this Section shall be applied to the outstanding Revolving A Loans and/or the outstanding Revolving B Loans as the Company may elect.  Within the foregoing parameters, prepayments under this Section 2.6(a) shall be applied first to Base Rate Loans and then to LIBOR Rate Loans in direct order of Interest Period maturities.  All prepayments under this Section 2.6(a) shall be subject to Section 2.15, but otherwise without premium or penalty.  Interest on the principal amount prepaid shall be payable on the next occurring Interest Payment Date that would have occurred had such Loan not been prepaid or, at the request of the Agent, interest on the principal amount prepaid shall be payable on any date that a prepayment is made hereunder through the date of prepayment.  Amounts prepaid on the Loans may be reborrowed in accordance with the terms hereof.

(bb)Mandatory Prepayments.  

(i)If at any time after the Closing Date, the sum of the aggregate principal amount of outstanding Revolving A Loans plus outstanding Swingline Loans plus outstanding LOC Obligations shall exceed the Revolving A Committed Amount, the Company shall immediately prepay the Revolving A Loans and Swingline Loans and (after all Revolving A Loans and Swingline Loans have been repaid) Cash Collateralize the LOC Obligations in an amount sufficient to eliminate such excess.  All amounts required to be paid pursuant to this Sectionclause shall be applied as follows: (1) first to the outstanding Swingline Loans, (2) second to the outstanding Revolving A Loans and (3) third to Cash Collateralize the LOC Obligations.  Within the foregoing parameters, prepayments under this Section 2.6(b) shall be applied first to Base Rate Loans and then to LIBOR Rate Loans in direct order of Interest Period maturities. All prepayments under this Section 2.6(b) shall be subject to Section 2.15, but otherwise without premium or penalty.

(c

(ii)If at any time after the First Amendment Effective Date, the aggregate principal amount of outstanding Revolving B Loans shall exceed the Revolving B Committed Amount, the Company shall immediately prepay the Revolving B Loans in an amount sufficient to eliminate such excess.  All amounts required to be paid pursuant to this clause shall be applied to the outstanding Revolving B Loans.  Within the foregoing parameters, prepayments under this Section 2.6(b) shall be applied first to Base Rate Loans and then to LIBOR Rate Loans in direct order of Interest Period maturities. All prepayments under this Section 2.6(b) shall be subject to Section 2.15, but otherwise without premium or penalty.

(c)Bank Product Obligations Unaffected.  Any prepayment made pursuant to this Section 2.6 shall not affect the Company’s obligation to continue to make payments under any Bank Product, which shall remain in full force and effect notwithstanding such repayment or prepayment, subject to the terms of such Bank Product.

Section 2.72.7Default Rate and Payment Dates.

(aa)If all or a portion of the principal amount of any Loan which is a LIBOR Rate Loan shall not be paid when due or continued as a LIBOR Rate Loan in accordance with the provisions of Section 2.8 (whether at the stated maturity, by acceleration or otherwise), such overdue principal amount of such Loan shall be converted to a Base Rate Loan at the end of the Interest Period applicable thereto.

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(bb)Upon the occurrence and during the continuance of a (ii) Bankruptcy Event or a Payment Event of Default, the principal of and, to the extent permitted by law, interest on the Loans and any other amounts owing hereunder or under the other Loan Documents shall automatically bear interest at a rate per annum which is equal to the Default Rate and (iiii) any other Event of Default hereunder, at the option of the Required Lenders, the principal of and, to the extent permitted by law, interest on the Loans and any other amounts owing hereunder or under the other Loan Documents shall automatically bear interest, at a per annum rate which is equal to the Default Rate, in each case from the date of such Event of Default until such Event of Default is waived in accordance with Section 9.1.  Any default interest owing under this Section 2.7(b) shall be due and payable on the earlier to occur of (x) demand by the Agent (which demand the Agent shall make if directed by the Required Lenders) and (y) the applicable Maturity Date.

(cc)Interest on each Loan shall be payable in arrears on each Interest Payment Date; provided that interest accruing pursuant to paragraph (b) of this Section shall be payable from time to time on demand.

Section 2.82.8Conversion Options.

(aa)The Company may, in the case of Revolving Loans, elect from time to time to convert Base Rate Loans to LIBOR Rate Loans or to continue LIBOR Rate Loans, by delivering a Notice of Conversion/Extension to the Agent at least three Business Days’ prior to the proposed date of conversion or continuation.  In addition, the Company may elect from time to time to convert all or any portion of a LIBOR Rate Loan to a Base Rate Loan by giving the Agent irrevocable written notice thereof by 11:00 A.M. one (1) Business Day prior to the proposed date of conversion.  If the date upon which a Base Rate Loan is to be converted to a LIBOR Rate Loan is not a Business Day, then such conversion shall be made on the next succeeding Business Day and during the period from such last day of an Interest Period to such succeeding Business Day such Loan shall bear interest as if it were a Base Rate Loan.  LIBOR Rate Loans may only be converted to Base Rate Loans on the last day of the applicable Interest Period.  If the date upon which a LIBOR Rate Loan is to be converted to a Base Rate Loan is not a Business Day, then such conversion shall be made on the next succeeding Business Day and during the period from such last day of an Interest Period to such succeeding Business Day such Loan shall bear interest as if it were a Base Rate Loan.  All or any part of outstanding Base Rate Loans may be converted as provided herein; provided that (ii) no Loan may be converted into a LIBOR Rate Loan when any Default or Event of Default has occurred and is continuing and (iiii) partial conversions shall be in an aggregate principal amount of $100,000 or a whole multiple of $100,000 in excess thereof.  All or any part of outstanding LIBOR Rate Loans may be converted as provided herein; provided that partial conversions shall be in an aggregate principal amount of $100,000 or a whole multiple of $100,000 in excess thereof.

(bb)Any LIBOR Rate Loans may be continued as such upon the expiration of an Interest Period with respect thereto by compliance by the Company with the notice provisions contained in Section 2.8(a); provided, that no LIBOR Rate Loan may be continued as such when any Default or Event of Default has occurred and is continuing, in which case such Loan shall be automatically converted to a Base Rate Loan at the end of the applicable Interest Period with respect thereto.  If the Company shall fail to give timely notice of an election to continue a LIBOR Rate Loan, or the continuation of LIBOR Rate Loans is not permitted hereunder, such LIBOR Rate Loans shall be automatically converted to Base Rate Loans at the end of the applicable Interest Period with respect thereto.

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Section 2.92.9Swingline Loan Subfacility.

(aa)Swingline Commitment.  During the Commitment Period, subject to the terms and conditions hereof, each Swingline Lender, in its individual capacity, agrees to, in reliance upon the agreements of the other Revolving A Lenders set forth in this Section, make certain revolving credit loans to the Company (each a “Swingline Loan” and, collectively, the “Swingline Loans”) for the purposes hereinafter set forth; provided, however, (ii) the aggregate principal amount of Swingline Loans outstanding at any time shall not exceed THIRTY MILLION DOLLARS ($30,000,000) (the “Swingline Committed Amount”), (iiii) the sum of the aggregate principal amount of outstanding Revolving A Loans plus outstanding Swingline Loans plus outstanding LOC Obligations shall not exceed the Revolving A Committed Amount then in effect, and (iii) the sum of the aggregate principal amount of a Swingline Lender’s outstanding Swingline Loans shall not exceed such Swingline Lender’s respective share of the Swingline Committed Amount according to such Swingline Lender’s Swingline Commitment Percentage.  Swingline Loans hereunder may be repaid and reborrowed in accordance with the provisions hereof.

(bb)Swingline Loan Borrowings.

(ii)Notice of Borrowing and Disbursement.  Upon receiving a Notice of Borrowing from the Company not later than 3:00 P.M. (Charlotte, North Carolina time) on any Business Day requesting that a Swingline Loan be made, the Applicable Swingline Lender will make Swingline Loans available to the Company on the same Business Day such request is received by such Applicable Swingline Lender.  Upon receipt, the Applicable Swingline Lender will provide to the Agent a copy of any Notice of Borrowing received by such Applicable Swingline Lender.  Swingline Loan borrowings hereunder shall be made in minimum amounts of $50,000 (or the remaining available amount of the Swingline Committed Amount if less) and in integral amounts of $50,000 in excess thereof.

(iiii)Repayment of Swingline Loans.  Each Swingline Loan borrowing shall be due and payable on the earlier of thirty (30) days following the date such Swingline Loan is made and the applicable Maturity Date.  The Applicable Swingline Lender may, at any time, in its sole discretion, by written notice to the Company and the Agent, demand repayment of its Swingline Loans by way of a Revolving A Loan borrowing, in which case the Company shall be deemed to have requested a Revolving A Loan borrowing comprised entirely of Base Rate Loans in the amount of such Swingline Loans; provided, however, that, in the following circumstances, any such demand shall also be deemed to have been given one Business Day prior to each of (AA) the applicable Maturity Date, (BB) the occurrence of any Bankruptcy Event, (CC) upon acceleration of the Obligations hereunder, whether on account of a Bankruptcy Event or any other Event of Default, and (DD) the exercise of remedies in accordance with the provisions of Section 7.2 hereof (each such Revolving A Loan borrowing made on account of any such deemed request therefor as provided herein being hereinafter referred to as “Mandatory Swingline Borrowing”).  Each Revolving A Lender hereby irrevocably agrees to make such Revolving A Loans promptly upon any such request or deemed request on account of each Mandatory Swingline Borrowing in the amount and in the manner specified in the preceding sentence on the date such notice is received by the Revolving A Lenders from the Agent if such notice is received at or before 2:00 P.M., otherwise such payment shall be made at or before 12:00 Noon on the Business Day next succeeding the date such notice is received notwithstanding (11) the amount of Mandatory Swingline Borrowing

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may not comply with the minimum amount for borrowings of Revolving A Loans otherwise required hereunder, (22) whether any conditions specified in Section 4.2 are then satisfied, (33) whether a Default or an Event of Default then exists, (44) failure of any such request or deemed request for Revolving A Loans to be made by the time otherwise required in Section 2.1(b)(i), (55) the date of such Mandatory Swingline Borrowing, or (66) any reduction in the Revolving A Committed Amount or termination of the Revolving A Commitments immediately prior to such Mandatory Swingline Borrowing or contemporaneously therewith.  In the event that any Mandatory Swingline Borrowing cannot for any reason be made on the date otherwise required above (including, without limitation, as a result of the commencement of a proceeding under the Bankruptcy Code), then each Revolving A Lender hereby agrees that it shall forthwith purchase (as of the date the Mandatory Swingline Borrowing would otherwise have occurred, but adjusted for any payments received from the Company on or after such date and prior to such purchase) from the Applicable Swingline Lender such Participation Interest in the outstanding Swingline Loans as shall be necessary to cause each such Lender to share in such Swingline Loans ratably based upon its respective Revolving A Commitment Percentage (determined before giving effect to any termination of the Commitments pursuant to Section 7.2); provided that (x) all interest payable on the Swingline Loans shall be for the account of the Applicable Swingline Lender until the date as of which the respective Participation Interest is purchased, and (y) at the time any purchase of a Participation Interest pursuant to this sentence is actually made, the purchasing Revolving A Lender shall be required to pay to the  Applicable Swingline Lender interest on the principal amount of such Participation Interest purchased for each day from and including the day upon which the Mandatory Swingline Borrowing would otherwise have occurred to but excluding the date of payment for such Participation Interest, at the rate equal to, if paid within two (2) Business Days of the date of the Mandatory Swingline Borrowing, the Federal Funds Effective Rate, and thereafter at a rate equal to the Base Rate.  The Company shall have the right to repay the Swingline Loan in whole or in part from time to time in accordance with Section 2.6(a).

(cc)Interest on Swingline Loans.  Subject to the provisions of Section 2.7, Swingline Loans shall bear interest at a per annum rate equal to the LIBOR Reference Rate plus the Applicable Margin for Revolving A Loans.  Interest on Swingline Loans shall be payable in arrears on each Interest Payment Date.

(dd)Swingline Note; Covenant to Pay.  The Swingline Loans shall be evidenced by this Agreement and, upon request of the Applicable Swingline Lender, by a duly executed promissory note of the Company in favor of the Applicable Swingline Lender in the original amount of the Swingline Commitment of each Swingline Lender and substantially in the form of Exhibit 2.9(d).  The Company covenants and agrees to pay the Swingline Loans in accordance with the terms of this Agreement.

(ee)Cash Collateral.  At any point in time in which there is a Defaulting Lender, any Swingline Lender may require the Company to Cash Collateralize the outstanding Swingline Loans pursuant to Section 2.20.

Section 2.102.10Computation of Interest and Fees; Usury.

(aa)Interest payable hereunder with respect to any Base Rate Loan based on the Prime Rate shall be calculated on the basis of a year of 365 days (or 366 days, as applicable) for the actual days elapsed.  All other fees, interest and all other amounts payable hereunder shall be

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calculated on the basis of a 360-day year for the actual days elapsed.  The Agent shall as soon as practicable notify the Company and the Lenders of each determination of a LIBOR Rate on the Business Day of the determination thereof.  Any change in the interest rate on a Loan resulting from a change in the Base Rate shall become effective as of the opening of business on the day on which such change in the Base Rate shall become effective.  The Agent shall as soon as practicable notify the Company and the Lenders of the effective date and the amount of each such change.

(bb)Each determination of an interest rate by the Agent pursuant to any provision of this Agreement shall be conclusive and binding on the Company and the Lenders in the absence of manifest error.  The Agent shall, at the request of the Company, deliver to the Company a statement showing the computations used by the Agent in determining any interest rate.

(cc)It is the intent of the Lenders and the Credit Parties to conform to and contract in strict compliance with applicable usury law from time to time in effect.  All agreements between the Lenders and the Credit Parties are hereby limited by the provisions of this subsection which shall override and control all such agreements, whether now existing or hereafter arising and whether written or oral.  In no way, nor in any event or contingency (including, but not limited to, prepayment or acceleration of the maturity of any Obligation), shall the interest taken, reserved, contracted for, charged, or received under this Agreement, under the Notes or otherwise, exceed the maximum nonusurious amount permissible under applicable law.  If, from any possible construction of any of the Loan Documents or any other document, interest would otherwise be payable in excess of the maximum nonusurious amount, any such construction shall be subject to the provisions of this paragraph and such interest shall be automatically reduced to the maximum nonusurious amount permitted under applicable law, without the necessity of execution of any amendment or new document.  If any Lender shall ever receive anything of value which is characterized as interest on the Loans under applicable law and which would, apart from this provision, be in excess of the maximum nonusurious amount, an amount equal to the amount which would have been excessive interest shall, without penalty, be applied to the reduction of the principal amount owing on the Loans and not to the payment of interest, or refunded to the Company or the other payor thereof if and to the extent such amount which would have been excessive exceeds such unpaid principal amount of the Loans.  The right to demand payment of the Loans or any other Indebtedness evidenced by any of the Loan Documents does not include the right to receive any interest which has not otherwise accrued on the date of such demand, and the Lenders do not intend to charge or receive any unearned interest in the event of such demand.  All interest paid or agreed to be paid to the Lenders with respect to the Loans shall, to the extent permitted by applicable law, be amortized, prorated, allocated, and spread throughout the full stated term (including any renewal or extension) of the Loans so that the amount of interest on account of such Indebtedness does not exceed the maximum nonusurious amount permitted by applicable law.

Section 2.112.11Pro Rata Treatment and Payments.

(aa)Allocation of Payments Prior to Exercise of Remedies.  

(i)Each borrowing of Revolving A Loans and any reduction of the Revolving A Commitments shall be made pro rata according to the respective Revolving A Commitment Percentages of the Revolving A Lenders.  Unless otherwise required by the terms of this Agreement, each payment under this Agreement with respect to the Revolving A Loans shall be applied, first, to any fees then due and owing by the Company pursuant to Section 2.4 with respect to such Loans, second, to interest then due

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and owing hereunder ofby the Company with respect to such Loans and, third, to principal then due and owing hereunder and under this Agreement ofby the Company with respect to such Loans.  Each payment on account of any fees pursuant to Section 2.4 shall be made pro rata in accordance with the respective amounts due and owing (except as to the Letter of Credit Facing Fees and the Issuing Lender Fees which shall be paid to the applicable Issuing Lender).  Each payment by the Company on account of principal of and interest on the Revolving A Loans, shall be applied to such Loans on a pro rata basis and, to the extent applicable, in accordance with the terms of Section 2.6 hereof.  For the avoidance of doubt, unless otherwise required by the terms of this Agreement, each payment made with regards to the LOC Commitments shall be made pro rata according to the respective outstanding LOC Obligations of the applicable Issuing Lender.

(ii)Each borrowing of Revolving B Loans and any reduction of the Revolving B Commitments shall be made pro rata according to the respective Revolving B Commitment Percentages of the Revolving B Lenders.  Unless otherwise required by the terms of this Agreement, each payment under this Agreement with respect to the Revolving B Loans shall be applied, first, to any fees then due and owing by the Company pursuant to Section 2.4 with respect to such Loans, second, to interest then due and owing hereunder by the Company with respect to such Loans and, third, to principal then due and owing hereunder by the Company with respect to such Loans.  Each payment on account of any fees pursuant to Section 2.4 shall be made pro rata in accordance with the respective amounts due and owing.  Each payment by the Company on account of principal of and interest on the Revolving B Loans, shall be applied to such Loans on a pro rata basis and, to the extent applicable, in accordance with the terms of Section 2.6 hereof.  

(iii)All payments (including prepayments) to be made by the Company on account of principal, interest and fees shall be made without defense, set-off or counterclaim and shall be made to the Agent for the account of the Lenders at the Agent’s office specified on Section 9.2 in Dollars and in immediately available funds not later than 1:00 P.M. (Charlotte, North Carolina time) on the date when due.  The Agent shall distribute such payments to the Lenders entitled thereto promptly upon receipt in like funds as received.  If any payment hereunder (other than payments on the LIBOR Rate Loans) becomes due and payable on a day other than a Business Day, such payment shall be extended to the next succeeding Business Day, and, with respect to payments of principal, interest thereon shall be payable at the then applicable rate during such extension.  If any payment on a LIBOR Rate Loan becomes due and payable on a day other than a Business Day, such payment date shall be extended to the next succeeding Business Day unless the result of such extension would be to extend such payment into another calendar month, in which event such payment shall be made on the immediately preceding Business Day.  For the avoidance of doubt, unless otherwise required by the terms of this Agreement, each payment made with regards to the LOC Commitments shall be made pro rata according to the respective outstanding LOC Obligations of the applicable Issuing Lender.

(bb)Allocation of Payments After Exercise of Remedies. Notwithstanding any other provisions of this Agreement to the contrary, after the exercise of remedies (other than the application of default interest pursuant to Section 2.7) by the Agent or the Lenders pursuant to Section 7.2 (or after the Commitments shall automatically terminate and the Loans (with accrued interest thereon) and all other amounts under the Loan Documents (including, without limitation,

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the maximum amount of all contingent liabilities under Letters of Credit) shall automatically become due and payable in accordance with the terms of such Section), all amounts collected or received by the Agent or any Lender on account of the Credit Party Obligations or any other amounts outstanding under any of the Loan Documents shall or in respect of the Collateral shall be paid over or delivered as follows (irrespective of whether the following costs, expenses, fees, interest, premiums, scheduled periodic payments or Credit Party Obligations are allowed, permitted or recognized as a claim in any proceeding resulting from the occurrence of a Bankruptcy Event):

FIRST, to the payment of all reasonable out‑of‑pocket costs and expenses (including, without limitation, reasonable attorneys’ fees) of the Agent in connection with enforcing the rights of the Lenders under the Loan Documents and any protective advances made by the Agent with respect to the Collateral under or pursuant to the terms of the Security Documents;

SECOND, to the payment of any fees owed to the Agent and the Issuing Lenders;

THIRD, to the payment of all reasonable out‑of‑pocket costs and expenses (including, without limitation, reasonable attorneys’ fees) of each of the Lenders in connection with enforcing its rights under the Loan Documents or otherwise with respect to the Credit Party Obligations owing to such Lender;

FOURTH, to the payment of all of the Credit Party Obligations consisting of accrued fees and interest, and including, with respect to any Bank Product, any fees, premiums and scheduled periodic payments due under such Bank Product and any interest accrued thereon;

FIFTH, to the payment of the outstanding principal amount of the Credit Party Obligations and the payment or Cash Collateralization of the outstanding LOC Obligations, and including with respect to any Bank Product, any breakage, termination or other payments due under such Bank Product and any interest accrued thereon;

SIXTH, to all other Credit Party Obligations and other obligations which shall have become due and payable under the Loan Documents or otherwise and not repaid pursuant to clauses “FIRST” through “FIFTH” above; and

SEVENTH, to the payment of the surplus, if any, to whoever may be lawfully entitled to receive such surplus.

In carrying out the foregoing, (aa) amounts received shall be applied in the numerical order provided until exhausted prior to application to the next succeeding category; (bb) each of the Lenders (including any Issuing Lenders) and any Bank Product Provider shall receive an amount equal to its pro rata share (based on the proportion that the then outstanding Loans and LOC Obligations held by such Lender or the outstanding obligations payable to such Bank Product Provider bears to the aggregate then outstanding Loans and LOC Obligations and obligations payable under all Bank Products) of amounts available to be applied pursuant to clauses “THIRD”, “FOURTH”, “FIFTH” and “SIXTH” above; and (cc) to the extent that any amounts available for distribution pursuant to clause “FIFTH” above are attributable to the issued but undrawn amount of outstanding Letters of Credit, such amounts shall be held by the Agent in a Cash Collateral account and applied (ii) first, to reimburse each applicable Issuing Lender from time to time for any drawings under such Letters of Credit on a pro rata basis and (iiii) then,

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following the expiration of all Letters of Credit, to all other obligations of the types described in clauses “FIFTH” and “SIXTH” above in the manner provided in this Section.  Notwithstanding the foregoing terms of this Section, only Collateral proceeds and payments under the Subsidiary Guaranty (as opposed to ordinary course principal, interest and fee payments hereunder) shall be applied to obligations under any Bank Product. Notwithstanding the foregoing, Credit Party Obligations arising under Bank Products with Bank Product Providers shall be excluded from the application described above if the Agent has not received written notice thereof, together with such supporting documentation as the Agent may request, from the applicable Bank Product Provider, as the case may be.  Each Bank Product Provider not a party to this Agreement that has given the notice contemplated by the preceding sentence shall, by such notice, be deemed to have acknowledged and accepted the appointment of the Agent pursuant to the terms of Article VIII for itself and its Affiliates as if a “Lender” party hereto.

Section 2.122.12Non-Receipt of Funds by the Agent.

(aa)Funding by Lenders; Presumption by Agent.  Unless the Agent shall have received written notice from a Lender prior to the proposed date of any Extension of Credit that such Lender will not make available to the Agent such Lender’s share of such Extension of Credit, the Agent may assume that such Lender has made such share available on such date in accordance with this Agreement and may, in reliance upon such assumption, make available to the Company a corresponding amount.  In such event, if a Lender has not in fact made its share of the applicable Extension of Credit available to the Agent, then the applicable Lender and the Company severally agree to pay to the Agent within two Business Days on demand such corresponding amount with interest thereon, for each day from and including the date such amount is made available to the Company to but excluding the date of payment to the Agent, at (ii) in the case of a payment to be made by such Lender, the greater of the Federal Funds Effective Rate and a rate determined by the Agent in accordance with banking industry rules on interbank compensation and (iiii) in the case of a payment to be made by the Company, the interest rate applicable to Loans.  If the Company and such Lender shall pay such interest to the Agent for the same or an overlapping period, the Agent shall promptly remit to the Company the amount of such interest paid by the Company for such period.  If such Lender pays its share of the applicable Extension of Credit to the Agent, then the amount so paid shall constitute such Lender’s Loan included in such Extension of Credit.  Any payment by the Company shall be without prejudice to any claim the Company may have against a Lender that shall have failed to make such payment to the Agent.

(bb)Payments by Company; Presumptions by Agent.  Unless the Agent shall have received notice from the Company prior to the date on which any payment is due to the Agent for the account of the Lenders or the Issuing Lenders hereunder that the Company will not make such payment, the Agent may assume that the Company has made such payment on such date in accordance herewith and may, in reliance upon such assumption, distribute to the Lenders or the Issuing Lenders, as the case may be, the amount due.  In such event, if the Company has not in fact made such payment, then each of the Lenders or the Issuing Lenders, as the case may be, severally agrees to repay to the Agent forthwith on demand the amount so distributed to such Lender or Issuing Lender, with interest thereon, for each day from and including the date such amount is distributed to it to but excluding the date of payment to the Agent, at the greater of the Federal Funds Effective Rate and a rate determined by the Agent in accordance with banking industry rules on interbank compensation.

A notice of the Agent to any Lender or the Company with respect to any amount owing under subsections (a) and (b) of this Section shall be conclusive, absent manifest error.

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UNIVERSAL HEALTH REALTY INCOME TRUST

FIRST AMENDMENT TO CREDIT AGREEMENT

 

(cc)Failure to Satisfy Conditions Precedent.  If any Lender makes available to the Agent funds for any Loan to be made by such Lender as provided in the foregoing provisions of this Article II, and such funds are not made available to the Company by the Agent because the conditions to the applicable Extension of Credit set forth in Article IV are not satisfied or waived in accordance with the terms thereof, the Agent shall return such funds (in like funds as received from such Lender) to such Lender, without interest.

(dd)Obligations of Lenders Several.  The obligations of the Revolving A Lenders hereunder to make Revolving A Loans, to fund participations in Letters of Credit and Swingline Loans and to make payments pursuant to Section 9.5(c) are several and not joint.  The obligations of the Revolving B Lenders hereunder to make Revolving B Loans and to make payments pursuant to Section 9.5(c) are several and not joint.  The failure of any Lender to make any Loan, to fund any such participation or to make any such payment under Section 9.5(c) on any date required hereunder shall not relieve any other Lender of its corresponding obligation to do so on such date, and no Lender shall be responsible for the failure of any other Lender to so make its Loan, to purchase its participation or to make its payment under Section 9.5(c).

(ee)Funding Source.  Nothing herein shall be deemed to obligate any Lender to obtain the funds for any Loan in any particular place or manner or to constitute a representation by any Lender that it has obtained or will obtain the funds for any Loan in any particular place or manner.

Section 2.132.13