Item 1.01. Entry Into a Material Definitive Agreement.
On June 3, 2011, Nationwide Health Properties, Inc. (the “Company”) entered into a Term Loan
Agreement (the “Term Loan Agreement”) with JPMorgan Chase Bank, N.A., Credit Agricole Corporate &
Investment Bank (“Credit Agricole”), Key Bank National Association (“Key Bank”), Wells Fargo Bank,
N.A. (“Wells Fargo” and, together with J.P. Morgan, Credit Agricole and Key Bank, the “Lenders”),
as Lenders, and JPMorgan Chase Bank, N.A., as administrative agent (the “Administrative Agent” or
“J.P. Morgan”).
The Term Loan Agreement provides for commitments for up to $800 million senior unsecured term loans
maturing on June 1, 2012 and available from time to time on a non-revolving basis, subject to
customary conditions. Borrowings under the Term Loan Agreement bear interest at a per annum rate
equal to, at the Company’s election: (a) in the case of LIBOR loans, the adjusted LIBO Rate plus
1.50%, and (b) in the case of Base Rate loans, the Alternate Base Rate plus 0.50%. The “Alternate
Base Rate” is the greatest of (i) the Administrative Agent’s prime rate, (ii) the Federal Funds
Effective Rate plus 0.50%, and (iii) the adjusted LIBO Rate for a one month interest period plus
1.00%. In addition, the Company will pay an unused commitment fee of 0.10% per annum on the
average daily unused commitments under the Term Loan Agreement. Borrowings under the Term Loan
Agreement are prepayable at any time at the Company’s option and, except as set forth below, are
subject to certain mandatory prepayment requirements if the Company fails to comply with certain
financial covenants and upon receipt of net cash proceeds from certain debt and equity issuances.
Amounts borrowed and repaid under the Term Loan Agreement may not be reborrowed.
The Term Loan Agreement contains certain customary covenants, including, among others, limitations
on additional indebtedness and limitations on liens. The Term Loan Agreement also contains certain
customary events of default.
Concurrently with the execution of the Term Loan Agreement, the Company, the Lenders and the
Administrative Agent entered into a Consent Agreement (the
“Consent Agreement”) under which the Lenders and the
Administrative Agent, subject to certain conditions, consented to the transaction contemplated by
the Agreement and Plan of Merger, dated as of February 27, 2011, by and among the Company, Ventas,
Inc., a Delaware corporation (“Ventas”), and Needles Acquisition LLC, a Delaware limited liability
company and a direct wholly owned subsidiary of Ventas, pursuant to which the Company will be
merged with and into Needles Acquisition LLC (the “Merger”). Pursuant to the terms of the Consent
Agreement, subject to Ventas providing a guarantee of the obligations
of the Company under the Term Loan Agreement, effective immediately upon completion of the Merger, the Term Loan Agreement will be
modified to eliminate the mandatory prepayment requirements, to replace certain financial covenants
with the financial covenants under Ventas’s existing Credit and Guaranty Agreement dated as of
April 26, 2006, as amended (the “Ventas Revolving Credit Facility”), and to cross-default the Term
Loan Agreement to the Ventas Revolving Credit Facility.
Each of the Lenders and/or their respective affiliates have had commercial and/or investment
banking relationships with the Company, for which they have received customary compensation. Such
services have included affiliates of each of the Lenders serving as lenders under the Company’s
Amended and Restated Credit Agreement, dated October 20, 2005, as amended (the “2005 Credit
Agreement”). To the extent any proceeds from the loans under the Term Loan Agreement are used to
repay borrowings under the 2005 Credit Agreement, affiliates of the Lenders may receive a portion
of such proceeds. J.P. Morgan’s investment banking affiliate, J.P. Morgan Securities LLC, serves
as the Company’s financial advisor in connection with the proposed Merger. Affiliates of each of
the Lenders other than Wells Fargo are counterparts to the Company’s outstanding forward-starting
interest rate swaps. Affiliates of each of Key Bank and Credit Agricole have served as sales
agents under the Company’s at-the-market equity offering program. The Lenders and affiliates of
the Lenders may, from time to time in the future, engage in transactions with and perform services
for the Company in the ordinary course of business.
The foregoing description is qualified in its entirety by reference to the Term Loan Agreement, a
copy of which is filed herewith as Exhibit 10.1 and incorporated herein by reference.