REVOLVING CREDIT AGREEMENT
THIS CREDIT AGREEMENT (the "Credit Agreement"), dated as of October 15,
1998, is by and among HEALTHCARE REALTY TRUST INCORPORATED, a Maryland
corporation, the banks listed on the signature pages hereof, and NATIONSBANK,
N.A., as administrative agent for such banks and FIRST UNION NATIONAL BANK,
SOCIETE GENERALE and BANK AUSTRIA CREDITANSTALT CORPORATE FINANCE, INC. as
co-agents.
The parties hereto agree as follows:
ARTICLE I
DEFINITION
SECTION 1.01 Definitions. The following terms, as used herein, have the
following meanings:
"Adjusted Eurodollar Rate" means, for the Interest Period for
each Eurodollar Loan comprising part of the same borrowing (including
conversions, extensions and renewals), a per annum interest rate
determined pursuant to the following formula:
Adjusted Eurodollar Rate = Interbank Offered Rate
-------------------------------
1 - Eurodollar Reserve Percentage
"Administrative Questionnaire" means, with respect to each
Bank, an administrative questionnaire in the form prepared by the Agent
and submitted to the Agent duly completed by such Bank.
"Affiliate" means, with respect to any designated Person, (a)
any officers or directors of such Person or (b) any other Person (other
than a Subsidiary of such designated Person) that has a relationship
with the designated Person whereby either of such Persons directly or
indirectly controls or is controlled by or is under common control with
the other of such Persons. The term "control" means the possession,
directly or indirectly, of the power, whether or not exercised to
direct or cause the direction of the management or policies of any
Person, whether through ownership of voting securities, by contract or
otherwise.
"Agent" means NationsBank, in its capacity as administrative
agent for the Banks hereunder, and its successors in such capacity.
"Agent's Fee Letter" means that letter agreement dated as of
August 31, 1998 among NationsBank, N.A., NationsBanc Montgomery
Securities LLC and the Borrower, as amended, modified, supplemented or
replaced from time to time.
"Aggregate Revolving Committed Amount" means the aggregate
amount of Revolving Commitments in effect, being initially TWO HUNDRED
SIXTY-FIVE MILLION DOLLARS ($265,000,000).
"Applicable Lending Office" means, with respect to any Bank,
(a) in the case of its Base Rate Loans, its Domestic Lending Office and
(b) in the case of its Eurodollar Loans, its Eurodollar Lending Office.
"Applicable Percentage" means for any day, the rate per annum
set forth below opposite the applicable rating for the Borrower's
senior unsecured (non-credit enhanced) long term debt then in effect,
it being understood that the Applicable Percentage for (i) Base Rate
Loans shall be the percentage set forth under the column "Base Rate
Margin", (ii) Eurodollar Loans shall be the percentage set forth under
the column "Eurodollar Margin and Letter of Credit Fee", (iii) the
Letter of Credit Fee shall be the percentage set forth under the column
"Eurodollar Margin and Letter of Credit Fee", and (iv) the Unused Fee
shall be the percentage set forth under the column "Unused Fee":
IF THERE IS NO RATING BY S&P OR MOODY'S:
---------------------------------------
Duff & Phelps Eurodollar Margin
Pricing and Fitch and Letter of Base Rate
Level Ratings Credit Fee Margin Unused Fee
----- ------- ---------- ------ ----------
I A- or above 0.750% 0% 0.1875%
II BBB+ 0.875% 0% 0.200%
III BBB 1.00% 0% 0.200%
IV BBB- 1.125% 0% 0.225%
V below BBB- 1.375% 0.25% 0.250%
or unrated
The foregoing pricing matrix shall apply only if the
Borrower's senior unsecured (non-credit enhanced) long term debt is not
rated by either S&P or Moody's. If a such a rating is provided by
either or both of S&P or Moody's, the pricing matrix which follows
shall apply.
-2-
IF A RATING IS PROVIDED BY EITHER OR BOTH OF S&P OR MOODY'S:
-----------------------------------------------------------
S&P,
Duff & Phelps Eurodollar Margin
Pricing and Fitch Moody's and Letter of Base Rate
Level Ratings Rating Credit Fee Margin Unused Fee
----- ------- ------ ---------- ----- ----------
I A- or above A3 or above 0.675% 0% 0.1875%
II BBB+ Baa1 0.800% 0% 0.200%
III BBB Baa2 0.925% 0% 0.200%
IV BBB- Baa3 1.05% 0% 0.225%
V below BBB- below Baa3 1.30% 0.25% 0.250%
The numerical classification set forth under the column
"Pricing Level" shall be established based on the ratings by S&P,
Moody's, Duff & Phelps and Fitch (collectively, the "Rating Services")
for the Borrower's senior unsecured (non-credit enhanced) long term
debt.
Where such a rating is provided by Duff & Phelps and/or Fitch,
but not S&P or Moody's, the pricing shall be determined by reference to
the first pricing matrix shown above as hereafter provided. Where such
a rating is provided only by Duff & Phelps or Fitch, but not both, the
pricing shall be determined by reference to the ratings so provided.
Where such a rating is provided by Duff & Phelps and Fitch, the pricing
shall be determined by reference to the lower of the two ratings if
they are not more than one Pricing Level apart, or by an average of the
applicable Pricing Levels (and applicable margins and fee percentages)
if they are more than one Pricing Level apart.
Where such a rating is provided by either or both of S&P or
Moody's, the pricing shall be determined by reference to the second
pricing matrix shown above as hereafter provided. Where such a rating
is provided only by S&P or Moody's, but not any other Ratings Service,
the pricing shall be determined by reference to such rating. Where such
a rating is provided by more than one such Ratings Service, pricing
shall be determined by reference to the lower of the two highest
ratings available, provided that at least one of the two such highest
ratings is S&P or Moody's (and the other is the highest of the other
ratings services), where the two such highest ratings are not more than
one Pricing Level apart, or by an average of the applicable Pricing
Levels (and applicable margins and fee percentages) if they are more
than one Pricing Level apart.
The Applicable Percentage shall be determined and adjusted on
the date five (5) Business Days after each change in debt rating.
Adjustments in the Applicable Percentage shall be effective as to all
Loans and Letters of Credit, existing and prospective, from the date of
adjustment. The Agent shall promptly notify the Lenders of changes in
the Applicable Percentage. Adjustments in the Applicable Percentage
shall be effective as to existing Extensions of Credit as well as new
Extensions of Credit made thereafter.
-3-
"Asset Sale" means any sale, lease or other disposition
(including any such transaction effected by way of merger, amalgamation
or consolidation) by the Borrower or any of its Subsidiaries or
Specified Affiliates subsequent to the date hereof of any asset
(including stock), including without limitation any sale-leaseback
transaction, whether or not involving a Capital Lease, but excluding
(a) any sale, lease or other disposition of real property in the
ordinary course of business of the Borrower or any of its Subsidiaries
or Specified Affiliates, (b) any sale, lease or other disposition of
raw materials, supplies or other nonfixed assets in the ordinary course
of business, (c) any sale, lease or other disposition of surplus,
obsolete or worn out machinery, equipment, molds or other manufacturing
equipment in the ordinary course of business to the extent that the
aggregate book value of all of such assets sold, leased or otherwise
disposed of in a fiscal year does not exceed $1,000,000 (on a
non-cumulative basis), (d) any sale, lease or other disposition to the
Borrower or any Wholly-Owned Consolidated Subsidiary or Specified
Affiliate of the Borrower, (e) any sale or other disposition in the
ordinary course of business of readily marketable securities, (f) any
disposition of cash not prohibited hereunder, (g) any Securities
Transaction to the extent approved by the Majority Banks under the Term
Loan Agreement, and (h) the issuance of any shares of stock in any
Specified Affiliate to any officer, director or employee of the
Borrower.
"Assignee" shall have the meaning given to such term in
Section 9.06(c).
"Bank" means each bank listed on the signature pages hereof,
each Assignee which becomes a Bank pursuant to Section 9.06(c),
and their respective successors.
"Base Rate" means, for any day, the rate per annum (rounded
upwards, if necessary, to the nearest whole multiple of 1/100 of 1%)
equal to the greater of (a) the Federal Funds Rate in effect on such
day plus 1/2 of 1% or (b) the Prime Rate in effect on such day. If for
any reason the Agent shall have determined (which determination shall
be conclusive absent manifest error) that it is unable after due
inquiry to ascertain the Federal Funds Rate for any reason, including
the inability or failure of the Agent to obtain sufficient quotations
in accordance with the terms hereof, the Base Rate shall be determined
without regard to clause (a) of the first sentence of this
definition until the circumstances giving rise to such inability no
longer exist. Any change in the Base Rate due to a change in the Prime
Rate or the Federal Funds Rate shall be effective on the effective
date of such change in the Prime Rate or the Federal Funds Rate,
respectively.
"Base Rate Borrowing" means a Borrowing consisting of Base
Rate Loans.
"Base Rate Loan" means a Loan hereunder which bears interest
at the Base Rate plus the Applicable Percentage pursuant to the
applicable Notice of Borrowing or Notice of Interest Rate Election or
the provisions of Article VIII.
"Benefit Arrangement" ERISA which is not a Plan or a
Multiemployer Plan and which is maintained or otherwise contributed
to by any member of the ERISA Group.
-4-
"Borrower" means Healthcare Realty Trust Incorporated, a
corporation organized and existing under the laws of the State
of Maryland, and its successors.
"Borrowing" means a Revolving Loan borrowing or Swingline Loan
hereunder, including extensions and conversions.
"Business Day" means any day except 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.
"Buy-Sell Agreement" means a written agreement between the
Borrower or any Subsidiary,as purchaser, and one or more third parties,
as seller, obligating the Borrower or such Subsidiary, upon payment
of a definitely determinable price, to acquire the real property and
improvements described therein without contingency, except that the
improvements are constructed in accordance with the conditions set
forth in the particular Buy-Sell Agreement.
"Capital Lease" means a lease that would be capitalized on a
balance sheet of the lessee prepared in accordance with generally
accepted accounting principles.
"Capital Lease Indebtedness" means indebtedness incurred
pursuant to a Capital Lease.
"CCT" means HR Acquisition I Corporation, a Maryland
corporation and successor by merger to Capstone Capital Corporation,
a Maryland corporation.
"Change of Control" means the occurrence of any of the
following events: (i) any Person or two or more Persons acting in
concert shall have acquired beneficial ownership, directly or
indirectly, of, or shall have acquired by contract or otherwise, or
shall have entered into a contract or arrangement that, upon
consummation, will result in its or their acquisition of or control
over, voting stock of the Borrower (or other securities convertible
into such voting stock) representing 35% or more of the combined voting
power of all voting stock of the Borrower, or (ii) during any period of
up to 24 consecutive months, commencing after the Closing Date,
individuals who at the beginning of such 24 month period were directors
of the Borrower (together with any new director whose election by the
Borrower's Board of Directors or whose nomination for election by the
Borrower's shareholders was approved by a vote of at least two-thirds
of the directors then still in office who either were directors at the
beginning of such period or whose election or nomination for election
was previously so approved) cease for any reason to constitute a
majority of the directors of the Borrower then in office. As used
herein, "beneficial ownership" shall have the meaning provided in Rule
13d-3 of the Securities and Exchange Commission under the Securities
Exchange Act of 1934.
-5-
"Closing Date" means the date on which the conditions set
forth in Article III to the making of the initial Extension of Credit
hereunder shall have been fulfilled and on which such initial Extension
of Credit shall have been made.
"Code" means the Internal Revenue Code of 1986, as amended
from time to time, or any successor statute.
"Commitments" means, collectively, the Revolving Commitment,
the LOC Commitment and the Swingline Commitment.
"Commitment Period" means the period from and including the
Closing Date to but not including the earlier of (i) the Termination
Date, or (ii) the date on which the Commitments terminate in accordance
with the provisions of this Credit Agreement.
"Consolidated EBIT" means, for any period, the sum of (a) the
consolidated net income of the Borrower and its Consolidated
Subsidiaries for such period plus (b) to the extent deducted in
determining such consolidated net income, Consolidated Interest
Expense, plus (c) the amount of any consolidated income taxes (or minus
the amount of any consolidated tax benefits) of the Borrower and its
Consolidated Subsidiaries for such period.
"Consolidated Funded Indebtedness" means, without duplication,
all obligations, liabilities and indebtedness of the Borrower and its
Subsidiaries of the types described in subsections (a) through (f),
inclusive, (i) and (j) of the definition of Debt.
"Consolidated Interest Expense" means, for any period, the
cash interest expense and letter of credit fee expense of the Borrower
and its Consolidated Subsidiaries determined on a consolidated basis
for such period.
"Consolidated Mortgage Debt" means the aggregate principal
amount of all Debt of the Borrower and its Subsidiaries secured by a
Lien on any real property owned or leased by them.
"Consolidated Senior Debt" means all Consolidated Funded
Indebtedness other than any amount thereof the repayment of which has
been subordinated to the repayment of any other Consolidated Funded
Indebtedness.
"Consolidated Senior Secured Debt" means at any date the sum
(without duplication) of (i) Consolidated Mortgage Debt plus (ii)
Consolidated Subsidiary Debt plus (iii) all preferred stock of
Subsidiaries not owned by the Borrower and/or one or more of its
wholly-owned Subsidiaries, valued at the higher of voluntary or
involuntary liquidation preference thereof.
"Consolidated Subsidiary" means at any date any Subsidiary or
other entity the accounts of which would be consolidated with those of
the Borrower in its consolidated financial statements if such
-6-
statements were prepared as of such date. For purposes of this Credit
Agreement, Specified Affiliates of the Borrower shall be classified as
Consolidated Subsidiaries.
"Consolidated Subsidiary Debt" means all Debt of Subsidiaries
of the Borrower (exclusive of Debt owed to the Borrower), determined in
accordance with generally accepted accounting principals on a
consolidated basis.
"Consolidated Tangible Net Worth" means, at any time,
consolidated stockholders' equity of the Borrower and its Consolidated
Subsidiaries determined as of such time in accordance with generally
accepted accounting principles applied on a consistent basis, with no
upward adjustments due to a revaluation of assets (other than in
respect of assets purchased or acquired in connection with the
acquisition of CCT on or about the Closing Date), minus all Intangible
Assets.
"Consolidated Total Capital" means, at any time, the sum of
(a) Consolidated Tangible Net Worth plus (b) Consolidated Funded
Indebtedness.
"Consolidated Unencumbered Realty" means for the Borrower and
its Subsidiaries, the book value of all realty (prior to deduction of
accumulated depreciation) minus outstanding Consolidated Senior Secured
Debt minus the book value of all properties (prior to deduction of
accumulated depreciation) as to which associated leases or mortgage
indebtedness relating thereto is past due or otherwise in default more
than 30 days.
"Consolidated Unsecured Debt" means all unsecured Debt of the
Borrower and its Subsidiaries.
"Constitutional Documents" in relation to any corporate Person
means the Certificate of Incorporation and By-Laws or other
constitutional documents of such corporate Person.
"Credit Agreement" shall have the meaning given to such term
in the introductory paragraph hereof.
"Debt" of any Person means at any date, without duplication,
(a) all obligations of such Person for borrowed money, (b) all
obligations of such Person evidenced by bonds, debentures, notes or
other similar instruments, (c) all unconditional obligations of such
Person to pay (as opposed to a contingent or conditional obligation of
such Person to pay) the deferred purchase price of property or
services, except security deposits, sums retained to secure
performance, reserves for capital improvements, trade accounts payable
and accrued expenses arising in the ordinary course of business, (d)
all Capitalized Lease Indebtedness, (e) all Debt of others secured by a
Lien on any asset of such Person, whether or not such Debt is assumed
by such Person (to the extent of the lesser of the amount of such Debt
and the book value of any assets subject to such Lien), (f) the maximum
-7-
amount of all letters of credit issued or acceptance facilities
established for the account of such Person and, without duplication,
all drafts drawn thereunder (other than letters of credit and
acceptance facilities supporting other Debt of such Person), (g)
obligations under Interest Rate Protection Agreements, (h) all
indebtedness relating to or arising from any Securities Transactions,
(i) all instruments, obligations or undertakings treated as
indebtedness in accordance with generally accepted accounting
principles, or otherwise treated as indebtedness by S&P, Moody's or any
other Ratings Service (whether or not treated as indebtedness for
purposes of generally accepted accounting principles) and (j) all Debt
of others Guaranteed by such Person (to the extent of the lesser of the
amount of such Debt Guaranteed or the amount of such Guarantee);
provided, however, Debt shall not include obligations under Buy-Sell
Agreements.
"Default" means any condition or event which constitutes an
Event of Default or which with the giving of notice or lapse of time or
both would, unless cured or waived, become an Event of Default.
"Defaulting Bank" means, at any time, any Bank that, at such
time, (i) has failed to make an Extension of Credit required pursuant
to the terms of this Credit Agreement, (ii) has failed to pay to the
Agent or any Bank an amount owed by such Bank pursuant to the terms of
the Credit Agreement or any other of the Credit Documents, or (iii) has
been deemed insolvent or has become subject to a bankruptcy or
insolvency proceeding or to a receiver, trustee or similar proceeding.
"Dollars" and "$" means lawful money of the United States of
America.
"Dollar Amount" means, in relation to any Debt denominated in
Dollars, the amount of such Debt.
"Domestic Lending Office" means, as to each Bank, its office
located at its address set forth in its Administrative Questionnaire
(or identified in its Administrative Questionnaire as its Domestic
Lending Office) or such other office as such Bank may hereafter
designate as its Domestic Lending office by notice to the Borrower and
the Agent.
"Duff & Phelps" means Duff & Phelps Credit Rating Co., Inc.,
or any successor or assignee of the business of such company in the
business of rating securities.
"Environmental Laws" means any and all federal, state, local
and foreign statutes, laws, regulations, ordinances, rules, judgments,
orders, decrees, permits, grants, licenses, agreements or other
governmental restrictions including, without limitation, the
Comprehensive Environmental Response, Compensation and Liability Act,
the Superfund Amendments and Reauthorization Act, the Resource
Conservation and Recovery Act, the Toxic Substances Control Act, the
Clean Air Act and the Clean Water Act relating to the environment or to
emissions, discharges or releases of pollutants, contaminants,
petroleum or petroleum products, chemicals or industrial, toxic or
-8-
hazardous substances or wastes into the environment (including, without
limitation, ambient air, surface water, ground water or land) or
otherwise relating to the manufacture, processing, distribution, use,
treatment, storage, disposal, transport or handling of pollutants,
contaminants, petroleum or petroleum products, chemicals or industrial,
toxic or hazardous substances or wastes or the clean-up or other
remediation thereof.
"ERISA" means the Employment Retirement Income Security Act of
1974, as amended, or any successor statute.
"ERISA Group" means the Borrower and all members of a
controlled group of corporations and all trades or businesses (whether
or not incorporated) under common control which, together with the
Borrower, are treated as a single employer under Section 414 of the
Code.
"Eurodollar Borrowing" means any Borrowing consisting of
Eurodollar Loans.
"Eurodollar Business Day" means any Business Day on which the
Agent and the Eurodollar Reference Bank are open for international
business (including dealings in Dollar deposits) in London.
"Eurodollar Lending Office" means, as to each Bank, its
office, branch or affiliate located at its address set forth in its
Administrative Questionnaire (or identified in its Administrative
Questionnaire as its Eurodollar Lending Office) or such other office,
branch or affiliate of such Bank as it may hereafter designate as its
Eurodollar Lending Office by notice to the Agent.
"Eurodollar Loan" means a Loan which bears interest at the
Adjusted Eurodollar Rate plus the Applicable Percentage pursuant to the
applicable Notice of Borrowing or Notice of Interest Rate Election.
"Eurodollar Reserve Percentage" means for any day, that
percentage (expressed as a decimal) which is in effect from time to
time under Regulation D of the Board of Governors of the Federal
Reserve System (or any successor), as such regulation may be amended
from time to time or any successor regulation, as the maximum reserve
requirement (including, without limitation, any basic, supplemental,
emergency, special, or marginal reserves) applicable with respect to
Eurocurrency liabilities as that term is defined in Regulation D (or
against any other category of liabilities that includes deposits by
reference to which the interest rate of Eurodollar Loans is
determined), whether or not Lender has any Eurocurrency liabilities
subject to such reserve requirement at that time. Eurodollar Loans
shall be deemed to constitute Eurocurrency liabilities and as such
shall be deemed subject to reserve requirements without benefits of
credits for proration, exceptions or offsets that may be available from
time to time to a Bank. The Eurodollar Rate shall be adjusted
automatically on and as of the effective date of any change in the
Eurodollar Reserve Percentage.
-9-
"Event of Acceleration" means any of the events or conditions
set forth in Sections 6.01(g) or (h) with respect to the Borrower.
"Event of Default" has the meaning set forth in Section 6.01.
"Existing Letters of Credit" means those Letters of Credit
outstanding on the Closing Date and identified on Schedule 2.06(b)-1.
"Extension of Credit" means, as to any Bank, the making
(including extensions and conversions) of, or participation in, a Loan
by such Bank or the issuance or extension of, or participation in, a
Letter of Credit.
"Federal Funds Rate" means, for any day, the rate of interest
per annum (rounded upwards, if necessary, to the nearest whole multiple
of 1/100 of 1%) 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 on such day, as published by the
Federal Reserve Bank of New York on the Business Day next succeeding
such day, provided that (A) if such day is not a Business Day, the
Federal Funds Rate for such day shall be such rate on such transactions
on the next preceding Business Day and (B) if no such rate is so
published on such next preceding Business Day, the Federal Funds Rate
for such day shall be the average rate quoted to the Agent on such day
on such transactions as determined by the Agent.
"Financing Documents" means the Credit Agreement, the Notes,
the LOC Documents and the Subsidiaries Guarantees, in each case as
amended and in effect from time to time.
"Fitch" means Fitch IBCA, Inc., or any successor or assignee
of the business of such company in the business of rating securities.
"Foreign Government" means any government other than that of
the United States of America or any political subdivision thereof.
"Foreign Person" means (a) any Foreign Government, (b) any
agency of a Foreign Government, (c) any form of business enterprise
organized under the laws of any country other than the United States of
America or its possessions or any political subdivision thereof or (d)
any form of business enterprise owned or controlled by any of the
Persons described in clauses (a), (b) or (c) of this definition.
"Funds From Operations" means the Borrower's net income
(loss), excluding gains (losses) from restructuring of indebtedness and
sales of property, plus depreciation and amortization, and after
adjustments for unconsolidated partnerships and joint ventures as
hereafter provided. Notwithstanding contrary treatment under generally
accepted accounting principles, for purposes hereof, "Funds From
Operations" shall include, and be adjusted to take into account, the
-10-
Borrower's interests in unconsolidated partnerships and joint ventures,
on the same basis as consolidated partnerships and subsidiaries, as
provided in the "white paper" issued in March 1995 by the National
Association of Real Estate Investment Trusts, a copy of which is
attached hereto as Schedule 5.17.
"Government" means the federal government of the United States
of America or any agency thereof.
"Governmental Authority" means any federal, state. local or
foreign court or governmental agency, authority, instrumentality or
regulatory body.
"Group" or "Group of Loans" means at any time a group of Loans
consisting of (a) all Base Rate Loans at such time or (b) all
Eurodollar Loans having the same Interest Period at such time; provided
that, if a Loan of any particular Bank is converted to or made as a
Base Rate Loan pursuant to Sections 8.02 or 8.04, such Loan shall be
included in the same Group or Groups of Loans from time to time as if
it had not been so converted or made as a Base Rate Loan.
"Guarantee" by any Person means any obligation, contingent or
otherwise, of such Person directly or indirectly guaranteeing any Debt
or other obligation of any other Person and, without limiting the
generality of the foregoing, any obligation, direct or indirect,
contingent or otherwise, of such Person (a) to purchase or pay (or
advance or supply funds for the purchase or payment of) such Debt or
other obligation (whether by virtue of partnership arrangements, by
agreement to keep-well, to purchase assets, goods, securities or
services, to take-or-pay, or to maintain financial statement conditions
or otherwise) or (b) entered into for the purpose of assuring in any
other manner the obligee of such Debt or other obligation of the
payment thereof or to protect such obligee against loss in respect
thereof (in whole or in part); provided that the term Guarantee shall
not include endorsement for collection or deposit in the ordinary
course of business.
"Guarantor" means any guarantor under a Subsidiaries Guarantee
"Hazardous Substance" means any toxic or hazardous substance,
including petroleum and its derivatives presently regulated under the
Environmental Laws.
"Intangible Assets" shall mean, as of the date of any
determination thereof, the total amount of all assets of the Borrower
and its Subsidiaries consisting of goodwill patents, trade names,
trademarks, copyrights, franchises, experimental expense, organization
expense, unamortized debt discount and expense, deferred assets (other
than prepaid insurance and prepaid taxes), the excess of cost of shares
acquired over book value of related assets and such other assets as are
properly classified as "intangible assets" in accordance with generally
accepted accounting principles.
-11-
"Interbank Offered Rate" means, for the Interest Period for
each Eurodollar Loan comprising part of the same borrowing (including
conversions, extensions and renewals), a per annum interest rate
(rounded upwards, if necessary, to the nearest whole multiple of 1/100
of 1%) equal to the rate of interest, determined by the Agent on the
basis of the offered rates for deposits in dollars for a period of time
corresponding to such Interest Period (and commencing on the first day
of such Interest Period), appearing on Telerate Page 3750 (or, if, for
any reason, Telerate Page 3750 is not available, the Reuters Screen
LIBO Page) as of approximately 11:00 A.M. (London time) two (2)
Business Days before the first day of such Interest Period. As used
herein, "Telerate Page 3750" means the display designated as page 3750
by Dow Jones Markets, Inc. (or such other page as may replace such page
on that service for the purpose of displaying the British Bankers
Association London interbank offered rates) and "Reuters Screen LIBO
Page" means the display designated as page "LIBO" on the Reuters
Monitor Money Rates Service (or such other page as may replace the LIBO
page on that service for the purpose of displaying London interbank
offered rates of major banks).
"Interest Period" means, with respect to each Eurodollar Loan,
a period commencing on the date of Borrowing specified in the
applicable Notice of Borrowing or on the date specified in the
applicable Notice of Interest Rate Election and ending, one, two,
three, six or twelve months thereafter, as the Borrower may elect in
the applicable Notice; provided that:
(i) any Interest Period which would otherwise
end on a day which is not a Eurodollar Business Day shall be
extended to the next succeeding Eurodollar Business Day unless
such Eurodollar Business Day falls in another calendar month,
in which case such Interest Period shall end on the next
preceding Eurodollar Business Day;
(ii) any Interest Period which begins on the
last Eurodollar 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 Eurodollar Business Day of a calendar month; and
(iii) no Interest Period shall extend beyond
the Termination Date.
"Interest Rate Protection Agreement" means interest rate swap
agreement or interest rate future, option, cap, collar or other hedging
arrangements.
"Investment" means any investment in any Person, whether by
means of share purchase, capital contribution (including, without
limitation, subordinated debt), loan, time deposit, warrant, option or
otherwise.
"Investment Policy" means the Borrower's investment policy
currently in effect as of the date hereof and as previously disclosed
in writing to the Banks, and as amended from time to time by Borrower
-12-
with the approval of Majority Banks, which approval shall not be
unreasonably delayed, it being agreed and understood that in the event
Agent does not notify in writing within ten (10) days following the
date of Agent's receipt of Borrower's request for approval of an
amendment to the Investment Policy that the Majority Banks have
disapproved the requested amendment, the Majority Banks shall be deemed
to have approved the amended investment Policy.
"Issuing Bank" means NationsBank.
"Issuing Bank Fees" shall have the meaning assigned to such
term in Section 2.15(c)(ii).
"Letter of Credit" means the Existing Letters of Credit and
any letter of credit issued by the Issuing Bank for the account of the
Borrower in accordance with the terms of Section 2.01(b).
"Letter of Credit Fee" shall have the meaning given such term
in Section 2.15(c)(i).
"Liens" means, with respect to any asset, any mortgage, lien,
pledge, charge, security interest or encumbrance of any kind in respect
of such asset. For the purposes of this Credit Agreement, the Borrower
or any Subsidiary of the Borrower shall be deemed to own subject to a
Lien any asset which it has acquired or holds subject to the interest
of a vendor or lessor under any conditional sales agreement, capital
lease or other title retention agreement relating to such asset.
"Loan" or "Loans" means the Revolving Loans and/or Swingline
Loans or a Eurodollar Loan and/or Base Rate Loan, as appropriate.
"LOC Commitment" means the commitment of the Issuing Bank to
issue, and to honor payment obligations under, Letters of Credit
hereunder and with respect to each Bank, the commitment of each Bank to
purchase participation interests in the Letters of Credit up to such
Bank's LOC Committed Amount as specified in Schedule 2.1(a), as such
amount may be reduced from time to time in accordance with the
provisions hereof.
"LOC Committed Amount" means, collectively, the aggregate
amount of all of the LOC Commitments of the Banks to issue and
participate in Letters of Credit as referenced in Section 2.01(b) and,
individually, the amount of each Bank's LOC Commitment as specified in
Schedule 2.1(a).
"LOC Documents" means, 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 (i) the rights and obligations of the parties concerned
or at risk or (ii) any collateral security for such obligations.
-13-
"LOC Obligations" means, at any time, the sum of (i) 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 (ii) the aggregate amount of all drawings
under Letters of Credit honored by the Issuing Bank but not theretofore
reimbursed.
"Long-Term Debt" shall mean, at any time, any senior unsecured
debt obligations outstanding at such time with a maturity more than one
(1) year after the date of any determination hereunder.
"Majority Banks" means, at any time, Banks having more than
sixty-six and two-thirds percent (66-2/3%) of the Revolving
Commitments, or if the Revolving Commitments have been terminated,
Banks having more than sixty-six and two-thirds percent (66-2/3%) of
the aggregate principal amount of the Obligations outstanding (taking
into account in each case Participation Interests or the obligation to
participate therein); provided that the Commitments of, and the
outstanding principal amount of Obligations (taking into account in
each case Participation Interests or the obligation to participate
therein) owing to, a Defaulting Bank shall be excluded for purposes
hereof in making a determination of Majority Banks.
"Margin Stock" has the meaning assigned to such term in
Regulation U (to the extent applicable).
"Material Adverse Effect" means a material adverse effect on
(i) the condition (financial or otherwise), operations, business,
assets, liabilities or prospects of the Borrower and its Subsidiaries
taken as a whole, (ii) the ability of the Borrower and the other
Obligors, taken as a whole, to perform any material obligation under
the Financing Documents, or (iii) the rights and remedies of the Agent
and the Banks under the Financing Documents.
"Material Plan" means a Plan or Plans having aggregate
Unfunded Liabilities in excess of $1,000,000.
"Material Subsidiary" means the Subsidiaries identified as
such Schedule 4.07 attached hereto and any Subsidiary which subsequent
to the Closing Date owns assets (including stock) having an aggregate
market value in excess of $2,500,000.
"Moody's" means Moody's Investors Service, Inc., or any
successor or assignee of the business of such company in the business
of rating securities.
"Multiemployer Plan" means at any time an employee pension
benefit plan within the meaning of Section 4001(a)(3) of ERISA to which
-14-
any member of the ERISA Group is then making or accruing an obligation
to make contributions or has within the preceding five (5) plan years
made contributions, including for these purposes any Person which
ceased to be a member of the ERISA Group during such five (5) year
period.
"NationsBank" means NationsBank, N.A., a national banking
association, and its successors.
"Net Sale Proceeds" means, with respect to any Asset Sale, (a)
the cash proceeds received by the Borrower or any of its Subsidiaries,
minus (b) the sum of (i) fees and expenses incurred by the Borrower or
such Subsidiary in connection with such Asset Sale, (ii) cash or
incremental taxes payable by the Borrower or such Subsidiary as a
result of and in connection with such Asset Sale, (iii) any Debt
secured by a Lien on any assets subject to such Asset Sale and required
or permitted to be repaid in connection with such Asset Sale, (iv) any
portion of such proceeds payable to any holder (other than the Borrower
or any of its Subsidiaries or any of its Affiliates) of any direct or
indirect minority interest in such assets, and (v) any portion of such
net proceeds required by the Code to be paid to shareholders to
maintain the Borrower's REIT status.
"NMS" means NationsBanc Montgomery Securities LLC, and its
successors and assigns.
"Note" or "Notes" means any of the Revolving Notes.
"Notice of Borrowing" has the meaning given to such term in
Section 2.02(a).
"Notice of Interest Rate Election" has the meaning given to
such term in Section 2.10(a).
"Obligations" means, collectively, the Revolving Loans,
Swingline Loans and LOC Obligations.
"Obligor" means the Borrower and any of the Guarantors, and
their respective successors.
"Parent" means, with respect to any Bank, any Person as to
which such Bank is a Subsidiary.
"Participant" means a bank or other institution which assumes,
in accordance with Section 9.06(b), a participating interest with
respect to the Loans, the Notes and this Credit Agreement.
"Participation Interest" means the purchase by a Bank of a
participation in LOC Obligations as provided in Section 2.06(b), in
Swingline Loans as provided in Section 2.07(b), and in Revolving Loans
as provided in Section 9.04.
-15-
"PBGC" means the Pension Benefit Guaranty Corporation or any
entity succeeding to any or all of its functions under ERISA.
"Person" means an individual, a corporation, a partnership, a
limited liability company, an association, a trust or any other entity
or organization, including a government or political subdivision or an
agency or instrumentality thereof.
"Plan" means at any time an employee pension benefit plan as
defined in Subsection 3(2) of ERISA (other than a Multiemployer Plan)
which is covered by Title IV of ERISA or subject to the minimum funding
standards under Section 412 of the Code and either (a) is maintained,
or contributed to, by any member of the ERISA Group for employees of
any member of the ERISA Group or (b) has at any time within the
preceding five (5) years been maintained or contributed to, by any
Person which was at such time a member of the ERISA Group for employees
of any Person which was at such time a member of the ERISA Group.
"Prime Rate" means the rate of interest per annum publicly
announced from time to time by NationsBank as its prime rate in effect
at its principal office in Charlotte, North Carolina, with each change
in the Prime Rate being effective on the date such change is publicly
announced as effective (it being understood and agreed that the Prime
Rate is a reference rate used by NationsBank in determining interest
rates on certain loans and is not intended to be the lowest rate of
interest charged on any extension of credit by NationsBank to any
debtor).
"Quarterly Period" means a three month period ending on the
last Business Day of each March, June, September and December.
"Quoted Rate" means, with respect to a Quoted Rate Swingline
Loan, the fixed or floating percentage rate per annum, if any, offered
by the Swingline Bank and accepted by the Borrower in accordance with
the provisions hereof.
"Quoted Rate Swingline Loan" means a Swingline Loan bearing
interest at the Quoted Rate.
"Ratings Services" shall have the meaning provided in the
definition of "Applicable Percentage".
"REIT" means a real estate investment trust as defined in
Sections 856-860 of the Internal Revenue Code of 1986, as amended and
any successor provision.
"Regulation T" means Regulation T of the Board of Governors of
the Federal Reserve System, as in effect from time to time.
"Regulation U" means Regulation U of the Board of Governors of
the Federal Reserve System, as in effect from time to time.
-16-
"Regulation X" means Regulation X of the Board of Governors of
the Federal Reserve System, as in effect from time to time.
"Release" has the meaning given to such term in Section
4.06(a) hereof.
"Revolving Commitment" means, with respect to each Bank, the
commitment of such Bank to make Revolving Loans in an aggregate
principal amount at any time outstanding of up to such Bank's Revolving
Committed Amount.
"Revolving Commitment Percentage" means, for each Bank, a
fraction (expressed as a decimal) the numerator of which is the
Revolving Committed Amount of such Bank at such time and the
denominator of which is the Aggregate Revolving Committed Amount at
such time. The initial Revolving Commitment Percentages are set out on
Schedule 2.1.
"Revolving Committed Amount" means, collectively, the
aggregate amount of all of the Revolving Commitments and, individually,
the amount of each Bank's Revolving Commitment as specified in Schedule
2.1, as such amounts may be reduced from time to time in accordance
with the provisions hereof.
"Revolving Banks" means Banks holding Revolving Commitments,
as identified on Schedule 2.1 and their successors and assigns.
"Revolving Loans" shall have the meaning assigned to such term
in Section 2.1(a).
"Revolving Note" or "Revolving Notes" means the promissory
notes of the Borrower in favor of each of the Revolving Banks
evidencing the Revolving Loans and Swingline Loans in substantially the
form attached as Schedule 2.03(a), individually or collectively, as
appropriate, as such promissory notes may be amended, modified,
supplemented, extended, renewed or replaced from time to time.
"Securities Transaction" means any purchase or other
acquisition (including any such transaction effected by way of
partnership formation, upreit, merger, amalgamation or consolidation)
by the Borrower or any of its Subsidiaries subsequent to the date
hereof of any real estate asset or any entity which has as its
principal assets, real estate, through which Borrower or any of its
Subsidiaries issue consideration comprised principally of its
respective stock or securities, including, without limitation, common
stock, preferred stock, bonds, and hybrid securities.
"S&P" means Standard & Poor's Ratings Group, a division of
McGraw Hill, Inc., or any successor or assignee of the business of such
division in the business of rating securities.
-17-
"Solvent" means, with respect to any person on a particular
date, that on such date (a) the fair value of the property of such
Person is greater than the total amount of liabilities, including,
without limitation, contingent liabilities, of such Person, (b) the
present fair saleable value of the assets of such Person is not less
than the amount that will be required to pay the probable liability of
such Person on its debts as they become absolute and matured, (c) such
Person is able to realize upon its assets and pay its debts and other
liabilities, contingent obligations and other commitments as they
mature, (d) such Person does not intend to, and does not believe that
it will, incur debts or liabilities beyond such Person's ability to pay
as such debts and liabilities mature, and (e) such Person is not
engaged in a business or a transaction, and is not about to engage in a
business or a transaction, for which such Person's property would
constitute unreasonably small capital after giving due consideration to
the prevailing practice in the industry in which such Person is
engaged. In computing the amount of contingent liabilities at any time,
it is intended that such liabilities will be computed at the amount
which, in light of all the facts and circumstances existing at such
time, represents the amount that can reasonably be expected to become
an actual or matured liability.
"Specified Affiliate" means any corporation, association or
other business entity formed for the purpose of earning income not
qualified as "rents from real property" under applicable provisions of
the Code, in which the Borrower owns substantially all of the economic
interest but less than 10% of the voting interests, and the remaining
economic and voting interests are subject to restrictions requiring
that ownership of such interests be held by officers, directors or
employees of the Borrower.
"Subsidiaries Guarantee" means the Subsidiaries Guarantee to
be executed and delivered by each of the Material Subsidiaries,
substantially in the form of Schedule 5.09 as the same may be amended,
supplemented or otherwise modified from time to time.
"Subsidiary" means, with respect to any Person, any
corporation or other entity of which securities or other ownership
interests having ordinary voting power to elect a majority of the board
of directors or other persons performing similar functions are at such
time directly or indirectly owned by such Person.
"Swingline Bank" means NationsBank.
"Swingline Commitment" means the commitment of the Swingline
Bank to make Swingline Loans in an aggregate principal amount at any
time outstanding up to the Swingline Committed Amount and the
commitment of the Banks to purchase participation interests in the
Swingline Loans up to their respective Revolving Commitment Percentage
as provided in Section 2.07(b), as such amounts may be reduced from
time to time in accordance with the provisions hereof.
"Swingline Committed Amount" means the amount of the Swingline
Bank's Commitment as specified in Section 2.01(c).
-18-
"Swingline Loan" means a swingline revolving loan made by the
Swingline Bank pursuant to the provisions of Section 2.01(c).
"Term Loan Agreement" means that $200 million Term Loan
Agreement dated as of the date hereof, as amended, modified,
supplemented and extended, among the Borrower, the banks identified
therein and NationsBank, N.A., as Agent.
"Term Loan" means the term loan made under the Term Loan
Agreement.
"Termination Date" means October 15, 2001, or such earlier
date on which the Commitments shall terminate, whether by acceleration
or otherwise.
"UCC" means, with respect to any jurisdiction, the Uniform
Commercial Code as then in effect in that jurisdiction.
"Unfunded Liabilities" means, with respect to any Plan at any
time, the amount (if any) by which (a) the present value of all
benefits under such Plan exceeds (b) the fair market value of all Plan
assets allocable to such benefits (excluding any accrued but unpaid
contributions), all determined as of the then most recent valuation
date for such Plan, but only to the extent that such excess represents
a potential liability of a member of the ERISA Group to the PBGC or any
other Person under Title IV of ERISA.
"Unused Fee" shall have the meaning given to such term in
Section 2.15(a).
"Wholly-Owned Consolidated Subsidiary" means, with respect to
any Person, any Consolidated Subsidiary of such Person all of the
shares of capital stock or other ownership interests of which (except
directors' qualifying shares) are at the time directly or indirectly
owned by such Person.
SECTION 1.02 Accounting Terms. Unless otherwise specified herein, all
accounting terms used herein shall be interpreted, all accounting determinations
hereunder shall be made, and all financial statements and certificates required
to be delivered hereunder shall be prepared in accordance with generally
accepted accounting principles in effect as of the Closing Date consistently
applied; provided that, if the Borrower notifies the Agent that the Borrower
wishes to amend any covenant in Article V to eliminate the effect of any change
in generally accepted accounting principles on the operation of such covenant
(or if the Agent notifies the Borrower that the Majority Banks wish to amend
Article V for such purpose), then the Borrower's compliance with such covenant
shall be determined on the basis of generally accepted accounting principals in
effect immediately before the relevant change in generally accepted accounting
principles became effective, until either such notice is withdrawn or such
covenant is amended in a manner satisfactory to the Borrower and the Majority
Banks.
SECTION 1.03 Other Definitional Provisions. References to "Articles",
"Sections" "subsections", "Schedules" and "Exhibits" shall be to Articles,
Sections, subsections, Schedules and Exhibits, respectively, of this Credit
Agreement unless otherwise specifically provided. Any of the terms defined in
-19-
Section 1.01 or referred to in Section 1.02 may, unless the context otherwise
requires, be used in the singular or the plural depending on the reference. In
this Credit Agreement, the word "including" means "including without limitation"
and the word "includes" means "includes without limitation." Terms defined in
this Credit Agreement and used, but not otherwise defined in the Exhibits and
Schedules, shall have the meaning ascribed to such terms in this Credit
Agreement.
ARTICLE II
THE LOANS
SECTION 2.01 Commitments.
(a) Revolving Commitments. During the Commitment Period, subject to the
terms and conditions hereof, each Revolving Bank severally agrees to make
revolving loans (the "Revolving Loans") to the Borrower in the amount of such
Bank's Revolving Commitment Percentage of such Revolving Loans for the purposes
hereinafter set forth; provided that (i) Extensions of Credit used for general
corporate purposes hereunder shall not exceed Fifty Million Dollars
($50,000,000) at any time, unless and to the extent necessary to maintain the
Borrower's REIT status, (ii) with regard to the Revolving Banks collectively,
the aggregate principal amount of Obligations at any time shall not exceed the
Aggregate Revolving Committed Amount and (iii) with regard to each Revolving
Bank individually, such Revolving Bank's Revolving Commitment Percentage of
Obligations at any time shall not exceed such Revolving Bank's Revolving
Committed Amount. Revolving Loans shall be made by the Revolving Banks ratably
in accordance with their respective Revolving Commitment Percentages. Revolving
Loans may consist of Base Rate Loans or Eurodollar Loans, or a combination
thereof, as the Borrower may request, and may be repaid and reborrowed in
accordance with the provisions hereof. Revolving Loans consisting of (A)
Eurodollar Loans shall be in the minimum aggregate principal amount of One
Million Dollars ($1,000,000) and integral multiples of One Hundred Thousand
Dollars ($100,000) in excess thereof, and (B) Base Rate Loans shall be in the
minimum aggregate principal amount of Five Hundred Thousand Dollars ($500,000)
and integral multiples of One Hundred Thousand Dollars ($100,000) in excess
thereof. Notwithstanding anything contained herein to the contrary, the Borrower
shall be limited to a maximum number of twenty (20) Eurodollar Loans outstanding
at any time.
(b) Letter of Credit Commitment. During the Commitment Period, subject
to the terms and conditions hereof and of the LOC Documents, if any, and such
other terms and conditions which the Issuing Bank may reasonably require, the
Issuing Bank shall issue, and the Banks shall participate severally in, such
Letters of Credit as the Borrower may request , in form acceptable to the
Issuing Bank, for the purposes hereinafter set forth; provided that (i) the
aggregate amount of LOC Obligations shall not exceed TEN MILLION DOLLARS
($10,000,000) at any time (the "LOC Committed Amount"), (ii) Extensions of
Credit used for general corporate purposes hereunder shall not exceed Fifty
Million Dollars ($50,000,000) at any time, unless and to the extent necessary to
maintain the Borrower's REIT status, (iii) with regard to the Revolving Banks
-20-
collectively, the aggregate principal amount of Obligations at any time shall
not exceed the Aggregate Revolving Committed Amount and (iv) with regard to each
Revolving Bank individually, such Revolving Bank's Revolving Commitment
Percentage of Obligations at any time shall not exceed such Revolving Bank's
Revolving Committed Amount. Letters of Credit issued hereunder shall have an
expiry date not more than one year from the date of issuance or extension, and
may not extend beyond the Termination Date.
(c) Swingline Commitment. During the Commitment Period, subject to the
terms and conditions hereof, the Swingline Bank agrees to make certain revolving
loans (the "Swingline Loans") to the Borrower; provided that (i) the aggregate
principal amount of Swingline Loans shall not exceed FIVE MILLION DOLLARS
($5,000,000) (the "Swingline Committed Amount"), (ii) Extensions of Credit used
for general corporate purposes hereunder shall not exceed Fifty Million Dollars
($50,000,000) at any time, unless and to the extent necessary to maintain the
Borrower's REIT status, (iii) with regard to the Revolving Banks collectively,
the aggregate principal amount of Obligations at any time shall not exceed the
Aggregate Revolving Committed Amount and (iv) with regard to each Revolving Bank
individually, such Revolving Bank's Revolving Commitment Percentage of
Obligations at any time shall not exceed such Revolving Bank's Revolving
Committed Amount. Swingline Loans may consist of Base Rate Loans or Quoted Rate
Swingline Loans, or a combination thereof, as the Borrower may request, and may
be repaid and reborrowed in accordance with the provisions hereof. Swingline
Loans shall be in a minimum principal amount of One Hundred Thousand Dollars
($100,000) and integral multiples of One Hundred Thousand Dollars ($100,000) in
excess thereof.
(d) Increase in Revolving Commitments. Subject to the terms and
conditions set forth herein, upon thirty (30) days advance written notice to the
Agent, the Borrower shall have the right, at any time and from time to time
during the Commitment Period, to increase the Revolving Commitments by up to
$35,000,000 in the aggregate (to an Aggregate Revolving Committed Amount of up
to $300 million); provided that (i) any such increase shall be in a minimum
principal amount of $10,000,000 and integral multiples of $5,000,000 in excess
thereof (or the remaining amount, if less), (ii) if any Revolving Loans are
outstanding at the time of any such increase, the Borrower shall make such
payments and adjustments on the Revolving Loans (including payment of any
break-funding amount owing under Section 2.12) as necessary to give effect to
the revised commitment percentages and commitment amounts of the Banks and (iii)
the conditions to Extensions of Credit in Section 3.02 shall be true and
correct. An increase in the Aggregate Revolving Committed Amount hereunder shall
be subject to satisfaction of the following: (A) the amount of such increase
shall be offered first to the existing Banks, and in the event the additional
commitments which existing Banks are willing to take shall exceed the amount
requested by the Borrower, then in proportion to the commitments of such
existing Banks willing to take additional commitments, and (B) if the amount of
the additional commitments requested by the Borrower shall exceed the additional
commitments which the existing Banks are willing to take, then the Borrower may
invite other commercial banks and financial institutions reasonably acceptable
to the Agent to join this Credit Agreement as Banks hereunder for the portion of
commitments not taken by existing Banks, provided that such other commercial
banks and financial institutions shall enter into such joinder agreements to
give effect thereto as the Agent and the Borrower may reasonably request. In
connection with any increase in the Revolving Commitments pursuant to this
-21-
Section, Schedule 2.1 shall be revised to reflect the modified commitment
percentages and commitments of the Banks.
SECTION 2.02 Method of Borrowing.
(a) The Borrower shall give the Agent and each Bank notice in
substantially the form of Schedule 2.02 (a "Notice of Borrowing") not later than
(i) 11:00 A.M. (Charlotte, North Carolina time) on the date of each Base Rate
Borrowing and (ii) 11:00 A.M. (Charlotte, North Carolina time) on the third
(3rd) Eurodollar Business Day before each Eurodollar Borrowing, specifying:
(i) the amount of the proposed Borrowing;
(ii) the date of such Borrowing, which shall be a
Business Day in the case of a Base Rate Borrowing or a Eurodollar
Business Day in the case of a Eurodollar Borrowing;
(iii) whether the Loans comprising such Borrowing are to
be Base Rate Loans or Eurodollar Loans, or a combination thereof, and
(iv) in the case of a Eurodollar Borrowing, the duration
of the initial Interest Period applicable thereto, subject to the
provisions of the definition of Interest Period.
(b) Upon receipt of a Notice of Borrowing, the Agent shall promptly
notify each Bank of the contents thereof and of such Banks ratable share of such
Borrowing and such Notice of Borrowing shall not thereafter be revocable by the
Borrower.
(c) Not later than (i) 2:00 P.M., (Charlotte, North Carolina time) on
the date of each Base Rate Borrowing, and (ii) 11:00 A.M. (Charlotte, North
Carolina time) on the date of each Eurodollar Borrowing, each Bank shall make
available its ratable share of such Borrowing, in federal or other funds
immediately available in Charlotte, North Carolina, to the Agent at its address
specified in or pursuant to Section 9.01. Unless any applicable condition
specified in Article III has not been satisfied, the Agent will make the funds
so received from the Banks available to the Borrower at an account of the
Borrower with the Agent immediately after being made available to the Agent at
the Agent's aforesaid address in immediately available funds.
SECTION 2.03 Notes.
(a) The Revolving Loans and Swingline Loans shall be evidenced by a
duly executed Revolving Note in favor of each Bank.
(b) Upon receipt of each Bank's Note pursuant to Section 3.01(b), the
Agent shall forward such Note to such Bank via overnight courier service. Each
Bank shall record on its Note the date, amount and maturity of each Loan made by
it and the date and amount of each payment of principal made by the Borrower
-22-
with respect thereto, and prior to any transfer of its Note shall endorse on the
schedule forming a part thereof appropriate notations to evidence the foregoing
information with respect to each such Loan then outstanding; provided that the
failure of any Bank to make any such recordation or endorsement shall not affect
the obligations of the Borrower hereunder or under such Note. Each Bank is
hereby irrevocably authorized by the Borrower so to endorse its Note and to
attach to and make a part of its Note a continuation of any such schedule as and
when required.
SECTION 2.04 Scheduled Termination of Commitments; Maturity of Loans.
(a) The Commitments shall terminate on the Termination Date and any
Loans then outstanding (together with accrued interest thereon) and all accrued
fees and other amounts payable hereunder (including all amounts payable under
Section 2.12) shall be due and payable in full on such date. Each repayment
pursuant to this Section 2.04(a) shall be made together with accrued interest to
the date of payment, and shall be applied ratably to payment of the Loans of the
several Banks in accordance with their respective Revolving Commitment
Percentages.
(b) Within the foregoing limits of this Section 2.04, each required
payment or prepayment shall be applied to the outstanding Group or Groups of
Loans as the Borrower may designate to the Agent not less than five (5) Business
Days or five (5) Eurodollar Business Days, as the case may be, prior to the date
required for such payment or prepayment or failing such designation by the
Borrower, as the Agent may specify by notice to the Borrower and the Banks.
SECTION 2.05 Interest Rates.
(a) Each Base Rate Loan shall bear interest on the outstanding
principal amount thereof, for each day from the date such Loan is made until it
becomes due, at a rate equal to the Base Rate for such day plus the Applicable
Percentage. Such interest shall be payable quarterly in arrears on the last day
of each Quarterly Period and on each date a Base Rate Loan is converted to a
Eurodollar Loan. Any overdue principal of or interest on any Base Rate Loan
shall bear interest, payable on demand, for each day until paid at a rate per
annum equal to the sum of 2.000% plus the rate otherwise applicable to Base Rate
Loans for such day.
(b) Each Eurodollar Loan shall bear interest on the outstanding
principal amount thereof, for the Interest Period applicable thereto, at a rate
equal to the Adjusted Eurodollar Rate for such Interest Period plus the
Applicable Percentage. Such interest shall be payable for each Interest Period
on the last day thereof and, if such Interest Period is longer than 3 months, at
intervals of 3 months after the first day thereof. Any overdue principal of or
interest on any Eurodollar Loan shall bear interest, payable on demand for each
day until paid at a rate per annum equal to the sum of 2.000% plus (i) for each
day during any Interest Period applicable to such Eurodollar Loan, the rate
applicable to such Eurodollar Loan for such day, and (ii) for each day after the
end of such Interest Period, the sum of 2.000% plus the rate applicable to Base
Rate Loans for such day.
-23-
(c) Each Swingline Loan shall bear interest on the outstanding
principal amount thereof, for each day from the date such Loan is made until it
becomes due, at a rate equal to the Base Rate plus Applicable Percentage, or the
Quoted Rate, as applicable. Such interest shall be payable quarterly on the last
day of each Quarterly Period in the case of Base Rate Loans, and on the last day
of each Interest Period, or if the Interest Period is longer than three (3)
months, at intervals of three (3) months after the first day thereof, in the
case of Quoted Rate Swingline Loans. Any overdue principal of or interest on any
Swingline Loans shall bear interest, payable on demand, for each day until paid
at a rate per annum equal to the sum of 2.000% plus the rate otherwise
applicable to such Swingline Loans for such day (or if no rate is otherwise
applicable for such day, the Base Rate).
(d) The Agent shall determine each interest rate applicable to the
Loans hereunder. The Agent shall give prompt notice to the Borrower and the
Banks by facsimile, telex or cable of each rate of interest so determined, and
its determination thereof shall be conclusive in the absence of manifest error.
(e) The Eurodollar Reference Bank agrees to use its best efforts to
furnish quotations to the Agent as contemplated by this Section 2.05. If the
Eurodollar Reference Bank does not provide a timely quotation, the provisions of
Section 8.01 shall apply.
2.06 Letters of Credit.
(a) Notice and Reports. Except for those Letters of Credit described on
Schedule 2.06(a) which shall be issued on the Closing Date, the request for the
issuance of a Letter of Credit shall be submitted by the Borrower to the Issuing
Bank at least three (3) Business Days prior to the requested date of issuance
(or such shorter period as may be agreed by the Issuing Bank). A form of Notice
of Request for Letter of Credit is attached as Schedule 2.06(b)-2. The Issuing
Bank will provide copies of the Letters of Credit to the Agent and the Banks
quarterly and more frequently upon request.
(b) Participation. Each Bank, with respect to the Existing Letters of
Credit, hereby purchases a participation interest in such Existing Letters of
Credit, and with respect to Letters of Credit issued on or after the Closing
Date, upon issuance of a Letter of Credit, shall be deemed to have purchased
without recourse a risk participation from the applicable Issuing Bank in such
Letter of Credit and the obligations arising thereunder, in each case in an
amount equal to its Revolving Commitment Percentage of the obligations under
such Letter of Credit and shall absolutely and unconditionally assume, and be
obligated to pay to the Issuing Bank therefor and discharge when due, its pro
rata share of the obligations arising under such Letter of Credit. Without
limiting the scope and nature of each Bank's participation in any Letter of
Credit, to the extent that the Issuing Bank has not been reimbursed as required
hereunder or under any such Letter of Credit, each such Bank shall pay to the
Issuing Bank its pro rata share of such unreimbursed drawing in same day funds
on the day of notification by the Issuing Bank of an unreimbursed drawing
pursuant to the provisions of subsection (d) hereof. The obligation of each Bank
to so reimburse the Issuing Bank 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
-24-
impair the obligation of the Borrower to reimburse the Issuing Bank under any
Letter of Credit, together with interest as hereinafter provided. The Borrower
agrees, to the fullest extent it may effectively do so under applicable law,
that each Bank which holds a participation in a Letter of Credit may exercise
rights of set-off or counterclaim and other rights with respect to such
participation as fully as if such holder of a participation were a direct
creditor of the Borrower in the amount of such participation.
(c) Reimbursement. In the event of any drawing under any Letter of
Credit, the Issuing Bank will promptly notify the Borrower. Unless the Borrower
shall immediately notify the Issuing Bank that the Borrower intends to otherwise
reimburse the Issuing Bank for such drawing, the Borrower shall be deemed to
have requested that the Banks make a Revolving Loan in the amount of the drawing
as provided in subsection (e) hereof on the related Letter of Credit, the
proceeds of which will be used to satisfy the related reimbursement obligations.
The Borrower promises to reimburse the Issuing Bank on the day of drawing under
any Letter of Credit (either with the proceeds of a Revolving Loan obtained
hereunder or otherwise) in same day funds. If the Borrower shall fail to
reimburse the Issuing Bank as provided hereinabove, the unreimbursed amount of
such drawing shall bear interest at a per annum rate equal to the Base Rate plus
the sum of (i) the Applicable Percentage and (ii) two percent (2%). The
Borrower's reimbursement obligations hereunder shall be absolute and
unconditional under all circumstances irrespective of any rights of setoff,
counterclaim or defense to payment the Borrower may claim or have against the
Issuing Bank, the Agent, the Banks, the beneficiary of the Letter of Credit
drawn upon or any other Person, including without limitation any defense based
on any failure of the Borrower to receive consideration or the legality,
validity, regularity or unenforceability of the Letter of Credit. The Issuing
Bank will promptly notify the other Banks of the amount of any unreimbursed
drawing and each Bank shall promptly pay to the Agent for the account of the
Issuing Bank in Dollars and in immediately available funds, the amount of such
Bank's pro rata share of such unreimbursed drawing. Such payment shall be made
on the day such notice is received by such Bank from the Issuing Bank 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. If such Bank does not pay such amount to the Issuing Bank in full upon
such request, such Bank shall, on demand, pay to the Agent for the account of
the Issuing Bank interest on the unpaid amount during the period from the date
of such drawing until such Bank pays such amount to the Issuing Bank in full at
a rate per annum equal to, if paid within two (2) Business Days of the date that
such Bank is required to make payments of such amount pursuant to the preceding
sentence, the Federal Funds Rate and thereafter at a rate equal to the Base
Rate. Each Bank's obligation to make such payment to the Issuing Bank, and the
right of the Issuing Bank 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 Credit Agreement or the Commitments hereunder,
the existence of a Default or Event of Default or the acceleration of the
obligations of the Borrower hereunder and shall be made without any offset,
abatement, withholding or reduction whatsoever. Simultaneously with the making
of each such payment by a Bank to the Issuing Bank, such Bank shall,
automatically and without any further action on the part of the Issuing Bank or
such Bank, acquire a participation in an amount equal to such payment (excluding
the portion of such payment constituting interest owing to the Issuing Bank) in
the related unreimbursed drawing portion of the LOC Obligation and in the
-25-
interest thereon and in the related LOC Documents, and shall have a claim
against the Borrower with respect thereto.
(d) Repayment with Revolving Loans. On any day on which the Borrower
shall have requested, or been deemed to have requested, a Revolving Loan advance
to reimburse a drawing under a Letter of Credit, the Agent shall give notice to
the Banks that a Revolving Loan has been requested or deemed requested by the
Borrower to be made in connection with a drawing under a Letter of Credit, in
which case a Revolving Loan advance comprised of Base Rate Loans (or Eurodollar
Loans to the extent the Borrower has complied with the procedures of Section
2.02(a) with respect thereto) shall be immediately made to the Borrower by all
Banks (notwithstanding any termination of the Commitments pursuant to Section
6.01) pro rata based on the respective Revolving Commitment Percentages of the
Banks (determined before giving effect to any termination of the Commitments
pursuant to Section 6.01) and the proceeds thereof shall be paid directly to the
Issuing Bank for application to the respective LOC Obligations. Each such Bank
hereby irrevocably agrees to make its pro rata share of each such Revolving Loan
immediately upon any such request or deemed request in the amount, in the manner
and on the date specified in the preceding sentence notwithstanding (i) the
amount of such borrowing may not comply with the minimum amount for advances of
Revolving Loans otherwise required hereunder, (ii) whether any conditions
specified in Section 3.02 are then satisfied, (iii) whether a Default or an
Event of Default then exists, (iv) failure for any such request or deemed
request for Revolving Loan to be made by the time otherwise required hereunder,
(v) whether the date of such borrowing is a date on which Revolving Loans are
otherwise permitted to be made hereunder or (vi) any termination of the
Commitments relating thereto immediately prior to or contemporaneously with such
borrowing. In the event that any Revolving Loan 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 with respect to the
Borrower), then each such Bank hereby agrees that it shall forthwith purchase
(as of the date such borrowing would otherwise have occurred, but adjusted for
any payments received from the Borrower on or after such date and prior to such
purchase) from the Issuing Bank such participation in the outstanding LOC
Obligations as shall be necessary to cause each such Bank to share in such LOC
Obligations ratably (based upon the respective Revolving Commitment Percentages
of the Banks (determined before giving effect to any termination of the
Commitments pursuant to Section 6.01)), provided that in the event such payment
is not made on the day of drawing, such Bank shall pay in addition to the
Issuing Bank interest on the amount of its unfunded Participation Interest at a
rate equal to, if paid within two (2) Business Days of the date of drawing, the
Federal Funds Rate, and thereafter at the Base Rate.
(e) Renewal, Extension. The renewal or extension of 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.
(f) Uniform Customs and Practices. The Issuing Bank may have the
Letters of Credit be subject to The Uniform Customs and Practice for Documentary
Credits, as published as of the date of issue by the International Chamber of
Commerce (the "UCP"), in which case the UCP may be incorporated therein and
deemed in all respects to be a part thereof.
-26-
(g) Indemnification; Nature of Issuing Bank's Duties.
(i) In addition to its other obligations under this Section
2.06, the Borrower hereby agrees to protect, indemnify, pay and save
the Issuing Bank harmless from and against any and all claims, demands,
liabilities, damages, losses, costs, charges and expenses (including
reasonable attorneys' fees) that the Issuing Bank may incur or be
subject to as a consequence, direct or indirect, of (A) the issuance of
any Letter of Credit or (B) the failure of the Issuing Bank to honor a
drawing under a Letter of Credit as a result of any act or omission,
whether rightful or wrongful, of any present or future de jure or de
facto government or governmental authority (all such acts or omissions,
herein called "Government Acts").
(ii) As between the Borrower and the Issuing Bank, the
Borrower shall assume all risks of the acts, omissions or misuse of any
Letter of Credit by the beneficiary thereof. The Issuing Bank shall not
be responsible: (A) for the form, validity, sufficiency, accuracy,
genuineness or legal effect of any document submitted by any party in
connection with the application for and issuance of any Letter of
Credit, even if it should in fact prove to be in any or all respects
invalid, insufficient, inaccurate, fraudulent or forged; (B) for the
validity or sufficiency of any instrument transferring or assigning or
purporting to transfer or assign any Letter of Credit or the rights or
benefits thereunder or proceeds thereof, in whole or in part, that may
prove to be invalid or ineffective for any reason; (C) for errors,
omissions, interruptions or delays in transmission or delivery of any
messages, by mail, cable, telegraph, telex or otherwise, whether or not
they be in cipher; (D) for any loss or delay in the transmission or
otherwise of any document required in order to make a drawing under a
Letter of Credit or of the proceeds thereof; and (E) for any
consequences arising from causes beyond the control of the Issuing
Bank, including, without limitation, any acts by Governmental
Authorities. None of the above shall affect, impair, or prevent the
vesting of the Issuing Bank's rights or powers hereunder.
(iii) In furtherance and extension and not in limitation of
the specific provisions hereinabove set forth, any action taken or
omitted by the Issuing Bank, under or in connection with any Letter of
Credit or the related certificates, if taken or omitted in good faith,
shall not put such Issuing Bank under any resulting liability to the
Borrower. It is the intention of the parties that this Credit Agreement
shall be construed and applied to protect and indemnify the Issuing
Bank against any and all risks involved in the issuance of the Letters
of Credit, all of which risks are hereby assumed by the Borrower,
including, without limitation, any and all acts by Governmental
Authorities. The Issuing Bank shall not, in any way, be liable for any
failure by the Issuing Bank or anyone else to pay any drawing under any
Letter of Credit as a result of any acts by Governmental Authorities or
any other cause beyond the control of the Issuing Bank.
(iv) Nothing in this subsection (g) is intended to limit the
reimbursement obligations of the Borrower contained in subsection (c)
above. The obligations of the Borrower under this subsection (g) shall
survive the termination of this Credit Agreement. No act or omission
-27-
of any current or prior beneficiary of a Letter of Credit shall in any
way affect or impair the rights of the Issuing Bank to enforce any
right, power or benefit under this Credit Agreement.
(v) Notwithstanding anything to the contrary contained in this
subsection (g), the Borrower shall have no obligation to indemnify the
Issuing Bank in respect of any liability incurred by the Issuing Bank
(A) arising solely out of the gross negligence or willful misconduct of
the Issuing Bank, as determined by a court of competent jurisdiction,
or (B) caused by the Issuing Bank's failure to pay under any Letter of
Credit after presentation to it of a request strictly complying with
the terms and conditions of such Letter of Credit, as determined by a
court of competent jurisdiction, unless such payment is prohibited by
any law, regulation, court order or decree.
(vi) The rights and benefits of this subsection (g) shall also
extend to Banks which hold participations in Letters of Credit
hereunder.
(h) Responsibility of Issuing Bank. It is expressly understood and
agreed that the obligations of the Issuing Bank hereunder to the Banks are only
those expressly set forth in this Credit Agreement and that the Issuing Bank
shall be entitled to assume that the conditions precedent set forth in Section
3.02 have been satisfied unless it shall have acquired actual knowledge that any
such condition precedent has not been satisfied; provided, however, that nothing
set forth in this Section 2.06 shall be deemed to prejudice the right of any
Bank to recover from the Issuing Bank any amounts made available by such Bank to
the Issuing Bank pursuant to this Section 2.06 in the event that it is
determined by a court of competent jurisdiction that the payment with respect to
a Letter of Credit constituted gross negligence or willful misconduct on the
part of the Issuing Bank.
(i) Conflict with LOC Documents. In the event of any conflict between
this Credit Agreement and any LOC Document (including any letter of credit
application), this Credit Agreement shall control.
2.07 Swingline Loan Advances.
(a) Notices; Disbursement. Whenever the Borrower desires a Swingline
Loan advance hereunder it shall give written notice (or telephonic notice
promptly confirmed in writing) to the Swingline Bank not later than 11:00 A.M.
(Charlotte, North Carolina time) on the Business Day of the requested Swingline
Loan advance. Each such notice shall be irrevocable and shall specify (A) that a
Swingline Loan advance is requested, (B) the date of the requested Swingline
Loan advance (which shall be a Business Day) and (C) the principal amount of and
Interest Period for the Swingline Loan advance requested. Each Swingline Loan
shall have such maturity date as the Swingline Bank and the Borrower shall agree
upon receipt by the Swingline Bank of any such notice from the Borrower. The
Swingline Bank shall initiate the transfer of funds representing the Swingline
Loan advance to the Borrower by 3:00 P.M. (Charlotte, North Carolina time) on
the Business Day of the requested borrowing.
-28-
(b) Repayment of Swingline Loans. The principal amount of all Swingline
Loans shall be due and payable on the earlier of (A) the maturity date agreed to
by the Swingline Bank and the Borrower with respect to such Loan or (B) the
Termination Date. The Swingline Bank may, at any time, in its sole discretion,
by written notice to the Borrower and the Banks, demand repayment of its
Swingline Loans by way of a Revolving Loan advance, in which case the Borrower
shall be deemed to have requested a Revolving Loan advance comprised solely of
Base Rate Loans (or, with the requisite notice, Eurodollar Loans) in the amount
of such Swingline Loans; provided, however, that any such demand shall be deemed
to have been given one Business Day prior to the Termination Date and on the
date of the occurrence of any Event of Default described in Section 6.01 and
upon acceleration of the indebtedness hereunder and the exercise of remedies in
accordance with the provisions of Section 6.01. Each Bank hereby irrevocably
agrees to make its pro rata share of each such Revolving Loan in the amount, in
the manner and on the date specified in the preceding sentence notwithstanding
(i) the amount of such borrowing may not comply with the minimum amount for
advances otherwise required hereunder, (ii) whether any conditions specified in
Section 3.02 are then satisfied, (iii) whether a Default or an Event of Default
then exists, (iv) failure of any such request or deemed request for Revolving
Loan to be made by the time otherwise required hereunder, (v) whether the date
of such borrowing is a date on which Revolving Loans are otherwise permitted to
be made hereunder or (vi) any termination of the Commitments relating thereto
immediately prior to or contemporaneously with such borrowing. In the event that
a Revolving Loan 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 with respect to the Borrower), then each
Bank hereby agrees that it shall forthwith purchase (as of the date such
borrowing would otherwise have occurred, but adjusted for any payments received
from the Borrower on or after such date and prior to such purchase) from the
Swingline Bank such Participation Interests in the outstanding Swingline Loans
as shall be necessary to cause each such Bank to share in such Swingline Loans
ratably based upon its Revolving Commitment Percentage (determined before giving
effect to any termination of the Commitments pursuant to Section 6.01), provided
that (A) all interest payable on the Swingline Loans shall be for the account of
the Swingline Bank until the date as of which the respective Participation
Interest is requested to be purchased and (B) at the time any purchase of
Participation Interests pursuant to this sentence is actually made, the
purchasing Bank shall be required to pay to the Swingline Bank, to the extent
not paid to the Swingline Bank by the Borrower in accordance with the terms
hereof, interest on the principal amount of Participation Interests purchased
for each day from and including the day upon which such borrowing would
otherwise have occurred to but excluding the date of payment for such
Participation Interests, at the rate equal to the Federal Funds Rate.
SECTION 2.08 Optional Termination or Reduction of Revolving
Commitments. The Borrower may at any time, upon at least three (3) Business
Days' written notice to the Agent, terminate the Revolving Commitments in whole
or reduce the Revolving Commitments in part up to the amount by which the
Revolving Commitments exceed the aggregate principal amount of the Revolving
Loans; provided, however, any such partial reduction shall be in a minimum
amount of $5,000,000.00 (or such lesser aggregate amount of the Revolving
Commitments as may then be in effect) or any larger multiple of $1,000,000.00,
provided further, any such reduction shall be made ratably among the Banks.
-29-
SECTION 2.09 Prepayments.
(a) Optional Prepayments.
(i) The Borrower may, upon written notice delivered to
the Agent not later than 2:00 P.M. (Charlotte, North Carolina time) on
the first Business Day prior to the date of such prepayment, prepay a
Group of Base Rate Loans in whole at any time, or from time to time in
part in amounts aggregating $500,000.00 or any larger multiple of
$100,000.00 by paying (in Dollars) the principal amount to be prepaid
together with accrued interest thereon to the date of prepayment. Each
such optional prepayment shall be applied to prepay ratably the Base
Rate Loans of the several Banks included in such Group.
(ii) The Borrower may, upon at least three (3) Eurodollar
Business Days' notice to the Agent, prepay a Group of Eurodollar Loans
in whole at any time, or from time to time in part in amounts
aggregating $1,000,000.00 or any larger multiple of $100,000.00, by
paying the principal amount to be prepaid together with accrued
interest thereon to the date of prepayment, as designated by Borrower
pursuant to Section 2.04(b); provided that the Borrower shall reimburse
each Bank for any loss or expense incurred by it as a result of any
such prepayment in accordance with Section 2.12. Each such optional
prepayment shall be applied to prepay ratably the Loans of the several
Banks included in such Group.
(iii) Upon receipt of a notice of prepayment pursuant to
this Section, the Agent shall promptly notify each Bank of the contents
thereof and of such Bank's ratable share of such prepayment and such
notice shall not thereafter be revocable by the Borrower.
(b) Mandatory Prepayments.
(i) Mandatory Prepayments from Asset Sales. Within five (5)
Business Days (or such longer period of time agreed to by the Banks
under the Term Loan Agreement) of each receipt by the Borrower or any
of its Subsidiaries or Specified Affiliates of any Net Sale Proceeds
from any Asset Sale, the Borrower shall prepay, or cause such
Subsidiary or Specified Affiliate to prepay on behalf of the Borrower,
to the Agent under the Term Loan Agreement for the account of the Banks
thereunder an amount equal to 100% of all Net Sale Proceeds from all
such Asset Sales. Prepayments pursuant to this subsection (b)(i) shall
be applied to prepay the Term Loans as provided in the Term Loan
Agreement until paid in full, including accrued interest and fees and
other amounts owing thereunder, together with interest accrued thereon
to the date of prepayment.
(ii) Mandatory Prepayment from the Proceeds of Equity
Contributions or the Issuance of Stock. Within five (5) Business Days
(or such longer period of time agreed to by the Banks under the Term
Loan Agreement) of each date on which the Borrower or any of its
-30-
Subsidiaries receives cash proceeds from any equity contributions or
cash proceeds from the issuance of stock, the Borrower shall make
payment, or shall cause any such Subsidiary to make payment, of such
cash proceeds less any actual out of pocket expenses, fees and other
sums paid or incurred by Borrower or its Subsidiary in connection
therewith, to prepay the Term Loans as provided in the Term Loan
Agreement until paid in full, including accrued interest and fees and
other amounts owing thereunder.
(iii) Mandatory Prepayment from the Proceeds of Debt. Within
five (5) Business Days (or such longer period of time agreed to by the
Banks under the Term Loan Agreement) of each date on which the Borrower
or any of its Subsidiaries receives cash proceeds from the issuance of
any Debt after the Closing Date (other than (i) borrowings under this
Revolving Credit Agreement, or (ii) mortgage indebtedness assumed in
connection with purchases and acquisitions otherwise permitted
hereunder), the Borrower shall make payment, or shall cause any such
Subsidiary to make payment, of such cash proceeds, less any actual out
of pocket expenses, fees and other sums paid or incurred by Borrower or
such Subsidiary in connection therewith, to prepay the Term Loans as
provided in the Term Loan Agreement until paid in full, including
accrued interest and fees and other amounts owing thereunder.
(iv) Mandatory Prepayment in respect of Commitments. If at any
time (i) the aggregate Obligations shall exceed the Aggregate Revolving
Commitments, (ii) the aggregate LOC Obligations shall exceed the
aggregate LOC Committed Amount, (iii) the Swingline Loans shall exceed
the Swingline Committed Amount, or (iv) Extensions of Credit used for
general corporate purposes shall exceed the sum of Fifty Million
Dollars ($50,000,000), plus any additional amounts to the extent
necessary to maintain the Borrower's REIT status, then the Borrower
shall make prompt payment on the Loans or after payment of the Loans in
full, provide cash collateral in respect of the LOC Obligations, in an
amount sufficient to eliminate the deficiency.
(v) Notice of Mandatory Prepayment. The Borrower shall notify
the Agent of any prepayment pursuant to this Section 2.09 at least two
(2) Business Days prior to the date on which such prepayment is
required to be made and deliver a compliance certificate with the
prepayment in form and substance satisfactory to the Agent; provided,
however, that the failure to give such notice shall not affect the
obligation of the Borrower to make such prepayment on such date.
SECTION 2.10 Method of Electing Interest Rates.
(a) The Loans included in each Borrowing shall bear interest initially
at the type of rate specified by the Borrower in the applicable Notice of
Borrowing. Thereafter, the Borrower may from time to time elect to change or
continue the type of interest rate borne by each Group of Loans (subject in each
case to the provisions of Article VIII), as follows:
(i) if such Loans are Base Rate Loans, the Borrower may
elect to convert such Loans to Eurodollar Loans as of any Eurodollar
Business Day; and
-31-
(ii) if such Loans are Eurodollar Loans, the Borrower may
elect to convert such Loans to Base Rate Loans or elect to continue
such Loans as Eurodollar Loans for an additional Interest Period, in
each case effective on the last day of the then current Interest Period
applicable to such Loans;
provided, that the Borrower may not elect to continue any Eurodollar Loan or
convert any Loan into a Eurodollar Loan after the occurrence and during the
continuation of a Default. Each such election shall be made by delivering a
notice in substantially the form of Schedule 2.10 (a "Notice of Interest Rate
Election") to the Agent no later than 11:00 A.M. (Charlotte, North Carolina
time) (x) if the relevant Loans are to be converted to Base Rate Loans, the
second Business Day before such conversion or continuation is to be effective
and (y) if the relevant Loans are to be converted to Eurodollar Loans or
continued as Eurodollar Loans for an additional Interest Period, the third
Eurodollar Business Day before such conversion or continuation is to be
effective. A Notice of Interest Rate Election may, if it so specifies, apply to
only a portion of the aggregate principal amount of the relevant Group of Loans;
provided that (i) such portion is allocated ratably among the Loans comprising
such Group and (ii) the portion to which such Notice applies, and the remaining
portion to which it does not apply, are each at least $500,000.00 and no more
than one of such portions is other than a multiple of $100,000.00.
(b) Each Notice of Interest Rate Election shall specify:
(i) the Group of Loans ( or portion thereof) to which
such notice applies;
(ii) the date on which the conversion or continuation
selected in such notice is to be effective, which shall comply with
subsection (a) above;
(iii) if the Loans comprising such Group are to be
converted, the new type of Loans and, if such new Loans are Eurodollar
Loans, the duration of the initial Interest Period applicable thereto;
and
(iv) if such Loans are to be continued as Eurodollar
Loans for an additional Interest Period, the duration of such
additional Interest Period.
Each Interest Period specified in a Notice of Interest Rate Election shall
comply with the provisions of the definition of Interest Period. No more than
twenty (20) Groups of Loans shall be outstanding at any one time.
(c) Upon receipt of a Notice of Interest Rate Election from the
Borrower pursuant to Section 2.10(a) above, the Agent shall promptly notify each
Bank of the contents thereof and such notice shall not thereafter be revocable
by the Borrower. If the Borrower fails to deliver a timely Notice of Interest
Rate Election to the Agent for any Group of Eurodollar Loans, such Loans shall
be converted into Base Rate Loans on the last day of the then current Interest
Period applicable thereto.
-32-
SECTION 2.11 General Provisions as to Payments.
(a) The Borrower shall make each payment of principal of, and interest
on, the Loans and of fees hereunder, without setoff, deduction, counterclaim or
withholding of any kind, not later than 3:00 p.m. (Charlotte, North Carolina
time) on the date when due, in federal or other funds immediately available in
Charlotte, North Carolina, to the Agent at its address referred to in Section
9.01 and any of such payments received after 3:00 p.m. on the required due date
shall be deemed to have been paid by the Borrower on the next succeeding
Business Day. Any such payment with respect to a Loan shall be made in Dollars.
The Agent will promptly distribute to each Bank its ratable share of each such
payment received by the Agent for the account of the Banks. Whenever any payment
of principal of, or interest on, the Base Rate Loans or of fees shall be due on
a day which is not a Business Day, the date for payment thereof shall be
extended to the next succeeding Business Day. Whenever any payment of principal
of, or interest on, the Eurodollar Loans shall be due on a day which is not a
Eurodollar Business Day, the date for payment thereof shall be extended to the
next succeeding Eurodollar Business Day unless such Eurodollar Business Day
falls in another calendar month, in which case the date for payment thereof
shall be the next preceding Eurodollar Business Day. If the date for any payment
of principal is extended by operation of law or otherwise, interest thereon
shall be payable for such extended time.
(b) Unless the Agent shall have received notice from the Borrower prior
to the date on which any payment is due to the Banks hereunder that the Borrower
will not make such payment in full, the Agent may assume that the Borrower has
made such payments in full to the Agent, on such date and the Agent may, in
reliance upon such assumption, cause to be distributed to each Bank on such due
date an amount equal to the amount then due such Bank. If and to the extent that
the Borrower shall not have so made such payments, each Bank shall repay to the
Agent forthwith on demand such amount distributed to such Bank together with
interest thereon, for each day from the date such amount is distributed to such
Bank until the date such Bank repays such amount to the Agent, at the Federal
Funds Rate.
SECTION 2.12 Funding Losses. If the Borrower makes any payments of
principal with respect to any Eurodollar Loan or any Eurodollar Loan is
converted to another type of Loan (pursuant to Articles II, VI, VIII, or
otherwise) on any day other than the last day of an Interest Period applicable
thereto, or if the Borrower fails to borrow or prepay any Eurodollar Loans after
notice has been given to any Bank in accordance with the terms hereof, the
Borrower shall reimburse each applicable Bank on demand for any resulting
reasonable out of pocket loss or expense incurred by it (or any existing
Participant in the related Loan, provided that the amount collected by a Bank
and its Participant shall not exceed the amount which the Bank would have been
entitled to collect absent such participation), including (without limitation)
any such loss incurred in obtaining, liquidating or employing deposits from
third parties to fund or maintain such Loan or proposed Loan, but excluding loss
of margin for the period after any such payment or conversion or failure to
borrow or prepay, provided that such Bank shall have delivered to the Borrower
(with a copy to the Agent) a certificate prior to requesting reimbursement
setting forth in reasonable detail its calculation of the amount of such loss or
expense, which certificate shall be conclusive in the absence of manifest error.
-33-
NOTWITHSTANDING THE FOREGOING PROVISIONS OF THIS SECTION 2.12 TO THE CONTRARY,
THE TERM "LOSS" SHALL NOT INCLUDE AND BORROWER SHALL NOT BE RESPONSIBLE FOR THE
PAYMENT OF ANY LOST PROFITS (IN EXCESS OF THE AMOUNTS OTHERWISE PAYABLE BY
BORROWER HEREUNDER AS A PART OF THE ADJUSTED EURODOLLAR RATE) OR ANY
CONSEQUENTIAL, SPECULATIVE, PUNITIVE OR OTHER DAMAGES.
SECTION 2.13 Computation of Interest and Fees. All interest and fees
hereunder shall be computed on the basis of a year of 360 days and paid for the
actual number of days elapsed (including the first day but excluding the last
day).
SECTION 2.14 Withholding Tax Exemption. At least five (5) Business Days
prior to the first date on which interest or fees are payable hereunder for the
account of any Bank, each Bank that is not incorporated under the laws of the
United States of America or a state thereof agrees that it will deliver to the
Borrower and the Agent two duly and properly completed copies of United States
Internal Revenue Service Form 1001 or 4224 (or any successor form, in either
case), certifying in either case that such Bank is entitled to receive payments
under this Credit Agreement and the Notes without deduction or withholding of
any United States federal income taxes. Each Bank which so delivers a Form 1001
or 4224 (or any successor form, in either case) further undertakes to deliver to
the Borrower and the Agent two (2) additional copies of such form (or a
successor form) on or before the date that such form expires or becomes obsolete
or after the occurrence of any event requiring a change in the most recent form
so delivered by it, and such amendments thereto or extensions or renewals
thereof as may be reasonably requested by the Borrower or the Agent, in each
case certifying that such Bank is entitled to receive payments under this Credit
Agreement and the Notes without deduction or withholding of any United States
federal income taxes, unless an event (including without limitation any change
in treaty, law or regulation) has occurred prior to the date on which any such
delivery would otherwise be required which renders all such forms inapplicable
or which would prevent such Bank from duly completing and delivering any such
form with respect to it and such Bank advises the Borrower and the Agent that it
is not capable of receiving payments without any deductions or withholding of
United States federal income tax, in which case such Bank shall have appropriate
amounts withheld pursuant to applicable law. Notwithstanding any provision
contained in this Credit Agreement to the contrary, if the Borrower, on advice
of counsel, reasonably believes that the Borrower should withhold an amount with
respect to any Bank on account of any applicable Government requirement, the
Borrower shall be entitled to withhold such sum in accordance with the
applicable Government requirement.
SECTION 2.15 Fees.
(a) Unused Fee. From and after the Closing Date, the Borrower agrees to
pay the Agent for the ratable benefit of the Banks an unused fee for each
calendar quarter, prorated for partial quarters, in an amount equal to the
Applicable Percentage multiplied by the average daily unused amount of the
Revolving Commitments (the "Unused Fee"). For purposes hereof, (i) Swingline
Loans shall not be counted toward or considered usage under the Revolving Loan
facility but (ii) LOC Obligations shall be counted toward and considered usage
-34-
under the Revolving Loan facility subject to compensation provided in Section
2.15(c)(i) hereof. The Unused Fee shall be payable quarterly in arrears on the
last day of each Quarterly Period commencing with the period ending December 31,
1998. The Agent shall distribute the Unused Fee to the Banks pro rata in
accordance with the respective Revolving Commitments of the Banks.
(b) Upfront and Other Fees. The Borrower agrees to pay to the Agent for
the benefit of the Banks the upfront and other fees provided in the Agent's Fee
Letter.
(c) Letter of Credit Fees.
(i) Letter of Credit Fee. In consideration of the LOC
Commitment hereunder, the Borrower agrees to pay to the Agent for the
ratable benefit of the Banks a fee (the "Letter of Credit Fee") equal
to the Applicable Percentage per annum on the average daily maximum
amount available to be drawn under Letters 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 15th day following the last day of
each calendar quarter for the immediately preceding quarter (or portion
thereof) beginning with the first such date to occur after the Closing
Date.
(ii) Issuing Bank Fees. In addition to the Letter of Credit
Fee, the Borrower agrees to pay to the Issuing Bank for its own account
without sharing by the other Banks (A) a fronting and negotiation fee
of one eighth of one percent (0.125%) per annum on the average daily
maximum amount available to be drawn under Letters of Credit issued by
it from the date of issuance to the date of expiration, and (B)
customary charges of the Issuing Bank with respect to the issuance,
amendment, transfer, administration, cancellation and conversion of,
and drawings under, such Letters of Credit (collectively, the "Issuing
Bank Fees").
(d) Agent's Fees. The Borrower agrees to pay the Agent such fees as may
be agreed upon by the Agent and the Borrower from time to time.
ARTICLE III
CONDITIONS
SECTION 3.01 Conditions to Initial Extensions of Credit. The obligation
of the Banks to make initial Extensions of Credit hereunder is subject to the
satisfaction of such of the following conditions in all material respects on or
prior to the Closing Date as shall not have been expressly waived in accordance
with Section 9.05:
(a) The Agent shall have received counterparts hereof signed by each of
the parties hereto (or, in the case of any party (other than the Borrower) as to
which an executed counterpart shall not have been received, receipt by the Agent
in form satisfactory to it of telegraphic, facsimile, telex or other written
-35-
confirmation from such party of execution of a counterpart hereof by such
party); provided, however, in any event, the Agent shall distribute to each Bank
promptly after the Closing Date an original Credit Agreement executed by the
Borrower, the Banks and the Agent;
(b) The Agent shall have received a duly executed Revolving Note for
the account of each Bank, complying with Section 2.03;
(c) The Agent shall have received the duly executed Subsidiaries
Guarantees;
(d) The Agent and each Bank shall have received legal opinions of
counsel to the Borrower and the other Obligors, in form and substance
satisfactory to the Agent and the Banks;
(e) The Agent shall have received all documents it may reasonably
request relating to the existence of the Borrower and each Obligor, the
corporate authority for and the validity of each of the Financing Documents, and
any other matters relevant hereto, all in form and substance satisfactory to the
Agent;
(f) The Agent shall receive the applicable Notice of Borrowing relating
to such Extension of Credit;
(g) No Default shall have occurred and be continuing immediately before
the making of such Extension of Credit and no Default shall exist immediately
thereafter;
(h) The representations and warranties of the Borrower and the Obligors
made in or pursuant to the Financing Documents to which it is a party shall be
true in all material respects as of the date of the making of such Extensions of
Credit;
(i) The Extension of Credit will be extended in compliance with all
applicable governmental laws and regulations (including without limitation
Regulations U, T and X);
(j) The Agent shall have received a certificate of the Borrower, signed
on behalf of Borrower by the Borrower's chief executive officer or chief
financial officer, confirming to the knowledge of such officer that no Default
is continuing, the Borrower is Solvent and all other conditions precedent to the
initial borrowing hereunder have been satisfied in all material respects;
(k) The Agent and the Banks shall have been paid all fees due and
payable pursuant to Sections 2.15(b) and (d) hereof;
(l) No litigation shall be pending or to the knowledge of Borrower
threatened against the Borrower, any Material Subsidiary or any Specified
Affiliate which would be likely to materially and adversely affect the assets,
operations, business or condition, financial or otherwise, of the Borrower, any
Material Subsidiary or any Specified Affiliate, or which could reasonably be
-36-
expected to affect materially and adversely the ability of the Borrower to
fulfill its obligations hereunder;
(m) There shall not have occurred or become known any material adverse
change with respect to the condition (financial or otherwise), operations,
business or assets of the Borrower and its Subsidiaries (including CCT and its
Subsidiaries) taken as a whole, since December 31, 1997;
(n) The Agent shall have received a certified copy of the definitive
Agreement and Plan of Merger dated as of June 8, 1998, among the Borrower, HR
Acquisition I Corporation and Capstone Capital Corporation, including exhibits,
schedules, amendments and modifications thereto, and related documentation;
(o) The acquisition of CCT shall have been consummated in accordance
with the foregoing Agreement and Plan of Merger and all applicable laws, and all
waiting periods required by any Governmental Authority applicable to the
Borrower with respect to such acquisition shall have lapsed without objection;
(p) within three (3) Business Days following the Closing Date, a
preliminary pro forma balance sheet, together with a statement of sources and
uses of funds in connection with the acquisition of CCT and the initial
Extensions of Credit hereunder, in form and detail satisfactory to the Agent
(subject to final adjustments, including reallocation of purchase
consideration);
(q) confirmation of the execution and effectiveness of the Term Loan
Agreement and the other credit documents relating thereto;
The certificates and opinions referred to in this Section shall be
dated not earlier than the date hereof and not later than the date of such
initial Extensions of Credit.
SECTION 3.02 Conditions to Extension of Credit. The obligation of any
Bank to make any Extension of Credit hereunder subsequent to the initial
Extension of Credit is subject to the satisfaction of such of the following
conditions on or prior to the proposed date of the making of such Extension of
Credit:
(a) The Agent shall receive the applicable Notice of Borrowing relating
to such loan pursuant to Section 2.02(a) hereof;
(b) No Default shall have occurred and be continuing immediately before
the making of such Extension of Credit and no Default shall exist immediately
thereafter;
(c) The representations and warranties of the Borrower and the other
Obligors made in or pursuant to the Financing Documents to which it is a party
shall be true in all material respects on and as of the date of such Extension
of Credit; and
-37-
(d) Immediately following the making of such Loan the sum of the
outstanding principal balance of the Obligations shall not exceed the
Commitments.
The making of such Extension of Credit hereunder shall be deemed to be
a representation and warranty by the Borrower on the date thereof as to the
facts specified in clauses (b), (c) and (d) of this Section.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
The Borrower represents and warrants, for itself and its subsidiaries
(except that with respect to CCT, the representation and warranties made
hereunder, other than those contained in Sections 4.01, 4.02 and 4.03, shall be
made to the best of the Borrower's knowledge based on due inquiry) that:
SECTION 4.01 Corporate Existence and Power. The Borrower and each of
its Subsidiaries is a corporation duly incorporated, validly existing and in
good standing under the laws of its jurisdiction of incorporation, has all
corporate powers and all material governmental licenses, authorizations,
consents and approvals required to carry on its business as now conducted and is
duly qualified as a foreign entity and in good standing under the laws of each
jurisdiction where its ownership, lease or operation of property or the conduct
of its business requires such qualification, other than in such jurisdictions
where the failure to be so qualified and in good standing would not, in the
aggregate, have a Material Adverse Effect.
SECTION 4.02 Corporate and Governmental Authorization; No
Contravention. The execution and delivery by the Obligors of the Financing
Documents and the performance by the Obligors of their respective obligations
thereunder are within the corporate power of the Obligors, have been duly
authorized by all necessary corporate action, require no action by or in respect
of, or filing with, any governmental body, agency or official (except for any
such action or filing that has been taken and is in full force and effect) and
do not contravene, or constitute a default under, any provision of applicable
law or regulation or of the Constitutional Documents of any Obligor or of any
material agreement, judgment, injunction, order, decree or other material
instrument binding upon any Obligor or result in the creation or imposition of
any Lien on any asset of any Obligor other than Liens created pursuant to the
Financing Documents.
SECTION 4.03 Binding Effect. The Financing Documents constitute valid
and binding agreements of the Obligors enforceable against the Obligors in
accordance with their terms.
SECTION 4.04 Litigation. Except as set forth on Schedule 4.04 attached
hereto, there is no action, suit or proceeding pending against, or to the
knowledge of the Borrower threatened against or affecting, the Borrower or any
of its Subsidiaries before any court or arbitrator or any governmental body,
agency or official in which there is a reasonable possibility of an adverse
decision which would materially adversely affect the business or the
-38-
consolidated results of operations of the Borrower and its Subsidiaries, or
which in any manner draws into question the validity of any Financing Document.
SECTION 4.05 Compliance with ERISA. Except as set forth on Schedule
4.05 attached hereto, each member of the ERISA Group has fulfilled its
obligations in all material aspects under the minimum funding standards of ERISA
and the Code with respect to each Plan and is in compliance in all material
respects with the presently applicable provisions of ERISA and the Code with
respect to each Plan. Except as previously disclosed to the Banks in writing
prior to the date hereof, no member of the ERISA Group has (i) sought a waiver
of the minimum funding standard under Section 412 of the Code in respect of any
Plan, (ii) failed to make any contribution or payment to any Plan or
Multiemployer Plan or in respect of any Benefit Arrangement, or made any
amendment to any Plan or Benefit Arrangement, which in either event has resulted
or could reasonably be expected to result in the imposition of a Lien or the
posting of a bond or other security under ERISA or the Code or (iii) incurred
any liability under Title IV of ERISA other than a liability to the PBGC for
premiums or similar items under Section 4007 of ERISA.
SECTION 4.06 Environmental Matters. Except as set forth on Schedule
4.06 hereto:
(a) No written notice, notification, demand, request for information,
citation, summons, complaint or order has been received by the Borrower and to
the knowledge of the Borrower, no penalty has been assessed and no investigation
or review is pending or threatened by any governmental or other entity, (i) with
respect to any alleged violation of any Environmental Laws in connection with
the conduct of the Borrower and relating to a Hazardous Substance or (ii) with
respect to any alleged failure to have any permit, certificate, license,
approval, registration or authorization required in connection with the conduct
of the Borrower relating to a Hazardous Substance or (iii) with respect to any
generation, treatment, storage, recycling, transportation, disposal or release
(including a release as defined in 42 U.S.C. Section 9601(22)) ("Release") of
any Hazardous Substance used by the Borrower, which alleged violation, alleged
failure to have any required permit, certificate, license, approval, or
registration, or generation, treatment, storage, recycling, transportation,
disposal or release, is reasonably likely to result in liability to the Borrower
in excess of $1,000,000 in any instance or $5,000,000 in the aggregate.
(b) (i) To the Borrower's knowledge, there has been no Release of a
Hazardous Substance at, on or under any property used by the Borrower or for
which the Borrower or any of its Subsidiaries would be liable, which Release, is
reasonably likely to result in liability to the Borrower in excess of $1,000,000
in any instance or $5,000,000 in the aggregate; (ii) to the Borrower's
knowledge, neither the Borrower nor any of its Subsidiaries has, other than as a
generator or in a manner not regulated or prohibited under the Environmental
Laws, stored or treated any "hazardous waste" (as defined in 42 U.S.C Section
6903(5)) on any property used by the Borrower or for which the Borrower or any
of its Subsidiaries would be liable, except for such storage or treatment which
is not reasonably likely to result in liability to the Borrower or any of its
Subsidiaries in excess of $1,000,000 in any instance or $5,000,000 in the
aggregate; and (iii) to the Borrower's knowledge no polychlorinated biphenyl
-39-
("PCB") in concentrations greater than 50 parts per million, friable asbestos,
or underground storage tank (in use or abandoned) is at any property used by the
Borrower or for which the Borrower or any of its Subsidiaries would be liable,
except for such PCBs, friable asbestos or underground storage tanks that are not
reasonably likely to result in liability to the Borrower or any of its
Subsidiaries in excess of $1,000,000 in any instance or $5,000,000 in the
aggregate.
(c) To the knowledge of the Borrower, neither the Borrower nor any of
its Subsidiaries has transported or arranged for the transportation (directly or
indirectly) of any Hazardous Substance to any location which is listed under the
Comprehensive Environmental Response, Compensation and Liability Act of 1980, as
amended ("CERCLA"), on the Comprehensive Environmental Response, Compensation
and Liability Information System, as amended ("CERCLIS"), or on any similar
state list or which is the subject of any federal state or local enforcement
action or other investigation which may lead to claims for clean-up costs,
remedial work, damages to natural resources or for personal injury claims,
including, but not limited to, claims under CERCLA, that are reasonably likely
to result in liability to the Borrower or any of its Subsidiaries in excess of
$1,000,000 in any instance or $5,000,000 in the aggregate.
(d) No written notification of a Release of a Hazardous Substance has
been filed by or on behalf of the Borrower or any of its Subsidiaries, which
individually or in combination with other such Releases, is reasonably likely to
result in liability for the Borrower or any of its Subsidiaries in excess of
$1,000,000 in any instance or $5,000,000 in the aggregate.
(e) There have been no environmental audits or similar investigations
conducted by or which are in the possession of the Borrower or any of its
Subsidiaries in relation to any property used by the Borrower or for which the
Borrower or any of its Subsidiaries would be liable, which identify one or more
environmental liabilities of the Borrower or any of its Subsidiaries which are
reasonably likely to exceed $1,000,000 in any instance or $5,000,000 in the
aggregate.
SECTION 4.07 Subsidiaries. Set forth on Schedule 4.07 hereto is a
complete and accurate list of all of the Subsidiaries of the Borrower, showing
as to each such Subsidiary the jurisdiction of its organization, the number of
shares of each class of capital stock or other equity interests outstanding and
the percentage of the outstanding shares of each such class owned (directly or
indirectly) by the Borrower or any other Subsidiary of the Borrower and the
number of shares covered by all outstanding options, warrants, rights of
conversion or purchase, and similar rights. All of the outstanding capital stock
or other equity interests of all of such Subsidiaries identified in such
Schedule 4.07 as being owned by the Borrower or any of its Subsidiaries has been
validly issued, is fully paid and nonassessable and is owned directly or
indirectly by the Borrower or any of its Subsidiaries, as the case may be, free
and clear of all Liens other than a Lien described in and permitted by Section
5.07 hereof. Each corporate Subsidiary of the Borrower is a corporation duly
incorporated, validly existing and in good standing under the laws of its
jurisdiction of incorporation, and has all corporate powers and all material
governmental licenses, authorizations, consents and approvals required to carry
on its business as now conducted.
-40-
SECTION 4.08 Not an Investment Company. Neither the Borrower nor any of
its Subsidiaries is an "investment company" within the meaning of the Investment
Company Act of 1940, as amended.
SECTION 4.09 Margin Stock. No proceeds of any Loan will be used to
purchase or carry any Margin Stock or to extend credit to others for the purpose
of purchasing or carrying any Margin Stock in violation of Regulations U, T or
X.
SECTION 4.10 Compliance With Laws. Except as set forth on Schedule 4.10
attached hereto and made a part hereof or as previously disclosed in writing to
the Banks prior to the date hereof, the Borrower and each of its Subsidiaries is
in compliance in all material respects with all applicable laws, rules and
regulations (including, without limitation, environmental laws, rules and
regulations), and is not in violation of, or in default under, any term or
provision of any charter, bylaw, mortgage, indenture, agreement, instrument,
statute, rule, regulation, judgment, decree, order, writ or injunction
applicable to it, except for any such non-compliance, violation, default or
failure to comply which would not be reasonably expected, individually or in the
aggregate, to have a material adverse effect on the business, financial position
or results of operations of the Borrower or any of its Subsidiaries, or on the
ability of the Borrower or any of its Subsidiaries to perform its obligations
under the Financing Documents.
SECTION 4.11 Absence of Liens. There are no liens of any nature
whatsoever on any properties or assets of the Borrower or any of its
Subsidiaries, except as otherwise permitted under Section 5.07 hereof.
SECTION 4.12 Debt. Other than as set forth on Schedule 4.12 hereto,
there is no material Debt of the Borrower and its Subsidiaries outstanding as of
the date hereof.
SECTION 4.13 Contingent Liabilities. As of the Closing Date, other than
as set on Schedule 4.13 there are no material contingent liabilities (other than
contingent liabilities that constitute Debt and material contingent liabilities
arising out of customary indemnifications given by the Borrower or its
Subsidiaries to its officers and directors, its underwriters or its lenders) of
the Borrower or its Subsidiaries as of the date hereof.
SECTION 4.14 Investments. Set forth on Schedule 4.14 is a complete and
accurate list, in all material respects, as of the date hereof of all
investments by the Borrower or any of its Subsidiaries in any Person, other than
investments by the Borrower or any of its Subsidiaries in a Subsidiary or
Specified Affiliate.
SECTION 4.15 Solvency. Each Obligor is Solvent after giving effect to
the transactions contemplated by the Financing Documents.
SECTION 4.16 Taxes. The Borrower and its Subsidiaries have filed, or
caused to be filed, all tax returns (federal, state, local and foreign) required
to be filed and paid all amounts of taxes shown thereon to be due (including
interest and penalties) and have paid all other taxes, fees, assessments and
other governmental charges owing by them, except for such taxes (i) which are
-41-
not yet delinquent or (ii) as are being contested in good faith and by proper
proceedings, and against which adequate reserves are being maintained in
accordance with generally accepted accounting principles. The Borrower is not
aware of any proposed material tax assessments against it or any of its
Subsidiaries.
SECTION 4.17 REIT Status. The Borrower is taxed as a "real estate
investment trust" within the meaning of Section 856 (a) of the Code.
SECTION 4.18 Specified Affiliates. Except as set forth on Schedul
4.07, there are no Specified Affiliates as of the date hereof.
SECTION 4.19 Financial Condition. Each of the financial statements
described below (copies of which have been provided to the Agent and the
Lenders), have been prepared in accordance with generally accepted accounting
principles applied on consistent basis throughout the periods covered thereby,
present fairly the financial condition and results from operations of the
entities and for the periods specified, subject in the case of interim
company-prepared statements to normal year-end adjustments:
(i) annual audited consolidated balance sheet of the Borrower
and its consolidated subsidiaries dated as of December 31, 1997,
together with related statements of income and cash flows certified by
Ernst & Young, certified public accountants;
(ii) annual audited consolidated balance sheet of Capstone
Capital Corporation dated as of December 31, 1997, together with
related statements of income and cash flows certified by KPMG Peat
Marwick, certified public accountants;
(iii) interim company-prepared consolidated balance sheet of
the Borrower and its consolidated subsidiaries dated as of June 30,
1998, together with related company-prepared statements of income and
cash flows; and
(iv) interim company-prepared consolidated balance sheet of
CCT and its consolidated subsidiaries dated as of June 30, 1998,
together with related company-prepared statements of income and cash
flows.
SECTION 4.20 No Material Adverse Effect. Since the date of the annual
audited financial statements referenced in Section 4.19, other than the
acquisition of Capstone Capital Corporation, there has been no circumstance,
development or event relating to or affecting the Borrower and its Subsidiaries
which has had or would reasonably be expected to have a Material Adverse Effect.
SECTION 4.21 Year 2000 Compliance. The Borrower has (i) initiated a
review and assessment of all areas within its and each of its Subsidiaries'
business and operations (including those affected by suppliers, vendors and
customers) that could be adversely affected by the "Year 2000 Problem" (that is,
the risk that computer applications used by the Borrower or any of its
Subsidiaries (or suppliers, vendors and customers) may be unable to recognize
-42-
and perform properly date-sensitive functions involving certain dates prior to
and any date after December 31, 1999), (ii) developed a plan and timeline for
addressing the Year 2000 Problem on a timely basis, and (iii) to date,
implemented that plan in accordance with that timetable. Based on the foregoing,
the Borrower believes that all computer applications (including those of its
suppliers, vendors and customers) that are material to its or any of its
Subsidiaries' business and operations are reasonably expected by no later than
December 31, 1999 to be able to perform properly date-sensitive functions for
all dates before and after January 1, 2000 (that is, be "Year 2000 compliant"),
except to the extent that a failure to do so could not reasonably be expected to
have a Material Adverse Effect.
ARTICLE V
COVENANTS
The Borrower hereby covenants and agrees that until the Obligations,
together with interest, fees and other obligations hereunder, have been paid in
full and the Commitments hereunder shall have terminated, the Borrower shall,
and shall cause its Subsidiaries to, perform and comply with the following
covenants:
SECTION 5.01 Information. The Borrower will deliver to Agent and the
Banks:
(a) as soon as available and in any event within ninety (90) days after
the end of each fiscal year of the Borrower, a consolidated and consolidating
balance sheet of the Borrower and its Subsidiaries as of the end of such fiscal
year and the related consolidated and consolidating statements of income and
consolidated statement of cash flows for such fiscal year, setting forth in each
case in comparative form the figures for the previous fiscal year, and, with
respect to such financial information for the Borrower, such consolidated
statements shall be audited statements by Ernst & Young or other independent
public accountants of nationally recognized standing and containing an opinion
of such accountants, which opinion shall be without exception, qualification or
limitation on scope of audit;
(b) as soon as available and in any event within forty-five (45) days
after the end of each of the first three (3) fiscal quarters of each fiscal year
of the Borrower, a consolidated and consolidating balance sheet of the Borrower
and its Subsidiaries as of the end of such quarter and the related consolidated
and consolidating statements of income and consolidated statement of cash flows
for such quarter and for the portion of the Borrower's fiscal year ended at the
end of such quarter, setting forth in each case in comparative form the figures
for the corresponding quarter and the corresponding portion of the previous
fiscal year, all certified (subject to normal year-end adjustments) as to
fairness of presentation, generally accepted accounting principles and
consistency by the chief financial officer of the Borrower;
(c) simultaneously with the delivery of each set of financial
statements referred to in subsections (a) and (b) of this Section, a certificate
of Borrower, signed on behalf of Borrower by the chief financial officer of the
Borrower (i) stating whether, to such officer's knowledge, there exists on the
-43-
date of such certificate any Default and, if any Default then exists, setting
forth the details thereof and the action that the Borrower is taking or proposes
to take with respect thereto, (ii) stating whether, since the date of the most
recent financial statements previously delivered pursuant to subsection (a) or
(b) of this Section, there has been a change in the generally accepted
accounting principles applied in preparing the financial statements then being
delivered from those applied in preparing the most recent audited financial
statements so delivered which is material to the financial statements then being
delivered, (iii) stating how much of the outstanding principal balance of the
Loans as of the end of the applicable fiscal quarter has been used for the
general corporate purposes of the Borrower and its Subsidiaries, (iv) furnishing
calculations demonstrating the compliance by the Borrower of the covenants
contained in Sections 5.18, 5.19, 5.20, 5.21 and 5.22 hereof, and (v) attaching
management's summary of the results contained in such financial statements;
(d) simultaneously with the delivery of each set of financial
statements referred to in clause (a) above, a statement (addressed to the Agent
for the benefit of the Banks) of the firm of independent public accountants
which reported on such statements whether anything has come to their attention
to cause them to believe that any Default existed on the date of such
statements;
(e) within five (5) Business Days after any officer obtains knowledge
of any Default, if such Default is then continuing, a certificate of Borrower,
signed on behalf of Borrower by the chief financial officer of the Borrower,
setting forth the details thereof and the action which the Borrower is taking or
proposes to take with respect thereto;
(f) promptly upon the mailing thereof to the shareholders of the
Borrower generally, copies of all financial statements, reports and proxy
statements so mailed;
(g) promptly upon the filing thereof, copies of all registration
statements (other than the exhibits thereto and any registration statements on
Form S-8 or its equivalent) and reports on Forms 10-K, 10-Q and 8-K (or their
equivalents) which the Borrower shall have filed with the Securities and
Exchange Commission;
(h) if and when any member of the ERISA Group (i) gives or is required
to give notice to the PBGC of any "reportable event" (as defined in Section 4043
of ERISA) with respect to any Plan which might constitute grounds for a
termination of such Plan under Title IV of ERISA, or knows that the plan
administrator of any Plan has given or is required to give notice of any such
reportable event, a copy of the notice of such reportable event given or
required to be given to the PBGC; (ii) receives notice of complete or partial
withdrawal liability with respect to any Multiemployer Plan under Title IV of
ERISA or notice that any Multiemployer Plan is in reorganization, is not Solvent
or has been terminated, a copy of such notice; (iii) receives notice from the
PBGC under Title IV of ERISA of its intent to terminate, impose liability (other
than for premiums under Section 4007 of ERISA) in respect of, or appoint a
trustee to administer any Plan, a copy of such notice; (iv) applies for a waiver
of the minimum funding standard under Section 412 of the Code, a copy of such
application; (v) gives notice of intent to terminate any Plan under Section
4041(c) of ERISA, a copy of such notice and other information filed with the
PBGC; (vi) gives notice of withdrawal from any Plan pursuant to Section 4063 of
-44-
ERISA, a copy of such notice; or (vii) except as previously disclosed to the
Banks in writing prior to the date hereof, fails to make any payment or
contribution to any Plan or Multiemployer Plan or in respect of any Benefit
Arrangement or makes any amendment to any Plan or Benefit Arrangement which has
resulted or could result in the imposition of a lien or the posting of a bond or
other security under ERISA or the Code, a certificate of Borrower, signed on
behalf of Borrower by the chief financial officer, the chief accounting officer
or the treasurer of the Borrower, setting forth details as to such occurrence
and the action, if any, which the Borrower or any applicable member of the ERISA
Group is required or proposes;
(i) as soon as possible after any officer of the Borrower obtains
knowledge of the commencement of, or of a material threat of the commencement
of, an action, suit or proceeding against the Borrower or any of its
Subsidiaries before any court or arbitrator or any governmental body, agency or
official in which there is a reasonable likelihood of an adverse decision which
would after the application of applicable insurance materially and adversely
affect the business, financial position or results of operations of the Borrower
and its Consolidated Subsidiaries, in each case considered as a whole, or which
in any manner questions the validity of any Financing Document, a written report
informing the Banks in reasonable detail of the nature of such pending or
threatened action, suit or proceeding;
(j) from time to time such additional information regarding the
financial position or business of the Borrower and its Subsidiaries, as the
Agent or any Bank may reasonably request; and
For purposes of the foregoing:
(i) during any period when generally accepted accounting
principles or related auditing standards require that a Specified
Affiliate of the Borrower be accounted for as a Subsidiary for purposes
of the consolidated financial statements of the Borrower and its
Subsidiaries, the term "Subsidiary" shall include a Specified Affiliate
of the Borrower for purposes of paragraphs (a) and (b) above; and
(ii) during any period when generally accepted accounting
principles or related auditing standards do not require that a
Specified Affiliate of the Borrower be accounted for as a Subsidiary
for purposes of the consolidated financial statements of the Borrower
and its Subsidiaries, the terms "Subsidiary" shall not include a
Specified Affiliate of the Borrower for purposes of paragraphs (a) and
(b) above and, if the Borrower shall have any Specified Affiliates
during any period covered by the financial statements delivered
pursuant to paragraphs (a) or (b) above, the Borrower shall deliver (A)
financial statements of the character specified in paragraphs (a) and
(b) above for such Specified Affiliates within the time periods set
forth in paragraphs (a) and (b) above, and (B) on a combined basis,
financial statements of the character specified in paragraphs (a) and
(b) above for the Borrower, its Subsidiaries and such Specified
Affiliates accompanied by the opinions and certificates specified in
paragraphs (b) and (c) above within the time periods set forth in
paragraphs (a), (b) and (c) above.
-45-
SECTION 5.02 Payment of Obligations. The Borrower will pay and
discharge, and will cause each of its Subsidiaries to pay and discharge, at or
before maturity, or prior to expiration of applicable notice, grace and curative
periods, all their respective material obligations and liabilities, including,
without limitation, tax liabilities, except where the same may be contested in
good faith by appropriate proceedings, and will maintain, and will cause each of
its Subsidiaries to maintain, in accordance with generally accepted accounting
principles, appropriate reserves for the accrual of any of the same.
SECTION 5.03 Maintenance of Property; Insurance.
(a) The Borrower will keep, and will cause each of its Subsidiaries to
keep, or will in the ordinary course of business cause the tenants of respective
properties to keep, all property materially useful and necessary in its business
in good working order and condition, ordinary wear and tear excepted.
(b) The Borrower will maintain, and will cause each of its Subsidiaries
to maintain, with financially sound and responsible insurance companies,
insurance on all their respective properties in at least such amounts and
against such risks (and with such risk retention) as are usually insured against
in the same general area by companies of established repute engaged in the same
or a similar business, and will furnish to the Banks, upon request from the
Agent, information presented in reasonable detail as to the insurance so
carried. The insurance described in this Section 5.03 may be carried by the
tenants under the respective tenant leases of such properties in lieu of by
Borrower or its Subsidiaries so long as the Borrower or its respective
Subsidiary is named as loss payee and additional insured with respect to such
insurance.
SECTION 5.04 Conduct of Business and Maintenance of Existence.Except
as contemplated otherwise by the Investment Policy, the Borrower will continue,
and will cause each Subsidiary to continue, to engage in business of the same
general type as now conducted by the Borrower and each of its Subsidiaries, and
will preserve, renew and keep in full force and effect, and will cause each of
its Subsidiaries to preserve, renew and keep in full force and effect their
respective corporate existences and, except for any such rights, privileges and
franchises the failure to preserve which would not in the aggregate have a
material adverse effect on the Borrower and its Subsidiaries or the ability of
the Borrower or any Subsidiary to perform any of their respective obligations
under any Financing Document, their respective rights, privileges and franchises
necessary or desirable in the normal conduct of business; provided that nothing
in this Section 5.04 shall prohibit (a) the merger of a Subsidiary of the
Borrower into the Borrower or the merger or consolidation of any Subsidiary of
the Borrower with or into another Person if the corporation surviving such
consolidation or merger is a Wholly-Owned Consolidated Subsidiary of the
Borrower and if, in each case, after giving effect thereto, no Default shall
have occurred and be continuing and a responsible officer of the Borrower shall
deliver to the Agent an officer's certificate, in form and substance
satisfactory to the Agent, indicating compliance with the terms hereof,
including specifically, the financial covenants hereunder, on a pro forma basis
after giving effect thereto, or (b) the termination of the corporate existence
of any Subsidiary of the Borrower or the discontinuation of any line of business
-46-
of the Borrower or any of its Subsidiaries if the Borrower in good faith
determines that such termination is in the best interest of the Borrower or such
Subsidiary, as the case may be, and is not materially disadvantageous to the
Banks.
SECTION 5.05 Compliance with Laws. The Borrower will comply, and cause
each of its Subsidiaries to comply, in all material respects with all applicable
laws, ordinances, rules, regulations, and requirements of governmental
authorities (including, without limitation, Environmental Laws and ERISA and the
rules and regulations thereunder) the failure to comply with which would have a
material adverse effect on the Borrower and its Subsidiaries or their ability to
perform any of its obligations under any Financing Document, except where the
necessity of compliance therewith is contested in good faith by appropriate
proceedings.
SECTION 5.06 Inspection of Property, Books and Records. The Borrower
will keep, and will cause each of its Subsidiaries to keep, proper books of
record and account in which full, true and correct entries shall be made of all
material dealings and transactions in relation to its business and activities;
and, except to the extent prohibited by applicable law, rule, regulations or
orders, will permit, and will cause each of its Subsidiaries to permit,
representatives of any Bank at such Bank's expense (which expense shall not be
subject to reimbursement by Borrower hereunder) to visit and inspect any of
their respective properties (subject to the rights of tenants in possession
thereof and to any limitations on the inspection rights of Borrower in
connection therewith), to examine and make abstracts from any of their
respective books and records and to discuss their respective affairs, finances
and accounts with their respective officers, employees and independent public
accountants, upon reasonable prior written notice to Borrower, all at such
reasonable times and as often as may reasonably be desired.
SECTION 5.07 Negative Pledge. The Borrower will not nor will it permit
any of its Subsidiaries to create, assume or suffer to exist any Lien on any
asset now owned or hereafter acquired by it, except:
(a) (i) Liens securing up to $12.6 million of indebtedness under the
Term Loan Agreement, (ii) Liens created by and existing under the Financing
Documents hereunder, and (iii) other mortgage Liens to the extent not
prohibited, both before and after giving effect thereto, by the provisions of
Sections 5.21 (Consolidated Senior Secured Debt to Consolidated Total Capital
Ratio) and Section 5.22 (Consolidated Unencumbered Realty to Consolidated
Unsecured Debt Ratio);
(b) carriers', warehousemen's, mechanics', landlords', materialmen's,
repairmen's, statutory banker's or other like Liens arising in the ordinary
course of business and which are not overdue for a period of more than thirty
(30) days or which are being contested in good faith by appropriate proceedings;
(c) Liens for taxes, assessments or other governmental charges not yet
due or which are being contested in good faith and by appropriate proceedings
and for which adequate reserves are taken in accordance with generally accepted
accounting principals;
-47-
(d) Liens imposed by law on pledges or deposits in connection with
workmen's compensation, unemployment insurance and other social security
legislation which do not interfere with or adversely affect in any material
respect the ordinary conduct of the business of the Borrower or any of its
Subsidiaries;
(e) deposits to secure the performance of bids, tenders, trade or
government contracts (other than for borrowed money), leases, licenses,
statutory obligations, surety bonds (other than in relation to judgments),
performance bonds, reserves for capital improvements and other obligations of a
like nature incurred in the ordinary course of business;
(f) easements, rights-of-way, zoning and similar restrictions and other
encumbrances or title defects incurred, or leases or subleases granted to others
which are in existence as of the date hereof, or if not in existence as of the
date hereof, do not interfere with or adversely affect in any material respect
the ordinary conduct of the business, or detract from the value of the property,
of the Borrower or any of its Subsidiaries;
(g) Liens securing reimbursement obligations with respect to trade
letters of credit issued in the ordinary course of business; provided that such
Liens only attach to the assets being acquired with the proceeds of such letters
of credit;
(h) any Lien arising out of the refinancing, extension, renewal or
refunding of any Debt secured by any Lien, to the extent such Lien is permitted
by any of the foregoing clauses of this Section; provided that such Debt is not
increased and is not secured by any additional assets;
(i) Liens on properties securing security deposits of tenants, provided
that the aggregate amount of such security deposits secured by such Liens shall
not exceed 5% of Consolidated Total Capital at any time outstanding; and
(j) Liens securing Debt of any Subsidiary or Specified Affiliate owing
to the Borrower, any Subsidiary or Specified Affiliate.
SECTION 5.08 Consolidations, Mergers and Sales of Assets.
(a) The Borrower will not, nor will it permit any of its Subsidiaries
to, consolidate or merge with or into any other Person except as permitted in
accordance with Section 5.04.
(b) The Borrower will not, nor will it permit any of its Subsidiaries
to, make any Asset Sale except the sale of any asset listed in Schedule 5.08
hereof, unless in connection with such Asset Sale, Borrower or such Subsidiary
makes provision for the Mandatory Prepayments described in Section 2.07.
SECTION 5.09 Creation of Subsidiaries. The Borrower will not, nor will
it permit any of its Subsidiaries to, create any Subsidiary except for the
creation of a wholly owned Subsidiary of the Borrower or a Specified Affiliate
provided that (i) such Subsidiary or Specified Affiliate is organized under the
laws of a jurisdiction within the United States of America, (ii) such Specified
-48-
Affiliate and such Subsidiary, if such Subsidiary is a Material Subsidiary,
executes at the time of its creation a guaranty in favor of the Banks in the
form of Schedule 5.09 attached hereto, and (iii) no Default exists immediately
prior to or after the creation of such Subsidiary or Specified Affiliate.
SECTION 5.10 Incurrence of Debt. The Borrower will not incur, nor will
it permit any of its Subsidiaries to incur, Debt except as follows:
(i) in the case of publicly issued or privately placed Debt,
the final maturity of such Debt shall not be prior to the Termination
Date hereunder, nor prior to the final maturity of the Term Loan;
(ii) in the case of Debt secured by mortgage liens, such Debt
shall be non-recourse to the Borrower and its Subsidiaries except to
the extent of the property pledged to secure such Debt; and
(iii) in all cases, Debt of the Borrower, provided that, after
giving effect to the incurrence thereof, the Borrower and its
Subsidiaries shall be in compliance with the terms of this Credit
Agreement, including the financial covenants hereunder.
SECTION 5.11 Transactions with Affiliates. The Borrower will not and
will not permit any Subsidiary to enter into directly or indirectly any material
transaction or material group of related transactions (including without
limitation the purchase, lease, sale or exchange of properties of any kind or
the rendering of any service) with any Affiliate (other than the Borrower or any
Guarantor), except in the ordinary course and pursuant to the reasonable
requirements of the Borrower's or such Subsidiary's business and upon fair and
reasonable terms no less favorable to the Borrower or such Subsidiary than would
be obtainable in a comparable arm's-length transaction with a Person not an
Affiliate.
SECTION 5.12 Use of Proceeds. The Extensions of Credit hereunder will
be used (i) to finance the acquisition of Capstone Capital Corporation, (ii) to
refinance existing indebtedness for borrowed money, (iii) to finance the
acquisition of healthcare real estate properties by the Borrower and its
Subsidiaries, and (iv) to finance the general corporate purposes of the Borrower
and its Subsidiaries, provided, however, no more than Fifty Million Dollars
($50,000,000) of Extensions of Credit at any one time outstanding shall be used
for general corporate purposes of the Borrower and its Subsidiaries, unless and
to the extent necessary to maintain the Borrower's REIT status.
SECTION 5.13 Constitutional Documents. Subject to changes, including
any dissolutions permitted pursuant to this Credit Agreement: (i) the Borrower
will not, nor will it permit any of its Subsidiaries to, amend its
Constitutional Documents in any manner which could materially adversely affect
the rights of the Banks under the Financing Documents or their ability to
enforce the same; (ii) the Borrower will not amend its Constitutional Documents
in a manner which would permit a single shareholder (as determined for purposes
hereof pursuant to the attribution provisions of Section 544 of the Code as
modified by Section 856 of the Code) to own more than thirty percent (30%) of
-49-
the outstanding stock in Borrower; and (iii) the Borrower will not consent to
any material amendment, modification, supplement or waiver to the Agreement and
Plan of Merger (including, but not limited to, any material amendment,
modification supplement or waiver relating to any disclosure schedule or
exhibit) without the prior written consent of the Agent and the Majority Banks.
SECTION 5.14 Investments. The Borrower shall not make, nor shall it
permit any of its Subsidiaries to make, any Investment in any other Person
except for Investments made in accordance with the Borrower's Investment Policy,
except that the Borrower may make and own Investments in (i) marketable direct
obligations issued or unconditionally guaranteed by the Government or issued by
any agency thereof and backed by the full faith and credit of the United States
of America, in each case maturing within one (1) year from the date of
acquisition thereof, (ii) marketable direct obligations issued by any state of
the United States of America or any political subdivision of any such state or
any public instrumentality thereof maturing within one (1) year from the date of
acquisition thereof and, at the time of acquisition, having the highest rating
obtainable from either S&P or Moody's, (iii) commercial paper maturing no more
than one (1) year from the date of creation thereof and, at the time of
acquisition, having a rating in one of the two highest rating categories of S&P
or Moody's, (iv) certificates of deposit, bankers acceptances or time deposits
maturing within one (1) year from the date of acquisition thereof issued by any
of the Banks, (v) certificates of deposit or bankers acceptances maturing within
one (1) year from the date of acquisition thereof or time deposits maturing
within thirty (30) days from the date of acquisition thereof issued by other
commercial banks organized under the laws of the United States of America or any
state thereof or the District of Columbia, each having shareholders' equity of
not less than $600,000,000, (vi) repurchase agreements with commercial banks or
with securities dealers, in any case fully secured as to principal and interests
by obligations described in clauses (i)-(v) of this Section, or (vii) joint
ventures or other non-Subsidiary enterprises in the same or closely related
lines of business in an aggregate amount up to ten percent (10%) of the book
value of consolidated assets of the Borrower and its Subsidiaries.
SECTION 5.15 Prepayments of Debt. The Borrower shall not, nor shall it
permit any of its Subsidiaries to, prepay, redeem, defease (whether actually or
in substance) or purchase in any manner (or deposit or set aside funds for the
purpose of any of the foregoing), make any payment in respect of principal of,
or make any payment in respect of interest on, or permit any of its Subsidiaries
to prepay, redeem, or purchase in an manner, make any payment in respect of
principal of, or make any payment in respect of interest on, any Debt of the
Borrower or any of its Subsidiaries except for (i) payments of principal,
interest or other sums required or permitted in accordance with the terms of the
instruments governing such Debt, (ii) payments with respect to Debt under this
Credit Agreement or any of the Financing Documents hereunder or under the Term
Loan Agreement or any of the Financing Documents thereunder, (iii) payments with
respect to Debt assumed or taken subject to in connection with any Securities
Transaction or asset purchase after the date hereof, (iv) payments with respect
to Debt of any Subsidiary to the Borrower and (v) payments and prepayments on up
to $60 million in principal amount of mortgage indebtedness assumed in
connection with the acquisition of Capstone Capital Corporation.
-50-
SECTION 5.16 Capital Expenditures. The Borrower shall not, nor shall it
permit any of its Subsidiaries to, make any capital expenditures in an aggregate
amount in excess of FIVE MILLION DOLLARS ($5,000,000) per fiscal year; provided,
however (i) capital expenditures incurred to acquire, expand or improve
facilities intended to be revenue producing shall not be deemed to be capital
expenditures for purposes of the foregoing requirement, and (ii) capital
expenditures required pursuant to any lease or other contract shall not be
deemed to be capital expenditures for purposes of the foregoing requirement.
SECTION 5.17 Repurchase, Retirement or Redemption of Capital Stock;
Dividends. The Borrower will not, nor will it permit any of its Subsidiaries
(other than its wholly-owned Subsidiaries or the Specified Affiliates) to,
repurchase, retire or redeem any of its capital stock. The Borrower will not pay
dividends on any of its stock in any fiscal year in excess of ninety five
percent (95%) of Funds From Operations for such fiscal year; provided that (i)
any wholly-owned Subsidiary of the Borrower may pay dividends or make
distributions to its parent company and (ii) the Borrower may pay such dividends
as are necessary to maintain its status as a REIT.
SECTION 5.18 Ratio of Consolidated Funded Indebtedness to Consolidated
Total Capital. The Borrower will not permit its ratio of Consolidated Funded
Indebtedness to Consolidated Total Capital to exceed (i) .42 to 1.0 as of the
last day of each fiscal quarter ending prior to December 31, 1999, and (ii) .40
to 1.0 as of the last day of each fiscal quarter ending as of December 31, 1999
and thereafter.
SECTION 5.19 Consolidated Tangible Net Worth. The Borrower shall
maintain Consolidated Tangible Net Worth at all times of at least
$800,000,000.00; provided, however, such amount shall be increased by an amount
equal to (a) ninety-five percent (95%) of the net proceeds received by the
Borrower on account of any additional equity offerings made subsequent to the
Closing Date; and (b) ninety-five percent (95%) of the net proceeds received by
the Borrower on account of any Securities Transaction completed subsequent to
the Closing Date.
SECTION 5.20 Consolidated Interest Coverage Ratio. The Borrower will
maintain a ratio of Consolidated EBIT to Consolidated Interest Expense as of the
last day of each fiscal quarter (computed for the four (4) consecutive quarterly
periods then ending) based on the Duff & Phelps rating for the Borrower's senior
unsecured (non-credit enhanced) long-term debt, of not less than:
Duff & Phelps Rating
BBB or above 2.50 to 1.0
below BBB 3.00 to 1.0
-51-
SECTION 5.21 Consolidated Senior Secured Debt to Consolidated Total
Capital Ratio. The ratio of Consolidated Senior Secured Debt to Consolidated
Total Capital shall not at any time exceed .20 to 1.0.
SECTION 5.22 Consolidated Unencumbered Realty to Consolidated Unsecured
Debt Ratio. The ratio of Consolidated Unencumbered Realty to Consolidated
Unsecured Debt shall not at any time be less than 2.1 to 1.0.
SECTION 5.23 Material Subsidiaries. The Borrower will give the Agent
prompt notice of any Subsidiary of the Borrower which to the Borrower's
knowledge becomes a Material Subsidiary subsequent to the Closing Date and will
take the following steps with respect to each such Material Subsidiary: (i) the
Borrower will cause each such Material Subsidiary to execute a guaranty in favor
of the Banks in the form of Schedule 5.09 attached hereto and (ii) the Borrower
will pay all reasonable costs and expenses incurred in connection with the
requirements set forth in this Section 5.23. The Borrower will satisfy the
foregoing requirements within thirty (30) days after any Subsidiary becomes a
Material Subsidiary.
SECTION 5.24 Specified Affiliates. The Borrower will take the following
steps with respect to each Specified Affiliate: (i) the Borrower will cause each
Specified Affiliate to execute a guaranty in favor of the Banks in the form of
Schedule 5.09 attached hereto and (ii) the Borrower will pay all reasonable
costs and expenses incurred in connection with the requirements set forth in
this Section 5.24. The Borrower will satisfy the foregoing requirements within
thirty (30) days after the creation of any Specified Affiliate.
SECTION 5.25 REIT Status. The Borrower will meet the requirements of
Section 857(a) of the Code and regulations thereunder.
SECTION 5.26 Leases. The Borrower will not modify or amend any lease
where the Borrower is the lessor thereunder if such modification or amendment
would have a material adverse effect on the Borrower.
SECTION 5.27 Year 2000 Compliance. The Borrower will promptly notify
the Bank in the event the Borrower discovers or determines that any computer
application (including those of its suppliers, vendors and customers) that is
material to its or any of its Subsidiaries' business and operations will not be
Year 2000 compliant, except to the extent that such failure could not reasonably
be expected to have a Material Adverse Effect.
SECTION 5.28 Construction and Development. The Borrower and its
Subsidiaries will not engage in construction and development projects in which
the total project costs of all such concurrent construction and development
projects exceed, in the aggregate at any one time, ten percent (10%) of the book
value of consolidated assets of the Borrower and its Subsidiaries (it being
understood and agreed for purposes of this Section that a project shall be
considered under construction and/or development until a certificate of
occupancy therefor, or other similar certificate, shall have been issued by
appropriate governmental authorities).
-52-
ARTICLE VI
EVENTS OF DEFAULT
SECTION 6.01 Events of Default. The occurrence of any of the following
events shall constitute an event of default hereunder (individually, an "Event
of Default" and collectively the "Events of Default"):
(a) The Borrower shall fail to pay (i) when due any principal of any
Loan or any reimbursement obligation owing on account of a drawing under a
Letter of Credit or (ii) within five (5) days after the same shall become due,
any interest on any Obligation or any fees or any other amount payable
hereunder;
(b) The Borrower shall fail to observe or perform any covenant
contained in Section 5.01 hereof for thirty (30) days after the earlier of a
responsible officer of the Borrower becoming aware of such failure or written
notice of such failure shall have been given to the Borrower by the Agent or any
Bank;
(c) Default in the due performance or observance of any term, covenant
or agreement contained in Section 5.07 through 5.28, inclusive;
(d) Any Obligor shall fail to observe or perform any covenant or
agreement contained in any Financing Document (other than those covered by
clause (a), (b) or (c) above) for thirty (30) days after the earlier of a
responsible officer of the Borrower becoming aware of such failure or written
notice of such failure shall have been given to the Borrower by the Agent or any
Bank;
(e) Any representation, warranty, certification or statement made or
deemed made by any Obligor in any Financing Document or in any certificate,
financial statement or other document delivered pursuant thereto shall prove to
have been incorrect in any material respect when made (or deemed made) and such
representation, warranty, certification or statement shall remain incorrect for
thirty (30) days after the earlier of a responsible officer of the Borrower
becoming aware of such failure or written notice of such failure shall have been
given to the Borrower by the Agent or any Bank;
(f) The Borrower or any of its Subsidiaries shall fail to make any
payment in respect of any Debt in an aggregate amount in excess of $5,000,000
when due or within any applicable grace period;
(g) Any event or condition shall occur which would cause or permit the
acceleration of the maturity of any Debt of Borrower or any Subsidiary in an
aggregate amount in excess of $5,000,000 or enables the holder of such Debt or
any Person acting on such holder's behalf to accelerate the maturity thereof;
-53-
(h) The Borrower or any Guarantor shall commence a voluntary case or
other proceeding seeking liquidation, reorganization or other relief with
respect to itself or its debts under any bankruptcy, insolvency or other similar
law now or hereafter in effect or seeking the appointment of a trustee,
receiver, liquidator, custodian or other similar official of it or any
substantial part of its property, or shall consent to any such relief or to the
appointment of or taking possession by any such official in an involuntary case
or other proceeding commenced against it, or shall make a general assignment for
the benefit of creditors, or shall fail generally to pay its debts as they
become due, or shall take any corporate action to authorize any of the
foregoing;
(i) An involuntary case or other proceeding shall be commenced against
the Borrower or any Guarantor seeking liquidation, reorganization or other
relief with respect to it or its debts under any bankruptcy, insolvency or other
similar law now or hereafter in effect or seeking the appointment of a trustee,
receiver, liquidator, custodian or other similar official of it or any
substantial part of its property, and such involuntary case or other proceeding
shall remain undismissed and unstayed for a period of thirty (30) days; or an
order for relief shall be entered against the Borrower or any Guarantor under
the federal bankruptcy laws as now or hereafter in effect;
(j) The Borrower or any Guarantor shall admit in writing its inability
to pay its debts as and when they fall due;
(k) Except as previously disclosed to the Banks in writing prior to the
date hereof: any member of the ERISA Group shall fail to pay when due an amount
or amounts aggregating in excess of $1,000,000 which it shall have become liable
to pay under Title IV of ERISA; or notice of intent to terminate any Plan which
is then a Material Plan shall be filed under Title IV of ERISA by any member of
the ERISA Group, any plan administrator or any combination of the foregoing; or
the PBGC shall institute proceedings under Title IV of ERISA to terminate, to
impose liability (other than for premiums under Section 4007 of ERISA) in
respect of, or to cause a trustee to be appointed to administer any Plan which
is then a Material Plan; or a condition shall exist by reason of which the PBGC
would be entitled to obtain a decree adjudicating that any Plan which is then a
Material Plan must be terminated; or there shall occur a complete or partial
withdrawal from, or a default, within the meaning of Section 4219(c)(5) of
ERISA, with respect to, one or more Multiemployer Plans which could cause one or
more members of the ERISA Group to incur a current payment obligation, that is,
an obligation or series of obligations payable within twelve (12) months, in
excess of $1,000,000;
(l) An uninsured, final, unappealable judgment or order for the payment
of money in excess of $1,000,000 shall be rendered against the Borrower or any
of its Subsidiaries and such judgment or order shall continue unsatisfied and
unstayed for a period of thirty (30) days;
(m) (i) The voting interests in any Specified Affiliate shall be held
by a Person other than a director, officer or employee of the Borrower, (ii) the
Borrower shall fail to own substantially all of the economic interest in any
Specified Affiliate and the remainder of such economic interest shall be held by
a Person other than directors, officers and/or employees or (iii) a Specified
-54-
Affiliate shall engage in any of the actions or activities that are limited or
restricted by Article 5 hereof;
(n) Except as to any which is dissolved, released or merged or
consolidated out of existence as the result of or in connection with a
dissolution, merger or consolidation permitted by Section 5.04, the guaranty
given by any Guarantor hereunder or any material provision thereof shall cease
to be in full force and effect, or any Guarantor hereunder or any Person acting
by or on behalf of such Guarantor shall deny or disaffirm such Guarantor's
obligations under such guaranty, or any Guarantor shall default in the due
performance or observance of any term, covenant or agreement on its part to be
performed or observed pursuant to any guaranty; or
(o) the occurrence of an Event of Default under the Term Loan
Agreement;
(p) the occurrence of a Change of Control;
then, and in every such event, the Agent shall during the continuance of such
Event of Default (i) if requested by the Majority Banks, by notice to the
Borrower terminate the Commitments, (ii) if requested by the Majority Banks, by
notice to the Borrower declare the Notes (together with accrued interest
thereon) and all other amounts payable by the Borrower hereunder to be, and such
Notes and amounts shall thereupon become, immediately due and payable without
presentment, demand, protest or other notice of any kind, all of which are
hereby waived by the Borrower, (iii) provide cash collateral in respect of the
LOC Obligations, and (iv) take such other actions as are directed by the
Majority Banks; provided that in the case of any Event of Acceleration, without
any notice to any Obligor or any other act by the Agent or any Bank, the
Commitments shall automatically terminate and the Notes (together with accrued
interest thereon) shall automatically become immediately due and payable without
presentment, demand, protest or other notice of any kind, all of which are
hereby waived by the Borrower ; and provided further that the Agent may
terminate commitments, declare the Loans and Obligations hereunder immediately
due and payable and demand cash collateral for the LOC Obligations without prior
notice to or the consent of the Banks where it determines such action is
warranted and appropriate based on the facts and circumstances. Subject to the
request or direction of the Majority Banks as provided above, Agent shall have
the exclusive right to enforce the remedies available under this Credit
Agreement during the continuance of any Event of Default hereunder.
ARTICLE VII
THE AGENT
SECTION 7.01 Appointment and Authorization. Each Bank appoints the
Agent to act as its agent in connection herewith and each of the other Financing
Documents.
SECTION 7.02 Agents and Affiliates. NationsBank shall have the same
rights and powers under this Credit Agreement as any other Bank and may exercise
or refrain from exercising the same as though it were not the Agent, and
NationsBank and each of its affiliates may accept deposits from, lend money to,
-55-
and generally engage in any kind of business with the Borrower, any of its
Subsidiaries and any of its or their respective Affiliates as if it were not the
Agent.
SECTION 7.03 Action by Agent. The obligations of the Agent under the
Financing Documents are only those expressly set forth herein with respect to
it. Without limiting the generality of the foregoing the Agent shall not be
required to take any action with respect to any Default or Event of Default,
except as expressly provided in Article VI.
SECTION 7.04 Consultation with Experts. The Agent may consult with
legal counsel (who may be counsel for the Borrower), independent public
accountants and other experts selected by the Agent and shall not be liable for
any action taken or omitted to be taken by the Agent in good faith in accordance
with the advice of such counsel, accountants or experts.
SECTION 7.05 Liability of Agent. Neither the Agent nor any of its
directors, officers, agents or employees shall be liable for any action taken or
not taken by it in connection with the Financing Documents (a) with the consent
or at the request of the Majority Banks; or (b) in the absence of gross
negligence or willful misconduct of the Agent. In requests for consents and
direction from the Banks, the Agent may provide reasonable periods in which to
respond. Neither the Agent nor any of its directors, officers, agents or
employees shall be responsible for or have any duty to ascertain, inquire into
or verify (i) any statement, warranty or representation made in connection with
any Financing Document; (ii) the performance or observance of any of the
covenants or agreements of the Borrower, (iii) the satisfaction of any condition
specified in Article III, except receipt of items required to be delivered to
the Agent; or (iv) the validity, effectiveness or genuineness of any Financing
Document or any other instrument or writing furnished in connection therewith.
The Agent shall not incur any liability by acting in reliance upon any notice,
consent, certificate, statement or other writing (which may be a bank wire,
facsimile, telex or similar writing) believed by it to be genuine or to be
signed by the proper party or parties.
SECTION 7.06 Indemnification. Each Bank shall, ratably in accordance
with its Revolving Commitment, indemnify the Agent and NMS (to the extent not
reimbursed by the Borrower) against any cost, expense (including reasonable
counsel fees and disbursements), claim, demand, action, loss or liability
(except such as result from the Agent's or NMS's gross negligence or willful
misconduct) that the Agent may suffer or incur in connection with the Financing
Documents or any action taken or omitted by the Agent thereunder.
SECTION 7.07 Credit Decision. Each Bank acknowledges that it has,
independently and without reliance upon the Agent or any other Bank, and based
on such documents and information as it has deemed appropriate, made its own
credit analysis and decision to enter into this Credit Agreement. Each Bank also
acknowledges that it will, independently and without reliance upon the Agent or
any other Bank, and based on such documents and information as it shall deem
appropriate at the time, continue to make its own credit decisions in taking or
not taking any action under the Financing Documents.
-56-
SECTION 7.08 Successor Agent. The Agent may resign at any time by
giving thirty (30) days prior written notice thereof to the Banks and the
Borrower. The Majority Banks may remove the Agent for cause at any time by
giving thirty (30) days prior written notice to the Agent, the other Banks and
the Borrower. Upon any such resignation or removal of the Agent, the Majority
Banks shall have the right to appoint a successor Agent, with the consent of the
Borrower (which consent shall not unreasonably be withheld, but which may in any
event be withheld if (a) the Borrower in good faith concludes that the
appointment of such proposed successor Agent could result in a violation of any
law, rule, guideline or regulation, or a violation of, revocation of, failure to
renew or modification of any order, facility security clearance or permit or (b)
the credit standing of the proposed successor Agent is lower than that of the
preceding Agent); provided, however, such consent of the Borrower shall not be
required upon the occurrence and during the continuance of an Event of Default.
If no successor Agent shall have been so appointed by the Majority Banks, and
shall have accepted such appointment, within thirty (30) days after the retiring
Agent gives notice of resignation, then the retiring Agent may, on behalf of the
Banks and with the consent of the Borrower (which consent shall not be
unreasonably withheld except as aforesaid), appoint a successor Agent, which
shall have core capital of at least $500,000,000. Upon the acceptance of its
appointment as Agent hereunder by a successor Agent the retiring Agent shall be
discharged from its duties and obligations hereunder. After any retiring Agent's
resignation hereunder as Agent, the provisions of this Article shall inure to
its benefit as to any actions taken or omitted to be taken by it while it was
Agent. In the event of any successor agent to NationsBank, (i) all references
herein to NationsBank shall be deemed to refer to such successor agent and (ii)
all references to Charlotte, North Carolina shall be deemed to mean the city in
which the successor Agent's headquarters is located.
SECTION 7.09 Agent's Fee. The Borrower shall pay to the Agent for its
own account fees in the amounts and at the time previously agreed upon in
writing between the Borrower and the Agent (with appropriate credit for agency
fees paid in advance in respect of the credit facility replaced hereby).
ARTICLE VIII
CHANGE IN CIRCUMSTANCES
SECTION 8.01 Basis for Determining Interest Rate Inadequate or Unfair.
If on or prior to the first day of any Interest Period for any Eurodollar Loan:
(a) the Agent is advised by the Eurodollar Reference Bank that deposits
in Dollars (in the applicable amounts) are not being offered to the Eurodollar
Reference Bank in the relevant market for such Interest Period, or
(b) the Majority Banks advise the Agent that the Adjusted Eurodollar
Rate as determined by the Agent will not adequately and fairly reflect the cost
to such Banks of funding their Eurodollar Loans for such Interest Period,
-57-
the Agent shall forthwith give notice thereof to the Borrower and the Banks,
whereupon until the Agent notifies the Borrower that the circumstances giving
rise to such suspension no longer exist, (i) the obligations of the Banks to
make new Eurodollar Loans or to convert outstanding Loans into Eurodollar Loans
shall be suspended and (ii) each outstanding Eurodollar Loan, as the case may
be, shall be converted into a Base Rate Loan on the last day of the then current
Interest Period applicable thereto. Unless the Borrower notifies the Agent at
least one (1) Business Day before the date of any Eurodollar Borrowing for which
a Notice of Borrowing has previously been given that it elects not to borrow on
such date, such Borrowing shall instead be made as a Base Rate Borrowing.
SECTION 8.02 Illegality. If, on or after the date of this Credit
Agreement, the adoption of any applicable law, rule or regulation, or any change
therein, or any change in the interpretation or administration thereof by any
governmental authority, central bank or comparable agency charged with the
interpretation or administration thereof or compliance by any Bank (or its
Eurodollar Lending Office) with any request or directive (whether or not having
the force of law) of any such authority, central bank or comparable agency shall
make it unlawful or impossible for any Bank (or its Eurodollar Lending Office)
to make, maintain or fund its Eurodollar Loans and such Bank shall so notify the
Agent, the Agent shall forthwith give notice thereof to the other Banks and the
Borrower, whereupon until such Bank notifies the Borrower and the Agent that the
circumstances giving rise to such suspension no longer exist, the obligation of
such Bank to make new Eurodollar Loans, or to convert outstanding Loans into
Eurodollar Loans, shall be suspended. Before giving any notice to the Agent
pursuant to this Section, such Bank shall designate a different Eurodollar
Lending Office if such designation will avoid the need for giving such notice
and will not, in the judgment of such Bank, be otherwise disadvantageous to such
Bank. If such notice is given, each Eurodollar Loan of such Bank then
outstanding shall be converted to a Base Rate Loan either (a) on the last day of
the then current Interest Period applicable to such Eurodollar Loan if such Bank
may lawfully continue to maintain and fund such Loan to such day or (b)
immediately if such Bank shall determine that it may not lawfully continue to
maintain and fund such Loan to such day.
SECTION 8.03 Increased Cost and Reduced Return.
(a) If on or after the date hereof, the adoption of any applicable law,
rule or regulation, or any change therein, or any change in the interpretation
or administration thereof by any governmental authority, central bank or
comparable agency charged with the interpretation or administration thereof, or
compliance by any Bank (or its Eurodollar Lending Office) with any request or
directive (whether or not having the force of law) of any such authority,
central bank or comparable agency:
(i) shall subject any Bank (or its Applicable Lending
Office) to any tax, duty or other charge with respect to its Eurodollar
Loans, or its obligation to make Eurodollar Loans, or shall change the
basis of taxation of payments to any Bank (or its Eurodollar Lending
Office) of the principal of or interest on its Eurodollar Loans or any
-58-
other amounts due under this Credit Agreement in respect of its
Eurodollar Loans or its obligation to make Eurodollar Loans (except for
(i) Non-Excluded Taxes covered by Section 8.04 (including Non-Excluded
Taxes imposed solely by reason of any failure of such Bank to comply
with its obligations under Section 2.14 and (ii) changes in the rate of
tax imposed on, or contemplated with respect to, the income of such
Bank or its Eurodollar Lending Office or changes generally affecting
the manner in which the income of such Bank or its Applicable Lending
Office is subjected to taxation, by the jurisdiction in which such
Bank's principal executive office or Eurodollar Lending Office is
located or the jurisdiction under the laws of which such Bank is
organized); or
(ii) shall impose, modify or deem applicable any reserve,
special deposit or similar requirement (including, without limitation,
any such requirement imposed by the Board of Governors of the Federal
Reserve System, but excluding with respect to any Eurodollar Loan any
such requirement included in an applicable Eurodollar Reserve
Percentage) against assets of, deposits with or for the account of, or
credit extended by, any Bank (or its Applicable Lending Office) or
shall impose on any Bank (or its Applicable Lending Office) or on the
United States market for certificates of deposit or the London
interbank market any other condition affecting its Eurodollar Loans,
its Note or its obligation to make Eurodollar Loans;
and the result of any of the foregoing is to increase the cost to such Bank (or
its Eurodollar Lending Office) of making or maintaining any Eurodollar Loan, or
to reduce the amount of any sum received or receivable by such Bank (or its
Eurodollar Lending Office) under this Credit Agreement or under its Note with
respect thereto, by an amount deemed by such Bank to be material (except to the
extent that such increased cost or reduction of a sum received or receivable is
attributable to such Bank's failure to perform any of its obligations under
Section 2.14 or is otherwise attributable to any act or action of such Bank
other than the loaning of funds under this Credit Agreement), then, within
fifteen (15) days after demand by such Bank (with a copy to the Agent)
accompanied by a certificate setting forth in reasonable detail its calculation
of such increased cost or reduction, the Borrower shall pay to such Bank such
additional amount or amounts as will compensate such Bank for such increased
cost or reduction.
(b) If any Bank shall have determined that, after the date hereof, the
adoption or change of any applicable law, rule, guideline or regulation
regarding capital adequacy, or any change therein, or any change in the
interpretation or administration thereof by any governmental authority, central
bank or comparable agency charged with the interpretation or administration
thereof or any request or directive regarding capital adequacy (whether or not
having the force of law) of any such authority, central bank or comparable
agency, has or would have the effect of reducing the rate of return on capital
of such Bank (or its Parent) as a consequence of such Bank's obligations
hereunder to a level below that which such Bank (or its Parent) could have
achieved but for such adoption, change, request or directive (taking into
consideration its policies with respect to capital adequacy) by an amount deemed
by such Bank to be material then from time to time, within fifteen (15) days
after demand by such Bank (with a copy to the Agent) accompanied by a
certificate setting forth in reasonable detail its calculation of such
reduction, the Borrower shall pay such Bank such additional amount or amounts as
will compensate such Bank (or its Parent) for such reduction.
-59-
(c) Each Bank will promptly notify the Borrower and the Agent of any
event of which it has knowledge, occurring after the date hereof, which will
entitle such Bank to compensation pursuant to this Section and will designate a
different Applicable Lending Office if such designation will avoid the need for,
or reduce the amount of, such compensation and will not, in the judgment of such
Bank, be otherwise disadvantageous to such Bank. A certificate of any Bank
claiming compensation under this Section and setting forth in reasonable detail
its calculation of the additional amount or amounts to be paid to it hereunder
shall be conclusive in the absence of manifest error. In determining such
amount, such Bank may use any reasonable averaging and attribution methods.
Failure on the part of any Bank to demand compensation under subsection (a) or
(b) with respect to any period shall not constitute a waiver of such Bank's
right to demand compensation with respect to such period or any other period;
provided, however, that no Bank shall be entitled to compensation for the period
which is more than thirty (30) days prior to the date the Borrower receives the
certificate described in this subsection (c) via facsimile. Each Bank agrees
that it will send the certificate described above via facsimile to insure
immediate receipt by the Borrower.
SECTION 8.04 Taxes.
(a) Except as provided below in this subsection, all payments made by
the Borrower under this Credit Agreement and any Notes shall be made free and
clear of, and without deduction or withholding for or on account of, any present
or future income, stamp or other taxes, levies, imposts, duties, charges, fees,
deductions or withholdings, now or hereafter imposed, levied, collected,
withheld or assessed by any court, or governmental body, agency or other
official, excluding taxes measured by or imposed upon the overall net income of
any Bank or its applicable lending office, or any branch or affiliate thereof,
and all franchise taxes, branch taxes, taxes on doing business or taxes on the
overall capital or net worth of any Bank or its applicable lending office, or
any branch or affiliate thereof, in each case imposed in lieu of net income
taxes, imposed: (i) by the jurisdiction under the laws of which such Bank,
applicable lending office, branch or affiliate is organized or is located, or in
which its principal executive office is located, or any nation within which such
jurisdiction is located or any political subdivision thereof; or (ii) by reason
of any connection between the jurisdiction imposing such tax and such Bank,
applicable lending office, branch or affiliate other than a connection arising
solely from such Bank having executed, delivered or performed its obligations,
or received payment under or enforced, this Credit Agreement or any Notes. If
any such non-excluded taxes, levies, imposts, duties, charges, fees, deductions
or withholdings ("Non-Excluded Taxes") are required to be withheld from any
amounts payable to the Agent or any Bank hereunder or under any Notes, (A) the
amounts so payable to the Agent or such Bank shall be increased to the extent
necessary to yield to the Agent or such Bank (after payment of all Non-Excluded
Taxes) interest or any such other amounts payable hereunder at the rates or in
the amounts specified in this Credit Agreement and any Notes, provided, however,
that the Borrower shall be entitled to deduct and withhold any Non-Excluded
Taxes and shall not be required to increase any such amounts payable to any Bank
that is not organized under the laws of the United States of America or a state
thereof if such Bank fails to comply with the requirements of Section 2.14
whenever any Non-Excluded Taxes are payable by the Borrower, and (B) as promptly
as possible thereafter the Borrower shall send to the Agent for its own account
-60-
or for the account of such Bank, as the case may be, a certified copy of an
original official receipt received by the Borrower showing payment thereof. If
the Borrower fails to pay any Non-Excluded Taxes when due to the appropriate
taxing authority or fails to remit to the Agent the required receipts or other
required documentary evidence, the Borrower shall indemnify the Agent and the
Banks for any incremental taxes, interest or penalties that may become payable
by the Agent or any Bank as a result of any such failure. The agreements in this
subsection shall survive the termination of this Credit Agreement and the
payment of the Loans and all other amounts payable hereunder.
SECTION 8.05 Base Rate Loans Substituted for Affected Eurodollar Loans.
If (i) the obligation of any Bank to make or maintain Eurodollar Loans has been
suspended pursuant to Section 8.02 or (ii) any Bank has demanded compensation
under Section 8.03 and the Borrower shall by at least five (5) Eurodollar
Business Days' prior notice to such Bank through the Agent have elected that the
provisions of this Section shall apply to such Bank, then, unless and until such
Bank notifies the Borrower that the circumstances giving rise to such suspension
or demand for compensation no longer apply:
(a) all Loans which would otherwise be made by such Bank as (or
continued as or converted into) Eurodollar Loans shall instead be Base Rate
Loans (on which interest and principal shall be payable contemporaneously with
the related Eurodollar Loans of the other Banks), and
(b) after each of its Eurodollar Loans has been repaid (or converted to
a Base Rate Loan), all payments of principal which would otherwise be applied to
repay such Eurodollar Loans shall be applied to repay its Base Rate Loans
instead.
If such Bank notifies the Borrower that the circumstances giving rise to such
notice no longer apply, unless Borrower elects otherwise, the principal amount
of each such Base Rate Loan shall be converted into a Eurodollar Loan on the
first day of the next succeeding Interest Period applicable to the related
Eurodollar Loan of the other Banks.
SECTION 8.06 Substitution of Bank. If (i) the obligation of any Bank to
make Eurodollar Loans has been suspended pursuant to Section 8.02 or (ii) any
Bank has demanded compensation under Section 8.03, the Borrower shall have the
right, with the assistance of the Agent, to seek a substitute bank or banks
reasonably satisfactory to the Agent and the Borrower (which may be one or more
of the Banks) to purchase the Note of such Bank and the interest of such Bank in
the Unused Fees and to assume the Commitment of such Bank for a purchase price
equal to all amounts payable to such Bank hereunder and under the Note, and the
Borrower, the Agent, such Bank and such substitute bank or banks shall execute
and deliver an appropriately completed Assignment and Assumption Agreement
pursuant to Section 9.06(c) hereof to effect the assignment of rights to and
assumption of obligations by such substitute bank or banks.
-61-
ARTICLE IX
MISCELLANEOUS
SECTION 9.01 Notices. All notices, requests and other communications to
any party hereunder shall be in writing (including bank wire, telex, facsimile
transmission or similar writing) and shall be given to such party: (a) in the
case of the Borrower and the Agent, at the address, facsimile number or telex
number set out below, and in the case of the Banks, at their respective address,
facsimile number or telex number set forth on the Schedule 9.1 hereto or (b) at
such other address, facsimile number or telex number as such party may hereafter
specify for the purpose of notice to the Agent and the Borrower:
If to the Borrower: Healthcare Realty Trust Incorporated
3310 West End Avenue
Suite 700
Nashville, Tennessee 37203
Attn: Treasurer
Phone: (615) 269-8175
Fax: (615) 269-8122
If to the Agent: NationsBank, N.A.
One Independence Center
101 North Tryon Street, 15th Floor
Charlotte, North Carolina 28255
Attn: Mike Roof
Agency Services
Phone: (704) 388-3196
Fax: (704) 386-9923
with a copy to:
NationsBank, N.A.
One NationsBank Plaza
Seventh Floor
Nashville, Tennessee 37239
Attn: Ashley Crabtree
Phone: (615) 749-3524
Fax: (615) 749-4640
Each such notice, request or other communication shall be effective (i) if given
by telex, when such telex is transmitted to the telex number specified in or
pursuant to this Section and the appropriate answerback is received, (ii) if
given by facsimile, when such facsimile is transmitted to the number specified
in or pursuant to this Section,(iii) if given by mail, 72 hours after such
communication is deposited in the mails with first class postage prepaid,
addressed as aforesaid or (iv) if given by any other means, when delivered at
the address specified in or pursuant to this Section; provided that notices to
-62-
the Agent or the Borrower or any Bank under Article II or Article VIII shall not
be effective until received.
SECTION 9.02 No Waivers. No failure or delay by the Agent or any Bank
in exercising any right, power or privilege hereunder or under any Note shall
operate as a waiver thereof nor shall any single or partial exercise thereof
preclude any other or further exercise thereof or the exercise of any other
right, power or privilege. The rights and remedies herein provided shall be
cumulative and not exclusive of any rights or remedies provided by law.
SECTION 9.03 Expenses.
(a) The Borrower shall pay (i) all reasonable out-of-pocket expenses of
the Agent associated with the preparation and due diligence of the Loans,
including reasonable fees and disbursements of special counsel for the Agent
(but excluding administration and syndication costs), in connection with any
waiver or consent requested by Borrower hereunder or any amendment hereof
requested by Borrower or any Default hereunder, any waiver or consent hereunder
or any amendment hereof or any Default or alleged Default hereunder and (ii) if
an Event of Default occurs, all reasonable out-of-pocket expenses incurred by
the Agent and each Bank, including reasonable fees and disbursements of counsel
in connection with such Event of Default and work-out, collection, bankruptcy,
insolvency and other enforcement proceedings resulting therefrom.
(b) The Borrower shall indemnify and defend the Agent, NMS and each
other Bank and their respective directors, officers, agents, employees,
Subsidiaries and Affiliates (the "Indemnified Parties") from, and hold each of
them harmless against any and all losses, liabilities, claims, damages or
expenses incurred by any of them arising out of, by reason of or in connection
with this Credit Agreement (but excluding any such losses, liabilities, claims,
damages or expenses incurred by reason of (i) the gross negligence or willful
misconduct by the indemnitee, and/or (ii) any claim made by Agent, NMS or any
Bank against the other), including, but without limitation, amounts paid in
settlement, court costs, and fees and disbursements of no more than one separate
law firm acting as counsel for any or all of the parties indemnified hereunder,
in each case incurred in connection with any such investigation, litigation or
other proceedings; provided, that the Indemnified Parties shall be entitled to
reimbursement of the expenses of more than one separate law firm if the
Indemnified Parties, in their reasonable discretion, determine that a single law
firm would not be able to adequately represent the interests of the Indemnified
Parties in a matter. Notwithstanding the foregoing provisions of this paragraph
to the contrary, each Indemnified Party shall use its best efforts to mitigate
any losses, liabilities, claims, damages or expenses as to which it is entitled
to seek indemnity pursuant to the provisions hereof.
SECTION 9.04 Sharing of Set-Offs. Each Bank agrees that if it shall, by
exercising any right of set-off or counterclaim or otherwise, receive payment of
a proportion of the aggregate amount of principal and interest due with respect
to any Note held by it which is greater than the proportion received by any
other Bank in respect of the aggregate amount of principal and interest due with
respect to any Note held by such other Bank, the Bank receiving such
-63-
proportionately greater payment shall purchase such participation in the Notes
held by the other Banks, and such other adjustments shall be made, as may be
required so that all such payments of principal and interest with respect to the
Notes held by the Banks shall be shared by the Banks pro rata. The Borrower
agrees, to the fullest extent it may effectively do so under applicable law,
that any holder of a participation in a Note, whether or not acquired pursuant
to the foregoing arrangements, may exercise rights of set-off or counterclaim
and other rights with respect to such participation as fully as if such holder
of a participation were a direct creditor of the Borrower in the amount of such
participation.
SECTION 9.05 Amendments and Waivers. Any provision of this Credit
Agreement or any of the other Financing Documents may be modified, amended or
waived if, but only if, such modification, amendment or waiver is in writing and
is signed by the Borrower and the Majority Banks (and, if the rights or duties
of the Agent are affected thereby, by the Agent); provided that no such
modification, amendment or waiver shall, unless signed by all the Banks, (a)
increase the Commitment of any Bank or subject any Bank to any additional
obligation, (b) reduce the principal of or rate of interest on any Loan or any
fees or other amounts payable to any Bank hereunder, (c) postpone the date fixed
for any scheduled payment of principal of or interest on any Loan or any fees
hereunder or for any scheduled reduction or termination of any Commitment, (d)
except as provided in Section 2.01(d), change the percentage of the Commitments
or of the aggregate unpaid principal amount of the Notes, or the number of
Banks, which shall be required for the Banks or any of them to take any action
under this Section or any other provision of this Credit Agreement or (e)
release all or substantially all of the Guarantors.
SECTION 9.06 Successors and Assigns.
(a) The provisions of this Credit Agreement shall be binding upon and
inure to the benefit of the parties hereto and their respective successors and
assigns, except that the Borrower may not assign or otherwise transfer any of
its rights or obligations under this Credit Agreement without the prior written
consent of all the Banks, and no Bank may assign or otherwise transfer any of
its rights or obligations under this Credit Agreement except in compliance with
this Section 9.06; provided that nothing contained herein shall prevent or
prohibit any Bank from (i) pledging its Loans and Obligations to a Federal
Reserve Bank in support of borrowings made by such Bank from such Federal
Reserve Bank, or (ii) granting assignments or selling participations in such
Bank's Obligations and/or Commitments hereunder to a parent company and/or an
Affiliate or Subsidiary of such Bank.
(b) Any Bank at any time may grant to one or more banks or other
institutions (each a "Participant") participating interests in its Commitment or
any or all of its Loans. In the event of any such grant by a Bank of a
participating interest to a Participant, whether or not upon notice to the
Borrower and the Agent, such Bank shall remain responsible for the performance
of its obligations hereunder, and the Borrower and the Agent shall continue to
deal solely and directly with such Bank in connection with such Bank's rights
and obligations under this Credit Agreement. Any agreement pursuant to which any
Bank may grant such a participating interest shall provide that such Bank shall
retain the sole right and responsibility to enforce the obligations of the
Borrower hereunder including, without limitation, the right to approve any
-64-
amendment, modification or waiver of any provision of the Financing Documents;
provided that such participation agreement may provide that such Bank will not
agree to any modification, amendment or waiver of this Credit Agreement
described in clause (a), (b) or (c) of Section 9.05, without the consent of the
Participant. An assignment or other transfer which is not permitted by
subsection (c) or (d) below shall be given effect for purposes of this Credit
Agreement only to the extent of a participating interest granted in accordance
with this subsection (b).
(c) Each Bank may assign all or a portion of its rights, obligations,
or rights and obligations hereunder (including, without limitation, its loans
and commitments hereunder) pursuant to an assignment agreement substantially in
the form of Schedule 9.06(c), to (i) a Bank, (ii) an affiliate of a Bank or
(iii) any other Person (other than the Borrower or an Affiliate of the Borrower)
reasonably acceptable to the Agent and, so long as no Default or Event of
Default has occurred and is continuing, the Borrower, which consent shall not be
unreasonably withheld or delayed and which consent shall be deemed given if the
Borrower shall not make written objection within two Business Days after notice
of the proposed assignment; provided that (i) any such assignment (other than an
assignment to an existing Bank or affiliate of an existing Bank) shall be in a
minimum aggregate principal amount of $5,000,000 (or the remaining amount of
loans and commitments, if less) and integral multiples of $1,000,000 in excess
thereof, and (ii) each such assignment shall be in a constant, not varying,
percentage of all the Bank's rights and obligations under this Credit Agreement.
Any assignment hereunder shall be effective upon delivery to the Agent of
written notice of the assignment together with a transfer fee of $3,500 payable
to the Agent for its own account from and after the effective date specified in
the applicable assignment agreement. The assigning Bank will give prompt notice
to the Agent and the Borrower of any such assignment. Upon the effectiveness of
any such assignment (and after notice to, and (to the extent required pursuant
to the terms hereof), with the consent of, the Borrower as provided herein), the
assignee shall become a "Bank" for all purposes of this Credit Agreement and the
other Financing Documents and, to the extent of such assignment, the assigning
Bank shall be relieved of its obligations hereunder to the extent of the
Obligations and Commitment components being assigned. Along such lines the
Borrower agrees that upon notice of any such assignment and surrender of the
appropriate Note or Notes, it will promptly provide to the assigning Bank and to
the assignee separate promissory notes in the amount of their respective
interests substantially in the form of the original Note (but with notation
thereon that it is given in substitution for and replacement of the original
Note or any replacement notes thereof). By executing and delivering an
assignment agreement in accordance with this Section 11.3(b), the assigning Bank
thereunder and the assignee thereunder shall be deemed to confirm to and agree
with each other and the other parties hereto as follows: (i) such assigning Bank
warrants that it is the legal and beneficial owner of the interest being
assigned thereby free and clear of any adverse claim; (ii) except as set forth
in clause (i) above, such assigning Bank makes no representation or warranty and
assumes no responsibility with respect to any statements, warranties or
representations made in or in connection with this Credit Agreement, any of the
other Financing Documents or any other instrument or document furnished pursuant
hereto or thereto, or the execution, legality, validity, enforceability,
genuineness, sufficiency or value of this Credit Agreement, any of the other
Financing Documents or any other instrument or document furnished pursuant
hereto or thereto or the financial condition of any Obligor or any of their
respective Affiliates or the performance or observance by any Obligor of any of
its obligations under this Credit Agreement, any of the other Financing
-65-
Documents or any other instrument or document furnished pursuant hereto or
thereto; (iii) such assignee represents and warrants that it is legally
authorized to enter into such assignment agreement; (iv) such assignee confirms
that it has received a copy of this Credit Agreement, the other Financing
Documents and such other documents and information as it has deemed appropriate
to make its own credit analysis and decision to enter into such assignment
agreement; (v) such assignee will independently and without reliance upon the
Agent, such assigning Bank or any other Bank, and based on such documents and
information as it shall deem appropriate at the time, continue to make its own
credit decisions in taking or not taking action under this Credit Agreement and
the other Financing Documents; (vi) such assignee appoints and authorizes the
Agent to take such action on its behalf and to exercise such powers under this
Credit Agreement or any other Financing Document as are delegated to the Agent
by the terms hereof or thereof, together with such powers as are reasonably
incidental thereto; and (vii) such assignee agrees that it will perform in
accordance with their terms all the obligations which by the terms of this
Credit Agreement and the other Financing Documents are required to be performed
by it as a Bank. Any purported assignment which does not comply with the
requirements of this Section 9.06(c) shall be null and void.
(d) Any Bank may at any time assign all or any portion of its rights
under this Credit Agreement and its Notes to a Federal Reserve Bank. No such
assignment shall release the transferor Bank from its obligations hereunder.
(e) The Borrower agrees that each Participant shall to the extent
provided in its participation agreement, be entitled to the benefits of Section
8.03 and 2.15 with respect to its participating interest; provided that no
Participant or other transferee of any Bank's rights shall be entitled to
receive any greater payment under Section 8.03 or 2.12 (whether individually or
in aggregate with any such payments received by such Bank) than such Bank would
have been entitled to receive with respect to the rights transferred if such
rights had not been transferred.
(f) Borrower shall not be required to pay any costs or expenses in
connection with any participation, assignment or transfer described in this
Section 9.06. No such participation or, except as provided in Section 9.06(c)
above with respect to an assignment which is consented to by Borrower,
assignment or transfer shall release any Bank from liability for its obligations
hereunder.
SECTION 9.07 Collateral. Each of the Banks represents to the Borrower,
the Agent and each of the other Banks that it in good faith is not relying upon
any "Margin Stock" (as defined in Regulation U) as collateral in the extension
or maintenance of the credit provided for in the Financing Documents.
SECTION 9.08 Governing Law; Submission to Jurisdiction. This Credit
Agreement and each Note shall be governed by and construed in accordance with
the laws of the State of North Carolina. The Borrower, Agent and each Bank
hereby submits to the nonexclusive jurisdiction of the United States District
Court of the Western District of North Carolina and of any North Carolina State
court sitting in Charlotte for purposes of all legal proceedings arising out of
or relating to this Credit Agreement or the transactions contemplated hereby.
-66-
The Borrower, Agent and each Bank irrevocably waives, to the fullest extent
permitted by law, any objection which it may now or hereafter have to the laying
of the venue of any such proceeding brought in such a court and any claim that
any such proceeding brought in such a court has been brought in an inconvenient
forum.
SECTION 9.09 Counterparts; Integration; Effectiveness. This Credit
Agreement may be signed in any number of counterparts, each of which shall be an
original with the same effect as if the signatures thereto and hereto were upon
the same instrument. This Credit Agreement constitutes the entire agreement and
understanding among the parties hereto and supersedes any and all prior
agreements and understandings, oral or written, relating to the subject matter
hereof. This Credit Agreement shall become effective when the Agent shall have
received counterparts hereof signed by all of the parties hereto.
SECTION 9.10 WAIVER OF JURY TRIAL. EACH OF THE BORROWER, THE AGENT AND
EACH BANK HEREBY IRREVOCABLY WAIVES ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY
LEGAL PROCEEDING ARISING OUT OF OR RELATING TO THIS CREDIT AGREEMENT, ANY
FINANCING DOCUMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY.
-67-
IN WITNESS WHEREOF, the parties hereto have caused this Credit
Agreement to be duly executed by their respective authorized officers as of the
day and year first above written.
HEALTHCARE REALTY TRUST INCORPORATED
By:_____________________________________________
Name:
Title:
NATIONSBANK, N.A., in its capacity as Agent and in
its individual capacity as a Bank
By:______________________________________________
Name:
Title:
FIRST UNION NATIONAL BANK
By:______________________________________________
Name:
Title:
SOCIETE GENERALE
By:______________________________________________
Name:
Title:
BANK AUSTRIA CREDITANSTALT CORPORATE
FINANCE, INC.
By:_____________________________________________
Name:
Title:
By:_____________________________________________
Name:
Title:
AMSOUTH BANK
By:____________________________________________
Name:
Title:
SOUTHTRUST BANK, N.A.
By:____________________________________________
Name:
Title:
FIRST TENNESSEE BANK NATIONAL
ASSOCIATION
By:___________________________________________
Name:
Title:
BANK ONE, KENTUCKY, N.A.
By:__________________________________________
Name:
Title:
FIRST COMMERCIAL BANK
By:___________________________________________
Name:
Title:
CREDIT LYONNAIS, NEW YORK BRANCH
By:___________________________________________
Name:
Title:
Schedule 2.1(a)
Schedule of Commitments
Revolving Committed Revolving Letter of Credit
Lender Amount Percentage Commitment
- ------ ------ ---------- ----------
NationsBank, N.A. $50,000,000 18.867924% $1,886,792.45
First Union National Bank $35,000,000 13.207547% $1,320,754.72
Societe Generale $35,000,000 13.207547% $1,320,754.72
Bank Austria Creditanstalt Corporate Finance, Inc. $35,000,000 13.207547% $1,320,754.72
AmSouth Bank $25,000,000 9.433962% $943,396.22
SouthTrust Bank, N.A. $20,000,000 7.547170% $754,716.98
First Tennessee Bank National Association $20,000,000 7.547170% $754,716.98
Bank One, Kentucky, N.A. $15,000,000 5.660377% $566,037.74
First Commercial Bank $15,000,000 5.660377% $566,037.74
Credit Lyonnais, New York Branch $15,000,000 5.660377% $566,037.74
----------- -------- -----------
$265,000,000 100.000000% $10,000,000.00
Schedule 2.02
FORM OF NOTICE OF BORROWING
NationsBank, N.A. NationsBank, N.A.,
as Agent for the Banks as Swingline Bank
101 N. Tryon Street 101 N. Tryon Street
Independence Center, 15th Floor Independence Center, 15th Floor
NC1-001-15-04 NC1-001-15-04
Charlotte, North Carolina 28255 Charlotte, North Carolina 28255
Attention: Agency Services Attention: Agency Services
RE: Credit Agreement dated as of October 15, 1998 (as amended and
modified, the "Credit Agreement")among HEALTHCARE REALTY TRUST
INCORPORATED, the Banks identified therein and NationsBank,
N.A., as Agent.Terms used but not otherwise defined herein
shall have the meanings provided in the Credit Agreement.
Ladies and Gentlemen:
The undersigned hereby gives notice of a request for Revolving Loan pursuant to
Section 2.02 of the Credit Agreement or of a request for Swingline Loan pursuant
to Section 2.07 (b) of the Credit Agreement as follows:
Revolving Loan
Swingline Loan
(A) Date of Borrowing
(which is a Business Day)
(B) Principal Amount of
Borrowing
(C) Interest rate basis
(D) Interest Period and the
last day thereof
In accordance with the requirements of Section 3.02 of the Credit Agreement, the
undersigned Borrower hereby certifies that:
(a) The representations and warranties contained in the Credit
Agreement and the other Credit Documents are true and correct in all material
respects as of the date of this request, and will be true and correct after
giving effect to the requested Extension of Credit (except for those which
expressly related to an earlier date).
(b) No Default or Event of Default exists, or will exist after giving
effect to the requested Extension of Credit.
(c) All conditions set forth in Section 2.02 as to the making of
Revolving Loans or in Section 2.07 as to the making of Swingline Loans, as
appropriate, have been satisfied.
Very truly yours,
HEALTHCARE REALTY TRUST INCORPORATED
By:_____________________________________
Name:
Title:
-2-
Schedule 2.03(a)
FORM OF REVOLVING NOTE
FOR VALUE RECEIVED, the undersigned Borrower hereby promises to pay to the
order of ____________, its successors and assigns, on or before the Termination
Date to the office of the Agent in immediately available funds as provided in
the Credit Agreement,
(i) in the case of Revolving Loans, such Bank's Revolving
Committed Amount or, if less, the aggregate unpaid principal amount of
all Revolving Loans owing to such Bank; and
(ii) in the case of Swingline Loans, if such lender is the
Swingline Bank, the aggregate Swingline Committed Amount or, if less,
the aggregate unpaid principal amount of all Swingline Loans owing to
such Swingline Bank; and
together with interest thereon at the rates and as provided in the Credit
Agreement.
This Note is one of the Revolving Notes referred to in the Credit
Agreement dated as of October 15, 1998 ( as amended and modified, the "Credit
Agreement") among HEALTHCARE REALTY TRUST INCORPORATED, a Maryland corporation,
the Banks identified therein and NationsBank, N.A., as Agent. Terms used but
not otherwise defined herein shall have the meanings provided in the Credit
Agreement.
The holder may endorse and attach a schedule to reflect borrowings
evidenced by this Note and all payments and prepayments thereon; provided that
any failure to endorse such information shall not affect the obligation of the
undersigned Borrower to pay amounts evidenced hereby.
Upon the occurrence of an Event of Default, all amounts evidenced by
this Note may, or shall, become immediately due and payable as provided in the
Credit Agreement without presentment, demand, protest or notice of any kind, all
of which are waived by the undersigned Borrower. In the event payment of amounts
evidenced by this Note is not made at any stated or accelerated maturity, the
undersigned Borrower agrees to pay, in addition to principal and interest, all
costs of collection, including reasonable attorneys' fees.
This Note and the Loans and amounts evidenced hereby may be transferred
only as provided in the Credit Agreement.
This Note shall be governed by, and construed and interpreted in
accordance with, the law of the State of North Carolina.
-3-
In WITNESS WHEREOF, the undersigned Borrower has caused this Note to be duly
executed as of the date first above written.
HEALTHCARE REALTY TRUST INCORPORATED,
a Maryland corporation
By: ____________________________________
Name:
Title:
-4-
Schedule 2.06(a)
Letters of Credit to be issued on the Closing Date
-5-
Schedule 2.06(b)-1
Existing Letters of Credit
-6-
Schedule 2.06(b)-2
Form of Notice of Request for Letter of Credit
[Date]
NationsBank, N.A. NationsBank, N.A.
as Issuing Bank under the as Agent under the
Credit Agreement referred to below Credit Agreement referred to below
101 N. Tryon Street 101 N. Tryon Street
Independence Center, 15th Floor Independence Center, 15th Floor
NC1-001-15-04 NC1-001-15-04
Charlotte, North Carolina 28255 Charlotte, North Carolina 28255
Attention: Agency Services
Re: Credit Agreement dated as of October 15, 1998 (as amended and
modified, the "Credit Agreement") among HEALTHCARE REALTY
TRUST INCORPORATED, the Banks identified therein and
NationsBank, N.A., as Agent. Terms used but not otherwise
defined herein shall have the meanings provided in the Credit
Agreement.
Ladies and Gentlemen:
The undersigned, pursuant to Section 2.06(b) of the Credit Agreement,
hereby requests that the following Letters of Credit be issued on [Date] as
follows:
(1) Account Party:
(2) For use by:
(3) Beneficiary:
(4) Face Amount of Letter of Credit:
(5) Date of Issuance:
Delivery of Letter of Credit should be made as follows:
In accordance with the requirements of Section 3.02 of the Credit
Agreement, the undersigned Borrower hereby certifies that:
(a) The representations and warranties contained in the Credit
Agreement and the other Credit Documents are true and correct in all material
respects as of the date of this request, and will be true and correct after
giving effect to the requested Extension of Credit (except for those which
expressly relate to an earlier date).
(b) No Default or Event of Default exists, or will exist after
giving effect to the requested Extension of Credit.
-7-
(c) All conditions set forth in Section 2.06 as to the issuance of
a Letter of Credit have been satisfied.
Very truly yours,
HEALTHCARE REALTY TRUST INCORPORATED
By:_________________________________
Name:
Title:
-8-
Schedule 2.10
Form of Notice of Interest Rate Election
NationsBank, N.A.,
as Agent for the Banks
101 N. Tryon Street
Independence Center, 15th Floor
NC1-001-15-04
Charlotte, North Carolina 28255
Attention: Agency Services
Re: Credit Agreement dated as of October 15, 1998 ( as amended and
modified,the "Credit Agreement") among HEALTHCARE REALTY TRUST
INCORPORATED, the Banks identified therein and NationsBank,
N.A., as Agent. Terms used but not otherwise defined herein
shall have the meanings provided in the Credit Agreement.
Ladies and Gentlemen:
The undersigned hereby gives notice pursuant to Section 2.10 of the
Credit Agreement that it requests an extension or conversion of a Revolving Loan
outstanding under the Credit Agreement, and in connection therewith sets forth
below the terms on which such extension or conversion is requested to be made:
(A) Date of Extension or Conversion
(which is the last day of the
applicable Interest Period) _______________________________
(B) Principal Amount of
Extension or Conversion _______________________________
(C) Interest rate basis _______________________________
(D) Interest Period and the
last day thereof _______________________________
In accordance with the requirements of Section 3.02 of the Credit
Agreement, the undersigned Borrower hereby certifies that:
(a) The representations and warranties contained in the
Credit Agreement and the other Credit Documents are true and correct in
all material respects as of the date of this request, and will be true
and correct after giving effect to the requested Extension of Credit
(except for those which expressly relate to an earlier date).
(b) No Default or Event of Default exists, or will exist
after giving effect to the requested Extension of Credit.
-9-
(c) All conditions set forth in Section 2.02 as to the
making of Revolving Loans or in Section 2.07 as to the making of
Swingline Loans, as appropriate, have been satisfied.
Very truly yours,
HEALTHCARE REALTY TRUST INCORPORATED
By:__________________________________
Name:
Title:
-10-
Schedule 4.04
Legal Proceedings
-11-
Schedule 4.05
ERISA Matters
-12-
Schedule 4.06
Environmental Matters
-13-
Schedule 4.07
Subsidiaries (including Material Subsidiaries and Specified Affiliates)
Material Subsidiaries:
Specified Affiliates:
Other Subsidiaries:
Other Affiliates:
-14-
Schedule 4.10
Compliance with Laws
-15-
Schedule 4.12
Debt
$300 million Revolving Loan Agreement dated as of the Closing Date with the
banks identified therein and NationsBank, N.A., as Agent.
$200 million Term Loan Agreement dated as of the Closing Date with the banks
identified therein and NationsBank, N.A., as Agent.
$90 million 7.41% Senior Notes of the Borrower due September 1, 2002.
-16-
Schedule 4.13
Contingent Liabilities
Subsidiary Guarantee dated as of the Closing Date in respect of the Revolving
Credit Agreement referenced on Schedule 4.12 given by the Subsidiaries and
affiliates identified therein.
Subsidiary Guarantee dated as of the Closing Date in respect of the Term Loan
Agreement referenced on Schedule 4.12 given by the Subsidiaries and affiliates
identified therein.
-17-
Schedule 4.14
Investments
-18-
Schedule 5.08
Asset Sales
-19-
Schedule 5.09
Form of Subsidiaries Guarantee
-20-
Schedule 5.17
"White Paper" issued in March 1995 by the
National Association of Real Estate Investment Trusts
-21-
Schedule 9.01
Lender's Addresses
Address for Domestic Eurodollar
Lenders Notice Lending Office Lending Office
NationsBank, N.A. NationsBank, N.A. NationsBank, N.A. NationsBank, N.A.
101 N. Tryon Street 101 N. Tryon Street 101 N. Tryon Street
Independence Center, 15th Floor Independence Center, 15th Floor Independence Center, 15th Floor
Charlotte, NC 28255 Charlotte, NC 28255 Charlotte, NC 28255
Attn: Mike Roof Attn: Mike Roof Attn: Mike Roof
Tel: 704-388-3916 Tel: 704-388-3916 Tel: 704-388-3916
Fax: 704-386-9923 Fax: 704-386-9923 Fax: 704-386-9923
with a copy to:
NationsBank, N.A.
One NationsBank Plaza, 5th Floor
Nashville, TN 37239
Attn: Ashley M. Crabtree
Tel: 615-749-3524
Fax: 615-749-4640
First Union First Union National Bank of Tennessee First Union National Bank First Union National Bank
National Bank 150 11th Avenue, 2nd Floor Capital Markets Service Dept. Capital Markets Service Dept.
Nashville, TN 37219 One First Union Center, TW-5 One First Union Center, TW-5
Attn: Carolyn Hannon 301 South College Street 301 South College Street
Tel: 615-251-9374 Charlotte, NC 28288-0785 Charlotte, NC 28288-0785
Fax: 615-251-9247 Attn: Sue Patterson Attn: Sue Patterson
Tel: 704-374-7121 Tel: 704-374-7121
Fax: 704-383-9144 Fax: 704-383-9144
AmSouth Bank AmSouth Bank AmSouth Bank AmSouth Bank
333 Union Street, Suite 200 Relationship Banking Assistant Relationship Banking Assistant
Nashville, TN 37203 333 Union Street, Suite 200 333 Union Street, Suite 200
Attn: Cathy M. Wind Nashville, TN 37203 Nashville, TN 37203
Tel: 615-291-5268 Attn: Amy Vandygriff Attn: Amy Vandygriff
Fax: 615-291-5257 Tel: 615-291-5269 Tel: 615-291-5269
Fax: 615-291-5257 Fax: 615-291-5257
-2-
Societe Generale Societe Generale Societe Generale Societe Generale
2029 Century Park East, Suite 2900 2029 Century Park East, Suite 2900 2029 Century Park East, Ste 2900
Los Angeles, CA 90067 Los Angeles, CA 90067 Los Angeles, CA 90067
Attn: J. Staley Stewart Attn: Doris Fun Attn: Doris Fun
Tel: 310-788-7103 Tel: 310-788-7116 Tel: 310-788-7116
Fax: 310-551-1537 Fax: 310-203-0539 Fax: 310-203-0539
Creditanstalt Creditanstalt Corporate Finance, Inc. Creditanstalt Corporate Finance,Inc. Creditanstalt Corporate Finance
Corporate Two Greenwich Plaza Two Ravinia Drive, Suite 1680 Two Ravinia Drive, Suite 1680
Finance, Inc. Greenwich, CT 06830-6353 Atlanta, GA 30346 Atlanta, GA 30346
Attn: Lisa Bruno Attn: Scott Kray Attn: Scott Kray
Tel: 203-861-6464 Tel: 770-390-1858 Tel: 770-390-1858
Fax: 203-861-1475 Fax: 770-390-1851 Fax: 770-390-1851
SouthTrust Bank, SouthTrust Bank, N.A. SouthTrust Bank, N.A. SouthTrust Bank, N.A.
N.A. 420 North 20th Street 6434 1st Avenue, North 6434 1st Avenue, North
Birmingham, AL 35203 Birmingham, AL 35212 Birmingham, AL 35212
Attn: Keith Law Attn: Operations Specialist Attn: Operations Specialist
Tel: 205-254-4255 Tel: 205-599-5446 Tel: 205-599-5446
Fax: 205-254-5022 Fax: 205-599-4350 Fax: 205-599-4350
First Tennessee First Tennessee Bank National Association First Tennessee Bank National Assn. First Tennessee Bank Natl Assn
Bank National 511 Union Street 511 Union Street 511 Union Street
Association Nashville, TN 37219 Nashville, TN 37219 Nashville, TN 37219
Attn: J. Todd Carter Attn: Michelle Bull Attn: Michelle Bull
Tel: 615-734-6191 Tel: 615-734-6247 Tel: 615-734-6247
Fax: 615-734-6148 Fax: 615-734-6148 Fax: 615-734-6148
-3-
Bank One, Bank One, Kentucky, NA Bank One, Kentucky, NA Bank One, Kentucky, NA
Kentucky, NA 416 West Jefferson Street 1 Riverfront Plaza 1 Riverfront Plaza
Louisville, KY 40202 KY1-4190 KY1-4190
Attn: Todd D. Munson Louisville, KY 40202 Louisville, KY 40202
Tel: 502-566-2640 Attn: Sarilas Offutt Attn: Sarilas Offutt
Fax: 502-566-8339 Tel: 502-566-8855 Tel: 502-566-8855
Fax: 502-566-8621 Fax: 502-566-8621
First Commercial First Commercial Bank First Commercial Bank First Commercial Bank
Bank 800 Shadown Creek Parkway 800 Shadow Creek Parkway 800 Shadow Creek Parkway
Birmingham, AL 35202 Birmingham, AL 35202 Birmingham, AL 35202
Attn: Fred R. Elliott Attn: Melinda McCullough Attn: Melinda McCullough
Tel: 205-868-4921 Tel: 205-868-4582 Tel: 205-868-4582
Fax: 205-868-4898 Fax: 205-868-4898 Fax: 205-868-4898
Credit Lyonnais Credit Lyonnais New York Branch Credit Lyonnais New York Branch Credit Lyonnais New York Branch
New York Branch 1301 Avenue of the Americas 1301 Avenue of the Americas 1301 Avenue of the Americas
New York, NY 10019 New York, NY 10019 New York, NY 10019
Attn: Scott Schimpf Attn: Kenia A. Perez Attn: Kenia A. Perez
Tel: 212-261-7788 Tel: 212-261-7313 Tel: 212-261-7313
Fax: 212-261-3440 Fax: 212-261-3440 Fax: 212-261-3440
-4-
Schedule 9.06(c)
Form of Assignment and Acceptance
THIS ASSIGNMENT AND ACCEPTANCE dated as of , 199_ is entered into between
THE BANK IDENTIFIED ON THE SIGNATURE PAGES AS THE "ASSIGNOR" (the "Assignor")
and THE PARTIES IDENTIFIED ON THE SIGNATURE PAGES AS "ASSIGNEES" ("Assignee").
Reference is made to that Credit Agreement dated as of October 15, 1998 (as
amended and modified, the "Credit Agreement") among HEALTHCARE REALTY TRUST
INCORPORATED, a Maryland corporation (the "Borrower"), the Banks identified
therein and NationsBank, N.A., as Agent. Terms defined in the Credit Agreement
are used herein with the same meanings.
1. The Assignor hereby sells and assigns, without recourse, to the
Assignees, and the Assignees hereby purchase and assume, without recourse, from
the Assignor, effective as of the Effective Date shown below, those rights and
interests of the Assignor under the Credit Agreement identified below (the
"Assigned Interests"), including the Obligations and Commitments relating
thereto, together with unpaid interest and fees relating thereto accruing from
the Effective Date. The Assignor represents and warrants that it owns interests
assigned hereby free and clear of liens, encumbrances or other claims. Each of
the Assignees represents that it is an assignee permitted under Section 9.06(c)
of the Credit Agreement. The Assignor and each of the Assignees hereby makes and
agrees to be bound by all the representations, warranties and agreements set
forth in Section 9.06 of the Credit Agreement, a copy of which has been received
by each such party. From and after the Effective Date (i) each Assignee, if it
is not already a Bank under the Credit Agreement, shall be a party to and be
bound by the provisions of the Credit Agreement and, to the extent of the
interests assigned by this Assignment and Acceptance, have the rights and
obligations of a Bank thereunder and (ii) each Assignor shall, to the extent of
the interests assigned by this Assignment and Acceptance, relinquish its rights
and be released from its obligations under the Credit Agreement (other than the
rights of indemnification referenced in Section 9.03 of the Credit Agreement).
Schedule 2.1 is deemed modified and amended to the extent necessary to give
effect to this Assignment.
2. This Assignment and Acceptance shall be governed by and construed in
accordance with the laws of the State of North Carolina.
3. Terms of Assignment
(a) Date of Assignment: , 199__
(b) Legal Name of Assignor: SEE SIGNATURE PAGE
(c) Legal Name of Assignee: SEE SIGNATURE PAGE
(d) Effective Date of Assignment: , 199__
See Schedule I attached for a description of the Loans, Obligations and
Commitments (and the percentage interests therein and relating thereto) which
are the subject of this Assignment and Acceptance.
4. The fee payable to the Agent in connection with this Assignment is
enclosed.
IN WITNESS WHEREOF, the parties hereto have caused the execution of this
instrument by their duly authorized officers as of the date first above written.
ASSIGNOR: ASSIGNEE:
By:__________________________ By: _________________________
Name: Name:
Title: Title:
Address for Notices:
ACKNOWLEDGMENT AND CONSENT
NATIONSBANK, N.A. HEALTHCARE REALTY TRUST INCORPORATED
as Agent
By: By:
Name: Name:
Title: Title:
-2-
SCHEDULE I
TO ASSIGNMENT AND ACCEPTANCE
HEALTHCARE REALTY TRUST INCORPORATED
REVOLVING LOANS AND LETTERS OF CREDIT PRIOR TO ASSIGNMENT
Revolving Revolving Revolving LOC LOC
Committed Commitment Loans Committed Obligations
Amount Percentage Outstanding Amount Outstanding
--------- ---------- ----------- --------- -----------
ASSIGNOR
ASSIGNEES
--------- ---------- ----------- --------- ------------
$ % $ $ $
REVOLVING LOANS AND LETTERS OF CREDIT INTERESTS SUBJECT TO THIS ASSIGNMENT
Revolving Revolving Revolving LOC LOC
Committed Commitment Loans Committed Obligations
Amount Percentage Outstanding Amount Outstanding
--------- ---------- ----------- --------- -----------
ASSIGNOR
ASSIGNEES
--------- ---------- ----------- --------- ------------
$ % $ $ $
-2-
SCHEDULE 1
TO ASSIGNMENT AND ACCEPTANCE
REVOLVING LOANS AND LETTERS OF CREDIT AFTER ASSIGNMENT
Revolving Revolving Revolving LOC LOC
Committed Commitment Loans Committed Obligations
Amount Percentage Outstanding Amount Outstanding
--------- ---------- ----------- --------- -----------
ASSIGNOR
ASSIGNEES
--------- ---------- ----------- --------- ------------
$ % $ $ $
-3-