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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): February 2, 1998
HIGHWOODS PROPERTIES, INC.
(Exact name of registrant as specified in its charter)
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<CAPTION>
MARYLAND
(State of Incorporation)
<S> <C>
1-13100 56-1871668
(Commission File Number) (IRS Employer Identification No.)
3100 SMOKETREE COURT, SUITE 600 27604
RALEIGH, NORTH CAROLINA (Zip Code)
(Address of principal executive
offices)
(919) 872-4924
(Registrant's telephone number, including area code)
</TABLE>
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ITEM 5. OTHER EVENTS
The purpose of this filing is to set forth certain exhibits in connection
with the issuance by Highwoods/Forsyth Limited Partnership on February 2, 1998
of $125 million of 6.835% MandatOry Par Put Remarketed Securities(sm)
("MOPPRS(sm)") due February 1, 2013 and $100 million of 7-1/8% notes due
February 1, 2008.
ITEM 7. EXHIBITS
Following is a list of the exhibits filed as a part of this report:
4.1 Form of Notes due February 1, 2008.
4.2 Form of MOPPRS(sm) due February 1, 2013.
4.3 Form of Remarketing Agreement among Highwoods/Forsyth Limited
Partnership, the Registrant and Merrill Lynch, Pierce, Fenner & Smith.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
HIGHWOODS PROPERTIES, INC.
/S/ CARMAN J. LIUZZO
Carman J. Liuzzo
Vice President and Chief Financial
Officer
Date: February 2, 1998
2
Unless this certificate is presented by an authorized representative of The
Depository Trust Company, a New York corporation ("DTC"), to the Issuer (as
defined below) or its agent for registration of transfer, exchange, or payment,
and any certificate issued is registered in the name of Cede & Co. or in such
other name as is requested by an authorized representative of DTC (and any
payment is made to Cede & Co. or to such other entity as is requested by an
authorized representative of DTC), ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR
VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL inasmuch as the registered
owner hereof, Cede & Co., has an interest herein.
REGISTERED PRINCIPAL AMOUNT
No. :1 $100,000,000
CUSIP No: 431282 AE2
HIGHWOODS/FORSYTH LIMITED PARTNERSHIP
7-1/8% NOTE DUE FEBRUARY 1, 2008
HIGHWOODS/FORSYTH LIMITED PARTNERSHIP, a North Carolina limited
partnership (hereinafter called the "Issuer," which term shall include any
successor partnership or entity under the Indenture hereinafter referred to),
for value received, hereby promises to pay to Cede & Co, or registered assigns,
upon presentation, the principal sum of ONE HUNDRED MILLION DOLLARS
($100,000,000) on February 1, 2008, and to pay interest on the outstanding
principal amount thereon from February 2, 1998, or from the most recent Interest
Payment Date to which interest has been paid or duly provided for, semi-annually
in arrears on February 1 and August 1, in each year, commencing August 1, 1998,
at the rate of 7-1/8% per annum, until the entire principal amount hereof is
paid or made available for payment. The interest so payable, and punctually paid
or duly provided for, on any Interest Payment Date will, as provided in the
Indenture, be paid to the Person in whose name this Note (or one or more
Predecessor Notes) is registered at the close of business on the Regular Record
Date for such interest which shall be 15 calendar days (whether or not a
Business Day) preceding such Interest Payment Date. Any such interest not so
punctually paid or duly provided for shall forthwith cease to be payable to the
Holder on such Regular Record Date, and may either be paid to the Person in
whose name this Note (or one or more Predecessor Notes) is registered at the
close of business on a Special Record Date for the payment of such Defaulted
Interest to be fixed by the Trustee which shall not be more than 15 days and not
less than 10 days prior to the date of the proposed payment, notice whereof
shall be given to Holders not less than 10 days prior to such Special Record
Date, or may be paid at any time in any other lawful manner not inconsistent
with the requirements of any securities exchange on which the Notes may be
listed, and upon exchange, all as more fully provided in the Indenture Payment
of the principal of, Make-Whole Amount, if any, on, and interest on this Note
will be made at the Office or Agency of the Issuer maintained for that purpose
in the City of New York, State of New York, currently located c/o First Union
National Bank of New York, 40 Broad Street, 5th Floor, Suite 550, New York, New
York 10004, or elsewhere as provided in the Indenture, in such coin or currency
of the United States of America as at the time of payment is legal tender for
payment of public and private debts; provided,
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however, that at the option of the Issuer payment of interest may be made by (i)
check mailed to the address of the Person entitled thereto as such address shall
appear in the Security Register kept for the Notes pursuant to Section 305 of
the Indenture (the "Note Register") or (ii) transfer to an account of the Person
entitled thereto located inside the United States.
This Note is one of a duly authorized issue of securities of the
Issuer (herein called the "Notes"), issued and to be issued in one or more
series under an Indenture, dated as of December 1, 1996 (herein called the
"Indenture"), among the Issuer, Highwoods Properties, Inc. and First Union
National Bank (herein called the "Trustee," which term includes any successor
trustee under the Indenture with respect to the Notes), to which Indenture and
all indentures supplemental thereto reference is hereby made for a statement of
the respective rights, limitations of rights, duties and immunities thereunder
of the Issuer, the Trustee, Highwoods Properties, Inc and the Holders of the
Notes and of the terms upon which the Notes are, and are to be, authenticated
and delivered. This Note is one of the series designated as the "7-1/8% Notes
due February 1, 2008," limited in aggregate principal amount to $100,000,000.
The Notes may be redeemed at any time at the option of the Issuer, in
whole or from time to time in part, upon notice of not more than 60 nor less
than 30 days prior to the Redemption Date, at a redemption price equal to the
sum of (i) the principal amount of the Notes (or portion thereof) being redeemed
plus accrued interest thereon to the Redemption Date and (ii) the Make-Whole
Amount, if any, with respect to such Notes (or portion thereof).
The following definitions apply with respect to any redemption or
accelerated payment of the Notes of this series:
"Make-Whole Amount" means, in connection with any optional redemption
or accelerated payment of any Notes, the excess, if any, of (i) the aggregate
present value as of the date of such redemption or accelerated payment of each
dollar of principal being redeemed or paid and the amount of interest (exclusive
of interest accrued to the date of redemption or accelerated payment) that would
have been payable in respect of such dollar if such redemption or accelerated
payment had not been made, determined by discounting, on a semi-annual basis,
such principal and interest at the Reinvestment Rate (determined on the third
Business Day preceding the date such notice of redemption is given or
declaration of acceleration is made) from the respective dates on which such
principal and interest would have been payable if such redemption or accelerated
payment had not been made, over (ii) the aggregate principal amount of the Notes
being redeemed or paid.
"Reinvestment Rate" means .25% plus the yield on treasury securities
at a constant maturity for the most recent week under the heading "Week Ending"
published in the most recent Statistical Release under the caption" Treasury
Constant Maturities" for the maturity (rounded to the nearest month)
corresponding to the remaining life to maturity, as of the payment date of the
principal being redeemed or paid. If no maturity exactly corresponds to such
maturity, yields for the two published maturities most closely corresponding to
such maturity shall be calculated pursuant to the immediately preceding sentence
and the Reinvestment Rate shall be interpolated or extrapolated from such yields
on a straight-line basis, rounding in each of such relevant periods to the
nearest
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month. For the purpose of calculating the Reinvestment Rate, the most recent
Statistical Release published prior to the date of determination of the Make-
Whole Amount shall be used.
"Statistical Release" means the statistical release designated "H.15
(519)"or any successor publication which is published weekly by the Federal
Reserve System and which establishes yields on actively traded United States
government securities adjusted to constant maturities, or, if such statistical
release is not published at the time of any determination under the Indenture,
then such other reasonably comparable index which shall be designated by the
Issuer.
The Indenture contains provisions for defeasance at any time of (a)
the entire indebtedness of the Issuer on this Note and (b) certain restrictive
covenants and the related defaults and Events of Default applicable to the
Issuer, in each case, upon compliance by the Issuer with certain conditions set
forth in the Indenture, which provisions apply to this Note.
If an Event of Default with respect to the Notes of this series shall
occur and be continuing, the principal of, and the Make-Whole Amount, if any,
on, the Notes of this series may be declared due and payable in the manner and
with the effect provided in the Indenture.
As provided in and subject to the provisions of the Indenture, the
Holder of this Note shall not have the right to institute any proceeding with
respect to the Indenture or for the appointment of a receiver or trustee or for
any other remedy thereunder, unless such Holder shall have previously given the
Trustee written notice of a continuing Event of Default with respect to the
Notes of this series, the Holders of not less than 25% in principal amount of
the Notes of this series at the time Outstanding shall have made written request
to the Trustee to institute proceedings in respect of such Event of Default as
Trustee and offered the Trustee reasonable indemnity and the Trustee shall not
have received from the Holders of a majority in principal amount of the Notes of
this series at the time Outstanding a direction inconsistent with such request,
and shall have failed to institute any such proceeding for 60 days after receipt
of such notice, request and offer of indemnity. The foregoing shall not apply to
any suit instituted by the Holder of this Note for the enforcement of any
payment of principal hereof or any interest on or after the respective due dates
expressed herein.
The Indenture permits, with certain exceptions as therein provided,
the amendment thereof and the modification of the rights and obligations of the
Issuer and the rights of the Holders of the Notes under the Indenture at any
time by the Issuer and the Trustee with the consent of the Holders of not less
than a majority in principal amount of the Outstanding Notes. The Indenture also
contains provisions permitting the Holders of specified percentages in principal
amount of the Notes at the time Outstanding, on behalf of the Holders of all
Notes, to waive compliance by the Issuer with certain provisions of the
Indenture and certain past defaults under the Indenture and their consequences.
Any such consent or waiver by the Holder of this Note shall be conclusive and
binding upon such Holder and upon all future Holders of this Note and of any
Note issued upon the registration of transfer hereof or in exchange herefor or
in lieu hereof, whether or not notation of such consent or waiver is made upon
this Note.
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No reference herein to the Indenture and no provision of this Note or
of the Indenture shall alter or impair the obligation of the Issuer, which is
absolute and unconditional, to pay the principal of, Make-Whole Amount, if any,
on, and interest on this Note at the times, place and rate, and in the coin or
currency, herein prescribed.
As provided in the Indenture and subject to certain limitations
therein set forth, the transfer of this Note is registrable in the Note
Register, upon surrender of this Note for registration of transfer at the Office
or Agency of the Issuer in any Place of Payment where the principal of,
Make-Whole Amount, if any, on, and interest on this Note are payable, duly
endorsed by, or accompanied by a written instrument of transfer in form
satisfactory to the Issuer and the Security Registrar for the Notes (the "Note
Registrar") duly executed by, the Holder hereof or his attorney duly authorized
in writing, and thereupon one or more new Notes of this series, of authorized
denominations and for the same aggregate principal amount, will be issue to the
designated transferee or transferees.
The Notes of this series are issuable only in registered form without
coupons in denominations of $1,000 and any integral multiple thereof. As
provided in the Indenture and subject to certain limitations therein set forth,
Notes of this series are exchangeable for a like aggregate principal amount of
Notes of this series of a different authorized denomination, as requested by the
Holder surrendering the same.
No service charge shall be made for any such registration of transfer
or exchange, but the Trustee or the Issuer may require payment of a sum
sufficient to cover any tax or other governmental charge payable in connection
therewith.
Prior to due presentment of this Note for registration of transfer,
the Issuer, the Trustee and any agent of the Issuer or the Trustee may treat the
Person in whose name this Note is registered as the owner hereof for all
purposes, whether or not this Note be overdue, and neither the Issuer, the
Trustee nor any such agent shall be affected by notice to the contrary.
All terms used in this Note which are defined in the Indenture shall
have the meanings assigned to them in the Indenture.
THE INDENTURE AND THE NOTES, INCLUDING THIS NOTE, SHALL BE GOVERNED
BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK APPLICABLE
TO AGREEMENTS MADE OR INSTRUMENTS ENTERED INTO AND, IN EACH CASE, PERFORMED IN
SAID STATE.
Pursuant to a recommendation promulgated by the Committee on Uniform
Security Identification Procedures, the Issuer has caused "CUSIP" numbers to be
printed on the Notes as a convenience to the Holders of the Notes. No
representation is made as to the correctness or accuracy of such CUSIP numbers
as printed on the Notes, and reliance may be placed only on the other
identification numbers printed hereon.
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Unless the certificate of authentication hereon has been executed by
or on behalf of the Trustee by manual signature, this Note shall not be entitled
to any benefit under the Indenture or be valid or obligatory for any purpose.
5
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IN WITNESS WHEREOF, the Issuer has caused this instrument to be duly
executed this 2nd day of February, 1998.
HIGHWOODS/FORSYTH LIMITED PARTNERSHIP
By: Highwoods Properties, Inc., its General
Partner
By: /s/ Ronald P. Gibson
-------------------------------------
Ronald P. Gibson
President and Chief Executive Officer
Attest:
By: /s/ Edward J. Fritsch
---------------------
Edward J. Fritsch
Secretary
[SEAL]
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TRUSTEE'S CERTIFICATE OF AUTHENTICATION:
This is one of the Notes of the series designated "7-1/8% Notes due
February 1, 2008" referred to in the within-mentioned Indenture.
FIRST UNION NATIONAL BANK,
as Trustee
By:
------------------------
Authorized Officer
7
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ASSIGNMENT FORM
FOR VALUE RECEIVED, the undersigned hereby
sells, assigns and transfers unto
PLEASE INSERT SOCIAL
SECURITY OR OTHER IDENTIFYING
NUMBER OF ASSIGNEE
[GRAPHIC OMITTED]
................................................................................
(Please Print or Typewrite Name and Address, including
Zip Code, of Assignee)
................................................................................
the within Note of Highwoods/Forsyth Limited Partnership and ___________________
hereby does irrevocably constitute and appoint
................................................................................
Attorney to transfer said Note on the books of the within-named Issuer with full
power of substitution in the premises.
Dated: .........................................................................
Signature: .....................................................................
NOTICE: The signature to this assignment must correspond with the name as it
appears on the first page of the within Note in every particular, without
alteration or enlargement or any change whatever.
Signature
Guaranteed: ....................................................................
NOTICE: Signature(s) must be guaranteed by an "ELIGIBLE GUARANTOR INSTITUTION"
that is a member or participant in a "SIGNATURE GUARANTEE PROGRAM" (E.G., the
Securities Transfer Agents Medallion Program, the Stock Exchange Medallion
Program or the New York Stock Exchange, Inc. Medallion Signature Program).
8
Unless this certificate is presented by an authorized representative of the
Depository Trust Company (the "Depositary") (55 Water Street, New York, New
York) to the Issuer hereof or its agent for registration of transfer, exchange
or payment, and any certificate issued is registered in the name of Cede & Co.
or such other name as requested by an authorized representative of the
Depositary and any payment is made to Cede & Co., ANY TRANSFER, PLEDGE OR OTHER
USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL since the
registered owner hereof, Cede & Co., has an interest herein.
Unless and until it is exchanged in whole or in part for securities in
certificated form, this security may not be transferred except as a whole by the
Depositary to a nominee of the Depositary or by a nominee of the Depositary to
the Depositary or another nominee of the Depositary or by the Depositary or any
such nominee to a successor Depositary or a nominee of such successor
Depositary.
REGISTERED PRINCIPAL AMOUNT:
No. 1 $125,000,000
CUSIP NO.: 431282 AD4
HIGHWOODS/FORSYTH LIMITED PARTNERSHIP
6.835% MandatOry Par Put Remarketed Securities(sm) ("MOPPRS(sm)")
due February 1, 2013
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ORIGINAL ISSUE DATE: INTEREST RATE STATED MATURITY DATE:
February 2, 1998 TO REMARKETING February 1, 2013
DATE: 6.835%
REMARKETING DATE: INTEREST RATE
January 31, 2003 TO MATURITY: To be determined as provided herein and set
forth in the records of the Trustee
AUTHORIZED DENOMINATION: INTEREST PAYMENT DATE(S):
$1,000 and integral multiples thereof February 1 and August 1 (except that
the Interest Payment Date otherwise
occurring on February 1, 2003 will
instead occur on January 31, 2003)
</TABLE>
- -----------
"MandatOry Par Put Remarketed Securities(sm)" and "MOPPRS(sm)" are service marks
owned by Merrill Lynch & Co., Inc.
<PAGE>
HIGHWOODS/FORSYTH LIMITED PARTNERSHIP, a North Carolina limited
partnership (hereinafter called the "Issuer," which term shall include any
successor partnership or entity under the Indenture hereinafter referred to),
for value received, hereby promises to pay to Cede & Co., a nominee of The
Depository Trust Company ("DTC"), or its registered assigns, upon presentation,
the principal amount of ONE HUNDRED AND TWENTY-FIVE MILLION DOLLARS
($125,000,000), on the Stated Maturity Date specified above (or any earlier
redemption date or repurchase date) (each such Stated Maturity Date, redemption
date or repurchase date being hereinafter referred to as the "Maturity Date"
with respect to the principal repayable on such date) and to pay interest
thereon, at the Interest Rate per annum specified above to January 31, 2003 (the
"Remarketing Date"), and thereafter, subject to the terms and conditions set
forth herein, at the Interest Rate determined by the Remarketing Dealer (as
defined below) in accordance with the procedures set forth below (the "Interest
Rate to Maturity"), until the principal hereof is paid or duly made available
for payment. The Issuer will pay interest in arrears on each Interest Payment
Date, if any, specified above (each, an "Interest Payment Date"), commencing
with the first Interest Payment Date next succeeding the Original Issue Date
specified above, and on the Maturity Date. Interest on this MOPPRS will be
computed on the basis of a 360-day year of twelve 30-day months.
If, pursuant to the Remarketing Agreement, dated as of the date hereof
(the "Remarketing Agreement), among Merrill Lynch, Pierce, Fenner & Smith
Incorporated, as Remarketing Dealer (the "Remarketing Dealer"), the Issuer and
Highwoods Properties, Inc. (the "Company"), the Remarketing Dealer elects to
remarket the MOPPRS, then, except as otherwise set forth herein, (i) this MOPPRS
shall be subject to mandatory tender to the Remarketing Dealer for remarketing
on the Remarketing Date, on the terms and subject to the conditions set forth
herein, and (ii) on and after the Remarketing Date, this MOPPRS shall bear
interest at the Interest Rate to Maturity determined by the Remarketing Dealer
in accordance with the procedures set forth in Section 3 herein.
Interest on this MOPPRS will accrue from, and including, the
immediately preceding Interest Payment Date to which interest has been paid or
duly provided for (or from, and including, the Original Issue Date if no
interest has been paid or duly provided for) to, but excluding, the applicable
Interest Payment Date or the Maturity Date, as the case may be. The interest so
payable, and punctually paid or duly provided for, on any Interest Payment Date
will, subject to certain exceptions described herein, be paid to the person in
whose name this MOPPRS (or one or more predecessor MOPPRS) is registered at the
close of business on the fifteenth calendar day (whether or not a Business Day,
as defined below) immediately preceding such Interest Payment Date (the "Regular
Record Date"); provided, however, that interest payable on the Maturity Date
will be payable to the person to whom the principal hereof and premium, if any,
hereon shall be payable. Any such interest not so punctually paid or duly
provided for ("Defaulted Interest") will forthwith cease to be payable to the
holder on any Regular Record Date, and shall be paid to the person in whose name
this MOPPRS is registered at the close of business on a special record date (the
"Special Record Date") for the payment of such Defaulted Interest to be fixed by
the Trustee hereinafter referred to, of which notice shall be given to the
holder of this MOPPRS by the Trustee not more than 15 days nor less than 10 days
prior to such Special Record Date or may be paid at any time in any other lawful
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manner not inconsistent with the requirements of any securities exchange on
which this MOPPRS may be listed, and upon such notice as may be required by such
exchange, all as more fully provided for in the Indenture.
Payment of principal, premium, if any, and interest in respect of this
MOPPRS due on the Maturity Date will be made in immediately available funds upon
presentation and surrender of this MOPPRS (and, with respect to any applicable
repayment of this MOPPRS, a duly completed election form as contemplated on the
reverse hereof) at the Office or Agency of the Issuer maintained for that
purpose in the Borough of Manhattan, The City of New York, currently located c/o
First Union National Bank of New York, 40 Broad Street, 5th Floor, Suite 550,
New York, New York, 10004, or at such other paying agency in The City of New
York, State of New York, or elsewhere as provided in the Indenture. Payment of
interest due on any Interest Payment Date other than the Maturity Date will be
made by check mailed to the address of the person entitled thereto as such
address shall appear in the Security Register kept for the MOPPRS pursuant to
Section 305 of the Indenture.
If any Interest Payment Date or the Maturity Date falls on a day that
is not a Business Day, the required payment of principal, premium, if any,
and/or interest shall be made on the next succeeding Business Day with the same
force and effect as if made on the date such payment was due, and no interest
shall accrue with respect to such payment for the period from and after such
Interest Payment Date or the Maturity Date, as the case may be.
As used herein, "Business Day" means any day other than a Saturday,
Sunday or a day on which banking institutions in The City of New York are
authorized or required by law, regulation, executive order or governmental
decree to be closed.
The Issuer is obligated to make payment of principal, premium, if any,
and interest in respect of this MOPPRS in U.S. Dollars.
Reference is hereby made to the further provisions of this MOPPRS set
forth on the reverse hereof.
Unless the Certificate of Authentication hereon has been executed by
the Trustee by manual signature, this MOPPRS shall not be entitled to any
benefit under the Indenture or be valid or obligatory for any purpose.
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IN WITNESS WHEREOF, Highwoods/Forsyth Limited Partnership has caused
this MOPPRS to be duly executed this 2nd day of February, 1998.
HIGHWOODS/FORSYTH LIMITED PARTNERSHIP
By: HIGHWOODS PROPERTIES, INC.
its General Partner
By: /s/ Ronald P. Gibson
--------------------
Ronald P. Gibson
President and Chief Executive Officer
Attest:
By: /s/ Edward J. Fritsch
---------------------
Edward J. Fritsch
Secretary
[SEAL]
4
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TRUSTEE'S CERTIFICATE OF AUTHENTICATION:
This is one of the Securities of the series designated 6.835% MandatOry Par Put
Remarketed Securities Due February 1, 2013 referred to in the within-mentioned
Indenture.
Dated: February 2, 1998 FIRST UNION NATIONAL BANK,
as Trustee
By:
----------------------------------
Authorized Signatory
5
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HIGHWOODS/FORSYTH LIMITED PARTNERSHIP
6.835% MandatOry Par Put Remarketed Securities(sm) ("MOPPRS(sm)")
due February 1, 2013
1. INDENTURE. (a) This MOPPRS is one of a duly authorized series of
Securities of the Issuer issued under an Indenture, dated as of December 1, 1996
(the "Indenture"), among the Issuer, Highwoods Properties, Inc., and First Union
National Bank, as Trustee (herein called the "Trustee", which term includes any
successor trustee under the Indenture with respect to the MOPPRS), to which
Indenture and all indentures supplemental thereto reference is hereby made for a
statement of the respective rights, limitations of rights, duties and immunities
thereunder of the Issuer, the Trustee, Highwoods Properties, Inc (the "Company")
and the holders of the MOPPRS, and of the terms upon which the MOPPRS are
authenticated and delivered. This Security is designated as "6.835% MandatOry
Par Put Remarketed Securities(sm) Due February 1, 2013" ("MOPPRS"), which MOPPRS
are limited to $125,000,000 aggregate principal amount, subject to the
provisions of the Indenture. All terms used but not defined in this MOPPRS shall
have the meanings assigned to such terms in the Indenture. Except where the
context otherwise requires, all references in this MOPPRS to "herein" or
"hereof" or similar terms shall include the Indenture.
(b) This MOPPRS is issuable only in registered form without
coupons in minimum denominations of U.S. $1,000 and integral multiples thereof.
(c) This MOPPRS will not be subject to any sinking fund.
2. MANDATORY TENDER. Provided that on a Business Day not more than 15
nor less than five Business Days prior to the Remarketing Date the Remarketing
Dealer notifies the Issuer and the Trustee of its election to purchase the
MOPPRS on the Remarketing Date (the "Notification Date"), the MOPPRS shall be
subject to mandatory tender to the Remarketing Dealer, and the Remarketing
Dealer shall be obligated to purchase the MOPPRS, for remarketing on the
Remarketing Date, subject in each case to the conditions described herein and
set forth in the Remarketing Agreement.
3. DETERMINATION OF INTEREST RATE TO MATURITY. (a) Subject to the
Remarketing Dealer's election to remarket the MOPPRS as provided in Section 2
hereof and the Remarketing Agreement, the Interest Rate to Maturity shall be
determined by the Remarketing Dealer by 3:30 p.m., New York City time, on the
third Business Day preceding the Remarketing Date (the "Determination Date") to
the nearest one hundred-thousandth (0.00001) of one percent per annum, and will
be equal to the sum of 5.715% (the "Base Rate") plus the Applicable Spread,
which will be based on the Dollar Price of the MOPPRS.
The "Applicable Spread" will be the lowest bid indication, expressed as
a spread (in the form of a percentage or in basis points) above the Base Rate,
obtained by the Remarketing Dealer on the Determination Date from the bids
quoted by five Reference Corporate Dealers for the full aggregate principal
amount of the MOPPRS at the Dollar Price, but assuming (i) an issue date equal
to the
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Remarketing Date, with settlement on such date without accrued interest, (ii) a
maturity date equal to the Stated Maturity Date of the MOPPRS, and (iii) a
stated annual interest rate equal to the Base Rate plus the spread bid by the
applicable Reference Corporate Dealer. If fewer than five Reference Corporate
Dealers bid as described above, then the Applicable Spread shall be the lowest
of such bid indications obtained as described above. The Interest Rate to
Maturity announced by the Remarketing Dealer, absent manifest error, shall be
binding and conclusive upon the beneficial owners and Holders of the MOPPRS, the
Issuer and the Trustee.
"Dollar Price" means the present value, as of the Remarketing Date, of
the Remaining Scheduled Payments discounted to the Remarketing Date, on a
semi-annual basis (assuming a 360- day year consisting of twelve 30-day months),
at the Treasury Rate.
"Reference Corporate Dealers" mean leading dealers of publicly traded
debt securities of the Issuer in The City of New York (which may include the
Remarketing Dealer or one of its affiliates) selected by the Remarketing Dealer.
"Treasury Rate" means, with respect to the Remarketing Date, the rate
per annum equal to the semi-annual equivalent yield to maturity or interpolated
(on a day count basis) yield to maturity of the Comparable Treasury Issues,
assuming a price for the Comparable Treasury Issues (expressed as a percentage
of its principal amount), equal to the Comparable Treasury Price for the
Remarketing Date.
"Comparable Treasury Issues" means the United States Treasury security
or securities selected by the Remarketing Dealer as having an actual or
interpolated maturity or maturities comparable to the remaining term of the
MOPPRS being remarketed.
"Comparable Treasury Price" means, with respect to the Remarketing
Date, (a) the offer prices for the Comparable Treasury Issues (expressed in each
case as a percentage of its principal amount) on the Determination Date, as set
forth on "Telerate Page 500" (or such other page as may replace Telerate Page
500), or (b) if such page (or any successor page) is not displayed or does not
contain such offer prices on the Determination Date, (i) the average of the
Reference Treasury Dealer Quotations for the Remarketing Date, after excluding
the highest and lowest of such Reference Treasury Dealer Quotations, or (ii) if
the Remarketing Dealer obtains fewer than four such Reference Treasury Dealer
Quotations, the average of all such Reference Treasury Dealer Quotations.
"Telerate Page 500" means the display designated as "Telerate Page 500" on Dow
Jones Markets Limited (or such other page as may replace Telerate Page 500 on
such service) or such other service displaying the offer prices specified in (a)
above as may replace Dow Jones Markets Limited.
"Reference Treasury Dealer Quotations" means, with respect to each
Reference Treasury Dealer and the Remarketing Date, the offer prices for the
Comparable Treasury Issues (expressed in each case as a percentage of its
principal amount) quoted in writing to the Remarketing Dealer by such Reference
Treasury Dealer by 3:30 p.m., New York City time, on the Determination Date.
7
<PAGE>
"Reference Treasury Dealer" means each of Credit Suisse First Boston
Corporation, Lehman Brothers Inc., Merrill Lynch, Pierce, Fenner & Smith
Incorporated, Morgan Stanley & Co. Incorporated and Salomon Brothers Inc and
their respective successors; provided, however, that if any of the foregoing or
their affiliates shall cease to be a primary U.S. government securities dealer
in The City of New York (a "Primary Treasury Dealer"), the Remarketing Dealer
shall substitute therefor another Primary Treasury Dealer.
"Remaining Scheduled Payments" means, with respect to the MOPPRS, the
remaining scheduled payments of the principal thereof and interest thereon,
calculated at the Base Rate only, that would be due after the Remarketing Date
to and including the Stated Maturity Date; provided, however, that if the
Remarketing Date is not an Interest Payment Date with respect to the MOPPRS, the
amount of the next succeeding scheduled interest payment thereon, calculated at
the Base Rate only, will be reduced by the amount of interest accrued thereon,
calculated at the Base Rate only, to the Remarketing Date.
(b) Notwithstanding any provision herein to the contrary, upon the
occurrence of any Termination Event (as defined below), the Remarketing Dealer,
in its sole discretion at any time between the Determination Date and 3:30 p.m.,
New York City time, on the Business Day immediately preceding the Remarketing
Date, may elect to purchase the MOPPRS for remarketing and determine a new
Interest Rate to Maturity in the manner provided in Section 3(a) hereof, except
that for purposes of determining the new Interest Rate to Maturity pursuant to
this paragraph, the Determination Date referred to therein shall be the date of
such election and redetermination. The Remarketing Dealer shall notify the
Issuer, the Trustee and DTC by telephone, confirmed in writing (which may
include facsimile or other electronic transmission), by 4:00 p.m., New York City
time, on the date of such election, of the new Interest Rate to Maturity
applicable to the MOPPRS. Thereupon, such new Interest Rate to Maturity shall
supersede and replace any Interest Rate to Maturity previously determined by the
Remarketing Dealer and, absent manifest error, shall be binding and conclusive
upon the beneficial owners and Holders of the MOPPRS on or after the Remarketing
Date, the Issuer and the Trustee.
"Termination Event" means any event as specified in Section 12(b) of
the Remarketing Agreement.
4. REPURCHASE. In the event that (i) the Remarketing Dealer for any
reason does not notify the Issuer of the Interest Rate to Maturity by 4:00 p.m.,
New York City time, on the Determination Date, or (ii) prior to the Remarketing
Date, the Remarketing Dealer has resigned and no successor has been appointed on
or before the Determination Date, or (iii) at any time after the Remarketing
Dealer elects on the Notification Date to remarket the MOPPRS, any event as set
forth in Section 9 or Section 12 of the Remarketing Agreement shall have
occurred, or (iv) the Remarketing Dealer for any reason does not elect to
purchase the MOPPRS for remarketing on the Remarketing Date, or (v) the
Remarketing Dealer for any reason does not purchase all tendered MOPPRS on the
Remarketing Date, the Issuer shall repurchase the MOPPRS as a whole on the
Remarketing Date at a price equal to 100% of the principal amount of the MOPPRS
plus all accrued
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<PAGE>
and unpaid interest, if any, on the MOPPRS to the Remarketing Date. In any such
case, payment will be made by the Issuer through the Trustee to the DTC
participant of each tendering beneficial owner of MOPPRS, by book-entry through
DTC by the close of business on the Remarketing Date against delivery through
DTC of such beneficial owner's tendered MOPPRS.
5. REDEMPTION. (a) This MOPPRS will be subject to redemption at the
option of the Issuer from the Remarketing Dealer on the Remarketing Date, in
whole but not in part, at the Optional Redemption Price. To exercise its option
to redeem the MOPPRS, the Issuer must notify the Remarketing Dealer and the
Trustee not later than the Business Day immediately preceding the Determination
Date. The "Optional Redemption Price" shall be the greater of (i) 100% of the
principal amount of the MOPPRS and (ii) the sum of the present values of the
Remaining Scheduled Payments thereon, as determined by the Remarketing Dealer,
discounted to the Remarketing Date on a semi-annual basis (assuming a 360-day
year consisting of twelve 30-day months) at the Treasury Rate, plus in either
case accrued and unpaid interest from the Remarketing Date on the principal
amount being redeemed to the date of redemption. If the Issuer elects to redeem
the MOPPRS, it shall pay the redemption price therefor in same-day funds by wire
transfer to an account designated by the Remarketing Dealer on the Remarketing
Date.
(b) After the Remarketing Date, this MOPPRS shall be subject to
redemption at the option of the Issuer, in whole or in part, at any time, in
increments of U.S. $1,000 (provided that any remaining principal amount hereof
shall be at least U.S. $1,000), at a redemption price equal to the sum of (i)
the principal amount of the MOPPRS being redeemed, plus accrued and unpaid
interest thereon to the redemption date, and (ii) the Make-Whole Amount, if any
(the "Redemption Price"). For purposes of redemption after the Remarketing Date,
interest shall be calculated at the Interest Rate to Maturity.
If notice has been given as provided in the Indenture and funds for the
redemption of any MOPPRS called for redemption shall have been made available on
the redemption date referred to in such notice, such MOPPRS shall cease to bear
interest on the date fixed for such redemption specified in such notice and the
only right of the Holders from and after the redemption date shall be to receive
payment of the Redemption Price upon surrender of such MOPPRS in accordance with
such notice.
Notice of any optional redemption of any MOPPRS shall be given to
Holders at their addresses, as shown in the security register for the MOPPRS,
not less than 30 nor more than 60 days prior to the date fixed for redemption.
The notice of redemption shall specify, among other items, the Redemption Price
and the principal amount of the MOPPRS held by such Holder to be redeemed. If
less than all of the MOPPRS are to be redeemed, the particular MOPPRS to be
redeemed shall be selected by such method as the Trustee deems fair and
appropriate.
"Make-Whole Amount" shall mean, in connection with any optional
redemption of any MOPPRS, the excess, if any, of (i) the aggregate present value
as of the date of such redemption of each dollar of principal being redeemed and
the amount of any interest (exclusive of interest accrued
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<PAGE>
to the date of redemption) that would have been payable in respect of each such
dollar if such redemption had not been made, determined by discounting, on a
semi-annual basis, such principal and interest at the applicable Reinvestment
Rate (determined on the third Business Day preceding the date such notice of
redemption is given) from the respective dates on which such principal and
interest would have been payable if such redemption had not been made, over (ii)
the aggregate principal amount of the MOPPRS being redeemed.
"Reinvestment Rate" shall mean .25% plus the yield on treasury
securities at a constant maturity for the most recent week under the heading
"Week Ending" published in the most recent Statistical Release under the caption
"Treasury Constant Maturities" for the maturity (rounded to the nearest month)
corresponding to the remaining life to maturity, as of the payment date of the
principal being redeemed. If no maturity exactly corresponds to such maturity,
yields for the two published maturities most closely corresponding to such
maturity shall be calculated pursuant to the immediately preceding sentence and
the Reinvestment Rate shall be interpolated or extrapolated from such yields on
a straight-line basis, rounding in each of such relevant periods to the nearest
month. For the purpose of calculating the Reinvestment Rate, the most recent
Statistical Release published prior to the date of determination of the
Make-Whole Amount shall be used.
"Statistical Release" shall mean the statistical release designated
"H.15(519)" or any successor publication that is published weekly by the Federal
Reserve System and that establishes yields on actively traded United States
government securities adjusted to constant maturities, or, if such statistical
release is not published at the time of any determination under the Indenture,
then such other reasonably comparable index that shall be designated by the
Issuer.
6. EFFECT OF EVENTS OF DEFAULT. If an Event of Default, as defined in
the Indenture, shall occur and be continuing, the principal of, and the
Make-Whole Amount, if any, on the MOPPRS may be declared due and payable in the
manner and with the effect provided in the Indenture.
7. DEFEASANCE. The Indenture contains provisions for defeasance of (i)
in the case of this clause (i), after the Remarketing Date, the entire
indebtedness of the MOPPRS or (ii) certain restrictive covenants and Events of
Default with respect to the MOPPRS, in each case upon compliance with certain
conditions set forth therein, which provisions apply to the MOPPRS. Subject to
the forgoing, prior to the Remarketing Date, neither the Company, the Issuer nor
any of their subsidiaries or affiliates shall defease, purchase or otherwise
acquire, or enter into any agreement to defease, purchase or otherwise acquire,
any of the MOPPRS prior to the remarketing thereof by the Remarketing Dealer.
8. AMENDMENT AND MODIFICATION. The Indenture permits, with certain
exceptions as therein provided, the amendment thereof and the modification of
the rights and obligations of the Issuer and the rights of the holders of the
MOPPRS at any time by the Issuer and the Trustee with the consent of the holders
of not less than a majority of the aggregate principal amount of all MOPPRS at
the time outstanding and affected thereby. The Indenture also contains
10
<PAGE>
provisions permitting the holders of specified percentages in principal amount
of the MOPPRS at the time outstanding, on behalf of the holders of all MOPPRS,
to waive compliance by the Issuer with certain provisions of the Indenture and
certain past defaults under the Indenture and their consequences. Any such
consent or waiver by the holder of this MOPPRS shall be conclusive and binding
upon such holder and upon all future holders of this MOPPRS and other MOPPRS
issued upon the registration or transfer hereof or in exchange heretofore or in
lieu hereof, whether or not notation of such consent or waiver is made upon this
MOPPRS.
9. OBLIGATION TO PAY PRINCIPAL, PREMIUM, IF ANY, AND INTEREST. No
reference herein to the Indenture and no provision of this MOPPRS or of the
Indenture shall alter or impair the obligation of the Issuer, which is absolute
and unconditional, to pay principal, premium, if any, and interest in respect of
this MOPPRS at the times, places and rate or formula, and in the coin or
currency, herein prescribed.
10. TRANSFER AND EXCHANGE. As provided in the Indenture and subject to
certain limitations therein and herein set forth, the transfer of this MOPPRS is
registrable in the Security Register of the Issuer upon surrender of this MOPPRS
for registration of transfer at the Office or Agency of the Issuer in any place
where the principal hereof and any premium or interest hereon are payable, duly
endorsed by, or accompanied by a written instrument of transfer in form
satisfactory to the Issuer and the Security Registrar duly executed by, the
holder hereof or by his attorney duly authorized in writing, and thereupon one
or more new MOPPRS, of authorized denominations and for the same aggregate
principal amount, will be issued to the designated transferee or transferees.
As provided in the Indenture and subject to certain limitations therein
and herein set forth, this MOPPRS is exchangeable for a like aggregate principal
amount of MOPPRS of different authorized denominations but otherwise having the
same terms and conditions, as requested by the holder hereof surrendering the
same.
No service charge shall be made for any such registration of transfer
or exchange, but the Issuer may require payment of a sum sufficient to cover any
tax or other governmental charge payable in connection therewith.
Prior to due presentment of this MOPPRS for registration of transfer,
the Issuer, the Trustee and any agent of the Issuer or the Trustee may treat the
holder in whose name this MOPPRS is registered as the owner thereof for all
purposes, whether or not this MOPPRS be overdue, and neither the Issuer, the
Trustee nor any such agent shall be affected by notice to the contrary.
11. GOVERNING LAW. The Indenture and this MOPPRS shall be governed by
and construed in accordance with the laws of the State of New York applicable to
agreements made or instruments entered into and, in each case, performed in such
State.
11
<PAGE>
ASSIGNMENT FORM
FOR VALUE RECEIVED, the undersigned hereby
sells, assigns and transfers unto
PLEASE INSERT SOCIAL
SECURITY OR OTHER IDENTIFYING
NUMBER OF ASSIGNEE
[GRAPHIC OMITTED]
................................................................................
(Please Print or Typewrite Name and Address, including
Zip Code, of Assignee)
................................................................................
the within MOPPRS of Highwoods/Forsyth Limited Partnership and _________________
hereby does irrevocably constitute and appoint
................................................................................
Attorney to transfer said MOPPRS on the books of the within-named Issuer with
full power of substitution in the premises.
Dated: .......................................................................
Signature:......................................................................
NOTICE: The signature to this assignment must correspond with the name as it
appears on the first page of the within MOPPRS in every particular, without
alteration or enlargement or any change whatever.
Signature Guaranteed:...........................................................
NOTICE: Signature(s) must be guaranteed by an "ELIGIBLE GUARANTOR INSTITUTION"
that is a member or participant in a "SIGNATURE GUARANTEE PROGRAM" (E.G., the
Securities Transfer Agents Medallion Program, the Stock Exchange Medallion
Program or the New York Stock Exchange, Inc. Medallion Signature Program).
12
REMARKETING AGREEMENT
REMARKETING AGREEMENT, dated as of February 2, 1998 (this "Agreement"),
among Highwoods/Forsyth Limited Partnership, a North Carolina limited
partnership (the "Operating Partnership"), Highwoods Properties, Inc., a
Maryland corporation (the "Company"), and Merrill Lynch, Pierce, Fenner & Smith
Incorporated ("Merrill Lynch" and, in its capacity as the remarketing dealer
hereunder, the "Remarketing Dealer").
WHEREAS, the Operating Partnership has issued $125,000,000 aggregate
principal amount of its 6.835% MandatOry Par Put Remarketed Securities(sm) due
February 1, 2013 (the "MOPPRS(sm)")* pursuant to an indenture, dated as of
December 1, 1996 (the "Indenture"), among the Operating Partnership, the Company
and First Union National Bank, as trustee (the "Trustee"); and
WHEREAS, the MOPPRS are being sold initially pursuant to an
underwriting agreement, dated January 28, 1998, among the Operating Partnership,
the Company and Merrill Lynch, J.P. Morgan Securities Inc. and NationsBanc
Montgomery Securities LLC (the "Underwriters"), as supplemented by a terms
agreement, dated January 28, 1998, between the Operating Partnership and the
Underwriters (together, the "Underwriting Agreement"); and
WHEREAS, the Company and the Operating Partnership have filed with the
Securities and Exchange Commission (the "Commission") a registration statement
on Form S-3 (File Nos. 333-31183 and 333-31183-01) under the Securities Act of
1933, as amended (the "1933 Act"), in connection with the registration of, among
other securities, debt securities, including the MOPPRS, of the Operating
Partnership, which registration statement was declared effective by order of the
Commission on July 24, 1997, and have filed such amendments thereto and such
amended prospectuses as may have been required to the date hereof, and will file
such additional amendments thereto and such additional amended prospectuses as
may hereafter be required (such registration statement and any amendments
thereto, including any prospectus relating to the offering of MOPPRS by the
Operating Partnership constituting a part thereof, and all documents
incorporated therein by reference, as from time to time amended or supplemented
pursuant to the Securities Act of 1934, as amended (the "1934 Act"), the 1933
Act, or otherwise, are referred to herein as the "Registration Statement" and
the "Prospectus," respectively, except that, if any revised prospectus shall be
provided to the Remarketing Dealer by the Operating Partnership or the Company
for use in connection with the remarketing of the MOPPRS that differs from the
Prospectus on file at the Commission at the time the Registration Statement
became effective (whether or not such revised prospectus is required to be filed
by the Company or the Operating Partnership pursuant to Rule 424(b) of the rules
and regulations under the 1933 Act (the "1933 Act Regulations"), the term
"Prospectus" shall refer to such revised prospectus from and after the time it
is first provided to the Remarketing Dealer for such use); and
- -------------------
* "MandatOry Par Put Remarketed Securities(sm)" and "MOPPRS(sm)" are
service marks owned by Merrill Lynch & Co., Inc.
<PAGE>
WHEREAS, Merrill Lynch is prepared to act as the Remarketing Dealer
with respect to the remarketing of the MOPPRS on January 31, 2003 (the
"Remarketing Date") pursuant to the terms of, but subject to the conditions set
forth in, this Agreement;
NOW, THEREFORE, for and in consideration of the covenants herein made,
and subject to the conditions herein set forth, the parties hereto agree as
follows:
Section 1. Definitions. Capitalized terms used and not defined in this
Agreement shall have the meanings assigned to them in the Indenture (including
the form of the MOPPRS).
Section 2. Representations and Warranties. (a) Each of the Operating
Partnership and the Company represents and warrants, jointly and severally, to
the Remarketing Dealer as of the date hereof, the Notification Date (as defined
below), the Determination Date (as defined below), the Remarketing Date (each
such date being hereinafter referred to as a "Representation Date"), that (i) it
has made all the filings with the Commission that it is required to make under
the 1934 Act and the rules and regulations thereunder (the "1934 Act
Regulations") (collectively, the "1934 Act Documents"), (ii) each 1934 Act
Document complies in all material respects with the requirements of the 1934 Act
and 1934 Act Regulations, and each 1934 Act Document did not at the time of
filing with the Commission, and as of each Representation Date will not, include
an untrue statement of a material fact or omit to state a material fact required
to be stated therein or necessary in order to make the statements therein, in
the light of the circumstances under which they were made, not misleading, (iii)
the applicable Remarketing Materials (as defined herein) will not, as of the
Remarketing Date and each date, if any, thereafter, of delivery of MOPPRS by the
Remarketing Dealer, include an untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary in order to
make the statements therein, in the light of the circumstances under which they
were made, not misleading and (iv) no consent, approval, authorization, order or
decree of any court or governmental agency or body, including as to an effective
registration statement under the 1933 Act with respect to the MOPPRS, is
required for the consummation by the Operating Partnership or the Company of the
transactions contemplated by this Agreement or in connection with the
remarketing of MOPPRS pursuant hereto, except such as have been or shall have
been obtained or rendered, as the case may be.
(b) Each of the Operating Partnership and the Company further
represents and warrants, jointly and severally, to the Remarketing Dealer as of
each Representation Date as follows:
(i) This Agreement has been duly authorized, executed and
delivered by the Operating Partnership and the Company.
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<PAGE>
(ii) The Indenture has been duly and validly authorized,
executed and delivered by the Operating Partnership and the Company and
duly qualified under the Trust Indenture Act of 1939, as amended (the
"1939 Act"), and, assuming it has been duly executed and delivered by
the Trustee, constitutes a valid and legally binding agreement of the
Operating Partnership and the Company, enforceable against the
Operating Partnership and the Company in accordance with its terms,
except as enforcement thereof may be limited by bankruptcy, insolvency,
reorganization, moratorium or other similar laws relating to or
affecting creditors' rights generally or by general equity principles
(regardless of whether enforcement is considered in a proceeding in
equity or at law).
(iii) The MOPPRS have been duly authorized and executed by the
Operating Partnership and authenticated, issued and delivered in the
manner provided for in the Indenture and delivered against payment of
the purchase price therefor as provided in the Underwriting Agreement,
and constitute valid and binding obligations of the Operating
Partnership, enforceable against the Operating Partnership in
accordance with their terms, except as enforcement thereof may be
limited by bankruptcy, insolvency, reorganization, moratorium or other
similar laws relating to or affecting creditors' rights generally or by
general equity principles (regardless of whether enforcement is
considered in a proceeding in equity or at law), and are in the form
contemplated by, and entitled to the benefits of, the Indenture.
(iv) No filing with, or authorization, approval, consent,
license, order, registration, qualification or decree of, any court or
governmental authority or agency is necessary or required for the
performance by the Operating Partnership or the Company of its
obligations hereunder, in connection with the remarketing of the MOPPRS
hereunder or the consummation of the transactions contemplated by this
Agreement or for the due execution, delivery or performance of the
Indenture by the Operating Partnership or the Company, except such as
have been already obtained.
(v) The MOPPRS are rated "BBB" by Standard & Poor's Rating
Services and "Baa2" by Moody's Investors Service or such other rating
as to which the Operating Partnership shall have most recently notified
the Remarketing Dealer pursuant to Section 3(a) hereof.
(vi) The accountants who certified the financial statements
and supporting schedules included or incorporated by reference in the
1934 Act Documents are independent public accountants as required by
the 1933 Act and the 1933 Act Regulations.
(vii) The historical financial statements (including the notes
thereto) included or incorporated by reference in the 1934 Act
Documents present fairly the financial position of the respective
entity, entities or properties, as applicable, at the dates indicated
and the results of operations for the periods specified; said financial
statements have been prepared
3
<PAGE>
in conformity with generally accepted accounting principles ("GAAP")
applied on a consistent basis throughout the periods involved and
comply with the applicable accounting requirements of the 1933 Act
(including, without limitation, Rule 3-14 of Regulation S-X promulgated
by the Commission), and all adjustments necessary for a fair
presentation of the results for such periods have been made; the
supporting schedules included or incorporated by reference in the 1934
Act Documents present fairly in accordance with GAAP the information
required to be stated therein.
(viii) Any historical summaries of revenue and certain
operating expenses included or incorporated by reference in the 1934
Act Documents present fairly the revenue and those operating expenses
included in such summaries of the properties related thereto for the
periods specified in conformity with GAAP; any pro forma consolidated
financial statements included or incorporated by reference in the 1934
Act Documents present fairly the pro forma financial position of the
respective entity or entities, as applicable, as of the dates indicated
and the results of operations for the periods specified; and such pro
forma financial statements have been prepared in accordance with the
Commission's rules and guidelines with respect to pro forma financial
statements and have been properly compiled on the basis described
therein, and the assumptions used in the preparation thereof are
reasonable and adjustments used therein are appropriate to give effect
to the transactions and circumstances referred to therein.
(ix) Since the respective dates as of which information is
given in the 1934 Act Documents, except as otherwise stated therein,
(a) there has been no material adverse change in the condition,
financial or otherwise, or in the earnings, business affairs or
business prospects of the Operating Partnership, the Company and their
subsidiaries considered as one enterprise, whether or not arising in
the ordinary course of business (a "Material Adverse Effect"), (b) no
material casualty loss or material condemnation or other material
adverse event with respect to any of the real property or improvements
thereon owned by the Operating Partnership, the Company or any of their
subsidiaries (each individually, a "Property" and collectively, the
"Properties") has occurred, (c) there have been no transactions entered
into by the Operating Partnership, the Company or any of their
subsidiaries, other than those in the ordinary course of business, that
are material with respect to the Operating Partnership, the Company and
their subsidiaries considered as one enterprise, and (d) except for
regular quarterly dividends on the Company's common stock in amounts
per share that are consistent with past practice or dividends or
distributions declared, paid or made in accordance with the terms of
any series of the Company's preferred stock, there has been no dividend
or distribution of any kind declared, paid or made by the Company on
any class of its capital stock and, except for regular quarterly
distributions on the Operating Partnership's common units in amounts
per unit that are consistent with past practice and distributions on
any series of the Operating Partnership's preferred units, there has
been no distribution of any kind made by the Operating Partnership with
respect to its partnership interests ("Units").
4
<PAGE>
(x) The Company has been duly organized and is validly
existing as a corporation in good standing under the laws of the State
of Maryland and has full corporate power and authority to own, lease
and operate its properties and to conduct its business as described in
the 1934 Act Documents and to enter into and perform its obligations
under this Agreement; and the Company is duly qualified as a foreign
corporation to transact business and is in good standing in each
jurisdiction in which such qualification is required, whether by reason
of the ownership or leasing of property or the conduct of business,
except where the failure to so qualify or to be in good standing would
not result in a Material Adverse Effect.
(xi) The Agreement of Limited Partnership of the Operating
Partnership (the "Partnership Agreement") has been duly and validly
authorized, executed and delivered by the Company and is a valid and
binding agreement of the Company, enforceable against the Company in
accordance with its terms. The Partnership Agreement has been duly
executed and delivered by the other parties thereto and, to the
Company's knowledge, is a valid and binding agreement, enforceable
against such parties in accordance with its terms. The Operating
Partnership has been duly formed and is validly existing as a limited
partnership in good standing under the laws of the State of North
Carolina and has all the requisite power and authority to own, lease
and operate its properties, to conduct the business in which it is
engaged or proposes to engage as described in the 1934 Act Documents
and to enter into and perform its obligations under this Agreement and
all other agreements to which it is a party. The Operating Partnership
is duly qualified or registered as a foreign partnership and is in good
standing in each jurisdiction in which such qualification or
registration is required, whether by reason of the ownership or leasing
of property or the conduct of business, except where the failure to so
qualify or register would not result in a Material Adverse Effect. The
Company is the sole general partner of the Operating Partnership.
(xii) Each subsidiary (which term, as used in this Agreement,
includes corporations, limited and general partnerships, joint ventures
and other entities, and includes direct and indirect subsidiaries) of
the Operating Partnership and the Company has been duly formed and is
validly existing and in good standing under the laws of the
jurisdiction of its origin, has power and authority to own, lease and
operate its properties and to conduct its business as described in the
1934 Act Documents and is duly qualified to transact business and is in
good standing in each jurisdiction in which such qualification is
required, whether by reason of the ownership or leasing of property or
the conduct of business, except where the failure to so qualify or to
be in good standing would not result in a Material Adverse Effect; and,
except as otherwise stated in the 1934 Act Documents, all of the issued
and outstanding capital stock or other ownership interests in each such
subsidiary has been duly authorized and validly issued, is fully paid
and non-assessable and is owned by the Operating Partnership or the
Company, as the case may be, directly or through subsidiaries, free and
clear of any security interest, mortgage, pledge, lien, encumbrance,
claim or equity; none of the outstanding shares of capital stock or
other
5
<PAGE>
ownership interests in any subsidiary of the Operating Partnership and
the Company was issued in violation of the preemptive or similar rights
of any securityholder of such subsidiary.
(xiii) None of the Operating Partnership, the Company or any
of their subsidiaries is in violation of its charter, by-laws,
agreement of limited partnership or other organizational documents or
in default in the performance or observance of any material obligation,
agreement, covenant or condition contained in any contract, indenture,
mortgage, loan agreement, note, lease or other instrument to which the
Operating Partnership, the Company or any of their subsidiaries is a
party or by which it or any of them may be bound, or to which any of
the property or assets of the Operating Partnership, the Company or any
of their subsidiaries is subject, except for any such violation or
default that would not result in a Material Adverse Effect; and the
execution, delivery and performance of this Agreement, the Indenture
and the MOPPRS, and the consummation of the transactions contemplated
herein, therein and in the Registration Statement (including the
issuance and sale of the MOPPRS and the use of the proceeds from the
sale of the MOPPRS as described in the Prospectus under the caption
"Use of Proceeds") and compliance by the Operating Partnership and the
Company, each severally, with their respective obligations hereunder
and under the Indenture and the MOPPRS have been duly authorized by all
necessary action and do not and will not, whether with or without the
giving of notice or passage of time or both, conflict with or
constitute a breach of, or default or Repayment Event (as defined
below) under, or result in the creation or imposition of any lien,
charge or encumbrance upon any property or assets of the Operating
Partnership, the Company or any of their subsidiaries pursuant to, any
contract, indenture, mortgage, loan agreement, note, lease or other
instrument to which the Operating Partnership, the Company or any of
their subsidiaries is a party or by which any of them may be bound, or
to which any of the property or assets of the Operating Partnership,
the Company or any of their subsidiaries is subject, nor will such
action result in any violation of the charter, by-laws, agreement of
limited partnership or other organizational documents of the Operating
Partnership, the Company or any of their subsidiaries or any applicable
law, administrative regulation or administrative or court decree. As
used herein, a "Repayment Event" means any event or condition that
gives the holder of any note, debenture or other evidence of
indebtedness (or any person acting on such holder's behalf), the right
to require the repurchase, redemption or repayment of all or a portion
of such indebtedness by the Operating Partnership, the Company or any
of their subsidiaries.
(xiv) The Company is and has been since the taxable year ended
December 31, 1994, organized and operated in conformity with the
requirements for qualification and taxation as a real estate investment
trust under the Internal Revenue Code of 1986, as amended (the "Code"),
and the Company's method of operation will enable it to continue to
meet the requirements for taxation as a real estate investment trust
under the Code.
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(xv) None of the Operating Partnership, the Company or any of
their subsidiaries is required to be registered under the Investment
Company Act of 1940, as amended.
(xvi) There is no action, suit or proceeding before or by any
court or governmental agency or body, domestic or foreign, now pending,
or, to the knowledge of the Operating Partnership and the Company,
threatened against or affecting the Operating Partnership, the Company
or any of their subsidiaries that is required to be disclosed in the
1934 Act Documents (other than as disclosed therein), or that might
reasonably be expected to result in a Material Adverse Effect, or that
might reasonably be expected to materially and adversely affect the
properties or assets of the Operating Partnership, the Company or any
of their subsidiaries, or that might reasonably be expected to
materially and adversely affect the consummation of the transactions
contemplated in this Agreement or the performance by each of the
Operating Partnership and the Company of each of its obligations
hereunder; all pending legal or governmental proceedings to which the
Operating Partnership, the Company or any of their subsidiaries is a
party or of which any property or assets of the Operating Partnership,
the Company or any of their subsidiaries is subject that are not
described in the 1934 Act Documents, including ordinary routine
litigation incidental to the business, are, considered in the
aggregate, not material.
(xvii) Each of the Operating Partnership, the Company and each
of their subsidiaries possesses such certificates, authorities or
permits issued by the appropriate state, federal or foreign regulatory
agencies or bodies necessary to conduct the business presently
conducted by it, and none of the Operating Partnership, the Company or
any of their subsidiaries has received any written notice of
proceedings relating to the revocation or modification of any such
certificate, authority or permit that, singly or in the aggregate, if
the subject of an unfavorable decision, ruling or finding, would result
in a Material Adverse Effect.
(xviii) (a) Each of the Operating Partnership, the Company and
each of their respective subsidiaries has good and marketable title to
all items of real and personal property referred to in the Prospectus
as owned by it, in each case free and clear of all liens, encumbrances,
claims, security interests and defects, other than those referred to in
the 1934 Act Documents or that are not material in amount; (b) all
liens, charges, encumbrances, claims or restrictions on or affecting
the properties and other assets owned by the Operating Partnership, the
Company or any of their respective subsidiaries that are required to be
disclosed in the 1934 Act Documents are disclosed therein; (c) none of
the Operating Partnership, the Company, any of their respective
subsidiaries, or, to the best of the knowledge of the Operating
Partnership and the Company, any lessee under a lease relating to any
Property is in default under any of the leases relating to any Property
and neither the Operating Partnership nor the Company knows of any
event that, but for the passage of time or the giving of notice, or
both, would constitute a default under any of such leases, except such
defaults that would not result in a Material Adverse Effect; (d)
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except as otherwise disclosed in the 1934 Act Documents, no tenant
under any of the leases pursuant to which the Operating Partnership,
the Company or any of their respective subsidiaries leases any of their
real property or improvements has an option or right of first refusal
to purchase the premises demised under such lease, the exercise of
which would result in a Material Adverse Effect; (e) each of the
Properties is in compliance with all applicable codes and zoning laws
and regulations, except for such failures to comply that would not
individually or in the aggregate result in a Material Adverse Effect;
and (f) neither the Operating Partnership nor the Company has knowledge
of any pending or threatened condemnation, zoning change, or other
proceeding or action that will in any manner affect the size of, use
of, improvements on, construction on, or access to any Property, except
such proceedings or actions that would not result in a Material Adverse
Effect.
(xix) Each of the Operating Partnership, the Company and each
of their subsidiaries has title insurance on all Properties described
in the 1934 Act Documents as owned by them in an amount at least equal
to the greater of (a) the cost of acquisition of such Property and (b)
the cost of construction of the improvements located on such
Properties.
(xx) Except as disclosed in the 1934 Act Documents, each of
the Operating Partnership and the Company has no knowledge of (a) the
unlawful presence of any hazardous substances, hazardous materials,
toxic substances or waste materials (collectively, "Hazardous
Materials") on any Property or any other property currently owned by
the Operating Partnership, the Company or any of their subsidiaries or
which the Operating Partnership, the Company or any of their
subsidiaries has an option to purchase, or (b) any spill, release,
discharge or disposal of Hazardous Materials that have occurred or are
presently occurring from any Property owned by the Operating
Partnership, the Company or any of their subsidiaries or which the
Operating Partnership, the Company or any of their subsidiaries has an
option to purchase, as a result of any construction on or operation and
use of any such property, which presence or occurrence would result in
a Material Adverse Effect. In connection with the construction on or
operation and use of any Property, the Operating Partnership and the
Company represent that each of the Operating Partnership and the
Company has no knowledge of any material failure to comply with all
applicable local, state and federal environmental laws, regulations,
ordinances and administrative and judicial orders relating to the
generation, recycling, reuse, sale, storage, handling, transport and
disposal of any Hazardous Materials that would result in a Material
Adverse Effect.
(xxi) All ground leases affecting the Properties are in full
force and effect and have not been modified, and none of the Operating
Partnership, the Company or any of their subsidiaries is in default
under any such ground lease and neither of the Operating Partnership
nor the Company knows of any event which, but for the passage of time
or the
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<PAGE>
giving of notice, or both, would constitute a default under any of such
ground leases, except such defaults that would not result in a Material
Adverse Effect.
(xxii) The Operating Partnership, the Company and their
subsidiaries have filed all federal, state, local and foreign tax
returns that are required to be filed or have duly requested extensions
thereof and have paid all taxes required to be paid and any related
assessments, fines or penalties, except for any such tax, assessment,
fine or penalty that is being contested in good faith and by
appropriate proceedings.
(c) ADDITIONAL CERTIFICATIONS. Any certificate signed by any director
or officer of the Company in such capacity or as general partner of the
Operating Partnership and delivered to the Remarketing Dealer or to counsel for
the Remarketing Dealer in connection with the remarketing of the MOPPRS shall be
deemed a representation and warranty by the Operating Partnership or the
Company, as the case may be, to the Remarketing Dealer as to the matters covered
thereby.
Section 3. Covenants of the Operating Partnership and the Company. Each
of the Operating Partnership and the Company covenants with the Remarketing
Dealer as follows:
(a) The Operating Partnership or the Company will provide prompt notice
by telephone, confirmed in writing (which may include facsimile or other
electronic transmission), to the Remarketing Dealer of (i) any notification or
announcement by a "nationally recognized statistical rating agency" (as defined
by the Commission for purposes of Rule 436(g)(2) under the 1933 Act) with regard
to the ratings of any securities of the Operating Partnership or the Company,
including, without limitation, notification or announcement of a downgrade in or
withdrawal of the rating of any security of the Operating Partnership or the
Company or notification or announcement of the placement of any rating of any
securities of the Operating Partnership or the Company under surveillance or
review, including placement on CREDITWATCH or on WATCH LIST with negative
implications, or (ii) the occurrence at any time of any event set forth in
Section 9(c) of this Agreement.
(b) The Operating Partnership or the Company will furnish upon request
to the Remarketing Dealer:
(i) the Registration Statement and the Prospectus relating to
the MOPPRS (including in each case any amendment or supplement thereto
and each document incorporated therein by reference);
(ii) each 1934 Act Document filed after the date hereof; and
(iii) in connection with the remarketing of MOPPRS, such other
information as the Remarketing Dealer may reasonably request from time
to time.
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The Operating Partnership and the Company agree to provide the
Remarketing Dealer with as many copies of the foregoing written materials and
other Operating Partnership or Company approved information as the Remarketing
Dealer may reasonably request for use in connection with the remarketing of
MOPPRS and consents to the use thereof for such purpose.
(c) If, at any time on or before the Remarketing Date during which the
Remarketing Dealer would be obligated to take any action under this Agreement,
any event or condition known to the Operating Partnership or the Company
relating to or affecting the Operating Partnership, the Company, any subsidiary
thereof or the MOPPRS shall occur that could reasonably be expected to cause any
of the reports, documents, materials or information referred to in paragraph (b)
above or any document incorporated therein by reference (collectively, the
"Remarketing Materials") to contain an untrue statement of a material fact or
omit to state a material fact, the Operating Partnership or the Company shall
promptly notify the Remarketing Dealer in writing of the circumstances and
details of such event or condition.
(d) So long as MOPPRS are outstanding and prior to and including the
Remarketing Date, the Company and the Operating Partnership will file all
documents required to be filed with the Commission pursuant to the 1934 Act
within the time periods required by the 1934 Act and the 1934 Act Regulations.
(e) The Company and the Operating Partnership will comply with the 1933
Act and the 1933 Act Regulations, the 1934 Act and the 1934 Act Regulations and
the 1939 Act and the rules and regulations of the Commission thereunder so as to
permit the completion of the remarketing of the MOPPRS as contemplated in this
Agreement and in the Prospectus. If at any time on or before the Remarketing
Date when a prospectus is required by the 1933 Act to be delivered in connection
with sales of the MOPPRS, any event shall occur or condition shall exist as a
result of which it is necessary, in the opinion of counsel for the Remarketing
Dealer or for the Company and the Operating Partnership, to amend the
Registration Statement or amend or supplement the Prospectus in order that the
Prospectus will not include any untrue statements of a material fact or omit to
state a material fact necessary in order to make the statements therein not
misleading in the light of the circumstances existing at the time it is
delivered to a purchaser, or if it shall be necessary, in the opinion of such
counsel, at any such time to amend the Registration Statement or file a new
registration statement or amend or supplement the Prospectus or issue a new
prospectus in order to comply with the requirements of the 1933 Act or the 1933
Act Regulations and the Commission's interpretations of the 1933 Act and the
1933 Act Regulations, the Company or the Operating Partnership, at its expense,
will promptly (i) prepare and file with the Commission such amendment or
supplement as may be necessary to correct such statement or omission or to make
the Registration Statement or the Prospectus comply with such requirements, or
prepare and file any such new registration statement and prospectus as may be
necessary for such purpose, (ii) furnish to the Remarketing Dealer such number
of copies of such amendment, supplement or other document as the Remarketing
Dealer may reasonably request and (iii) furnish to the Remarketing Dealer an
officers' certificate, an opinion, including a statement as to the absence of
material misstatements in or omissions from the Registration
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Statement and Prospectus, as amended or supplemented, of counsel for the Company
and the Operating Partnership satisfactory to the Remarketing Dealer and a
"comfort letter" from the Company's and the Operating Partnership's independent
accountants, in each case in form and substance satisfactory to the Remarketing
Dealer, of the same tenor as the officers' certificate, opinion and comfort
letter, respectively, delivered pursuant to the Underwriting Agreement, but
modified to relate to the Registration Statement and Prospectus as amended or
supplemented to the date thereof or such new registration statement and
prospectus.
(f) The Company and Operating Partnership agree that neither they nor
any of their subsidiaries or affiliates shall defease, purchase or otherwise
acquire, or enter into any agreement to defease, purchase or otherwise acquire,
any of the MOPPRS prior to the remarketing thereof by the Remarketing Dealer,
other than pursuant to Section 4(g) or 4(h) of this Agreement.
(g) Notwithstanding any provision to the contrary set forth in the
Indenture, the Operating Partnership shall (i) use its best efforts to maintain
the MOPPRS in book-entry form with The Depositary Trust Company ("DTC") or any
successor thereto and to appoint a successor depositary to the extent necessary
to maintain the MOPPRS in book-entry form, and (ii) waive any discretionary
right it otherwise has under the Indenture to cause the MOPPRS to be issued in
certificated form.
(h) The Company and the Operating Partnership will comply with each of
the covenants set forth in the Underwriting Agreement.
Section 4. Appointment and Obligations of the Remarketing Dealer. (a)
Unless this Agreement is otherwise terminated in accordance with Section 12
hereof, in accordance with the terms, but subject to the conditions, of this
Agreement, the Operating Partnership hereby appoints Merrill Lynch, and Merrill
Lynch hereby accepts such appointment, as the exclusive Remarketing Dealer with
respect to $125,000,000 aggregate principal amount of MOPPRS, subject further to
repurchase of the MOPPRS in accordance with clause (g) of this section or
redemption of the MOPPRS in accordance with clause (h) of this section.
(b) It is expressly understood and agreed by the parties hereto that
the obligations of the Remarketing Dealer hereunder with respect to the MOPPRS
to be remarketed on the Remarketing Date are conditioned on (i) the issuance and
delivery of such MOPPRS pursuant to the terms and conditions of the Underwriting
Agreement and (ii) the Remarketing Dealer's election on the Notification Date to
purchase the MOPPRS for remarketing on the Remarketing Date. It is further
expressly understood and agreed by and between the parties hereto that, if the
Remarketing Dealer has elected to remarket the MOPPRS pursuant to clause (c)
below, the Remarketing Dealer shall not be obligated to set the Interest Rate to
Maturity on any MOPPRS, to remarket any MOPPRS or to perform any of the other
duties set forth herein at any time after the Notification Date that (i) any of
the conditions set forth in clause (a) or (b) of Section 9 hereof shall not have
been fully and completely met to the satisfaction of the Remarketing Dealer, or
(ii) any of the events set forth in clause (c) of Section 9 hereof shall have
occurred.
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(c) On a Business Day not more than fifteen nor less than five Business
Days prior to the Remarketing Date, the Remarketing Dealer shall notify the
Operating Partnership and the Trustee as to whether it elects to purchase the
MOPPRS on the Remarketing Date (the "Notification Date"). If, and only if, the
Remarketing Dealer so elects, the MOPPRS shall be subject to mandatory tender to
the Remarketing Dealer for remarketing on the Remarketing Date, subject to the
conditions described herein.
(d) Subject to the Remarketing Dealer's election to remarket the MOPPRS
as provided in clause (c) above, the Interest Rate to Maturity shall be
determined by the Remarketing Dealer by 3:30 p.m., New York City time, on the
third Business Day preceding the Remarketing Date (the "Determination Date") to
the nearest one hundred-thousandth (0.00001) of one percent per annum, and will
be equal to the sum of 5.715% (the "Base Rate") plus the Applicable Spread (as
defined below), which will be based on the Dollar Price (as defined below) of
the MOPPRS.
The "Applicable Spread" will be the lowest bid indication, expressed as
a spread (in the form of a percentage or in basis points) above the Base Rate,
obtained by the Remarketing Dealer on the Determination Date from the bids
quoted by five Reference Corporate Dealers (as defined below) for the full
aggregate principal amount of the MOPPRS at the Dollar Price, but assuming (i)
an issue date equal to the Remarketing Date, with settlement on such date
without accrued interest, (ii) a maturity date equal to the Stated Maturity Date
of the MOPPRS, and (iii) a stated annual interest rate equal to the Base Rate
plus the spread bid by the applicable Reference Corporate Dealer. If fewer than
five Reference Corporate Dealers bid as described above, then the Applicable
Spread shall be the lowest of such bid indications obtained as described above.
The Interest Rate to Maturity announced by the Remarketing Dealer, absent
manifest error, shall be binding and conclusive upon the Beneficial Owners and
Holders of the MOPPRS, the Operating Partnership and the Trustee.
"Dollar Price" means, with respect to the MOPPRS, the present value, as
of the Remarketing Date, of the Remaining Scheduled Payments (as defined below)
discounted to the Remarketing Date, on a semi-annual basis (assuming a 360-day
year consisting of twelve 30-day months), at the Treasury Rate (as defined
below).
"Reference Corporate Dealers" mean leading dealers of publicly traded
debt securities of the Operating Partnership in The City of New York (which may
include the Remarketing Dealer or one of its affiliates) selected by the
Remarketing Dealer.
"Treasury Rate" means, with respect to the Remarketing Date, the rate
per annum equal to the semi-annual equivalent yield to maturity or interpolated
(on a day count basis) yield to maturity of the Comparable Treasury Issues (as
defined below), assuming a price for the Comparable Treasury Issues (expressed
as a percentage of its principal amount), equal to the Comparable Treasury Price
(as defined below) for such Remarketing Date.
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"Comparable Treasury Issues" means the United States Treasury security
or securities selected by the Remarketing Dealer as having an actual or
interpolated maturity or maturities comparable to the remaining term of the
MOPPRS being remarketed.
"Comparable Treasury Price" means, with respect to the Remarketing
Date, (a) the offer prices for the Comparable Treasury Issues (expressed in each
case as a percentage of its principal amount) on the Determination Date, as set
forth on "Telerate Page 500" (or such other page as may replace Telerate Page
500), or (b) if such page (or any successor page) is not displayed or does not
contain such offer prices on the Determination Date, (i) the average of the
Reference Treasury Dealer Quotations for such Remarketing Date, after excluding
the highest and lowest of such Reference Treasury Dealer Quotations, or (ii) if
the Remarketing Dealer obtains fewer than four such Reference Treasury Dealer
Quotations, the average of all such Reference Treasury Dealer Quotations.
"Telerate Page 500" means the display designated as "Telerate Page 500" on Dow
Jones Markets Limited (or such other page as may replace Telerate Page 500 on
such service) or such other service displaying the offer prices specified in (a)
above as may replace Dow Jones Markets Limited.
"Reference Treasury Dealer Quotations" means, with respect to each
Reference Treasury Dealer and the Remarketing Date, the offer prices for the
Comparable Treasury Issues (expressed in each case as a percentage of its
principal amount) quoted in writing to the Remarketing Dealer by such Reference
Treasury Dealer by 3:30 p.m., New York City time, on the Determination Date.
"Reference Treasury Dealer" means each of Credit Suisse First Boston
Corporation, Lehman Brothers Inc., Merrill Lynch, Morgan Stanley & Co.
Incorporated and Salomon Brothers Inc and their respective successors; provided,
however, that if any of the foregoing or their affiliates shall cease to be a
primary U.S. government securities dealer in The City of New York (a "Primary
Treasury Dealer"), the Remarketing Dealer shall substitute therefor another
Primary Treasury Dealer.
"Remaining Scheduled Payments" means, with respect to the MOPPRS, the
remaining scheduled payments of the principal thereof and interest thereon,
calculated at the Base Rate only, that would be due after the Remarketing Date
to and including the Stated Maturity Date; provided, however, that if the
Remarketing Date is not an Interest Payment Date with respect to the MOPPRS, the
amount of the next succeeding scheduled interest payment thereon, calculated at
the Base Rate only, will be reduced by the amount of interest accrued thereon,
calculated at the Base Rate only, to the Remarketing Date.
(e) Subject to the Remarketing Dealer's election to remarket the MOPPRS
as provided in clause (c) above, the Remarketing Dealer shall notify the
Operating Partnership, the Trustee and DTC by telephone, confirmed in writing
(which may include facsimile or other electronic transmission), by 4:00 p.m.,
New York City time, on the Determination Date of the
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Interest Rate to Maturity applicable to the MOPPRS effective from and including
the Remarketing Date.
(f) In the event that the MOPPRS are remarketed as provided herein, the
Remarketing Dealer shall make, or cause the Trustee to make, payment to the DTC
participant of each tendering Beneficial Owner of MOPPRS subject to remarketing,
by book entry through DTC by the close of business on the Remarketing Date
against delivery through DTC of such Beneficial Owner's tendered MOPPRS, of 100%
of the principal amount of the tendered MOPPRS that have been purchased for
remarketing by the Remarketing Dealer. The Operating Partnership shall make, or
cause the Trustee to make, payment of interest to each Beneficial Owner of
MOPPRS due on the Remarketing Date by book entry through DTC by the close of
business on the Remarketing Date.
(g) Subject to Section 12(c) of this Agreement, in the event that (i)
the Remarketing Dealer for any reason does not notify the Operating Partnership
of the Interest Rate to Maturity by 4:00 p.m., New York City time, on the
Determination Date, or (ii) prior to the Remarketing Date, the Remarketing
Dealer has resigned and no successor has been appointed on or before the
Determination Date, or (iii) at any time after the Remarketing Dealer elects on
the Notification Date to remarket the MOPPRS any event as set forth in Section 9
or Section 12 of this Agreement shall have occurred, or (iv) the Remarketing
Dealer for any reason does not elect, by notice to the Operating Partnership and
the Trustee not later than the Notification Date, to purchase the MOPPRS for
remarketing on the Remarketing Date, or (v) the Remarketing Dealer for any
reason does not purchase all tendered MOPPRS on the Remarketing Date, the
Operating Partnership shall repurchase the MOPPRS as a whole on the Remarketing
Date at a price equal to 100% of the principal amount of the MOPPRS plus all
accrued and unpaid interest, if any, on the MOPPRS to the Remarketing Date. In
any such case, payment will be made by the Operating Partnership through the
Trustee to the DTC participant of each tendering Beneficial Owner of MOPPRS, by
book-entry through DTC by the close of business on the Remarketing Date against
delivery through DTC of such Beneficial Owner's tendered MOPPRS.
(h) If the Remarketing Dealer elects to remarket the MOPPRS as provided
in clause (c) above, then not later than the Business Day immediately preceding
the Determination Date, the Operating Partnership shall notify the Remarketing
Dealer and the Trustee if the Operating Partnership irrevocably elects to
exercise its right to redeem the MOPPRS, in whole but not in part, from the
Remarketing Dealer on the Remarketing Date at the Optional Redemption Price. The
"Optional Redemption Price" shall be the greater of (i) 100% of the principal
amount of the MOPPRS and (ii) the sum of the present values of the Remaining
Scheduled Payments thereon, as determined by the Remarketing Dealer, discounted
to the Remarketing Date on a semi-annual basis (assuming a 360-day year
consisting of twelve 30-day months) at the Treasury Rate, plus in either case
accrued and unpaid interest from the Remarketing Date on the principal amount
being redeemed to the date of redemption. If the Operating Partnership elects to
redeem the MOPPRS, it shall pay the redemption price therefor in same-day funds
by wire transfer to an account designated by the Remarketing Dealer on the
Remarketing Date.
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(i) Transactions involving the sale and purchase of MOPPRS remarketed
by the Remarketing Dealer on and after the Remarketing Date shall settle in
immediately available funds through DTC's Same-Day Funds Settlement System.
(j) The Remarketing Dealer may, in accordance with the terms of the
Indenture, modify the tender and settlement procedures set forth in the
Indenture in order to facilitate the tender and settlement process.
(k) The tender and settlement procedures described above, including
provisions for payment by purchasers of MOPPRS in the remarketing or for payment
to selling Beneficial Owners of tendered MOPPRS, may be modified to the extent
required by DTC or, if agreed to by the Remarketing Dealer in accordance with
Section 9(c)(viii) of this Agreement, to the extent required to facilitate the
tender and remarketing of MOPPRS in certificated form, if the book-entry system
is no longer available for the MOPPRS at the time of the remarketing.
Section 5. Fees and Expenses. Subject to Section 12 of this Agreement,
for its services in performing its duties set forth herein, the Remarketing
Dealer will not receive any fees or reimbursement of expenses from the Operating
Partnership or the Company.
Section 6. Resignation of the Remarketing Dealer. The Remarketing
Dealer may resign and be discharged from its duties and obligations hereunder at
any time, such resignation to be effective 10 days after delivery of a written
notice to the Operating Partnership and the Trustee of such resignation. The
Remarketing Dealer also may resign and be discharged from its duties and
obligations hereunder at any time, such resignation to be effective immediately,
upon termination of this Agreement in accordance with Section 12(b) hereof. It
shall be the sole obligation of the Operating Partnership to appoint a successor
Remarketing Dealer.
Section 7. Dealing in the MOPPRS; Purchase of MOPPRS by the Operating
Partnership. (a) Merrill Lynch, when acting as the Remarketing Dealer or in its
individual or any other capacity, may, to the extent permitted by law, buy,
sell, hold and deal in any of the MOPPRS. Merrill Lynch, as Holder or Beneficial
Owner of the MOPPRS, may exercise any vote or join as a Holder or Beneficial
Owner, as the case may be, in any action that any Holder or Beneficial Owner of
MOPPRS may be entitled to exercise or take pursuant to the Indenture with like
effect as if it did not act in any capacity hereunder. The Remarketing Dealer,
in its capacity either as principal or agent, may also engage in or have an
interest in any financial or other transaction with the Operating Partnership or
the Company as freely as if it did not act in any capacity hereunder.
(b) The Operating Partnership may purchase MOPPRS in the remarketing,
provided that the Interest Rate to Maturity established with respect to MOPPRS
in the remarketing is not different from the Interest Rate to Maturity that
would have been established if the Operating Partnership had not purchased such
MOPPRS.
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Section 8. Information. (a) The Operating Partnership and the Company
agree to furnish to the Remarketing Dealer prior to and including the
Remarketing Date: (i) copies of each report or other document mailed or filed by
the Operating Partnership or the Company with the Commission including the
Registration Statement and the Prospectus relating to the MOPPRS (including in
each case any documents incorporated therein by reference), (ii) notice of the
occurrence of any of the events set forth in clause (c) of Section 9 hereof, and
(iii) in connection with the remarketing, such other information as the
Remarketing Dealer may reasonably request, including, but not limited to, the
financial condition of the Operating Partnership or the Company or any material
subsidiary thereof. The Operating Partnership and the Company agree to provide
the Remarketing Dealer with as many copies of the foregoing materials and
information as the Remarketing Dealer may reasonably request for use in
connection with the remarketing and consents to the use thereof for such
purpose.
(b) If, at any time on or before the Remarketing Date during which the
Remarketing Dealer would be obligated to take any action under this Agreement,
any event or condition known to the Operating Partnership or the Company
relating to or affecting the Operating Partnership, the Company, any subsidiary
thereof or the MOPPRS shall occur that might cause any of the reports,
documents, materials or information referred to in clause (i) of paragraph (a)
above or any document incorporated therein by reference to include an untrue
statement of a material fact or omit to state a material fact, the Company or
the Operating Company shall promptly notify the Remarketing Dealer in writing of
the circumstances and details of such event or condition.
Section 9. Conditions to Remarketing Dealer's Obligations. The
obligations of the Remarketing Dealer under this Agreement have been undertaken
in reliance on, and shall be subject to, (a) the due performance in all material
respects by the Operating Partnership and the Company of their obligations and
agreements as set forth in this Agreement and the accuracy of the
representations and warranties in this Agreement and any certificate delivered
pursuant hereto, (b) the due performance in all material respects by the
Operating Partnership and the Company of their obligations and agreements set
forth in, and the accuracy in all material respects as of the dates specified
therein of the representations and warranties contained in the Underwriting
Agreement and (c) the further condition that none of the following events shall
have occurred after the Remarketing Dealer elects on the Notification Date to
remarket the MOPPRS:
(i) the rating of any securities of the Operating Partnership
or the Company shall have been down-graded or put under surveillance or
review, including being put on CREDITWATCH or WATCH LIST with negative
implications, or withdrawn by a nationally recognized statistical
rating agency;
(ii) without the prior written consent of the Remarketing
Dealer, the Indenture (including the MOPPRS) shall have been amended in
any manner, or otherwise contain any provision not contained therein as
of the date hereof, that in either case in the judgment of the
Remarketing Dealer materially changes the nature of the MOPPRS or the
remarketing procedures (it being understood that, notwithstanding the
provisions of this
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clause (ii), the Operating Partnership and the Company shall not be
prohibited from amending the Indenture);
(iii) trading in any securities of the Operating Partnership
or the Company shall have been suspended or materially limited by the
Commission or the New York Stock Exchange, or if trading generally on
the American Stock Exchange or the New York Stock Exchange or in the
Nasdaq National Market shall have been suspended or materially limited,
or minimum or maximum prices for trading shall have been fixed, or
maximum ranges for prices shall have been required, by any of said
exchanges or by such system or by order of the Commission, the National
Association of Securities Dealers, Inc. or any other governmental
authority, or if a banking moratorium shall have been declared by
either Federal or New York authorities;
(iv) there shall have occurred any material adverse change in
the financial markets in the United States or the international
financial markets, any outbreak of hostilities or escalation thereof or
other calamity or crisis or any change or development involving a
prospective change in national or international political, financial or
economic conditions, in each case the effect of which is such as to
make it, in the reasonable judgment of the Remarketing Dealer,
impracticable to remarket the MOPPRS or to enforce contracts for the
sale of the MOPPRS;
(v) an Event of Default (as defined in the Indenture), or any
event that, with the giving of notice or passage of time, or both,
would constitute an Event of Default, with respect to the MOPPRS shall
have occurred and be continuing;
(vi) a material adverse change in the condition, financial or
otherwise, or in the earnings, business affairs or business prospects
of the Company and its subsidiaries considered as one enterprise or the
Operating Partnership and its subsidiaries considered as one
enterprise, whether or not arising in the ordinary course of business,
shall have occurred since the Notification Date or since the respective
dates as of which information is given in the 1934 Act Documents;
(vii) if a prospectus is required under the 1933 Act to be
delivered in connection with the remarketing of the MOPPRS, the
Operating Partnership or the Company shall fail to furnish to the
Remarketing Dealer on the Remarketing Date the officers' certificate,
opinion and comfort letter referred to in Section 3(e) of this
Agreement and such other documents and opinions as counsel for the
Remarketing Dealer may reasonably require for the purpose of enabling
such counsel to pass upon the sale of MOPPRS in the remarketing as
herein contemplated and related proceedings, or in order to evidence
the accuracy and completeness of any of the representations and
warranties, or the fulfillment of any of the conditions, herein
contained; or
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(viii) the MOPPRS are not maintained in book-entry form with
DTC or any successor thereto; provided, that the Remarketing Dealer, in
its sole discretion and subject to receipt of an opinion of counsel for
the Operating Partnership and the Company reasonably satisfactory to
the Remarketing Dealer, may waive the foregoing condition if in the
Remarketing Dealer's judgment the Indenture and the MOPPRS can be
amended, and they are amended, so as to permit the remarketing of the
MOPPRS in certificated form and otherwise as contemplated herein;
and the Remarketing Dealer shall have received on the Remarketing Date a
certificate of the chief executive officer and of the chief financial officer of
the Operating Partnership and the Company, dated as of the Remarketing Date, to
the effect that (i) the representations and warranties in this Agreement are
true and correct with the same force and effect as though expressly made at and
as of the Remarketing Date, (ii) each of the Operating Partnership and the
Company has complied with all agreements and satisfied all conditions on its
part to be performed or satisfied at or prior to the Remarketing Date and (iii)
none of the events specified in the preceding clause (c) has occurred.
(d) In furtherance of the foregoing, the effectiveness of the
Remarketing Dealer's election on the Notification Date to remarket the MOPPRS
shall be subject to the condition that the Remarketing Dealer shall have
received a certificate of the chief executive officer and of the chief financial
officer of the Operating Partnership and the Company, dated as of the
Notification Date, to the effect that (i) the Operating Partnership has, prior
to the Remarketing Dealer's election on the Notification Date to remarket the
MOPPRS, provided the Remarketing Dealer with notice of all events as required
under Section 3(a) of this Agreement, (ii) the representations and warranties in
this Agreement are true and correct at and as of the Notification Date and (iii)
each of the Operating Partnership and the Company has complied with all
agreements and satisfied all conditions on its part to be performed or satisfied
at or prior to the Notification Date. Such certificate shall be delivered by the
Operating Partnership to the Remarketing Dealer as soon as practicable following
notification by the Remarketing Dealer to the Operating Partnership on the
Notification Date of its election to remarket the MOPPRS and in any event prior
to the Determination Date.
In the event of the failure of any of the foregoing conditions, the
Remarketing Dealer may terminate its obligations under this Agreement or
redetermine the Interest Rate to Maturity as provided in Section 12.
Section 10. Indemnification. (a) The Operating Partnership and the
Company, jointly and severally, agree to indemnify and hold harmless the
Remarketing Dealer and its officers, directors and employees and each person, if
any, who controls the Remarketing Dealer within the meaning of Section 20 of the
1934 Act as follows:
(i) against any loss, liability, claim, damage and expense
whatsoever, as incurred, arising out of, (A) the failure to have an
effective registration statement under
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the 1933 Act relating to the MOPPRS, if required, or the failure to
satisfy the prospectus delivery requirements of the 1933 Act because
the Operating Partnership or the Company failed to provide the
Remarketing Dealer with an updated Prospectus for delivery, or (B) any
untrue statement or alleged untrue statement of a material fact
contained in any of the Remarketing Materials (including any
incorporated documents), or (C) the omission or alleged omission
therefrom of a material fact necessary to make the statements therein,
in the light of the circumstances in which they were made, not
misleading, or (D) any violation by the Operating Partnership or the
Company of, or any failure by the Operating Partnership or the Company
to perform any of its obligations under, this Agreement, or (E) the
acts or omissions of the Remarketing Dealer in connection with its
duties and obligations to determine the Interest Rate to Maturity
hereunder except that are finally judicially determined to be due to
its gross negligence or willful misconduct;
(ii) against any and all loss, liability, claim, damage and
expense whatsoever, as incurred, to the extent of the aggregate amount
paid in settlement of any litigation, or investigation or proceeding by
any governmental agency or body, commenced or threatened, or of any
claim whatsoever arising out of, or based upon, any of items (A)
through (E) in clause (i) above; provided that (subject to clause (d)
below) such settlement is effected with the written consent of the
Operating Partnership or the Company, which consent shall not be
unreasonably withheld; and
(iii) against any and all expense whatsoever, as incurred
(including the fees and disbursements of counsel chosen by the
Remarketing Dealer), reasonably incurred in investigating, preparing or
defending against any litigation, or any investigation or proceeding by
any governmental agency or body, commenced or threatened, or any claim
whatsoever arising out of, or based upon, any of items (A) through (E)
in clause (i) above to the extent that any such expense is not paid
under (i) or (ii) above;
provided, however, that the foregoing indemnity shall not apply to any losses,
liabilities, claims, damages and expenses to the extent arising out of any
untrue statement or omission made in reliance upon and in conformity with
written information furnished to the Operating Partnership or the Company by the
Remarketing Dealer expressly for use in the Remarketing Materials.
(b) The Remarketing Dealer agrees to indemnify and hold harmless the
Operating Partnership, the Company, its directors and each of its officers who
signed the Registration Statement, from and against any loss, liability, claim,
damage and expense, as incurred, but only with respect to untrue statements or
omissions made in the Remarketing Materials in reliance upon and in conformity
with information furnished to the Operating Partnership or the Company in
writing by the Remarketing Dealer expressly for use in such Remarketing
Materials. The indemnity agreement in this paragraph shall extend upon the same
terms and conditions to each person, if any, who controls the Operating
Partnership or the Company within the meaning of Section 20 of the 1934 Act.
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<PAGE>
(c) Each indemnified party shall give notice as promptly as reasonably
practicable to each indemnifying party of any action commenced against it in
respect of which indemnity may be sought hereunder, but failure to so notify an
indemnifying party shall not relieve such indemnifying party from any liability
hereunder to the extent it is not materially prejudiced as a result thereof and
in any event shall not relieve it from any liability that it may have otherwise
than on account of this indemnity agreement. In the case of parties indemnified
pursuant to clause (a) above, counsel to the indemnified parties shall be
selected by Merrill Lynch, and, in the case of parties indemnified pursuant to
clause (b) above, counsel to the indemnified parties shall be selected by the
Operating Partnership. An indemnifying party may participate at its own expense
in the defense of any such action; provided, however, that counsel to the
indemnifying party shall not (except with the consent of the indemnified party)
also be counsel to the indemnified party. In no event shall the indemnifying
parties be liable for fees and expenses of more than one counsel (in addition to
any local counsel) separate from their own counsel for all indemnified parties
in connection with any one action or separate but similar or related actions in
the same jurisdiction arising out of the same general allegations or
circumstances. No indemnifying party shall, without the prior written consent of
the indemnified parties, settle or compromise or consent to the entry of any
judgment with respect to any litigation, or any investigation or proceeding by
any governmental agency or body, commenced or threatened, or any claim
whatsoever in respect of which indemnification or contribution could be sought
under this Section 10 or Section 11 hereof (whether or not the indemnified
parties are actual or potential parties thereto), unless such settlement,
compromise or consent (i) includes an unconditional release of each indemnified
party from all liability arising out of such litigation, investigation,
proceeding or claim and (ii) does not include a statement as to or an admission
or fault, culpability or a failure to act by or on behalf of any indemnified
party.
(d) If at any time an indemnified party shall have requested an
indemnifying party to reimburse the indemnified party for fees and expenses of
counsel, such indemnifying party agrees that it shall be liable for any
settlement of the nature contemplated by clause (a)(ii) effected without its
written consent if (i) such settlement is entered into more than 45 days after
receipt by such indemnifying party of the aforesaid request, (ii) such
indemnifying party shall have received notice of the terms of such settlement at
least 30 days prior to such settlement being entered into and (iii) such
indemnifying party shall not have reimbursed such indemnified party in
accordance with such request prior to the date of such settlement.
(e) The indemnity agreements contained in this Section 10 shall remain
operative and in full force and effect, regardless of any investigation made by
or on behalf of the Remarketing Dealer, and shall survive the termination or
cancellation of this Agreement and the remarketing of any MOPPRS hereunder.
Section 11. Contribution. If the indemnification provided for in
Section 10 hereof is for any reason unavailable to or insufficient to hold
harmless an indemnified party in respect of any losses, liabilities, claims,
damages or expenses referred to therein, then each indemnifying party shall
contribute to the aggregate amount of such losses, liabilities, claims, damages
and expenses
20
<PAGE>
incurred by such indemnified party, as incurred, (i) in such proportion as is
appropriate to reflect the relative benefits received by the Operating
Partnership and the Company on the one hand and the Remarketing Dealer on the
other hand from the remarketing of the MOPPRS pursuant to this Agreement or (ii)
if the allocation provided by clause (i) is not permitted by applicable law, in
such proportion as is appropriate to reflect not only the relative benefits
referred to in clause (i) above but also the relative fault of the Operating
Partnership or the Company on the one hand and of the Remarketing Dealer on the
other hand in connection with the acts, failures to act, statements or omissions
that resulted in such losses, liabilities, claims, damages or expenses, as well
as any other relevant equitable considerations.
The relative benefits received by the Operating Partnership and the
Company on the one hand and the Remarketing Dealer on the other hand in
connection with the remarketing of the MOPPRS pursuant to this Agreement shall
be deemed to be in the same respective proportions as (i) the aggregate
principal amount of the MOPPRS, and (ii) the aggregate positive difference, if
any, between the price paid by the Remarketing Dealer for the MOPPRS tendered on
the Remarketing Date and the price at which the MOPPRS are sold by the
Remarketing Dealer in the remarketing.
The relative fault of the Operating Partnership and the Company on the
one hand and the Remarketing Dealer on the other hand shall be determined by
reference to, among other things, the responsibility hereunder of the applicable
party for any act or failure to act relating to the losses, liabilities, claims,
damages or expenses incurred or, in the case of any losses, liabilities, claims,
damages or expenses arising out of any untrue or alleged untrue statement of a
material fact contained in any of the Remarketing Materials or the omission or
alleged omission to state a material fact therefrom, whether any such untrue or
alleged untrue statement of a material fact or omission or alleged omission to
state a material fact relates to information supplied by the Operating
Partnership or by the Remarketing Dealer and the parties' relative intent,
knowledge, access to information and opportunity to correct or prevent such
statement or omission.
The Operating Partnership, the Company and the Remarketing Dealer agree
that it would not be just and equitable if contribution pursuant to this Section
11 were determined by pro rata allocation or by any other method of allocation
that does not take account of the equitable considerations referred to above in
this Section 11. The aggregate amount of losses, liabilities, claims, damages
and expenses incurred by an indemnified party and referred to above in this
Section 11 shall be deemed to include any legal or other expenses reasonably
incurred by such indemnified party in investigating, preparing or defending
against any litigation, or any investigation or proceeding by any governmental
agency or body, commenced or threatened, or any claim whatsoever based upon any
such act or failure to act or untrue or alleged untrue statement or omission or
alleged omission.
Notwithstanding the provisions of this Section 11, the Remarketing
Dealer shall not be required to contribute any amount in excess of the amount by
which the total price at which the MOPPRS remarketed by it and resold to the
public were sold to the public exceeds the amount of
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<PAGE>
any damages that the Remarketing Dealer has otherwise been required to pay by
reason of any act or failure to act for which it is responsible hereunder or any
untrue or alleged untrue statement or omission or alleged omission.
No person guilty of fraudulent misrepresentation (within the meaning of
Section 11(f) of the 1933 Act) shall be entitled to contribution from any person
who was not guilty of such fraudulent misrepresentation.
For purposes of this Section 11, each person, if any, who controls the
Remarketing Dealer within the meaning of Section 15 of the 1933 Act or Section
20 of the 1934 Act shall have the same rights to contribution as the Remarketing
Dealer or the Company, and each director of the Operating Partnership or the
Company, each officer of the Operating Partnership or the Company who signed the
Registration Statement, and each person, if any, who controls the Operating
Partnership or the Company within the meaning of Section 15 of the 1933 Act or
Section 20 of the 1934 Act shall have the same rights to contribution as the
Operating Partnership or the Company.
Section 12. Termination of Remarketing Agreement or Redetermination of
Interest Rate to Maturity. (a) This Agreement shall terminate as to the
Remarketing Dealer on the effective date of the resignation of the Remarketing
Dealer pursuant to Section 6 hereof or the repurchase of the MOPPRS by the
Operating Partnership pursuant to Section 4(g) hereof or the redemption of the
MOPPRS by the Operating Partnership pursuant to Section 4(h) hereof.
(b) In addition, the Remarketing Dealer may terminate all of its
obligations under this Agreement immediately by notifying the Operating
Partnership and the Trustee of its election to do so, at any time on or before
the Remarketing Date, in the event that: (i) any of the conditions referred to
or set forth in Section 9 (a) or (b) hereof have not been met or satisfied in
full, (ii) any of the events set forth in Section 9(c) shall have occurred after
the Remarketing Dealer elects on the Notification Date to remarket the MOPPRS or
(iii) the Remarketing Dealer determines, in its sole discretion, after
consultation with the Operating Partnership, that it shall not have received all
of the information, whether or not specifically referenced herein, necessary to
fulfill its obligations under this Agreement.
(c) Notwithstanding any provision herein to the contrary, in lieu of
terminating this Agreement pursuant to Section 12(b) above, upon the occurrence
of any of the events set forth therein, the Remarketing Dealer, in its sole
discretion at any time between the Determination Date and 3:30 p.m., New York
City time, on the Business Day immediately preceding the Remarketing Date, may
elect to purchase the MOPPRS for remarketing and determine a new Interest Rate
to Maturity in the manner provided in Section 4(d) of this Agreement, provided
that the Remarketing Dealer has previously elected to purchase the MOPPRS for
remarketing on the Notification Date, except that for purposes of determining
the new Interest Rate to Maturity pursuant to this paragraph the Determination
Date referred to therein shall be the date of such election and redetermination.
The Remarketing Dealer shall notify the Operating Partnership, the
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Trustee and DTC by telephone, confirmed in writing (which may include facsimile
or other electronic transmission), by 4:00 p.m., New York City time, on the date
of such election, of the new Interest Rate to Maturity applicable to the MOPPRS.
Thereupon, such new Interest Rate to Maturity shall supersede and replace any
Interest Rate to Maturity previously determined by the Remarketing Dealer and,
absent manifest error, shall be binding and conclusive upon the Beneficial
Owners and Holders of the MOPPRS on or after the Remarketing Date, the Operating
Partnership and the Trustee; provided, however, that the Remarketing Dealer, by
redetermining the Interest Rate to Maturity upon the occurrence of any event set
forth in Section 12(b) as set forth above, shall not thereby be deemed to have
waived its right to determine a new Interest Rate to Maturity or terminate this
Agreement upon the occurrence of any other event set forth in Section 12(b).
(d) If this Agreement is terminated pursuant to this Section, such
termination shall be without liability of any party to any other party, except
that, in the case of termination pursuant to Section 12(b) of this Agreement,
the Operating Partnership or the Company shall reimburse the Remarketing Dealer
for all of its out-of-pocket expenses, including the reasonable fees and
disbursements of counsel for the Remarketing Dealer in connection with the
remarketing, and except further as set forth in Section 12(e) below. Sections 1,
10, 11, 12(d) and 12(e) shall survive such termination and remain in full force
and effect.
(e) In the case of either (i) termination of this Agreement pursuant to
Section 12(b) or (ii) the occurrence, prior to the Remarketing Dealer's election
on the Notification Date to remarket the MOPPRS, of any event set forth in
Section 9(c)(ii), (v) or (viii), upon the request of the Remarketing Dealer, the
Operating Partnership or the Company shall immediately following the Call Price
Determination Date (as defined below) pay the Remarketing Dealer, in same-day
funds by wire transfer to an account designated by the Remarketing Dealer, the
fair market value, calculated as set forth below, of the Remarketing Dealer's
right to purchase and remarket the MOPPRS pursuant to this Agreement (the "Call
Price").
In the case of termination of this Agreement pursuant to Section 12(b),
the Call Price shall be equal to the excess of (i) the present value of the
Remaining Scheduled Payments determined as provided in Section 4 over (ii) the
aggregate principal amount of the MOPPRS.
In the case of the occurrence, prior to the Remarketing Dealer's
election on the Notification Date to remarket the MOPPRS, of any event set forth
in Section 9(c)(ii) or (v) or (viii), the Call Price shall be determined in good
faith by the Remarketing Dealer on a commercially reasonable basis by reference
to, among other factors, the formulation set forth in the preceding paragraph.
The Remarketing Dealer shall determine the applicable Call Price on the
Business Day immediately following the date of termination or notification of
the occurrence, prior to the Remarketing Dealer's election on the Notification
Date to remarket the MOPPRS, of any event set forth in Section 9(c)(ii), (v) or
(viii), as the case may be, or as soon as practicable thereafter
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(the "Call Price Determination Date"). The Remarketing Dealer shall promptly
notify the Operating Partnership of the Call Price Determination Date and the
Call Price by telephone, confirmed in writing (which may include facsimile or
other electronic transmission). The Call Price, absent manifest error, shall be
binding and conclusive upon the parties hereto.
(f) This Agreement shall not be subject to termination by the Operating
Partnership or the Company.
Section 13. Remarketing Dealer Performance; Duty of Care. The duties
and obligations of the Remarketing Dealer shall be determined solely by the
express provisions of this Agreement and the Indenture. No implied covenants or
obligations of or against the Remarketing Dealer shall be read into this
Agreement or the Indenture. In the absence of bad faith on the part of the
Remarketing Dealer, the Remarketing Dealer may conclusively rely upon any
document furnished to it, which purports to conform to the requirements of this
Agreement and the Indenture, as to the truth of the statements expressed in any
of such documents. The Remarketing Dealer shall be protected in acting upon any
document or communication reasonably believed by it to have been signed,
presented or made by the proper party or parties. The Remarketing Dealer shall
incur no liability to the Operating Partnership or the Company or to any
Beneficial Owner or Holder of MOPPRS in its individual capacity or as
Remarketing Dealer for any action or failure to act in connection with the
remarketing or otherwise, except as a result of gross negligence or willful
misconduct on its part.
Section 14. GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO
CONTRACTS MADE AND TO BE PERFORMED IN SUCH STATE.
Section 15. Term of Agreement. Unless otherwise terminated in
accordance with the provisions hereof, this Agreement shall remain in full force
and effect from the date hereof until the earlier of the first day thereafter on
which no MOPPRS are outstanding or the completion of the remarketing of the
MOPPRS. Regardless of any termination of this Agreement pursuant to any of the
provisions hereof, the obligations of the Operating Partnership and the Company
pursuant to Sections 10, 11 and 12 hereof and the obligations of the Remarketing
Dealer pursuant to Sections 10 and 11 hereof shall remain operative and in full
force and effect until fully satisfied.
Section 16. Successors and Assigns. The rights and obligations of the
Operating Partnership and the Company hereunder may not be assigned or delegated
to any other person without the prior written consent of the Remarketing Dealer.
The rights and obligations of the Remarketing Dealer hereunder may not be
assigned or delegated to any other person without the prior written consent of
the Operating Partnership. This Agreement shall inure to the benefit of and be
binding upon the Operating Partnership, the Company and the Remarketing Dealer
and their respective successors and assigns, and will not confer any benefit
upon any other person, partnership, association or corporation other than
persons, if any, controlling the Remarketing
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Dealer within the meaning of Section 15 of the 1933 Act or Section 20 of the
1934 Act, or any indemnified party to the extent provided in Section 10 hereof,
or any person entitled to contribution to the extent provided in Section 11
hereof. The terms "successors" and "assigns" shall not include any purchaser of
any MOPPRS merely because of such purchase.
Section 17. Headings. Section headings have been inserted in this
Agreement as a matter of convenience of reference only, and it is agreed that
such section headings are not a part of this Agreement and will not be used in
the interpretation of any provisions of this Agreement.
Section 18. Severability. If any provision of this Agreement shall be
held or deemed to be or shall, in fact, be invalid, inoperative or unenforceable
as applied in any particular case in any or all jurisdictions because it
conflicts with any provision of any constitution, statute, rule or public policy
or for any other reason, such circumstances shall not have the effect of
rendering the provision in question invalid, inoperative or unenforceable in any
other case, circumstance or jurisdiction, or of rendering any other provision or
provisions of this Agreement invalid, inoperative or unenforceable to any extent
whatsoever.
Section 19. Counterparts. This Agreement may be executed in several
counterparts, each of which shall be regarded as an original and all of which
shall constitute one and the same document.
Section 20. Amendments. This Agreement may be amended by any instrument
in writing signed by each of the parties hereto so long as this Agreement as
amended is not inconsistent with the Indenture in effect as of the date of any
such amendment.
Section 21. Notices. Unless otherwise specified, any notices, requests,
consents or other communications given or made hereunder or pursuant hereto
shall be made in writing (which may include facsimile or other electronic
transmission) and shall be deemed to have been validly given or made when
delivered or mailed, registered or certified mail, return receipt requested and
postage prepaid, addressed as follows:
(a) to the Operating Partnership and the Company:
Highwoods/Forsyth Limited Partnership
Highwoods Properties, Inc.
3100 Smoketree Court, Suite 600
Raleigh, North Carolina 27604
Attention: Mack Pridgen, General Counsel
Facsimile No.: 919/876-6929
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(b) to Merrill Lynch:
Merrill Lynch, Pierce, Fenner & Smith Incorporated
North Tower
World Financial Center
New York, New York 10281-1201
Attention: Swaps Options Desk
Facsimile No.: 212/449-8920
With a copy to:
Scott Primrose
Facsimile No.: 212/449-2234
or to such other address as the Operating Partnership, the Company or the
Remarketing Dealer shall specify in writing.
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IN WITNESS WHEREOF, each of the Operating Partnership, the Company and
the Remarketing Dealer has caused this Agreement to be executed in its name and
on its behalf by one of its duly authorized officers as of the date first above
written.
HIGHWOODS/FORSYTH LIMITED PARTNERSHIP
By: Highwoods Properties, Inc., its general partner
By:
-----------------------------------------------
Name:
Title:
HIGHWOODS PROPERTIES, INC.
By:
-----------------------------------------------
Name:
Title:
MERRILL LYNCH, PIERCE, FENNER & SMITH
INCORPORATED
By:
-----------------------------------------------
Authorized Signatory
