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): September 27, 1996
HIGHWOODS/FORSYTH LIMITED PARTNERSHIP
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
North Carolina
(State of Organization)
333-3890-01 56-1869557
(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)
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ITEM 5. OTHER EVENTS.
On September 27, 1996, Highwoods Properties, Inc. (the "Company"),
which is the general partner of Highwoods/Forsyth Limited Partnership (the
"Registrant"), completed the acquisition of Crocker Realty Trust, Inc.
("Crocker") and the related restructuring of the Company.
As previously reported by the Company and the Registrant in
Registration Statements (Nos. 333-3890 and 333-3890-01) dated June 20, 1996 and
by the Company under item 2 in an 8-K dated April 29, 1996 (as amended on Form
8-K/A on June 3, 1996 and June 18, 1996), the Company and Cedar Acquisition
Corporation ("Cedar"), which was then a wholly owned subsidiary of the Company,
entered into a Stock Purchase Agreement on April 29, 1996, with AP CRTI
Holdings, L.P., AEW Partners, L.P., Thomas J. Crocker, Barbara F. Crocker,
Richard S. Ackerman and Robert E. Onisko (the "Sellers") to purchase all of the
Sellers' shares of Common Stock of Crocker (the "Shares"). The Company and Cedar
also entered into an Agreement and Plan of Merger with Crocker on April 29, 1996
(the "Merger Agreement"). The Merger Agreement provided that Cedar would be
merged into Crocker, with Crocker as the surviving entity (the "Merger").
On September 6, 1996, the Company closed the acquisition of the Shares.
The purchase price was $249.1 million ($11.05 per Share) and included, as
contemplated by the Stock Purchase Agreement, the $1.1 million purchase of
1,056,000 options to purchase shares of Crocker owned by the Sellers. The
acquisition was primarily funded ($189 million) from a portion of the net
proceeds raised by the Company in its recent 11.5 million share public offering.
The remaining $60 million of the purchase price was funded from a draw from the
Registrant's $140 million credit facility with NationsBank, N.A., First Union
National Bank of North Carolina and Wachovia Bank of North Carolina.
On September 20, 1996, the Merger was approved at a special meeting of
the shareholders of Crocker. At 11:59 p.m. on September 20, 1996, the effective
time of the Merger, each share of Crocker Common Stock held by Cedar and the
Company (including the Shares) was canceled, each share of common stock of Cedar
became a share of Common Stock of Crocker, and all other shares of Common Stock
of Crocker were converted into and represented a right to receive $11.05243 per
share. Following the Merger, the Company entered into various restructuring
transactions culminating in the merger of Crocker into the Company on September
26, 1996 and the subsequent contribution by the Company of Crocker's assets and
liabilities to the Registrant. As a result of the Merger and subsequent
transactions, substantially all of the assets and liabilities of Crocker at the
time of the Merger are the assets and liabilities of the Registrant. The Company
is the sole general partner of the Registrant and as of October 11, 1996, owned
87.9% of the partnership interests in the Registrant.
The cost of acquiring the remaining shares of Crocker in the Merger was
$73.7 million, which was funded through a draw on the Registrant's $140 million
credit facility. The total cost of the acquisition of all of the outstanding
shares of Crocker was approximately $565.8 million, which includes the
assumption of $243 million of Crocker debt discussed below. The effective
purchase price was substantially the same as that estimated in the Company's
April 29, 1996 8-K. The $25.8 million increase in the purchase price was largely
offset by the additional $21 million in cash held by Crocker at the time of the
Merger. The increase in the purchase price was due to an increase of
approximately 2.1 million in the number of outstanding shares of Crocker from
April 29, 1996. The additional shares were issued upon the exercise of
outstanding warrants to purchase the shares of Crocker Common Stock (the
"Warrants"). The increased cash held by Crocker was due to the $10.00 exercise
price of the Warrants. As of October 11, approximately 182,680 Warrants were
outstanding, representing a $192,000 obligation of the Company.
The Crocker portfolio obtained through the Merger consists of 58
suburban office properties and 12 service center properties (collectively, the
"Crocker Properties"), totaling 5.7 million square feet. The Crocker Properties
are located in 15 southeastern markets, of which four are existing Company
markets and 11 represent new markets for the Company (including Greenville, SC;
Tampa, FL; Memphis, TN; and Atlanta, GA). At September 30, 1996, the Crocker
Properties were 94% leased. As previously disclosed, Crocker's undeveloped land
(approximately 257.5 acres) and certain other assets and liabilities were
distributed by Crocker to another entity prior to the Merger and therefore were
not acquired in the Merger.
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Following the Merger, the Company's portfolio is comprised of 70%
suburban office space, 17% industrial space and 13% service center space and
includes 168 suburban office properties, 36 industrial properties and 74 service
center properties.
On September 27, 1996, the Registrant obtained a $280 million revolving
line of credit (the "Revolving Loan") from NationsBank, N.A., First Union
National Bank of North Carolina and other lenders. The Revolving Loan includes a
$10 million letter of credit facility and replaces the Registrant's $140 million
credit facility.
The Revolving Loan will bear interest at a rate of the Applicable
Percentage (defined below) plus (i) LIBOR or (ii) the higher of (x)
NationsBank's prime rate or (y) the federal funds rate plus 1/2 of 1%. The
Applicable Percentage varies with the Company's average unsecured long-term debt
rating as follows:
AVERAGE APPLICABLE
UNSECURED APPLICABLE APPLICABLE PERCENTAGE
LONG-TERM PERCENTAGE FOR PERCENTAGE FOR LETTER
LEVEL DEBT RATING EURODOLLAR LOANS BASE RATE LOANS OF CREDIT FEE
- ----- ----------- ---------------- --------------- --------------
I The equivalent of A- or 1.00% 0% 1.00%
better from S&P
II Less than the equivalent 1.20% 0% 1.20%
of A- from S&P but
greater than or equal to
the equivalent of BBB+
from S&P
III Less than the equivalent 1.35% .10% 1.35%
of BBB+ from S&P but
greater than or equal to
the equivalent of BBB
from S&P
IV Less than the equivalent 1.50% .15% 1.50%
of BBB from S&P but
greater than or equal to
the equivalent of BBB-
from S&P
V Worse than the 1.75% .30% 1.75%
equivalent of BBB-
from S&P or unrated by
either S&P or Moody's
The initial Applicable Percentage is based on Level IV and will remain at Level
IV until the earlier of (i) January 25, 1997 or (ii) the date the Company
receives an average unsecured long-term debt rating from S&P and Moody's.
Thereafter, the Applicable Percentage will be determined in accordance with the
schedule above and will be adjusted after an applicable rating change.
The Revolving Loan requires monthly payments of accrued and unpaid
interest. The Registrant is permitted to prepay the principal amount of the
revolving loans under the facility. Unless accelerated sooner due to an event of
default, the entire outstanding principal balance under the Revolving Loan and
all accrued and unpaid interest will be due on October 31, 1999.
In addition to the interest charges set forth above, the Registrant
pays to NationsBank, N.A., as agent, (i) for the account of the lenders a
commitment fee on the unused portion of the revolver at a rate ranging from .15%
to .25%
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per year depending on the size of the unused commitment, (ii) for the account of
the lenders a letter of credit fee on the aggregate amount then available for
drawing under all letters of credit at a rate equal to the Applicable Percentage
set forth above, and (iii) for the account of any issuing lender a letter of
credit fee on the aggregate amount of all letters of credit issued by such
lender at a rate per annum equal to 0.25%.
The obligations of the Registrant under the Revolving Loan are
guaranteed by the Company and certain of its subsidiaries.
The Revolving Loan contains customary representations, warranties and
events of default and requires the Registrant to comply with certain affirmative
and negative covenants, including the following financial covenants: (i)
adjusted net operating income divided by total liabilities of not less than
16.5%; (ii) total liabilities not greater than 45% of market capitalization;
(iii) tangible net worth not less than $700 million, which amount shall be
increased by not less than 85% of the net proceeds of any future offerings of
the Company's capital stock; (iv) a ratio of total liabilities to total assets
at a cost of no more than .50 to 1.0; (v) a ratio of earnings before interest,
income tax, depreciation and amortization to interest expense plus capital
expenditures of not less than 2.0 to 1.0, which increases to 2.2 and 2.5 to 1.0
on December 31, 1996 and June 30, 1997, respectively; (vi) a ratio of
unencumbered assets to unsecured debt of not less than 2.25 to 1.0; (vii) a
ratio of secured debt to total assets of not more than .40 to 1.0, which
decreases to .3 and .25 to 1.0 on April 1, 1997 and April 1, 1998, respectively;
(viii) a ratio of adjusted net operating income as derived from unencumbered
assets to interest expense paid on unsecured debt of not less than 2.25 to 1.0;
(ix) a ratio of adjusted net operating income derived from unencumbered assets
to unsecured debt of not less than .18 to 1.0; and (x) a ratio of the value of
speculative land acquired after September 27, 1996 to the value of improved
properties of not less than .02 to 1.0.
In connection with the Merger, the Registrant assumed approximately
$243 million of indebtedness at an average rate of 8.6%. This indebtedness
included: (i) a $140 million mortgage note (the "Mortgage Note") with a fixed
rate of 7.9%, (ii) variable rate mortgage loans in the aggregate amount of $76
million and (iii) fixed rate mortgage loans in the amount of $27 million.
Substantially all of such debt, other than the Mortgage Note, was repaid by the
Registrant following the Merger using funds available under the Revolving Loan.
ITEM 7(C). EXHIBITS
Item Description
10.1 Credit Agreement among Highwoods/Forsyth Limited Partnership, Highwoods
Properties, Inc., the Subsidiaries named therein and the Lenders named
therein, dated as of September 27, 1996.
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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/FORSYTH LIMITED PARTNERSHIP
By: Highwoods Properties, Inc., its general partner
By: /s/ Carman J. Liuzzo
Carman J. Liuzzo
Vice President and Chief Financial Officer
Date: October 15, 1996
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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/FORSYTH LIMITED PARTNERSHIP
By: Highwoods Properties, Inc., its general partner
By: /s/ Carman J. Liuzzo
Carman J. Liuzzo
Vice President and Chief Financial Officer
Date: October 15, 1996
5
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Exhibits
Item Description
10.1 Credit Agreement among Highwoods/Forsyth Limited Partnership, Highwoods
Properties, Inc., the Subsidiaries named therein and the Lenders named
therein, dated as of September 27, 1996.
6
CREDIT AGREEMENT
among
HIGHWOODS/FORSYTH LIMITED PARTNERSHIP,
as Borrower
AND
HIGHWOODS PROPERTIES, INC.,
and certain Subsidiaries of the Borrower and Highwoods Properties, Inc.
as Guarantors
AND
THE LENDERS IDENTIFIED HEREIN
AND
NATIONSBANK, N.A.,
as Administrative Agent
AND
FIRST UNION NATIONAL BANK OF NORTH CAROLINA,
as Documentation Agent
DATED AS OF September 27, 1996
<PAGE>
TABLE OF CONTENTS
SECTION 1
DEFINITIONS AND ACCOUNTING TERMS
<TABLE>
<CAPTION>
<S> <C> <C>
1.1 Definitions.......................................................................... 1
1.2 Computation of Time Periods and Other Definitional Provisions....................... 17
1.3 Accounting Terms.................................................................... 17
SECTION 2
CREDIT FACILITIES
2.1 Revolving Loans..................................................................... 18
2.2 Letter of Credit Subfacility........................................................ 20
SECTION 3
GENERAL PROVISIONS APPLICABLE TO LOANS AND LETTERS OF CREDIT
3.1 Interest............................................................................ 25
3.2 Place and Manner of Payments........................................................ 25
3.3 Prepayments......................................................................... 26
3.4 Fees................................................................................ 26
3.5 Payment in full at Maturity......................................................... 27
3.6 Computations of Interest and Fees................................................... 27
3.7 Pro Rata Treatment.................................................................. 28
3.8 Sharing of Payments................................................................. 29
3.9 Capital Adequacy.................................................................... 30
3.10 Inability To Determine Eurodollar Rate.............................................. 30
3.11 Illegality to Make Eurodollar Loans................................................. 30
3.12 Changes in Requirements of Law...................................................... 31
3.13 Taxes............................................................................... 32
3.14 Indemnity as to Eurodollar Loans.................................................... 34
SECTION 4
GUARANTY
4.1 Guaranty of Payment................................................................. 34
4.2 Obligations Unconditional........................................................... 35
4.3 Modifications....................................................................... 36
4.4 Waiver of Rights.................................................................... 36
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4.5 Reinstatement....................................................................... 36
4.6 Remedies............................................................................ 36
4.7 Limitation of Guaranty.............................................................. 37
SECTION 5
CONDITIONS PRECEDENT
5.1 Closing Conditions.................................................................. 37
5.2 Conditions to All Loans. .......................................................... 40
SECTION 6
REPRESENTATIONS AND WARRANTIES
6.1 Financial Condition................................................................. 41
6.2 Organization and Good Standing...................................................... 41
6.3 Due Authorization................................................................... 41
6.4 No Conflicts........................................................................ 41
6.5 Consents............................................................................ 42
6.6 Enforceable Obligations............................................................. 42
6.7 No Default.......................................................................... 42
6.8 Ownership........................................................................... 42
6.9 Indebtedness........................................................................ 42
6.10 Litigation.......................................................................... 42
6.11 Taxes............................................................................... 42
6.12 Compliance with Law................................................................. 42
6.13 ERISA............................................................................... 42
6.14 Subsidiaries........................................................................ 44
6.15 Use of Proceeds; Margin Stock....................................................... 44
6.16 Government Regulation............................................................... 44
6.17 Environmental Matters............................................................... 44
6.18 Intellectual Property............................................................... 45
6.19 Solvency............................................................................ 45
6.20 Disclosure.......................................................................... 45
6.21 Licenses, etc....................................................................... 46
6.22 No Burdensome Restrictions.......................................................... 46
SECTION 7
AFFIRMATIVE COVENANTS
7.1 Information Covenants............................................................... 46
7.2 Financial Covenants................................................................. 49
7.3 Preservation of Existence, Franchises and REIT Status............................... 50
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7.4 Books and Records................................................................... 50
7.5 Compliance with Law..................................................................50
7.6 Payment of Taxes and Other Indebtedness............................................. 51
7.7 Insurance........................................................................... 51
7.8 Maintenance of Property............................................................. 51
7.9 Performance of Obligations.......................................................... 51
7.10 Use of Proceeds..................................................................... 51
7.11 Audits/Inspections.................................................................. 52
7.12 Interest Rate Protection Agreements................................................. 52
7.13 Capital Expenditures................................................................ 52
7.14 Principal Offices................................................................... 52
7.15 Management.......................................................................... 52
7.16 Additional Credit Parties........................................................... 52
7.17 Equity Issuance..................................................................... 52
7.18 Upstream of Excess Cash Flow........................................................ 53
SECTION 8
NEGATIVE COVENANTS
8.1 Indebtedness........................................................................ 53
8.2 Nature of Business.................................................................. 54
8.3 Consolidation and Merger............................................................ 54
8.4 Restrictions on Loans............................................................... 54
8.5 Dividends........................................................................... 54
8.6 Transactions with Affiliates........................................................ 54
8.7 Fiscal Year; Organizational Documents............................................... 54
8.8 Negative Pledges.................................................................... 54
8.9 Non-Guarantor Subsidiaries.......................................................... 54
8.10 Investments......................................................................... 55
8.11 Liens............................................................................... 55
8.12 Indenture........................................................................... 55
SECTION 9
EVENTS OF DEFAULT
9.1 Events of Default................................................................... 55
9.2 Acceleration; Remedies.............................................................. 57
9.3 Allocation of Payments After Event of Default....................................... 58
SECTION 10
AGENCY PROVISIONS
10.1 Appointment......................................................................... 59
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10.2 Delegation of Duties................................................................ 60
10.3 Exculpatory Provisions.............................................................. 60
10.4 Reliance on Communications.......................................................... 60
10.5 Notice of Default................................................................... 61
10.6 Non-Reliance on Agents and Other Lenders............................................ 61
10.7 Indemnification..................................................................... 62
10.8 Agents in Their Individual Capacity................................................. 62
10.9 Successor Agent..................................................................... 62
SECTION 11
MISCELLANEOUS
11.1 Notices............................................................................. 63
11.2 Right of Set-Off.................................................................... 63
11.3 Benefit of Agreement................................................................ 64
11.4 No Waiver; Remedies Cumulative...................................................... 65
11.5 Payment of Expenses; Indemnification................................................ 65
11.6 Amendments, Waivers and Consents.................................................... 66
11.7 Counterparts........................................................................ 67
11.8 Headings............................................................................ 67
11.9 Defaulting Lender................................................................... 67
11.10 Survival............................................................................ 67
11.11 Governing Law....................................................................... 67
11.12 Arbitration......................................................................... 68
11.13 Time................................................................................ 68
11.14 Severability........................................................................ 68
11.15 Entirety............................................................................ 69
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SCHEDULES
Schedule 1.1(a) Commitment Percentages
Schedule 6.9 Indebtedness
Schedule 6.14 Subsidiaries
Schedule 11.1 Notices
EXHIBITS
Exhibit 2.1(b) Form of Notice of Borrowing
Exhibit 2.1(d) Form of Notice of Continuation/Conversion
Exhibit 2.1(f) Form of Revolving Note
Exhibit 7.1(c) Form of Officer's Certificate
Exhibit 7.16 Form of Joinder Agreement
Exhibit 11.3 Form of Assignment Agreement
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CREDIT AGREEMENT
THIS CREDIT AGREEMENT, dated as of September 27, 1996 (this "Credit
Agreement"), is entered into by and among HIGHWOODS/FORSYTH LIMITED PARTNERSHIP,
a North Carolina limited partnership (the "Borrower"), HIGHWOODS PROPERTIES,
INC., a Maryland corporation ("Highwoods Properties") (Highwoods Properties and
certain Subsidiaries of the Borrower and Highwoods Properties, individually a
"Guarantor" and collectively the "Guarantors"), the Lenders (as defined herein),
NATIONSBANK, N.A., as Administrative Agent for the Lenders and FIRST UNION
NATIONAL BANK OF NORTH CAROLINA as Documentation Agent.
R E C I T A L S
WHEREAS, the Borrower has requested that the Lenders provide a $280
million credit facility for the purposes hereinafter set forth; and
WHEREAS, the Lenders have agreed to make the requested credit facility
available to the Borrower on the terms and conditions hereinafter set forth.
NOW, THEREFORE, IN CONSIDERATION of the premises and other good and
valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the parties hereto agree as follows:
SECTION 1
DEFINITIONS AND ACCOUNTING TERMS
1.1 Definitions. As used herein, the following terms shall have the
meanings herein specified unless the context otherwise requires. Defined terms
herein shall include in the singular number the plural and in the plural the
singular:
"Additional Credit Party" means each Person that becomes a
Guarantor after the Effective Date, as provided in Section 7.16.
"Adjusted Base Rate" means the Base Rate plus the Applicable
Percentage.
"Adjusted Eurodollar Rate" means the Eurodollar Rate plus the
Applicable Percentage.
"Adjusted NOI" means, with respect to the applicable time
period, the amount equal to (a) the sum of all revenues and income
received by the Credit Parties with respect to the relevant Property or
Properties minus (b) the sum of all reasonable and customary expenses
incurred by the Credit Parties in the operation of such Property or
Properties, including, but
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not limited to, utility expenses, property taxes, insurance premiums,
management fees and Capital Expenditures (but excluding interest,
depreciation, amortization and income taxes).
"Administrative Agent" means NationsBank, N.A. (or any
successor thereto) or any successor administrative agent appointed
pursuant to Section 10.9.
"Affiliate" means a Person: (a) which directly or indirectly
through one or more intermediaries controls or is controlled by, or is
under common control of the Borrower or a Guarantor; or (b) which
beneficially owns or holds five percent (5%) or more of any class of
the voting stock of a Guarantor or more than five percent (5%) of the
partnership interests of the Borrower; or (c) of which five percent
(5%) or more of the voting stock (or in the case of a Person which is
not a corporation, five percent (5%) or more of the equity interest) is
beneficially owned or held by the Borrower or a Guarantor.
"Agency Services Address" means NationsBank, N.A., Real Estate
Loan Administration, One Hannover Square, Suite 301, Raleigh, North
Carolina 27601, or such other address as may be identified by written
notice from the Administrative Agent
to the Borrower.
"Agents" means the Administrative Agent and the Documentation
Agent and "Agent" means either the Administrative Agent or the
Documentation Agent.
"Applicable Percentage" means, at any time, and with respect
to all Eurodollar Loans, Base Rate Loans and Letters of Credit then
outstanding, the applicable percentage corresponding to the then
Average Unsecured Long Term Debt Rating of Highwoods Properties as
follows:
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<CAPTION>
APPLICABLE
APPLICABLE APPLICABLE PERCENTAGE
AVERAGE UNSECURED PERCENTAGE PERCENTAGE FOR LETTER
LONG TERM FOR EURODOLLAR BASE RATE OF CREDIT
LEVEL DEBT RATING LOANS LOANS FEE
<S> <C> <C> <C> <C>
I the equivalent of A- 1.00% 0% 1.00%
or
better from S&P
II less than the equivalent of 1.20% 0% 1.20%
A- from S&P
but
greater than or equal to
the equivalent of BBB+ from
S&P
</TABLE>
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<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
III less than the equivalent of 1.35% .10% 1.35%
BBB+ from S&P
but
greater than or equal to
the equivalent of BBB from
S&P
IV less than the equivalent of BBB 1.50% .15% 1.50%
from S&P
but
greater than or equal to the
equivalent of BBB- from S&P
V Worse than the equivalent of 1.75% .30% 1.75%
BBB- from S&P
or
Unrated by either
S&P or Moody's
</TABLE>
The initial Applicable Percentage for all Eurodollar Loans, Base Rate Loans and
the Letter of Credit Fee shall be based on Level IV and shall remain at Level IV
until the earlier of (i) the first 120 days subsequent to the Closing Date or
(ii) the date Highwoods Properties receives an Average Unsecured Long Term Debt
Rating from S&P and Moody's. Thereafter, the Applicable Percentage shall be
determined in accordance with the data above and shall be adjusted on the date
five Business Days after the Administrative Agent has knowledge of an applicable
rating change.
The Borrower shall promptly deliver to the Administrative Agent, at the address
set forth on Schedule 11.1 and at the Agency Services Address, information
regarding any change in its unsecured debt rating from any rating agency.
"Authorized Officer" means the President, Chief Executive
Officer, Chief Operating Officer, Chief Financial Officer, Secretary or
Chairman of the Board of Highwoods Properties.
"Average Unsecured Long Term Debt Rating" means the unsecured
debt rating of Highwoods Properties, as calculated from time to time by
the Administrative Agent, using an average of all ratings then provided
by rating agencies whose ratings are generally accepted by the market;
provided that (a) the ratings assigned by S&P and Moody's shall be
weighted three times heavier than any other agencies used in making
such calculation and (b) if either S&P or Moody's fails to rank the
senior unsecured debt of Highwoods Properties, the Applicable
Percentage for Base Rate Loans and Eurodollar Loans shall be based on
Level V. The calculation of the Average Unsecured Long Term Debt Rating
(including but not limited to the method used to make such calculation)
shall be in the sole discretion of the Administrative Agent and shall
be conclusive absent manifest error.
"Bankruptcy Code" means the Bankruptcy Code in Title 11 of the
United States Code, as amended, modified, succeeded or replaced from
time to time.
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"Base Rate" means, for any day, the rate per annum (rounded
upwards, if necessary, to the nearest whole multiple of 1/100 of 1%)
equal to the greater of (a) the Federal Funds Rate in effect on such
day plus 1/2 of 1% or (b) the Prime Rate in effect on such day. If for
any reason the Administrative Agent shall have determined (which
determination shall be conclusive absent manifest error) that it is
unable after due inquiry to ascertain the Federal Funds Rate for any
reason, including the inability or failure of the Administrative Agent
to obtain sufficient quotations in accordance with the terms hereof,
the Base Rate shall be determined without regard to clause (a) of the
first sentence of this definition until the circumstances giving rise
to such inability no longer exist. Any change in the Base Rate due to a
change in the Prime Rate or the Federal Funds Rate shall be effective
on the effective date of such change in the Prime Rate or the Federal
Funds Rate, respectively.
"Base Rate Loan" means any Loan bearing interest at a rate
determined by reference to the Base Rate.
"Borrower" means Highwoods/Forsyth Limited Partnership, a
North Carolina limited partnership, together with any permitted
successors and assigns.
"Business Day" means any day other than a Saturday or Sunday
or a legal holiday in Charlotte, North Carolina, or a day on which
banking institutions are authorized by law or other governmental action
to close; provided, however, if the applicable day relates to the
determination of the Eurodollar Rate, such day must also be a day upon
which banks are open for the transaction of business in London, England
and dealings in U.S. dollar deposits are carried on in the London
interbank market.
"Capital Expenditures" means all expenditures required for the
leasing of space within Properties owned and previously leased by the
Credit Parties, including upfit expenses and leasing commissions,
together with expenses for renovation or improvement of existing
properties that are classified as capital expenditures under GAAP.
Leasing and tenant improvements expenditures with respect to space not
previously leased shall not be included in any calculation of Capital
Expenditures, but must be reported to the Administrative Agent on a
quarterly basis as set forth in Section 7.1.
"Capital Lease" means, as applied to any Person, any lease of
any property (whether real, personal or mixed) by that Person as lessee
which, in accordance with GAAP, is or should be accounted for as a
capital lease on the balance sheet of the Borrower.
"Cash Available for Distribution" means all Funds from
Operations (as defined as of the Closing Date by the Board of Governors
of the National Association of Real Estate Investment Trusts) less (a)
Capital Expenditures and (b) principal payments made by the Credit
Parties on Indebtedness (other than principal payments made as a result
of terminating the Existing Credit Agreement).
"Cash Collateral Account" means an account maintained by the
Borrower with the Administrative Agent, for the benefit of the Lenders,
in which (a) the Administrative Agent has sole control and (b) the
Administrative Agent, for the benefit of the Lenders, has a
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perfected security in such account and the proceeds thereof and which
is used by the Borrower to make deposits as required herein.
"Closing Date" means the date hereof.
"Code" means the Internal Revenue Code of 1986 and the rules
and regulations promulgated thereunder, as amended, modified, succeeded
or replaced from time to time.
"Commitments" means the commitment of each Lender with respect
to the Revolving Committed Amount.
"Credit Documents" means this Credit Agreement, the Notes, the
Fee Letter and all other related agreements and documents issued or
delivered hereunder or thereunder or pursuant hereto or thereto.
"Credit Parties" means the Borrower and the Guarantors and
"Credit Party" means any one of them.
"Credit Party Obligations" means, without duplication, (a) all
of the obligations of the Credit Parties to the Lenders (including the
Issuing Lender) and the Agents, whenever arising, under this Credit
Agreement, the Notes, or any of the other Credit Documents to which the
Borrower or any Guarantor is a party and (b) all liabilities and
obligations owing from such Credit Party to any Lender, or any
Affiliate of a Lender, arising under Hedging Agreements.
"Default" means any event, act or condition which with notice
or lapse of time, or both, would constitute an Event of Default.
"Defaulting Lender" means, at any time, any Lender that, (a)
has failed to make a Loan or purchase a Participation Interest required
pursuant to the terms of this Credit Agreement, (b) has failed to pay
to the Agents or any Lender an amount owed by such Lender pursuant to
the terms of this Credit Agreement (but only for so long as such amount
has not been repaid) or (c) has been deemed insolvent or has become
subject to a bankruptcy or insolvency proceeding or to a receiver,
trustee or similar official.
"Documentation Agent" means First Union National Bank of North
Carolina (or any successor thereto) or any successor documentation
agent appointed pursuant to Section 10.9.
"Dollars" and "$" means dollars in lawful currency of the
United States of America.
"EBITDA" means, for any period, with respect to the Credit
Parties, on a consolidated basis, the sum of (a) Net Income for such
period (excluding the effect of any extraordinary or other
non-recurring gains or non-cash losses outside of the ordinary course
of business) plus (b) an amount which, in the determination of Net
Income for such period has been deducted for (i) Interest Expense for
such period, (ii) total Federal, state, foreign or other income taxes
of the Credit Parties for such period and (iii) all depreciation and
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amortization of the Credit Parties for such period, all as determined
in accordance with GAAP.
"Effective Date" means the date on which the conditions set
forth in Section 5.1 shall have been fulfilled (or waived in the sole
discretion of the Lenders) and on which the initial Loans shall have
been made and/or the initial Letters of Credit shall have been issued.
"Eligible Assignee" means (a) any Lender or Affiliate or
subsidiary of a Lender and (b) any other commercial bank, financial
institution, institutional lender or "accredited investor" (as defined
in Regulation D of the Securities and Exchange Commission) with total
assets of at least $10 billion and with a rating on their long term
unsecured debt of at least BBB with S&P or its equivalent and with an
office in the United States.
"Environmental Claim" means any investigation, written notice,
violation, written demand, written allegation, action, suit,
injunction, judgment, order, consent decree, penalty, fine, lien,
proceeding, or written claim whether administrative, judicial, or
private in nature arising (a) pursuant to, or in connection with, an
actual or alleged violation of, any Environmental Law, (b) in
connection with any Hazardous Material, (c) from any assessment,
abatement, removal, remedial, corrective, or other response action in
connection with an Environmental Law or other order of a Governmental
Authority or (d) from any actual or alleged damage, injury, threat, or
harm to health, safety, natural resources, or the environment.
"Environmental Laws" means any current or future legal
requirement of any Governmental Authority pertaining to (a) the
protection of health, safety, and the indoor or outdoor environment,
(b) the conservation, management, or use of natural resources and
wildlife, (c) the protection or use of surface water and groundwater,
(d) the management, manufacture, possession, presence, use, generation,
transportation, treatment, storage, disposal, release, threatened
release, abatement, removal, remediation or handling of, or exposure
to, any hazardous or toxic substance or material or (e) pollution
(including any release to land surface water and groundwater) and
includes, without limitation, the Comprehensive Environmental Response,
Compensation, and Liability Act of 1980, as amended by the Superfund
Amendments and Reauthorization Act of 1986, 42 USC 9601 ET SEQ., Solid
Waste Disposal Act, as amended by the Resource Conservation and
Recovery Act of 1976 and Hazardous and Solid Waste Amendment of 1984,
42 USC 6901 ET SEQ., Federal Water Pollution Control Act, as amended by
the Clean Water Act of 1977, 33 USC 1251 ET SEQ., Clean Air Act of
1966, as amended, 42 USC 7401 ET SEQ., Toxic Substances Control Act of
1976, 15 USC 2601 ET SEQ., Hazardous Materials Transportation Act, 49
USC App. 1801 ET SEQ., Occupational Safety and Health Act of 1970, as
amended, 29 USC 651 ET SEQ., Oil Pollution Act of 1990, 33 USC 2701 ET
SEQ., Emergency Planning and Community Right- to-Know Act of 1986, 42
USC 11001 ET SEQ., National Environmental Policy Act of 1969, 42 USC
4321 ET SEQ., Safe Drinking Water Act of 1974, as amended, 42 USC
300(f) ET SEQ., any analogous implementing or successor law, and any
amendment, rule, regulation, order, or directive issued thereunder.
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"Equity Issuance" means any issuance by a Credit Party to any
Person of (a) shares of its capital stock or other equity interests
(including, without limitation, participation units), (b) any shares of
its capital stock or other equity interests (including, without
limitation, participation units) pursuant to the exercise of options or
warrants or (c) any shares of its capital stock or other equity
interests (including, without limitation, participation units) pursuant
to the conversion of any debt securities to equity.
"ERISA" means the Employee Retirement Income Security Act of
1974, as amended, and any successor statute thereto, as interpreted by
the rules and regulations thereunder, all as the same may be in effect
from time to time. References to sections of ERISA shall be construed
also to refer to any successor sections.
"ERISA Affiliate" means an entity, whether or not
incorporated, which is under common control with any Credit Party
within the meaning of Section 4001(a)(14) of ERISA, or is a member of a
group which includes any Credit Party or any of its Subsidiaries and
which is treated as a single employer under Sections 414(b), (c), (m),
or (o) of the Code.
"Eurodollar Loan" means a Loan bearing interest based at a
rate determined by reference to the Eurodollar Rate.
"Eurodollar Rate" means, for the Interest Period for each
Eurodollar Loan comprising part of the same borrowing (including
conversions, extensions and renewals), a per annum interest rate
determined pursuant to the following formula:
Eurodollar Rate = London Interbank Offered Rate
1 - Eurodollar Reserve Percentage
"Eurodollar Reserve Percentage" means for any day, that
percentage (expressed as a decimal) which is in effect from time to
time under Regulation D of the Board of Governors of the Federal
Reserve System (or any successor), as such regulation may be amended
from time to time or any successor regulation, as the maximum reserve
requirement (including, without limitation, any basic, supplemental,
emergency, special, or marginal reserves) applicable with respect to
Eurocurrency liabilities as that term is defined in Regulation D (or
against any other category of liabilities that includes deposits by
reference to which the interest rate of Eurodollar Loans is
determined), whether or not a Lender has any Eurocurrency liabilities
subject to such reserve requirement at that time. Eurodollar Loans
shall be deemed to constitute Eurocurrency liabilities and as such
shall be deemed subject to reserve requirements without benefits of
credits for proration, exceptions or offsets that may be available from
time to time to a Lender. The Eurodollar Rate shall be adjusted
automatically on and as of the effective date of any change in the
Eurodollar Reserve Percentage.
"Event of Default" means any of the events or circumstances
described in Section 9.1.
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"Existing Loan Agreement" has the meaning set forth in Section
5.1(k).
"Extension of Credit" means, as to any Lender, the making of a
Loan by such Lender (or a participation therein by a Lender) or the
issuance of, or participation in, a Letter of Credit by such Lender.
"Federal Funds Rate" means for any day the rate per annum
(rounded upward, if necessary, to the nearest 1/100th of 1%) equal to
the weighted average of the rates on overnight Federal funds
transactions with members of the Federal Reserve System arranged by
Federal funds brokers on such day, as published by the Federal Reserve
Bank of New York on the Business Day next succeeding such day; provided
that (a) if such day is not a Business Day, the Federal Funds Rate for
such day shall be such rate on such transactions on the next preceding
Business Day and (b) if no such rate is so published on such next
preceding Business Day, the Federal Funds Rate for such day shall be
the average rate quoted to the Administrative Agent on such day on such
transactions as determined by the Administrative Agent.
"Fee Letter" means that certain letter agreement, dated as of
Closing Date, between the Administrative Agent and the Borrower, as
amended, modified, supplemented or replaced from time to time.
"Funded Debt" means, without duplication, the sum of (a) all
Indebtedness of the Credit Parties for borrowed money, (b) all purchase
money Indebtedness of the Credit Parties, (c) the principal portion of
all obligations of the Credit Parties under Capital Leases, (d)
commercial letters of credit and the maximum amount of all performance
and standby letters of credit issued or bankers' acceptance facilities
created for the account of a Credit Party, including, without
duplication, all unreimbursed draws thereunder, (e) all Guaranty
Obligations of the Credit Parties with respect to Funded Debt of
another Person, (f) all Funded Debt of another entity secured by a Lien
on any property of the Credit Parties whether or not such Funded Debt
has been assumed by a Credit Party, (g) all Funded Debt of any
partnership or unincorporated joint venture to the extent a Credit
Party is legally obligated or has a reasonable expectation of being
liable with respect thereto, net of any assets of such partnership or
joint venture and (h) the principal balance outstanding under any
synthetic lease, tax retention operating lease, off-balance sheet loan
or similar off-balance sheet financing product where such transaction
is considered borrowed money indebtedness for tax purposes but is
classified as an operating lease in accordance with GAAP.
"GAAP" means generally accepted accounting principles in the
United States applied on a consistent basis and subject to Section .
"Governmental Authority" means any Federal, state, local,
provincial or foreign court or governmental agency, authority,
instrumentality or regulatory body.
"Guarantors" means Highwoods Properties, Inc., a Maryland
corporation, each of the Subsidiaries of Highwoods Properties and the
Borrower other than the Non- Guarantor Subsidiaries and each Additional
Credit Party that has executed a Joinder Agreement.
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"Guaranty Obligations" means, with respect to any Person,
without duplication, any obligations (other than endorsements in the
ordinary course of business of negotiable instruments for deposit or
collection) guaranteeing or intended to guarantee any Indebtedness of
any other Person in any manner, whether direct or indirect, and
including without limitation any obligation, whether or not contingent,
(a) to purchase any such Indebtedness or other obligation or any
property constituting security therefor, (b) to advance or provide
funds or other support for the payment or purchase of such indebtedness
or obligation or to maintain working capital, solvency or other balance
sheet condition of such other Person (including, without limitation,
maintenance agreements, comfort letters, take or pay arrangements, put
agreements or similar agreements or arrangements) for the benefit of
the holder of Indebtedness of such other Person, (c) to lease or
purchase property, securities or services primarily for the purpose of
assuring the owner of such Indebtedness or (d) to otherwise assure or
hold harmless the owner of such Indebtedness or obligation against loss
in respect thereof. The amount of any Guaranty Obligation hereunder
shall (subject to any limitations set forth therein) be deemed to be an
amount equal to the outstanding principal amount (or maximum principal
amount, if larger) of the Indebtedness in respect of which such
Guaranty Obligation is made.
"Hazardous Materials" means any substance, material or waste
defined or regulated in or under any Environmental Laws.
"Hedging Agreements" means interest rate protection
agreements, foreign currency exchange agreements, commodity purchase or
option agreements or other interest or exchange rate or commodity price
hedging agreements.
"Improved Properties" means all Properties of the Borrower
other than Properties that have not been developed.
"Indebtedness" of any Person means, without duplication, (a)
all obligations of such Person for borrowed money, (b) all obligations
of such Person evidenced by bonds, debentures, notes or similar
instruments, or upon which interest payments are customarily made, (c)
all obligations of such Person under conditional sale or other title
retention agreements relating to property purchased by such Person to
the extent of the value of such property (other than customary
reservations or retentions of title under agreements with suppliers
entered into in the ordinary course of business), (d) all obligations,
other than intercompany items, of such Person issued or assumed as the
deferred purchase price of property or services purchased by such
Person which would appear as liabilities on a balance sheet of such
Person, (e) all Indebtedness of others secured by (or for which the
holder of such Indebtedness has an existing right, contingent or
otherwise, to be secured by) any Lien on, or payable out of the
proceeds of production from, property owned or acquired by such Person,
whether or not the obligations secured thereby have been assumed, (f)
all Guaranty Obligations of such Person, (g) the principal portion of
all obligations of such Person under (i) Capital Leases and (ii) any
synthetic lease, tax retention operating lease, off-balance sheet loan
or similar off-balance sheet financing product of such Person where
such transaction is considered borrowed money indebtedness for tax
purposes but is classified as an operating lease in accordance with
GAAP, (h) all obligations of such Person in respect of interest rate
9
<PAGE>
protection agreements, foreign currency exchange agreements, or other
interest or exchange rate or commodity price hedging agreements, (i)
the maximum amount of all performance and standby letters of credit
issued or bankers' acceptances facilities created for the account of
such Person and, without duplication, all drafts drawn thereunder (to
the extent unreimbursed), (j) all preferred stock issued by such Person
and required by the terms thereof to be redeemed, or for which
mandatory sinking fund payments are due, by a fixed date and (k) the
aggregate amount of uncollected accounts receivable of such Person
subject at such time to a sale of receivables (or similar transaction)
regardless of whether such transaction is effected without recourse to
such Person or in a manner that would not be reflected on the balance
sheet of such Person in accordance with GAAP. The Indebtedness of any
Person shall include the Indebtedness of any partnership or
unincorporated joint venture in which such Person is legally obligated
or has a reasonable expectation of being liable with respect thereto.
"Indenture" means that certain Indenture dated March 1, 1994
among AP Southeast Portfolio Partners, L.P. as Issuer, Bankers Trust
Company of California,N.A., as Indenture Trustee and Bankers Trust
Company, as Servicer evidencing 7.88% Mortgage Notes due January 31,
2001.
"Interest Expense" means, for any period, with respect to the
Credit Parties, on a consolidated basis, all net interest expense,
including the interest component under Capital Leases, as determined in
accordance with GAAP; provided that Interest Expense shall not include
the amortized cost of the $80 million cap purchased by the Borrower in
June 1994.
"Interest Payment Date" means (a) as to Base Rate Loans, on
the fifteenth (15th) day of each month and on the Revolving Loan
Maturity Date and (b) as to Eurodollar Loans, on the last day of each
applicable Interest Period and on the Revolving Loan Maturity Date.
"Interest Period" means, as to Eurodollar Loans, a period of
one month's duration, commencing, in each case, on the date of the
borrowing (including continuations and conversions thereof); provided,
however, (a) if any Interest Period would end on a day which is not a
Business Day, such Interest Period shall be extended to the next
succeeding Business Day (except that when the next succeeding Business
Day falls in the next succeeding calendar month, then on the next
preceding Business Day), (b) no Interest Period shall extend beyond the
Revolving Loan Maturity Date and (c) where an Interest Period begins on
a day for which there is no numerically corresponding day in the
calendar month in which the Interest Period is to end, such Interest
Period shall end on the last Business Day of such calendar month.
"Issuing Lender" means NationsBank, N.A.
"Issuing Lender Fees" has the meaning set forth in Section
3.4(b).
"Lender" means any of the Persons identified as a "Lender" on
the signature pages hereto, and any Person which may become a Lender by
way of assignment in accordance with the terms hereof, together with
their successors and permitted assigns.
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"Letter of Credit" means a Letter of Credit issued for the
account of a Credit Party by the Issuing Lender pursuant to Section
2.2, as such Letter of Credit may be amended, modified, extended,
renewed or replaced.
"Letter of Credit Fee" shall have the meaning assigned to such
term in Section 3.4(b).
"Lien" means any mortgage, pledge, hypothecation, assignment,
deposit arrangement, security interest, encumbrance, lien (statutory or
otherwise), preference, priority or charge of any kind, including,
without limitation, any agreement to give any of the foregoing, any
conditional sale or other title retention agreement, and any lease in
the nature thereof.
"Loan" or "Loans" means the Revolving Loans (or a portion of
any Revolving Loan), individually or collectively, as appropriate.
"LOC Documents" means, with respect to any Letter of Credit,
such Letter of Credit, any amendments thereto, any documents delivered
in connection therewith, any application therefor, and any agreements,
instruments, guarantees or other documents (whether general in
application or applicable only to such Letter of Credit) governing or
providing for (a) the rights and obligations of the parties concerned
or at risk or (b) any collateral security for such obligations;
provided that no LOC Document shall impose an obligation on the Issuing
Lender or the LOC Participants except for the honoring of Letters of
Credit or as otherwise contemplated herein.
"LOC Obligations" means, at any time, the sum of (a) the
maximum amount which is, or at any time thereafter may become,
available to be drawn under Letters of Credit then outstanding,
assuming compliance with all requirements for drawings referred to in
such Letters of Credit plus (b) the aggregate amount of all drawings
under Letters of Credit honored by an Issuing Lender but not
theretofore reimbursed.
"LOC Participants" means the Lenders.
"London Interbank Offered Rate" means, with respect to any
Eurodollar Loan for the Interest Period applicable thereto, the rate of
interest per annum (rounded upwards, if necessary, to the nearest 1/100
of 1%) appearing on Telerate Page 3750 (or any successor page) as the
London interbank offered rate for deposits in Dollars at approximately
11:00 A.M. (London time) two Business Days prior to the first day of
such Interest Period for a term comparable to such Interest Period;
provided, however, if more than one rate is specified on Telerate Page
3750, the applicable rate shall be the arithmetic mean of all such
rates. If, for any reason, such rate is not available, the term "London
Interbank Offered Rate" shall mean, with respect to any Eurodollar Loan
for the Interest Period applicable thereto, the rate of interest per
annum (rounded upwards, if necessary, to the nearest 1/100 of 1%)
appearing on Reuters Screen LIBO Page as the London interbank offered
rate for deposits in Dollars at approximately 11:00 A.M. (London time)
two Business Days prior to the first day of such Interest Period for a
term comparable to such Interest Period; provided, however, if more
than one rate is specified on Reuters Screen LIBO Page, the applicable
rate shall be the arithmetic mean of all such rates.
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"Market Capitalization" means (a) the market value of issued
and outstanding common stock of Highwoods Properties based on the
average closing price over the last twenty trading days plus (b) the
value of limited partnership units of the Borrower if each such unit
were converted to a share of common stock of the Guarantor, plus (c)
total Funded Debt outstanding of the Credit Parties.
"Material Adverse Effect" means a material adverse effect on
(a) the operations, financial condition, business or prospects of the
Borrower or a Guarantor, (b) the ability of the Borrower or a Guarantor
to perform its respective obligations under this Credit Agreement or
any of the other Credit Documents, or (c) the validity or
enforceability of this Credit Agreement, any of the other Credit
Documents, or the rights and remedies of the Lenders hereunder or
thereunder taken as a whole.
"Moody's" means Moody's Investors Service, Inc., or any
successor or assignee of the business of such company in the business
of rating securities.
"Multiemployer Plan" means a Plan covered by Title IV of ERISA
which is a multiemployer plan as defined in Section 3(37) or 4001(a)(3)
of ERISA.
"Multiple Employer Plan" means a Plan covered by Title IV of
ERISA, other than a Multiemployer Plan, which any Credit Party or any
of its Subsidiaries or any ERISA Affiliate and at least one employer
other than a Credit Party or any of its Subsidiaries or any ERISA
Affiliate are contributing sponsors.
"Net Cash Proceeds" means the gross cash proceeds received
from an Equity Issuance net of (a) transaction costs payable to third
parties and (b) a good faith estimate of the taxes payable with respect
to such proceeds.
"Net Income" means, for any period, the net income after taxes
for such period of the Credit Parties on a consolidated basis, as
determined in accordance with GAAP.
"Non-Excluded Taxes" has the meaning set forth in Section
3.13.
"Non-Guarantor Subsidiaries" means AP Southeast Portfolio
Partners, L.P., AP- GP Southeast Portfolio Partners, L.P., a Delaware
limited partnership, Highwoods Realty GP Corp., a Delaware limited
partnership and Forsyth-Carter Brokerage, L.L.C.
"Note" or "Notes" means the Revolving Loan Notes, individually
or collectively, as appropriate.
"Notice of Borrowing" means a request by the Borrower for a
Revolving Loan, in the form of Exhibit 2.1(b).
"Notice of Continuation/Conversion" means a request by the
Borrower to continue an existing Eurodollar Loan to a new Interest
Period or to convert a Eurodollar Loan to a Base Rate Loan or a Base
Rate Loan to a Eurodollar Loan, in the form of Exhibit 2.1(d).
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"Participation Interest" means the Extension of Credit by a
Lender by way of a purchase of a participation in Letters of Credit or
LOC Obligations as provided in Section 2.2 or in any Loans as provided
in Section 3.8.
"PBGC" means the Pension Benefit Guaranty Corporation
established pursuant to Subtitle A of Title IV of ERISA and any
successor thereto.
"Person" means any individual, partnership, joint venture,
firm, corporation, limited liability company, association, trust or
other enterprise (whether or not incorporated), or any Governmental
Authority.
"Plan" means any employee benefit plan (as defined in Section
3(3) of ERISA) which is covered by ERISA and with respect to which any
Credit Party or any of its Subsidiaries or any ERISA Affiliate is (or,
if such plan were terminated at such time, would under Section 4069 of
ERISA be deemed to be) an "employer" within the meaning of Section 3(5)
of ERISA.
"Prime Rate" means the per annum rate of interest established
from time to time by the Administrative Agent at its principal office
in Charlotte, North Carolina (or such other principal office of the
Administrative Agent as communicated in writing to the Borrower and the
Lenders) as its Prime Rate. Any change in the interest rate resulting
from a change in the Prime Rate shall become effective as of 12:01 a.m.
of the Business Day on which each change in the Prime Rate is announced
by the Administrative Agent. The Prime Rate is a reference rate used by
the Administrative Agent in determining interest rates on certain loans
and is not intended to be the lowest rate of interest charged on any
extension of credit to any debtor.
"Properties" means all real property, together with all
improvements thereon, owned by the Credit Parties and "Property" means
any one of them.
"Regulation D, G, U, or X" means Regulation D, G, U or X,
respectively, of the Board of Governors of the Federal Reserve System
as from time to time in effect and any successor to all or a portion
thereof.
"REIT" means a real estate investment trust as defined in
Sections 856-860 of the Code.
"Reportable Event" means a "reportable event" as defined in
Section 4043 of ERISA with respect to which the notice requirements to
the PBGC have not been waived.
"Required Lenders" means Lenders whose aggregate Credit
Exposure (as hereinafter defined) constitutes at least 66 2/3% of the
Credit Exposure of all Lenders at such time; provided, however, that if
any Lender shall be a Defaulting Lender at such time then there shall
be excluded from the determination of Required Lenders the aggregate
principal amount of Credit Exposure of such Lender at such time. For
purposes of the preceding sentence, the term "Credit Exposure" as
applied to each Lender shall mean (a) at any time prior to the
termination of the Commitments, the sum of the Revolving Loan
Commitment Percentage of
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such Lender multiplied by the Revolving Committed Amount and (b) at any
time after the termination of the Commitments, the sum of the principal
balance of the outstanding Loans and LOC Obligations of such Lender.
"Requirement of Law" means, as to any Person, the articles or
certificate of incorporation and by-laws or other organizational or
governing documents of such Person, and any law, treaty, rule or
regulation or final, non-appealable determination of an arbitrator or a
court or other Governmental Authority, in each case applicable to or
binding upon such Person or to which any of its material property is
subject.
"Revolving Committed Amount" means TWO HUNDRED EIGHTY MILLION
DOLLARS ($280,000,000) or such lesser amount as the Revolving Committed
Amount may be reduced pursuant to Section 2.1(d) or Section 3.3(c).
"Revolving Loan Commitment Percentage" means, for each Lender,
the percentage identified as its Revolving Loan Commitment Percentage
on Schedule 1.1(a), as such percentage may be modified in connection
with any assignment made in accordance with the provisions of Section
11.3.
"Revolving Loan Maturity Date" means October 31, 1999.
"Revolving Loans" means the Revolving Loans made to the
Borrower pursuant to Section 2.1.
"Revolving Note" or "Revolving Notes" means the promissory
notes of the Borrower in favor of each of the Lenders evidencing the
Revolving Loans provided pursuant to Section 2.1, individually or
collectively, as appropriate, as such promissory notes may be amended,
modified, supplemented, extended, renewed or replaced from time to time
and as evidenced in the form of Exhibit 2.1(g).
"S&P" means Standard & Poor's Ratings Group, a division of
McGraw Hill, Inc., or any successor or assignee of the business of such
division in the business of rating securities.
"Secured Debt" means the principal amount of Indebtedness
outstanding of the Borrower that is secured by a Lien on a Property.
"Securities Act" means the Securities Act of 1933, as amended,
modified, succeeded or replaced from time to time, and the rules and
regulations promulgated thereunder.
"Single Employer Plan" means any Plan which is covered by
Title IV of ERISA, but which is not a Multiemployer Plan.
"Solvent" means, with respect to any Person as of a particular
date, that on such date (a) such Person is able to pay its debts and
other liabilities, contingent obligations and other commitments as they
mature in the normal course of business, (b) such Person does not
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intend to, and does not believe that it will, incur debts or
liabilities beyond such Person's ability to pay as such debts and
liabilities mature in their ordinary course, (c) such Person is not
engaged in a business or a transaction, and is not about to engage in a
business or a transaction, for which such Person's assets would
constitute unreasonably small capital after giving due consideration to
the prevailing practice in the industry in which such Person is engaged
or is to engage, (d) the fair value of the assets of such Person is
greater than the total amount of liabilities, including, without
limitation, contingent liabilities, of such Person and (e) the present
fair saleable value of the assets of such Person is not less than the
amount that will be required to pay the probable liability of such
Person on its debts as they become absolute and matured. In computing
the amount of contingent liabilities at any time, it is intended that
such liabilities will be computed at the amount which, in light of all
the facts and circumstances existing at such time, represents the
amount that can reasonably be expected to become an actual or matured
liability.
"Speculative Land" means any Property of the Borrower which
has not been developed or which the Borrower does not plan to develop
within six months after such Property is acquired.
"Subsidiary" means, as to any Person, (a) any corporation more
than 50% of whose stock of any class or classes having by the terms
thereof ordinary voting power to elect a majority of the directors of
such corporation (irrespective of whether or not at the time, any class
or classes of such corporation shall have or might have voting power by
reason of the happening of any contingency) is at the time owned by
such Person directly or indirectly through Subsidiaries, and (b) any
partnership, association, joint venture or other entity in which such
person directly or indirectly through Subsidiaries has more than a 50%
equity interest at any time.
"Tangible Net Worth" means the net worth of the Credit
Parties, on a consolidated basis, as determined in accordance with
GAAP, including the value of limited partnership units in the Borrower
as if each such unit were converted to a share of Highwoods Properties'
capital stock, less all intangible assets of the Credit Parties on a
consolidated basis.
"Termination Event" means (a) with respect to any Single
Employer Plan, the occurrence of a Reportable Event or the substantial
cessation of operations (within the meaning of Section 4062(e) of
ERISA); (b) the withdrawal of any Credit Party or any ERISA Affiliate
from a Multiple Employer Plan during a plan year in which it was a
substantial employer (as such term is defined in Section 4001(a)(2) of
ERISA), or the termination of a Multiple Employer Plan; (c) the
distribution of a notice of intent to terminate or the actual
termination of a Plan pursuant to Section 4041(a)(2) or 4041A of ERISA;
(d) the institution of proceedings to terminate or the actual
termination of a Plan by the PBGC under Section 4042 of ERISA; (e) any
event or condition which might reasonably constitute grounds under
Section 4042 of ERISA for the termination of, or the appointment of a
trustee to administer, any Plan; or (f) the complete or partial
withdrawal of any Credit Party or any ERISA Affiliate from a
Multiemployer Plan.
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"Total Assets" means the total assets of the Credit Parties,
on a consolidated basis, as determined in accordance with GAAP.
"Total Assets at Cost" means the sum of (a) for Properties
owned by the Credit Parties on the Closing Date (including the assets
of Crocker Realty Trust, Inc.), the original undepreciated cost of such
real estate assets plus (b) for each Property acquired by the Credit
Parties after the Closing Date, the lesser of (i) the actual cost of
such Property or (ii) the Adjusted NOI for such Property for the twelve
months prior to its acquisition divided by ten percent (10%).
"Total Liabilities" means (a) the total liabilities of the
Credit Parties, on a consolidated basis, as determined in accordance
with GAAP, plus (b) all contingent liabilities and unfunded
Indebtedness of any Credit Party (other than unfunded Indebtedness
under this Credit Agreement).
"Unencumbered Assets" means all Properties of the Credit
Parties (a) that generate revenues from third parties, (b) in which at
least 75% of the available space located therein has been leased and
(c) that are not subject to any Lien.
"Unencumbered Assets at Cost" means the sum of (a) for all
Unencumbered Assets owned by the Credit Parties on the Closing Date
(including the assets of Crocker Realty Trust, Inc.), the original
undepreciated cost of such Unencumbered Assets plus (b) for each
Unencumbered Asset purchased after the Closing Date, the lesser of (i)
the actual cost of such Unencumbered Asset or (ii) the Adjusted NOI for
such Unencumbered Asset for the twelve months prior to its acquisition
divided by ten percent (10%).
"Unsecured Debt" means the total aggregate principal amount of
unsecured Indebtedness of the Credit Parties, on a consolidated basis,
actually outstanding; it being understood that Unsecured Debt shall not
include principal amounts available to be drawn (but not drawn) under
outstanding commitments.
"Unused Commitment" means, for any period, the amount by which
(a) the then applicable aggregate Revolving Committed Amount exceeds
(b) the daily average sum for such period of the outstanding aggregate
principal amount of all Revolving Loans plus the aggregate amount of
LOC Obligations outstanding.
"Unused Fee Percentage" means (a) if the Unused Commitment is
less than or equal to 33% of the Revolving Committed Amount, .15% per
annum, (b) if the Unused Commitment is less than or equal to 66% of the
Revolving Committed Amount but greater than 33% of the Revolving
Committed Amount, .20% per annum and (c) if the Unused Commitment is
greater than 66% of the Revolving Committed Amount, .25% per annum.
1.2 Computation of Time Periods and Other Definitional Provisions. For
purposes of computation of periods of time hereunder, the word "from" means
"from and including" and the words "to" and "until" each mean "to but
excluding." References in this Agreement to "Articles",
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"Sections", "Schedules" or "Exhibits" shall be to Articles, Sections, Schedules
or Exhibits of or to this Agreement unless otherwise specifically provided.
1.3 Accounting Terms. Except as otherwise expressly provided herein,
all accounting terms used herein shall be interpreted, and all financial
statements and certificates and reports as to financial matters required to be
delivered to the Lenders hereunder shall be prepared, in accordance with GAAP
applied on a consistent basis. All financial statements delivered to the Lenders
hereunder shall be accompanied by a statement from the Borrower that GAAP has
not changed since the most recent financial statements delivered by the Borrower
to the Lenders or if GAAP has changed describing such changes in detail and
explaining how such changes affect the financial statements. All calculations
made for the purposes of determining compliance with this Credit Agreement shall
(except as otherwise expressly provided herein) be made by application of GAAP
applied on a basis consistent with the most recent annual or quarterly financial
statements delivered pursuant to Section 7.1 (or, prior to the delivery of the
first financial statements pursuant to Section 7.1, consistent with the
financial statements described in Section 5.1(c)); provided, however, if (a) the
Borrower shall object to determining such compliance on such basis at the time
of delivery of such financial statements due to any change in GAAP or the rules
promulgated with respect thereto or (b) either Agent or the Required Lenders
shall so object in writing within 60 days after delivery of such financial
statements (or after the Lenders have been informed of the change in GAAP
affecting such financial statements, if later), then such calculations shall be
made on a basis consistent with the most recent financial statements delivered
by the Borrower to the Lenders as to which no such objection shall have been
made.
SECTION 2
CREDIT FACILITIES
2.1 Revolving Loans.
(a) Revolving Loan Commitment. Subject to the terms and
conditions set forth herein, each Lender severally agrees to make
revolving loans (each a "Revolving Loan" and collectively the
"Revolving Loans") to the Borrower, in Dollars, at any time and from
time to time, during the period from and including the Effective Date
to but not including the Revolving Loan Maturity Date (or such earlier
date if the Revolving Committed Amount has been terminated as provided
herein); provided, however, that (i) the sum of the aggregate amount of
Revolving Loans outstanding plus the aggregate amount of LOC
Obligations outstanding shall not exceed the Revolving Committed Amount
and (ii) with respect to each individual Lender, the Lender's pro rata
share of outstanding Revolving Loans plus such Lender's pro rata share
of outstanding LOC Obligations shall not exceed such Lender's Revolving
Loan Commitment Percentage of the Revolving Committed Amount. Subject
to the terms of this Credit Agreement (including Section 3.3), the
Borrower may borrow, repay and reborrow Revolving Loans.
(b) Method of Borrowing for Revolving Loans. By no later than
10:00 a.m. (i) one Business Day prior to the requested borrowing of
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Revolving Loans that will be Base Rate Loans or (ii) two Business Days
prior to the date of the requested borrowing of Revolving Loans that
will be Eurodollar Loans, the Borrower shall submit a written Notice of
Borrowing in the form of Exhibit 2.1(b) to the Administrative Agent
(which notice may be by telecopy with the original to follow) setting
forth (A) the amount requested, (B) whether such Revolving Loans shall
accrue interest at the Adjusted Base Rate or the Adjusted Eurodollar
Rate, (C) how the proceeds from such Revolving Loans will be used and
(D) certification that the Borrower has complied in all respects with
Section 5.2;
(c) Funding of Revolving Loans. Upon receipt of a Notice of
Borrowing, the Administrative Agent shall promptly inform the Lenders
as to the terms thereof. Each Lender shall make its Revolving Loan
Commitment Percentage of the requested Revolving Loans available to the
Administrative Agent by 2:00 p.m. on the date specified in the Notice
of Borrowing by deposit, in Dollars, of immediately available funds at
the offices of the Administrative Agent at its principal office in
Charlotte, North Carolina or at such other address as the
Administrative Agent may designate in writing. The amount of the
requested Revolving Loans will then be made available to the Borrower
by the Administrative Agent by crediting the account of the Borrower on
the books of such office of the Administrative Agent, to the extent the
amount of such Revolving Loans are made available to the Administrative
Agent.
No Lender shall be responsible for the failure or delay by any
other Lender in its obligation to make Revolving Loans hereunder;
provided, however, that the failure of any Lender to fulfill its
obligations hereunder shall not relieve any other Lender of its
obligations hereunder. Unless the Administrative Agent shall have been
notified by any Lender prior to the date of any such Revolving Loan
that such Lender does not intend to make available to the
Administrative Agent its portion of the Revolving Loans to be made on
such date, the Administrative Agent may assume that such Lender has
made such amount available to the Administrative Agent on the date of
such Revolving Loans, and the Administrative Agent in reliance upon
such assumption, may (in its sole discretion but without any obligation
to do so) make available to the Borrower a corresponding amount. If
such corresponding amount is not in fact made available to the
Administrative Agent, the Administrative Agent shall be able to recover
such corresponding amount from such Lender. If such Lender does not pay
such corresponding amount forthwith upon the Administrative Agent's
demand therefor, the Administrative Agent will promptly notify the
Borrower, and the Borrower shall immediately pay such corresponding
amount to the Administrative Agent. The Administrative Agent shall also
be entitled to recover from the Lender or the Borrower, as the case may
be, interest on such corresponding amount in respect of each day from
the date such corresponding amount was made available by the
Administrative Agent to the Borrower to the date such corresponding
amount is recovered by the Administrative Agent at a per annum rate
equal to (i) from the Borrower at the applicable rate for such
Revolving Loan pursuant to the Notice of Borrowing and (ii) from a
Lender at the Federal Funds Rate.
(d) Continuations and Conversions. Upon receipt of a Notice of
Continuation/Conversion, the Administrative Agent shall promptly inform
the Lenders as to the terms thereof. Subject to the terms of Section
5.2, the Borrower shall have the option, on any Business Day, to
continue existing Eurodollar Loans for a subsequent Interest Period, to
convert Base Rate Loans into Eurodollar Loans or to convert Eurodollar
Loans into Base
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Rate Loans; provided, however, that (i) each such continuation or
conversion must be requested by the Borrower pursuant to a written
Notice of Continuation/Conversion, in the form of Exhibit 2.1(d), in
compliance with the terms set forth below, (ii) except as provided in
Section 3.11, Eurodollar Loans may only be continued or converted into
Base Rate Loans on the last day of the Interest Period applicable
thereto, (iii) Eurodollar Loans may not be continued nor may Base Rate
Loans be converted into Eurodollar Loans during the existence and
continuation of a Default or Event of Default and (iv) any request to
continue a Eurodollar Loan that fails to comply with the terms hereof
or any failure to request a continuation of a Eurodollar Loan at the
end of an Interest Period shall constitute a conversion to a Base Rate
Loan on the last day of the applicable Interest Period. Each
continuation or conversion must be requested by the Borrower no later
than 11:00 a.m. (A) one Business Day prior to a requested conversion of
a Eurodollar Loan to a Base Rate Loan or (B) two Business Days prior to
the date for a requested continuation of a Eurodollar Loan or
conversion of a Base Rate Loan to a Eurodollar Loan, in each case
pursuant to a written Notice of Continuation/Conversion submitted to
the Administrative Agent.
(e) Minimum Amounts. Each request for a borrowing, conversion
or continuation shall be subject to the requirements that (i) each
Eurodollar Loan shall be in a minimum amount of $5,000,000 and in
integral multiples of $500,000 in excess thereof, (ii) each Base Rate
Loan shall be in a minimum amount of the lesser of $1,000,000 (and
integral multiples of $500,000 in excess thereof) or the remaining
amount available under the Revolving Committed Amount and (iii) no more
than ten Eurodollar Loans shall be outstanding hereunder at any one
time.
(f) Notes. The Revolving Loans made by each Lender shall be
evidenced by a duly executed promissory note of the Borrower to each
applicable Lender in the face amount of its Revolving Loan Commitment
Percentage of the Revolving Committed Amount in substantially the form
of Exhibit 2.1(f).
2.2 Letter of Credit Subfacility.
(a) Issuance. Subject to the terms and conditions hereof and
of the LOC Documents and any other terms and conditions which the
Issuing Lender may reasonably require (so long as such terms and
conditions do not impose any financial obligation on or require any
Lien (not otherwise contemplated by this Agreement) to be given by any
Credit Party or conflict with any obligation of, or detract from any
action which may be taken by, any Credit Party or their Subsidiaries
under this Agreement), the Issuing Lender shall from time to time upon
request issue (from the Effective Date to the Revolving Loan Maturity
Date and in a form reasonably acceptable to the Issuing Lender), in
Dollars, and the LOC Participants shall participate in, letters of
credit (the "Letters of Credit") for the account of the Borrower;
provided, however, that (i) the aggregate amount of LOC Obligations
shall not at any time exceed TEN MILLION DOLLARS ($10,000,000), (ii)
the sum of the aggregate amount of LOC Obligations outstanding plus
Revolving Loans outstanding shall not exceed the Revolving Committed
Amount and (iii) with respect to each individual LOC Participant, the
LOC Participant's pro rata share of outstanding Revolving Loans plus
its pro rata share of outstanding LOC Obligations shall not exceed such
LOC Participant's Revolving Loan
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Commitment Percentage of the Revolving Committed Amount. The issuance
and expiry date of each Letter of Credit shall be a Business Day.
Except as otherwise expressly agreed upon by all the LOC Participants,
no Letter of Credit shall have an expiry date extending beyond one
month prior to the Revolving Loan Maturity Date. Each Letter of Credit
shall be a standby letter of credit issued to support the obligations
(including pension or insurance obligations), contingent or otherwise,
of the Borrower.
(b) Notice and Reports. The request for the issuance of a
Letter of Credit shall be submitted to the Issuing Lender at least two
Business Days prior to the requested date of issuance. The Issuing
Lender will promptly notify the Administrative Agent (who shall then
promptly notify the Lenders) of a request for the issuance of a Letter
of Credit and will, at least quarterly and more frequently upon
request, provide to the Administrative Agent for dissemination to the
Lenders a detailed report specifying the Letters of Credit which are
then issued and outstanding and any activity with respect thereto which
may have occurred since the date of the prior report, and including
therein, among other things, the account party, the beneficiary, the
face amount, and the expiry date as well as any payments or expirations
which may have occurred. The Issuing Lender will further provide to the
Administrative Agent, promptly upon request, copies of the Letters of
Credit and the other LOC Documents.
(c) Participation. Each LOC Participant, upon issuance of a
Letter of Credit, shall be deemed to have purchased without recourse a
risk participation from the Issuing Lender in such Letter of Credit and
each LOC Document related thereto and the rights and obligations
arising thereunder and any collateral relating thereto, in each case in
an amount equal to its Revolving Loan Commitment Percentage of the
obligations under such Letter of Credit, and shall absolutely,
unconditionally and irrevocably assume, as primary obligor and not as
surety, and be obligated to pay to the Issuing Lender therefor and
discharge when due, its Revolving Loan Commitment Percentage of the
obligations arising under such Letter of Credit. Without limiting the
scope and nature of each LOC Participant's participation in any Letter
of Credit, to the extent that the Issuing Lender has not been
reimbursed as required hereunder or under any such Letter of Credit,
each such LOC Participant shall pay to the Issuing Lender its Revolving
Loan Commitment Percentage of such unreimbursed drawing in same day
funds on the day of notification by the Issuing Lender of an
unreimbursed drawing pursuant to the provisions of subsection (d)
hereof. The obligation of each LOC Participant to so reimburse the
Issuing Lender shall be absolute and unconditional and shall not be
affected by the occurrence of a Default, an Event of Default or any
other occurrence or event. Any such reimbursement shall not relieve or
otherwise impair the obligation of the Borrower or any other Credit
Party to reimburse the Issuing Lender under any Letter of Credit,
together with interest as hereinafter provided.
(d) Reimbursement. In the event of any drawing under any
Letter of Credit, the Issuing Lender will promptly notify the Borrower.
Unless the Borrower shall immediately notify the Issuing Lender of its
intent to otherwise reimburse the Issuing Lender, the Borrower shall be
deemed to have requested a Revolving Loan at the Adjusted Base Rate in
the amount of the drawing as provided in subsection (e) hereof, the
proceeds of which will be used to satisfy the reimbursement
obligations. The Borrower shall reimburse the Issuing Lender (by
payment through the Administrative Agent) on the day of drawing under
any
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Letter of Credit either with the proceeds of a Revolving Loan
obtained hereunder or otherwise in same day funds as provided herein or
in the LOC Documents. If the Borrower shall fail to reimburse the
Issuing Lender as provided hereinabove, the unreimbursed amount of such
drawing shall bear interest, for the benefit of the Lenders, at a per
annum rate equal to the Base Rate plus the Applicable Percentage for
the Base Rate Loans that are Revolving Loans plus two percent (2%). The
Borrower's reimbursement obligations hereunder shall be absolute and
unconditional under all circumstances irrespective of (but without
waiver of) any rights of set-off, counterclaim or defense to payment
the applicable account party or the Borrower may claim or have against
the Issuing Lender, the Agents, the Lenders, the beneficiary of the
Letter of Credit drawn upon or any other Person, including without
limitation, any defense based on any failure of the applicable account
party, the Borrower or any other Credit Party to receive consideration
or the legality, validity, regularity or unenforceability of the Letter
of Credit. The Issuing Lender will promptly notify the LOC Participants
of the amount of any unreimbursed drawing and each LOC Participant
shall promptly pay to the Administrative Agent for the account of the
Issuing Lender, in Dollars and in immediately available funds, the
amount of such LOC Participant's Revolving Loan Commitment Percentage
of such unreimbursed drawing. Such payment shall be made on the day
such notice is received by such LOC Participant from the Issuing Lender
if such notice is received at or before 1:00 p.m., otherwise such
payment shall be made at or before 12:00 Noon on the Business Day next
succeeding the day such notice is received. If such LOC Participant
does not pay such amount to the Issuing Lender in full upon such
request, such LOC Participant shall, on demand, pay to the
Administrative Agent for the account of the Issuing Lender interest on
the unpaid amount during the period from the date the LOC Participant
received the notice regarding the unreimbursed drawing until such LOC
Participant pays such amount to the Issuing Lender in full at a rate
per annum equal to, if paid within two Business Days of the date of
drawing, the Federal Funds Rate and thereafter at a rate equal to the
Base Rate. Each LOC Participant's obligation to make such payment to
the Issuing Lender, and the right of the Issuing Lender to receive the
same, shall be absolute and unconditional, shall not be affected by any
circumstance whatsoever and without regard to the termination of this
Credit Agreement or the Commitments hereunder, the existence of a
Default or Event of Default or the acceleration of the obligations
hereunder and shall be made without any offset, abatement, withholding
or reduction whatsoever. Simultaneously with the making of each such
payment by a LOC Participant to the Issuing Lender, such LOC
Participant shall, automatically and without any further action on the
part of the Issuing Lender or such LOC Participant, acquire a
participation in an amount equal to such payment (excluding the portion
of such payment constituting interest owing to the Issuing Lender) in
the related unreimbursed drawing portion of the LOC Obligation and in
the interest thereon and in the related LOC Documents, and shall have a
claim against the Borrower and the other Credit Parties with respect
thereto.
(e) Repayment with Revolving Loans. On any day on which the
Borrower shall have requested, or been deemed to have requested, a
Revolving Loan borrowing to reimburse a drawing under a Letter of
Credit, the Administrative Agent shall give notice to the Lenders that
a Revolving Loan has been requested or deemed requested in connection
with a drawing under a Letter of Credit, in which case a Revolving Loan
borrowing comprised solely of Base Rate Loans (each such borrowing, a
"Mandatory Borrowing") shall be immediately made
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from all applicable Lenders (without giving effect to any termination
of the Commitments pursuant to Section 9.2) pro rata based on each
Lender's respective Revolving Loan Commitment Percentage and the
proceeds thereof shall be paid directly to the Issuing Lender for
application to the respective LOC Obligations. Each such Lender hereby
irrevocably agrees to make such Revolving Loans immediately upon any
such request or deemed request on account of each such Mandatory
Borrowing in the amount and in the manner specified in the preceding
sentence and on the same such date notwithstanding (i) the amount of
Mandatory Borrowing may not comply with the minimum amount for
borrowings of Revolving Loans otherwise required hereunder, (ii)
whether any conditions specified in Section 5.2 are then satisfied,
(iii) whether a Default or Event of Default then exists, (iv) failure
of any such request or deemed request for Revolving Loans to be made by
the time otherwise required hereunder, (v) the date of such Mandatory
Borrowing, or (vi) any reduction in the Revolving Committed Amount or
any termination of the Commitments. In the event that any Mandatory
Borrowing cannot for any reason be made on the date otherwise required
above (including, without limitation, as a result of the commencement
of a proceeding under the Bankruptcy Code with respect to the Borrower
or any other Credit Party), then each such Lender hereby agrees that it
shall forthwith fund (as of the date the Mandatory Borrowing would
otherwise have occurred, but adjusted for any payments received from
the Borrower on or after such date and prior to such purchase) its
Participation Interest in the outstanding LOC Obligations; provided,
further, that in the event any Lender shall fail to fund its
Participation Interest on the day the Mandatory Borrowing would
otherwise have occurred, then the amount of such Lender's unfunded
Participation Interest therein shall bear interest payable to the
Issuing Lender upon demand, at the rate equal to, if paid within two
Business Days of such date, the Federal Funds Rate, and thereafter at a
rate equal to the Base Rate.
(f) Modification and Extension. The issuance of any
supplement, modification, amendment, renewal, or extensions to any
Letter of Credit shall, for purposes hereof, be treated in all respects
the same as the issuance of a new Letter of Credit hereunder.
(g) Uniform Customs and Practices. The Issuing Lender shall
have the Letters of Credit be subject to either the Uniform Commercial
Code in the applicable jurisdiction or The Uniform Customs and Practice
for Documentary Credits, as published as of the date of issue by the
International Chamber of Commerce (Publication No. 500 or the most
recent publication, the "UCP"), in which case the UCP may be
incorporated therein and deemed in all respects to be a part thereof,
and the Issuing Lender shall act in conformance therewith.
(h) Responsibility of Issuing Lender. It is expressly
understood and agreed as between the Lenders that the obligations of
the Issuing Lender hereunder to the LOC Participants are only those
expressly set forth in this Credit Agreement and that the Issuing
Lender shall be entitled to assume that the conditions precedent set
forth in Section 5 have been satisfied unless it shall have acquired
actual knowledge that any such condition precedent has not been
satisfied; provided, however, that nothing set forth in this Section
2.2 shall be deemed to prejudice the right of any LOC Participant to
recover from the Issuing Lender any amounts made available by such LOC
Participant to the Issuing Lender pursuant to this Section 2.2 in the
event that it is determined by a court of competent jurisdiction that
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the payment with respect to a Letter of Credit constituted gross
negligence or willful misconduct on the part of the Issuing Lender.
(i) Conflict with LOC Documents. In the event of any conflict
between this Credit Agreement and any LOC Document, this Credit
Agreement shall govern.
(j) Indemnification of Issuing Lender.
(i) In addition to its other obligations under
this Credit Agreement, the Borrower hereby agrees to protect,
indemnify, pay and save the Issuing Lender and each LOC
Participant harmless from and against any and all claims,
demands, liabilities, damages, losses, costs, charges and
expenses (including reasonable attorneys' fees) that the
Issuing Lender and each LOC Participant may incur or be
subject to as a consequence, direct or indirect, of (A) the
issuance of any Letter of Credit or (B) the failure of the
Issuing Lender to honor a drawing under a Letter of Credit as
a result of any act or omission, whether rightful or wrongful,
of any present or future de jure or de facto government or
governmental authority (all such acts or omissions, herein
called "Government Acts") including, without limitation, due
to failure of the applicable account party, the Borrower or
any Credit Party to receive consideration or the legality,
validity, regularity or unenforceability of a Letter of
Credit.
(ii) As between the Borrower and the Issuing
Lender, the Borrower shall assume all risks of the acts,
omissions or misuse of any Letter of Credit by the beneficiary
thereof. The Issuing Lender shall not be responsible for
(except in the case of (A), (B) and (C) below if the Issuing
Lender has actual knowledge to the contrary): (A) the form,
validity, sufficiency, accuracy, genuineness or legal effect
of any document submitted by any party in connection with the
application for and issuance of any Letter of Credit, even if
it should in fact prove to be in any or all respects invalid,
insufficient, inaccurate, fraudulent or forged; (B) the
validity or sufficiency of any instrument transferring or
assigning or purporting to transfer or assign any Letter of
Credit or the rights or benefits thereunder or proceeds
thereof, in whole or in part, that may prove to be invalid or
ineffective for any reason; (C) failure of the beneficiary of
a Letter of Credit to comply fully with conditions required in
order to draw upon a Letter of Credit; (D) errors, omissions,
interruptions or delays in transmission or delivery of any
messages, by mail, cable, telegraph, telex or otherwise,
whether or not they be in cipher; (E) errors in interpretation
of technical terms; (F) any loss or delay in the transmission
or otherwise of any document required in order to make a
drawing under a Letter of Credit or of the proceeds thereof;
and (G) any consequences arising from causes beyond the
control of the Issuing Lender, including, without limitation,
any Government Acts. None of the above shall affect, impair,
or prevent the vesting of the Issuing Lender's rights or
powers hereunder.
(iii) In furtherance and extension and not in
limitation of the specific provisions hereinabove set forth,
any action taken or omitted by the Issuing Lender, under or in
connection with any Letter of Credit or the related
certificates,
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if taken or omitted in good faith, shall not put the Issuing
Lender under any resulting liability to the Borrower or any
other Credit Party. It is the intention of the parties that
this Credit Agreement shall be construed and applied to
protect and indemnify the Issuing Lender against any and all
risks involved in the issuance of the Letters of Credit, all
of which risks are hereby assumed by the Borrower, including,
without limitation, any and all risks of the acts or
omissions, whether rightful or wrongful, of any present or
future Government Acts. The Issuing Lender shall not, in any
way, be liable for any failure by the Issuing Lender or anyone
else to pay any drawing under any Letter of Credit as a result
of any Government Acts or any other cause beyond the control
of the Issuing Lender.
(iv) Nothing in this subsection (j) is intended
to limit the reimbursement obligation of the Borrower
contained in this Section 2.2. The obligations of the Borrower
under this subsection (j) shall survive the termination of
this Credit Agreement. No act or omission of any current or
prior beneficiary of a Letter of Credit shall in any way
affect or impair the rights of the Issuing Lender to enforce
any right, power or benefit under this Credit Agreement.
(v) Notwithstanding anything to the contrary
contained in this subsection (j), the Borrower shall have no
obligation to indemnify the Issuing Lender in respect of any
liability incurred by the Issuing Lender arising solely out of
the gross negligence or willful misconduct of the Issuing
Lender, as determined by a court of competent jurisdiction.
Nothing in this Agreement shall relieve the Issuing Lender of
any liability to the Borrower in respect of any action taken
by the Issuing Lender which action constitutes gross
negligence or willful misconduct of the Issuing Lender or a
violation of the UCP or Uniform Commercial Code (as
applicable), as determined by a court of competent
jurisdiction.
SECTION 3
GENERAL PROVISIONS APPLICABLE TO LOANS AND LETTERS OF CREDIT
3.1 Interest.
(a) Interest Rate. All Base Rate Loans shall accrue interest
at the Adjusted Base Rate and all Eurodollar Loans shall accrue
interest at the Adjusted Eurodollar Rate.
(b) Default Rate of Interest. Upon the occurrence, and during
the continuance, of an Event of Default, the principal of and, to the
extent permitted by law, interest on the Loans and any other amounts
owing hereunder or under the other Credit Documents (including without
limitation fees and expenses) shall bear interest, payable on demand,
at a per annum rate equal to 4% plus the rate which would otherwise be
applicable (or if no rate is applicable, then the rate for Revolving
Loans that are Base Rate Loans plus four percent (4%) per annum).
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(c) Late Charges. In the event any payment of interest or
principal is delinquent more than fifteen (15) days, the Borrower will
pay to the Administrative Agent for the benefit of the Lenders a late
charge of four percent (4%) of the amount of the overdue payment. This
provision for late charges shall not be deemed to extend the time for
payment or be a "grace period" or "cure period" that gives the Borrower
a right to cure a Default or Event of Default. Imposition of such late
charges is not contingent upon giving of any notice or the lapse of any
cure period provided for in the Credit Agreement.
(d) Interest Payments. Interest on Loans shall be due and
payable in arrears on each Interest Payment Date. If an Interest
Payment Date falls on a date which is not a Business Day, such Interest
Payment Date shall be deemed to be the next succeeding Business Day,
except that in the case of Eurodollar Loans where the next succeeding
Business Day falls in the next succeeding calendar month, then on the
next preceding Business Day.
3.2 Place and Manner of Payments. All payments of principal, interest,
fees, expenses and other amounts to be made by a Credit Party under this
Agreement shall be received not later than 12:00 noon on the date when due, in
Dollars and in immediately available funds, by the Administrative Agent at its
offices in Charlotte, North Carolina. Payments received after such time shall be
deemed to have been received on the next Business Day. The Borrower shall, at
the time it makes any payment under this Agreement, specify to the
Administrative Agent, the Loans, Letters of Credit, fees or other amounts
payable by the Borrower hereunder to which such payment is to be applied (and in
the event that it fails to specify, or if such application would be inconsistent
with the terms hereof, the Administrative Agent shall, subject to Section 3.7,
distribute such payment to the Lenders in such manner as the Administrative
Agent may deem appropriate). The Administrative Agent will distribute such
payments to the Lenders on the date received if any such payment is received
prior to 12:00 p.m.; otherwise the Administrative Agent will distribute such
payment to the Lenders on the next succeeding Business Day. Whenever any payment
hereunder shall be stated to be due on a day which is not a Business Day, the
due date thereof shall be extended to the next succeeding Business Day (subject
to accrual of interest and fees for the period of such extension), except that
in the case of Eurodollar Loans, if the extension would cause the payment to be
made in the next following calendar month, then such payment shall instead be
made on the next preceding Business Day. If the Administrative Agent fails to
timely forward payment to a Lender it shall pay such Lender interest at the
Federal Funds Rate until such payment is made.
3.3 Prepayments.
(a) Voluntary Prepayments. The Borrower shall have the right
to prepay Loans in whole or in part from time to time without premium
or penalty; provided, however, that (i) Eurodollar Loans may only be
prepaid on two Business Days' prior written notice to the
Administrative Agent and any prepayment of Eurodollar Loans will be
subject to Section 3.14 and (ii) each such partial prepayment of Loans
shall be in the minimum principal amount of $100,000 and integral
multiples of $100,000 in excess thereof.
(b) Mandatory Prepayments. If at any time the sum of the
aggregate amount of Revolving Loans outstanding plus LOC Obligations
outstanding exceeds the Revolving Committed Amount, the Borrower shall
immediately make a principal payment to the
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Administrative Agent in the manner and in an amount necessary to be in
compliance with Section 2.1.
(c) Application of Prepayments. All amounts required to be
paid pursuant to Section 3.3(b) shall be applied first to Revolving
Loans. If the amount required to be paid under Section 3.3(b) exceeds
the aggregate amount of Revolving Loans outstanding,such excess shall
be applied second to the Cash Collateral Account in respect of LOC
Obligations. All prepayments hereunder shall be subject to Section
3.14.
3.4 Fees.
(a) Unused Fees. In consideration of the Revolving Committed
Amount being made available by the Lenders hereunder, the Borrower
agrees to pay to the Administrative Agent, for the pro rata benefit of
each applicable Lender (based on each Lender's Revolving Loan
Percentage of the Revolving Committed Amount), a fee equal to the
Unused Fee Percentage on the Unused Commitment (the "Unused Fees"). The
accrued Unused Fees shall commence to accrue on the Effective Date,
shall be calculated as of the last day of each March, June, September
and December and shall be due and payable in arrears on each April 15,
July 15, October 15 and January 15 (as well as on the Revolving Loan
Maturity Date and on any date that the Revolving Committed Amount is
reduced) for the immediately preceding calendar quarter (or portion
thereof), beginning with the first of such dates to occur after the
Closing Date.
(b) Letter of Credit Fees.
(i) Letter of Credit Fee. In consideration of
the issuance of Letters of Credit hereunder, the Borrower
agrees to pay to the Issuing Lender for the pro rata benefit
of the applicable Lenders (based on each Lender's Revolving
Loan Commitment Percentage of the Revolving Committed Amount),
a fee (the "Letter of Credit Fee") equal to the Applicable
Percentage for the Letter of Credit Fee on the average daily
maximum amount available to be drawn under each such Letter of
Credit from the date of issuance to the date of expiration.
The Letter of Credit Fee will be payable in arrears on each
April 15, July 15, October 15 and January 15 (as well as on
the Revolving Loan Maturity Date) for the immediately
preceding calendar quarter (or portion thereof), beginning
with the first of such dates to occur after the Closing Date.
(ii) Issuing Lender Fees. In addition to the
Letter of Credit Fees payable pursuant to subsection (i)
above, the Borrower shall pay to the Issuing Lender for its
own account, without sharing by the other Lenders, (A) a fee
equal to one-fourth of one percent (.25%) per annum on the
total sum of all Letters of Credit issued by the Issuing
Lender, such fee to be paid when the Letter of Credit is
issued and (B) the customary charges from time to time to the
Issuing Lender for its services in connection with the
issuance, amendment, payment, transfer, administration,
cancellation and conversion of, and drawings under, such
Letters of Credit (collectively, the "Issuing Lender Fees").
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(c) Administrative Fees. The Borrower agrees to pay to the
Administrative Agent, for its own account, an annual fee as agreed to
between the Borrower and the Administrative Agent in the Fee Letter.
3.5 Payment in full at Maturity. On the Revolving Loan Maturity Date,
the entire outstanding principal balance of all Revolving Loans and all LOC
Obligations, together with accrued but unpaid interest and all other sums owing
with respect thereto, shall be due and payable in full, unless accelerated
sooner pursuant to Section 9.
3.6 Computations of Interest and Fees.
(a) All computations of interest and fees hereunder shall be
made on the basis of the actual number of days elapsed over a year of
360 days. Interest shall accrue from and include the date of borrowing
(or continuation or conversion) but exclude the date of payment.
(b) It is the intent of the Lenders and the Credit Parties to
conform to and contract in strict compliance with applicable usury law
from time to time in effect. All agreements between the Lenders and the
Borrower are hereby limited by the provisions of this paragraph which
shall override and control all such agreements, whether now existing or
hereafter arising and whether written or oral. In no way, nor in any
event or contingency (including but not limited to prepayment or
acceleration of the maturity of any obligation), shall the interest
taken, reserved, contracted for, charged, or received under this Credit
Agreement, under the Notes or otherwise, exceed the maximum nonusurious
amount permissible under applicable law. If, from any possible
construction of any of the Credit Documents or any other document,
interest would otherwise be payable in excess of the maximum
nonusurious amount, any such construction shall be subject to the
provisions of this paragraph and such documents shall be automatically
reduced to the maximum nonusurious amount permitted under applicable
law, without the necessity of execution of any amendment or new
document. If any Lender shall ever receive anything of value which is
characterized as interest on the Loans under applicable law and which
would, apart from this provision, be in excess of the maximum lawful
amount, an amount equal to the amount which would have been excessive
interest shall, without penalty, be applied to the reduction of the
principal amount owing on the Loans and not to the payment of interest,
or refunded to the Borrower or the other payor thereof if and to the
extent such amount which would have been excessive exceeds such unpaid
principal amount of the Loans. The right to demand payment of the Loans
or any other indebtedness evidenced by any of the Credit Documents does
not include the right to receive any interest which has not otherwise
accrued on the date of such demand, and the Lenders do not intend to
charge or receive any unearned interest in the event of such demand.
All interest paid or agreed to be paid to the Lenders with respect to
the Loans shall, to the extent permitted by applicable law, be
amortized, prorated, allocated, and spread throughout the full stated
term (including any renewal or extension) of the Loans so that the
amount of interest on account of such indebtedness does not exceed the
maximum nonusurious amount permitted by applicable law.
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3.7 Pro Rata Treatment. Except to the extent otherwise provided herein:
(a) Loans. Each Revolving Loan borrowing (including, without
limitation, each Mandatory Borrowing), each payment or prepayment of
principal and/or interest of any Loan, each payment of fees (other than
the Issuing Lender Fees retained by the Issuing Lender for its own
account and the Administrative Fees retained by the Administrative
Agent for its own account), each reduction of the Revolving Committed
Amount, and each conversion or continuation of any Loan, shall (except
as otherwise provided in Section 3.11) be allocated pro rata among the
relevant Lenders in accordance with the respective Revolving Loan
Commitment Percentages of such Lenders (or, if the Commitments of such
Lenders have expired or been terminated, in accordance with the
respective principal amounts of the outstanding Loans and Participation
Interests of such Lenders); provided that, if any Lender shall have
failed to pay its applicable pro rata share of any Revolving Loan, then
any amount to which such Lender would otherwise be entitled pursuant to
this subsection (a) shall instead be payable to the Administrative
Agent until the share of such Loan not funded by such Lender has been
repaid; provided further, that in the event any amount paid to any
Lender pursuant to this subsection (a) is rescinded or must otherwise
be returned by the Administrative Agent, each Lender shall, upon the
request of the Administrative Agent, repay to the Administrative Agent
the amount so paid to such Lender, with interest for the period
commencing on the date such payment is returned by the Administrative
Agent until the date the Administrative Agent receives such repayment
at a rate per annum equal to, during the period to but excluding the
date two Business Days after such request, the Federal Funds Rate, and
thereafter, the Base Rate plus two percent (2%) per annum; and
(b) Letters of Credit. Each payment of unreimbursed drawings
in respect of LOC Obligations shall be allocated to each LOC
Participant pro rata in accordance with its Revolving Loan Commitment
Percentage; provided that, if any LOC Participant shall have failed to
pay its applicable pro rata share of any drawing under any Letter of
Credit, then any amount to which such LOC Participant would otherwise
be entitled pursuant to this subsection (b) shall instead be payable to
the Issuing Lender until the share of such unreimbursed drawing not
funded by such Lender has been repaid; provided further, that in the
event any amount paid to any LOC Participant pursuant to this
subsection (b) is rescinded or must otherwise be returned by the
Issuing Lender, each LOC Participant shall, upon the request of the
Issuing Lender, repay to the Administrative Agent for the account of
the Issuing Lender the amount so paid to such LOC Participant, with
interest for the period commencing on the date such payment is returned
by the Issuing Lender until the date the Issuing Lender receives such
repayment at a rate per annum equal to, during the period to but
excluding the date two Business Days after such request, the Federal
Funds Rate, and thereafter, the Base Rate plus two percent (2%) per
annum.
3.8 Sharing of Payments. The Lenders agree among themselves that,
except to the extent otherwise provided herein, in the event that any Lender
shall obtain payment in respect of any Loan, unreimbursed drawing with respect
to any LOC Obligations or any other obligation owing to such Lender under this
Credit Agreement through the exercise of a right of setoff, banker's lien or
counterclaim, or pursuant to a secured claim under Section 506 of the Bankruptcy
Code or other security or interest arising from, or in lieu of, such secured
claim, received by such Lender under any
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applicable bankruptcy, insolvency or other similar law or otherwise, or by any
other means, in excess of its pro rata share of such payment as provided for in
this Credit Agreement, such Lender shall promptly pay in cash or purchase from
the other Lenders a participation in such Loans, LOC Obligations, and other
obligations in such amounts, and make such other adjustments from time to time,
as shall be equitable to the end that all Lenders share such payment in
accordance with their respective ratable shares as provided for in this Credit
Agreement. The Lenders further agree among themselves that if payment to a
Lender obtained by such Lender through the exercise of a right of setoff,
banker's lien, counterclaim or other event as aforesaid shall be rescinded or
must otherwise be restored, each Lender which shall have shared the benefit of
such payment shall, by payment in cash or a repurchase of a participation
theretofore sold, return its share of that benefit (together with its share of
any accrued interest payable with respect thereto) to each Lender whose payment
shall have been rescinded or otherwise restored. The Borrower agrees that any
Lender so purchasing such a participation may, to the fullest extent permitted
by law, exercise all rights of payment, including setoff, banker's lien or
counterclaim, with respect to such participation as fully as if such Lender were
a holder of such Loan, LOC Obligation or other obligation in the amount of such
participation. Except as otherwise expressly provided in this Credit Agreement,
if any Lender or an Agent shall fail to remit to an Agent or any other Lender an
amount payable by such Lender or such Agent to such Agent or such other Lender
pursuant to this Credit Agreement on the date when such amount is due, such
payments shall be made together with interest thereon for each date from the
date such amount is due until the date such amount is paid to such Agent or such
other Lender at a rate per annum equal to the Federal Funds Rate. If under any
applicable bankruptcy, insolvency or other similar law, any Lender receives a
secured claim in lieu of a setoff to which this Section 3.8 applies, such Lender
shall, to the extent practicable, exercise its rights in respect of such secured
claim in a manner consistent with the rights of the Lenders under this Section
3.8 to share in the benefits of any recovery on such secured claim.
3.9 Capital Adequacy. If, after the date hereof, any Lender has
determined that the adoption or the becoming effective of, or any change in, or
any change by any Governmental Authority, central bank or comparable agency
charged with the interpretation or administration thereof in the interpretation
or administration of, any applicable law, rule or regulation regarding capital
adequacy, or compliance by such Lender, or its parent corporation, with any
request or directive regarding capital adequacy (whether or not having the force
of law) of any such authority, central bank or comparable agency, has or would
have the effect of reducing the rate of return on such Lender's (or parent
corporation's) capital or assets as a consequence of its commitments or
obligations hereunder to a level below that which such Lender, or its parent
corporation, could have achieved but for such adoption, effectiveness, change or
compliance (taking into consideration such Lender's (or parent corporation's)
policies with respect to capital adequacy), then, upon notice from such Lender
to the Borrower, the Borrower shall be obligated to pay to such Lender such
additional amount or amounts as will compensate such Lender on an after-tax
basis (after taking into account applicable deductions and credits in respect of
the amount indemnified) for such reduction. Each determination by any such
Lender of amounts owing under this Section shall, absent manifest error, be
conclusive and binding on the parties hereto. This covenant shall survive the
termination of this Credit Agreement and the payment of the Loans and all other
amounts payable hereunder.
3.10 Inability To Determine Eurodollar Rate. If prior to the first day
of any Interest Period, the Administrative Agent shall have determined in good
faith (which determination shall be conclusive
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and binding upon the Borrower) that, by reason of circumstances affecting the
relevant market, adequate and reasonable means do not exist for ascertaining the
Eurodollar Rate for such Interest Period, the Administrative Agent shall give
telecopy or telephonic notice thereof to the Borrower and the Lenders as soon as
practicable thereafter, and will also give prompt written notice to the Borrower
when such conditions no longer exist. If such notice is given (a) any Eurodollar
Loans requested to be made on the first day of such Interest Period shall be
made as Base Rate Loans, (b) any Loans that were to have been converted on the
first day of such Interest Period to or continued as Eurodollar Loans shall be
converted to or continued as Base Rate Loans and (c) any outstanding Eurodollar
Loans shall be converted, on the first day of such Interest Period, to Base Rate
Loans. Until such notice has been withdrawn by the Administrative Agent, no
further Eurodollar Loans shall be made or continued as such, nor shall the
Borrower have the right to convert Base Rate Loans to Eurodollar Loans.
3.11 Illegality to Make Eurodollar Loans. Notwithstanding any other
provision herein, if the adoption of or any change in any Requirement of Law or
in the interpretation or application thereof occurring after the Closing Date
shall make it unlawful for any Lender to make or maintain Eurodollar Loans as
contemplated by this Credit Agreement, (a) such Lender shall promptly give
written notice of such circumstances to the Borrower and the Administrative
Agent (which notice shall be withdrawn whenever such circumstances no longer
exist), (b) the commitment of such Lender hereunder to make Eurodollar Loans,
continue Eurodollar Loans as such and convert a Base Rate Loan to Eurodollar
Loans shall forthwith be canceled and, until such time as it shall no longer be
unlawful for such Lender to make or maintain Eurodollar Loans, such Lender shall
then have a commitment only to make a Base Rate Loan when a Eurodollar Loan is
requested and (c) such Lender's Loans then outstanding as Eurodollar Loans, if
any, shall be converted automatically to Base Rate Loans on the respective last
days or the then current Interest Periods with respect to such Loans or within
such earlier period as required by law. If any such conversion of a Eurodollar
Loan occurs on a day which is not the last day of the then current Interest
Period with respect thereto, the Borrower shall pay to such Lender such amounts,
if any, as may be required pursuant to Section 3.14.
3.12 Changes in Requirements of Law. If the adoption of or any change
in any Requirement of Law or in the interpretation or application thereof
applicable to any Lender, or compliance by any Lender with any request or
directive (whether or not having the force of law) from any central bank or
other Governmental Authority, in each case made subsequent to the Closing Date
(or, if later, the date on which such Lender becomes a Lender):
(a) shall subject such Lender to any tax of any kind
whatsoever with respect to any Letter of Credit, any Eurodollar Loans
made by it or its obligation to make Eurodollar Loans, or change the
basis of taxation of payments to such Lender in respect thereof (except
for Non-Excluded Taxes covered by Section 3.13 (including Non- Excluded
Taxes imposed solely by reason of any failure of such Lender to comply
with its obligations under Section 3.13(b)) and changes in taxes
measured by or imposed upon the overall net income, or franchise tax
(imposed in lieu of such net income tax), of such Lender or its
applicable lending office, branch, or any affiliate thereof);
(b) shall impose, modify or hold applicable any reserve,
special deposit, compulsory loan or similar requirement against assets
held by, deposits or other liabilities in
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or for the account of, advances, loans or other extensions of credit
by, or any other acquisition of funds by, any office of such Lender
which is not otherwise included in the determination of the Eurodollar
Rate hereunder; or
(c) shall impose on such Lender any other condition (excluding
any tax of any kind whatsoever);
and the result of any of the foregoing is to increase the cost to such Lender,
by an amount which such Lender deems to be material, of making, converting into,
continuing or maintaining Eurodollar Loans or issuing or participating in
Letters of Credit or to reduce any amount receivable hereunder in respect
thereof, then, in any such case, upon notice to the Borrower from such Lender,
through the Administrative Agent, in accordance herewith, the Borrower shall be
obligated to promptly pay such Lender, upon its demand, any additional amounts
necessary to compensate such Lender on an after-tax basis (after taking into
account applicable deductions and credits in respect of the amount indemnified)
for such increased cost or reduced amount receivable, provided that, in any such
case, the Borrower may elect to convert the Eurodollar Loans made by such Lender
hereunder to Base Rate Loans by giving the Administrative Agent at least one
Business Day's notice of such election, in which case the Borrower shall
promptly pay to such Lender, upon demand, without duplication, such amounts, if
any, as may be required pursuant to Section 3.14. If any Lender becomes entitled
to claim any additional amounts pursuant to this Section 3.12, it shall provide
prompt notice thereof to the Borrower, through the Administrative Agent,
certifying (x) that one of the events described in this Section 3.12 has
occurred and describing in reasonable detail the nature of such event, (y) as to
the increased cost or reduced amount resulting from such event and (z) as to the
additional amount demanded by such Lender and a reasonably detailed explanation
of the calculation thereof. Such a certificate as to any additional amounts
payable pursuant to this Section 3.12 submitted by such Lender, through the
Administrative Agent, to the Borrower shall be conclusive and binding on the
parties hereto in the absence of manifest error. This covenant shall survive the
termination of this Credit Agreement and the payment of the Loans and all other
amounts payable hereunder.
3.13 Taxes.
(a) Except as provided below in this Section 3.13, all
payments made by the Borrower under this Credit Agreement and any Notes
shall be made free and clear of, and without deduction or withholding
for or on account of, any present or future income, stamp or other
taxes, levies, imposts, duties, charges, fees, deductions or
withholdings, now or hereafter imposed, levied, collected, withheld or
assessed by any court, or governmental body, agency or other official,
excluding taxes measured by or imposed upon the overall net income of
any Lender or its applicable lending office, or any branch or affiliate
thereof, and all franchise taxes, branch taxes, taxes on doing business
or taxes on the overall capital or net worth of any Lender or its
applicable lending office, or any branch or affiliate thereof, in each
case imposed in lieu of net income taxes: (i) by the jurisdiction under
the laws of which such Lender, applicable lending office, branch or
affiliate is organized or is located, or in which its principal
executive office is located, or any nation within which such
jurisdiction is located or any political subdivision thereof; or (ii)
by reason of any connection between the jurisdiction imposing such tax
and such Lender, applicable lending office, branch or affiliate other
than a connection arising solely from such Lender having executed,
delivered or performed its obligations, or received payment under or
enforced, this Credit Agreement or
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any Notes. If any such non-excluded taxes, levies, imposts, duties,
charges, fees, deductions or withholdings ("Non-Excluded Taxes") are
required to be withheld from any amounts payable to an Agent or any
Lender hereunder or under any Notes, (A) the amounts so payable to an
Agent or such Lender shall be increased to the extent necessary to
yield to an Agent or such Lender (after payment of all Non-Excluded
Taxes) interest or any such other amounts payable hereunder at the
rates or in the amounts specified in this Credit Agreement and any
Notes, provided, however, that the Borrower shall be entitled to deduct
and withhold any Non-Excluded Taxes and shall not be required to
increase any such amounts payable to any Lender that is not organized
under the laws of the United States of America or a state thereof if
such Lender fails to comply with the requirements of paragraph (b) of
this Section 3.13 whenever any Non-Excluded Taxes are payable by the
Borrower, and (B) as promptly as possible after requested the Borrower
shall send to such Agent for its own account or for the account of such
Lender, as the case may be, a certified copy of an original official
receipt received by the Borrower showing payment thereof. If the
Borrower fails to pay any Non-Excluded Taxes when due to the
appropriate taxing authority or fails to remit to the Administrative
Agent the required receipts or other required documentary evidence, the
Borrower shall indemnify the Agents and any Lender for any incremental
taxes, interest or penalties that may become payable by an Agent or any
Lender as a result of any such failure. The agreements in this
subsection shall survive the termination of this Credit Agreement and
the payment of the Loans and all other amounts payable hereunder.
(b) Each Lender that is not incorporated under the laws of the
United States of America or a state thereof shall:
(i) (A) on or before the date of any payment by the
Borrower under this Credit Agreement or Notes to such Lender,
deliver to the Borrower and the Administrative Agent (x) two
duly completed copies of United States Internal Revenue
Service Form 1001 or 4224, or successor applicable form, as
the case may be, certifying that it is entitled to receive
payments under this Credit Agreement and any Notes without
deduction or withholding of any United States federal income
taxes and (y) an Internal Revenue Service Form W-8 or W-9, or
successor applicable form, as the case may be, certifying that
it is entitled to an exemption from United States backup
withholding tax;
(B) deliver to the Borrower and the
Administrative Agent two further copies of any such form or
certification on or before the date that any such form or
certification expires or becomes obsolete and after the
occurrence of any event requiring a change in the most recent
form previously delivered by it to the Borrower; and
(C) obtain such extensions of time for
filing and complete such forms or certifications as may
reasonably be requested by the Borrower or the Administrative
Agent; or
(ii) in the case of any such Lender that is not
a "bank" within the meaning of Section 881(c)(3)(A) of the
Internal Revenue Code, (A) represent to the
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Borrower (for the benefit of the Borrower and the Agents) that
it is not a bank within the meaning of Section 881(c)(3)(A) of
the Internal Revenue Code, (B) agree to furnish to the
Borrower, on or before the date of any payment by the
Borrower, with a copy to the Administrative Agent, two
accurate and complete original signed copies of Internal
Revenue Service Form W-8, or successor applicable form
certifying to such Lender's legal entitlement at the date of
such certificate to an exemption from U.S. withholding tax
under the provisions of Section 881(c) of the Internal Revenue
Code with respect to payments to be made under this Credit
Agreement and any Notes (and to deliver to the Borrower and
the Administrative Agent two further copies of such form on or
before the date it expires or becomes obsolete and after the
occurrence of any event requiring a change in the most
recently provided form and, if necessary, obtain any
extensions of time reasonably requested by the Borrower or the
Administrative Agent for filing and completing such forms),
and (C) agree, to the extent legally entitled to do so, upon
reasonable request by the Borrower, to provide to the Borrower
(for the benefit of the Borrower and the Agents) such other
forms as may be reasonably required in order to establish the
legal entitlement of such Lender to an exemption from
withholding with respect to payments under this Credit
Agreement and any Notes.
Notwithstanding the above, if any change in treaty, law or regulation
has occurred after the date such Person becomes a Lender hereunder
which renders all such forms inapplicable or which would prevent such
Lender from duly completing and delivering any such form with respect
to it and such Lender so advises the Borrower and the Administrative
Agent then such Lender shall be exempt from such requirements. Each
Person that shall become a Lender or a participant of a Lender pursuant
to Section 11.3 shall, upon the effectiveness of the related transfer,
be required to provide all of the forms, certifications and statements
required pursuant to this subsection (b); provided that in the case of
a participant of a Lender, the obligations of such participant of a
Lender pursuant to this subsection (b) shall be determined as if the
participant of a Lender were a Lender except that such participant of a
Lender shall furnish all such required forms, certifications and
statements to the Lender from which the related participation shall
have been purchased.
3.14 Indemnity as to Eurodollar Loans. The Borrower promises to
indemnify each Lender and to hold each Lender harmless from any loss or expense
which such Lender may sustain or incur as a consequence of (a) default by the
Borrower in making a borrowing of, conversion into or continuation of Eurodollar
Loans after the Borrower has given a notice requesting the same in accordance
with the provisions of this Credit Agreement, (b) default by the Borrower in
making any prepayment of a Eurodollar Loan after the Borrower has given a notice
thereof in accordance with the provisions of this Credit Agreement and (c) the
making of a prepayment of Eurodollar Loans on a day which is not the last day of
an Interest Period with respect thereto. Such indemnification may include an
amount equal to (i) the amount of interest which would have accrued on the
amount so prepaid, or not so borrowed, converted or continued, for the period
from the date of such prepayment or of such failure to borrow, convert or
continue to the last day of the applicable Interest Period (or, in the case of a
failure to borrow, convert or continue, the Interest Period that would have
commenced on the date of such failure) in each case at the applicable rate of
interest for such Eurodollar Loans provided for herein (excluding, however, the
Applicable Percentage included
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therein, if any) minus (ii) the amount of interest (as reasonably determined by
such Lender) which would have accrued to such Lender on such amount by placing
such amount on deposit for a comparable period with leading banks in the
interbank Eurodollar market. The agreements in this Section shall survive the
termination of this Credit Agreement and the payment of the Loans and all other
amounts payable hereunder.
SECTION 4
GUARANTY
4.1 Guaranty of Payment. Subject to Section 4.7 below, each of the
Guarantors hereby, jointly and severally, unconditionally guarantees to each
Lender, each Affiliate of Lender that enters into a Hedging Agreement and the
Agents the prompt payment of the Credit Party Obligations in full when due
(whether at stated maturity, as a mandatory prepayment, by acceleration or
otherwise). The Guarantors additionally, jointly and severally, unconditionally
guarantee to each Lender, each Affiliate of a Lender that enters into a Hedging
Agreement and the Agents the timely performance of all other obligations under
the Credit Documents and the Hedging Agreements. This Guaranty is a guaranty of
payment and not of collection and is a continuing guaranty and shall apply to
all Credit Party Obligations whenever arising.
4.2 Obligations Unconditional. The obligations of the Guarantors
hereunder are absolute and unconditional, irrespective of the value,
genuineness, validity, regularity or enforceability of any of the Credit
Documents or the Hedging Agreements, or any other agreement or instrument
referred to therein, to the fullest extent permitted by applicable law,
irrespective of any other circumstance whatsoever which might otherwise
constitute a legal or equitable discharge or defense of a surety or guarantor.
Each Guarantor agrees that this Guaranty may be enforced by the Lenders without
the necessity at any time of resorting to or exhausting any other security or
collateral and without the necessity at any time of having recourse to the Notes
or any other of the Credit Documents or any collateral, if any, hereafter
securing the Credit Party Obligations or otherwise and each Guarantor hereby
waives the right (including, without limitation, any rights under Section 26-7
et seq. of North Carolina General Statutes) to require the Lenders to proceed
against the Borrower or any other Person (including a co-guarantor) or to
require the Lenders to pursue any other remedy or enforce any other right. Each
Guarantor further agrees that it shall have no right of subrogation, indemnity,
reimbursement or contribution against the Borrower or any other Guarantor of the
Credit Party Obligations for amounts paid under this Guaranty until such time as
the Lenders (and any Affiliates of Lenders entering into Hedging Agreements)
have been paid in full, all Commitments under the Credit Agreement have been
terminated and no Person or Governmental Authority shall have any right to
request any return or reimbursement of funds from the Lenders in connection with
monies received under the Credit Documents. Each Guarantor further agrees that
nothing contained herein shall prevent the Lenders from suing on the Notes or
any of the other Credit Documents or any of the Hedging Agreements or
foreclosing its security interest in or Lien on any collateral, if any, securing
the Credit Party Obligations or from exercising any other rights available to it
under this Credit Agreement, the Notes, any other of the Credit Documents, or
any other instrument of security, if any, and the exercise of any of the
aforesaid rights and the completion of any foreclosure proceedings shall not
constitute a discharge of any of any Guarantor's obligations hereunder; it being
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the purpose and intent of each Guarantor that its obligations hereunder shall be
absolute, independent and unconditional under any and all circumstances. Neither
any Guarantor's obligations under this Guaranty nor any remedy for the
enforcement thereof shall be impaired, modified, changed or released in any
manner whatsoever by an impairment, modification, change, release or limitation
of the liability of the Borrower or by reason of the bankruptcy or insolvency of
the Borrower. Each Guarantor waives any and all notice of the creation, renewal,
extension or accrual of any of the Credit Party Obligations and notice of or
proof of reliance of by any Agent or any Lender upon this Guarantee or
acceptance of this Guarantee. The Credit Party Obligations, and any of them,
shall conclusively be deemed to have been created, contracted or incurred, or
renewed, extended, amended or waived, in reliance upon this Guarantee. All
dealings between the Borrower and any of the Guarantors, on the one hand, and
the Agents and the Lenders, on the other hand, likewise shall be conclusively
presumed to have been had or consummated in reliance upon this Guarantee.
4.3 Modifications. Each Guarantor agrees that (a) all or any part of
the security now or hereafter held for the Credit Party Obligations, if any, may
be exchanged, compromised or surrendered from time to time; (b) the Lenders
shall not have any obligation to protect, perfect, secure or insure any such
security interests, liens or encumbrances now or hereafter held, if any, for the
Credit Party Obligations or the properties subject thereto; (c) the time or
place of payment of the Credit Party Obligations may be changed or extended, in
whole or in part, to a time certain or otherwise, and may be renewed or
accelerated, in whole or in part; (d) the Borrower and any other party liable
for payment under the Credit Documents may be granted indulgences generally; (e)
any of the provisions of the Notes or any of the other Credit Documents may be
modified, amended or waived; (f) any party (including any co-guarantor) liable
for the payment thereof may be granted indulgences or be released; and (g) any
deposit balance for the credit of the Borrower or any other party liable for the
payment of the Credit Party Obligations or liable upon any security therefor may
be released, in whole or in part, at, before or after the stated, extended or
accelerated maturity of the Credit Party Obligations, all without notice to or
further assent by such Guarantor, which shall remain bound thereon,
notwithstanding any such exchange, compromise, surrender, extension, renewal,
acceleration, modification, indulgence or release.
4.4 Waiver of Rights. Each Guarantor expressly waives to the fullest
extent permitted by applicable law: (a) notice of acceptance of this Guaranty by
the Lenders and of all extensions of credit to the Borrower by the Lenders; (b)
presentment and demand for payment or performance of any of the Credit Party
Obligations; (c) protest and notice of dishonor or of default (except as
specifically required in the Credit Agreement) with respect to the Credit Party
Obligations or with respect to any security therefor; (d) notice of the Lenders
obtaining, amending, substituting for, releasing, waiving or modifying any
security interest, lien or encumbrance, if any, hereafter securing the Credit
Party Obligations, or the Lenders' subordinating, compromising, discharging or
releasing such security interests, liens or encumbrances, if any; (e) all other
notices to which such Guarantor might otherwise be entitled; and (f) demand for
payment under this Guaranty.
4.5 Reinstatement. The obligations of the Guarantors under this Section
4 shall be automatically reinstated if and to the extent that for any reason any
payment by or on behalf of any Person in respect of the Credit Party Obligations
is rescinded or must be otherwise restored by any holder of any of the Credit
Party Obligations, whether as a result of any proceedings in bankruptcy or
reorganization or otherwise, and each Guarantor agrees that it will indemnify
the Agents and each
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Lender on demand for all reasonable costs and expenses (including, without
limitation, reasonable fees of counsel) incurred by an Agent or such Lender in
connection with such rescission or restoration, including any such costs and
expenses incurred in defending against any claim alleging that such payment
constituted a preference, fraudulent transfer or similar payment under any
bankruptcy, insolvency or similar law.
4.6 Remedies. The Guarantors agree that, as between the Guarantors, on
the one hand, and the Agents and the Lenders, on the other hand, the Credit
Party Obligations may be declared to be forthwith due and payable as provided in
Section 9 (and shall be deemed to have become automatically due and payable in
the circumstances provided in Section 9) notwithstanding any stay, injunction or
other prohibition preventing such declaration (or preventing such Credit Party
Obligations from becoming automatically due and payable) as against any other
Person and that, in the event of such declaration (or such Credit Party
Obligations being deemed to have become automatically due and payable), such
Credit Party Obligations (whether or not due and payable by any other Person)
shall forthwith become due and payable by the Guarantors.
4.7 Limitation of Guaranty. Notwithstanding any provision to the
contrary contained herein or in any of the other Credit Documents, to the extent
the obligations of any Guarantor shall be adjudicated to be invalid or
unenforceable for any reason (including, without limitation, because of any
applicable state or federal law relating to fraudulent conveyances or transfers)
then the obligations of such Guarantor hereunder shall be limited to the maximum
amount that is permissible under applicable law (whether federal or state and
including, without limitation, the Bankruptcy Code).
SECTION 5
CONDITIONS PRECEDENT
5.1 Closing Conditions. The obligation of the Lenders to enter into
this Credit Agreement and make the initial Extension of Credit is subject to
satisfaction of the following conditions:
(a) Executed Credit Documents. Receipt by the Agents of duly
executed copies of: (i) this Credit Agreement; (ii) the Notes; and
(iii) all other Credit Documents, each in form and substance reasonably
acceptable to the Agents in their sole discretion.
(b) Partnership Documents. Receipt by the Agents of the
following:
(i) Certificates of Authorization. Certificate
of authorization of the general partner of the Borrower (and
each other Credit Party that is a partnership) as of the
Effective Date, approving and adopting the Credit Documents to
be executed by the Borrower (or such other Credit Party) and
authorizing the execution and delivery thereof.
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(ii) Partnership Agreement. Certified copies of
the partnership agreement of the Borrower (and each other
Credit Party that is a partnership), together with all
amendments thereto.
(iii) Certificates of Good Standing or
Existence. Certificate of good standing or existence for the
Borrower (and each other Credit Party that is a partnership)
issued as of a recent date by its state of organization and
each other state where the failure to qualify or be in good
standing could have a Material Adverse Effect.
(c) Corporate Documents. Receipt by the Agents of the
following:
(i) Charter Documents. Copies of the articles
or certificates of incorporation or other charter documents of
Highwoods Properties (and each other Credit Party that is a
corporation) certified to be true and complete as of a recent
date by the appropriate Governmental Authority of the state or
other jurisdiction of its incorporation and certified by a
secretary or assistant secretary of Highwoods Properties (and
each other Credit Party that is a corporation) to be true and
correct as of the Effective Date.
(ii) Bylaws. A copy of the bylaws of Highwoods
Properties (and each other Credit Party that is a corporation)
certified by a secretary or assistant secretary of Highwoods
Properties to be true and correct as of the Effective Date.
(iii) Resolutions. Copies of resolutions of the
Board of Directors of Highwoods Properties (and each other
Credit Party that is a corporation) approving and adopting the
Credit Documents to which it is a party, the transactions
contemplated therein and authorizing execution and delivery
thereof, certified by a secretary or assistant secretary of
Highwoods Properties (and each other Credit Party that is a
corporation) to be true and correct and in force and effect as
of the Effective Date.
(iv) Good Standing. Copies of (A) certificates
of good standing, existence or its equivalent with respect to
Highwoods Properties (and each other Credit Party that is a
corporation) certified as of a recent date by the appropriate
Governmental Authorities of the state or other jurisdiction of
incorporation and each other jurisdiction in which the failure
to so qualify and be in good standing could have a Material
Adverse Effect and (B) to the extent available, a certificate
indicating payment of all corporate franchise taxes certified
as of a recent date by the appropriate governmental taxing
authorities.
(v) Incumbency. An incumbency certificate of
Highwoods Properties (and each other Credit Party that is a
corporation) certified by a secretary or assistant secretary
to be true and correct as of the Effective Date.
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(d) Financial Statements. Receipt by the Agents and the
Lenders of the audited consolidated financial statements of the Credit
Parties, dated as of December 31, 1995, and the unaudited consolidated
financial statements of the Credit Parties dated as of June 30, 1996.
(e) Opinion of Counsel. Receipt by the Agents of an opinion,
or opinions (which shall cover, among other things, authority,
legality, validity, binding effect, and enforceability), reasonably
satisfactory to the Agents, addressed to the Agents on behalf of the
Lenders and dated as of the Effective Date, from legal counsel to the
Credit Parties.
(f) Evidence of Insurance. Receipt by the Agents of copies of
insurance policies or certificates of insurance of the Credit Parties
evidencing liability and casualty insurance meeting the requirements
set forth in the Credit Documents, including, but not limited to,
naming the Administrative Agent as sole loss payee on behalf of the
Lenders.
(g) Material Adverse Effect. There shall not have occurred a
change since December 31, 1995 that has had or could reasonably be
expected to have a Material Adverse Effect.
(h) Litigation. There shall not exist any pending or
threatened action, suit, investigation or proceeding against a Credit
Party that would have or would reasonably be expected to have a
Material Adverse Effect.
(i) Officer's Certificates. The Agents shall have received a
certificate or certificates executed by the general partner of the
Borrower and the chief financial officer of the Highwoods Properties as
of the Effective Date stating that (i) each of the Borrower and
Highwoods Properties is in compliance with all existing material
financial obligations, (ii) no action, suit, investigation or
proceeding is pending or threatened in any court or before any
arbitrator or governmental instrumentality that purports to effect any
Credit Party or any transaction contemplated by the Credit Documents,
if such action, suit, investigation or proceeding could have or could
be reasonably expected to have a Material Adverse Effect, (iii) the
financial statements and information delivered pursuant to Section
5.1(d) are true and accurate in all material respects and (iv)
immediately after giving effect to this Credit Agreement, the other
Credit Documents and all the transactions contemplated therein to occur
on such date, (A) each Credit Party is Solvent, (B) no Default or Event
of Default exists, (C) all representations and warranties contained
herein and in the other Credit Documents are true and correct in all
material respects, and (D) the Credit Parties are in compliance with
each of the financial covenants set forth in Section 7.2 with evidence
to support such compliance in a manner satisfactory to the
Administrative Agent.
(j) Fees and Expenses. Payment by the Credit Parties of all
fees and expenses owed by them to the Lenders and the Agents,
including, without limitation, payment to the Agents of the fees set
forth in the Fee Letter.
(k) Existing Indebtedness. Evidence of payment in full and
termination of (i) that certain Loan Agreement, dated as of March 26,
1996, among the Borrower, Highwoods
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Properties, NationsBank, N.A., First Union National Bank of North
Carolina and Wachovia Bank of North Carolina (the "Existing Loan
Agreement") and (ii) that certain Promissory Note dated September 19,
1996 executed by the Borrower in favor of NationsBank, N.A., First
Union National Bank of North Carolina and Wachovia Bank of North
Carolina in the face amount of $30 million (the "Existing Note") and
all documents and instruments executed and/or delivered in connection
with the Existing Loan Agreement and the Existing Note.
(l) Acquisition of Crocker Realty. Evidence that the Credit
Parties have consummated the acquisition of all of the assets of
Crocker Realty Trust, Inc. on terms and conditions satisfactory to the
Agents.
(m) Other. Receipt by the Lenders of such other documents,
instruments, agreements or information as reasonably and timely
requested by any Lender, including, but not limited to, information
regarding litigation, tax, accounting, labor, insurance, pension
liabilities (actual or contingent), real estate leases, material
contracts, debt agreements, property ownership and contingent
liabilities of the Credit Parties.
5.2 Conditions to All Loans. In addition to the conditions precedent
stated elsewhere herein, the Lenders shall not be obligated to make Loans (or
continue or convert Loans) nor shall the Issuing Lender be required to issue or
extend a Letter of Credit unless:
(a) Notice. The Borrower shall have delivered (i) in the case
of any new Revolving Loan, a Notice of Borrowing, duly executed and
completed, by the time specified in Section 2.1 and (ii) in the case of
any Letter of Credit, the Issuing Lender shall have received an
appropriate request for issuance in accordance with the provisions of
Section 2.2;
(b) Representations and Warranties. The representations and
warranties made by the Credit Parties in any Credit Document are true
and correct in all material respects at and as if made as of such date
except to the extent they expressly relate to an earlier date;
(c) No Default. No Default or Event of Default shall exist or
be continuing either prior to or after giving effect thereto;
(d) No Material Adverse Effect. There shall not have occurred
any Material Adverse Effect;
(e) Availability. Immediately after giving effect to the
making of a Revolving Loan (and the application of the proceeds
thereof) or to the issuance of a Letter of Credit, as the case may be,
the sum of the Revolving Loans outstanding plus LOC Obligations
outstanding shall not exceed the Revolving Commitment Amount; and
(f) Total Liabilities to Market Capitalization. The ratio of
(i) Total Liabilities to (ii) Market Capitalization shall be less than
or equal to .45 to 1.0.
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The delivery of each Notice of Borrowing, each Notice of Continuation/Conversion
and each request for a Letter of Credit shall constitute a representation and
warranty by the Borrower of the correctness of the matters specified in
subsections (b), (c), (d), (e) and (f) above.
SECTION 6
REPRESENTATIONS AND WARRANTIES
The Credit Parties hereby represent to the Agents and each Lender that:
6.1 Financial Condition. The financial statements delivered to the
Lenders pursuant to Section 5.1(d) and Section 7.1(a) and (b): (a) have been
prepared in accordance with GAAP and (b) present fairly the consolidated
financial condition, results of operations and cash flows of the Credit Parties
as of such date and for such periods. Since December 31, 1995, there has been no
sale, transfer or other disposition by any Credit Party of any material part of
the business or property of any Credit Party and no purchase or other
acquisition by any of them of any business or property (including any capital
stock of any other Person) material in relation to the financial condition of
any Credit Party in each case, which, is not (i) reflected in the most recent
financial statements delivered to the Lenders pursuant to Section 7.1 or in the
notes thereto or (ii) otherwise communicated to the Agents.
6.2 Organization and Good Standing. Each Credit Party is either (a) a
limited partnership duly organized, validly existing and in good standing under
the laws of the State of its organization or (b) a corporation duly
incorporated, validly existing and in good standing under the laws of its
incorporation. Each Credit Party (a) is duly qualified and in good standing and
authorized to do business in every other jurisdiction where ownership of its
properties or the conduct of its business requires it to be so unless the
failure to be so qualified, in good standing or authorized would have a Material
Adverse Effect and (b) has the requisite corporate or partnership power and
authority to own its properties and to carry on its business as now conducted
and as proposed to be conducted.
6.3 Due Authorization. Each Credit Party (a) has the requisite
corporate or partnership power and authority to execute, deliver and perform
this Credit Agreement and the other Credit Documents to which it is a party and
to incur the obligations herein and therein provided for and (b) is duly
authorized to, and has been authorized by all necessary corporate or partnership
action, to execute, deliver and perform this Credit Agreement and the other
Credit Documents to which it is a party.
6.4 No Conflicts. Neither the execution and delivery of the Credit
Documents, nor the consummation of the transactions contemplated therein, nor
performance of and compliance with the terms and provisions thereof by such
Credit Party will (a) violate or conflict with any provision of, as applicable,
its articles or certificate of incorporation or bylaws or its partnership
agreement or certificate of limited partnership, (b) violate, contravene or
materially conflict with any Requirement of Law or any other law, regulation
(including, without limitation, Regulation U or Regulation X), order, writ,
judgment, injunction, decree or permit applicable to it, (c) violate, contravene
or conflict with contractual provisions of, or cause an event of default under,
any indenture, loan agreement,
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mortgage, deed of trust, contract or other agreement or instrument to which it
is a party or by which it may be bound, the violation of which could have or
might be reasonably expected to have a Material Adverse Effect, or (d) result
in or require the creation of any Lien upon or with respect to its properties.
6.5 Consents. No consent, approval, authorization or order of, or
filing, registration or qualification with, any court or Governmental Authority
or third party in respect of any Credit Party is required in connection with the
execution, delivery or performance of this Credit Agreement or any of the other
Credit Documents by such Credit Party.
6.6 Enforceable Obligations. This Credit Agreement and the other Credit
Documents have been duly executed and delivered and constitute legal, valid and
binding obligations of each Credit Party enforceable against such Credit Party
in accordance with their respective terms, except as may be limited by
bankruptcy or insolvency laws or similar laws affecting creditors' rights
generally or by general equitable principles.
6.7 No Default. No Credit Party is in default in any respect under any
contract, lease, loan agreement, indenture, mortgage, security agreement or
other agreement or obligation to which it is a party or by which any of its
properties is bound which default would have or would be reasonably expected to
have a Material Adverse Effect. No Default or Event of Default has occurred or
exists except as previously disclosed in writing to the Lenders.
6.8 Ownership. Each Credit Party is the owner of, and has good and
marketable title to, all of its respective assets.
6.9 Indebtedness. The Credit Parties have no Indebtedness except (a) as
disclosed in the financial statements referenced in Section 6.1, (b) as set
forth on Schedule 6.9 and (c) as otherwise permitted by this Credit Agreement.
6.10 Litigation. There are no actions, suits or legal, equitable,
arbitration or administrative proceedings, pending or, to the knowledge of any
Credit Party, threatened against a Credit Party which could have or might be
reasonably expected to have a Material Adverse Effect.
6.11 Taxes. Each Credit Party has filed, or caused to be filed, all tax
returns (federal, state, local and foreign) required to be filed and paid (a)
all amounts of taxes shown thereon to be due (including interest and penalties)
and (b) all other taxes, fees, assessments and other governmental charges owing
by it, except for such taxes (i) which are not yet delinquent or (ii) that are
being contested in good faith and by proper proceedings, and against which
adequate reserves are being maintained in accordance with GAAP. No Credit Party
is aware of any proposed tax assessments against it.
6.12 Compliance with Law. Each Credit Party is in compliance with all
Requirements of Law and all other laws, rules, regulations, orders and decrees
(including without limitation Environmental Laws) applicable to it, or to its
properties, unless such failure to comply would not have or would not be
reasonably expected to have a Material Adverse Effect. No Requirement of Law
would be reasonably expected to cause a Material Adverse Effect.
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6.13 ERISA. Except as would not result or be reasonably expected to
result in a Material Adverse Effect:
(a) During the five-year period prior to the date on which
this representation is made or deemed made: (i) no Termination Event
has occurred, and, to the best knowledge of the Credit Parties, no
event or condition has occurred or exists as a result of which any
Termination Event could reasonably be expected to occur, with respect
to any Plan; (ii) no "accumulated funding deficiency," as such term is
defined in Section 302 of ERISA and Section 412 of the Code, whether or
not waived, has occurred with respect to any Plan; (iii) each Plan has
been maintained, operated, and funded in compliance with its own terms
and in material compliance with the provisions of ERISA, the Code, and
any other applicable federal or state laws; and (iv) no lien in favor
or the PBGC or a Plan has arisen or is reasonably likely to arise on
account of any Plan.
(b) The actuarial present value of all "benefit liabilities"
under each Single Employer Plan (determined within the meaning of
Section 401(a)(2) of the Code, utilizing the actuarial assumptions used
to fund such Plans), whether or not vested, did not, as of the last
annual valuation date prior to the date on which this representation is
made or deemed made, exceed the current value of the assets of such
Plan allocable to such accrued liabilities.
(c) Neither any Credit Party nor any ERISA Affiliate has
incurred, or, to the best knowledge of the Credit Parties, are
reasonably expected to incur, any withdrawal liability under ERISA to
any Multiemployer Plan or Multiple Employer Plan. Neither the Borrower,
any of its Subsidiaries nor any ERISA Affiliate has received any
notification that any Multiemployer Plan is in reorganization (within
the meaning of Section 4241 of ERISA), is insolvent (within the meaning
of Section 4245 of ERISA), or has been terminated (within the meaning
of Title IV of ERISA), and no Multiemployer Plan is, to the best
knowledge of the Credit Parties, reasonably expected to be in
reorganization, insolvent, or terminated.
(d) No prohibited transaction (within the meaning of Section
406 of ERISA or Section 4975 of the Code) or breach of fiduciary
responsibility has occurred with respect to a Plan which has subjected
or is reasonably likely to subject the Borrower or any of its
Subsidiaries or any ERISA Affiliate to any liability under Sections
406, 409, 502(i), or 502(l) of ERISA or Section 4975 of the Code, or
under any agreement or other instrument pursuant to which a Credit
Party or any ERISA Affiliate has agreed or is required to indemnify any
person against any such liability.
(e) The present value (determined using actuarial and other
assumptions which are reasonable with respect to the benefits provided
and the employees participating) of the liability of the Credit Parties
and each ERISA Affiliate for post-retirement welfare benefits to be
provided to their current and former employees under Plans which are
welfare benefit plans (as defined in Section 3(1) of ERISA), net of all
assets under all such Plans allocable to such benefits, are reflected
on the Financial Statements in accordance with FASB 106.
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(f) Each Plan which is a welfare plan (as defined in Section
3(1) of ERISA) to which Sections 601-609 of ERISA and Section 4980B of
the Code apply has been administered in compliance in all material
respects with such sections.
6.14 Subsidiaries. Set forth on Schedule 6.14 is a complete list of all
Subsidiaries of each Credit Party and the type and amount of ownership of each.
6.15 Use of Proceeds; Margin Stock. The proceeds of the Loans hereunder
will be used solely for the purposes specified in Section 7.10. None of the
proceeds of the Loans will be used for the purpose of purchasing or carrying any
"margin stock" as defined in Regulation U, Regulation X or Regulation G, or for
the purpose of reducing or retiring any Indebtedness which was originally
incurred to purchase or carry "margin stock" or any "margin security" or for any
other purpose which might constitute this transaction a "purpose credit" within
the meaning of Regulation U, Regulation X, Regulation G or Regulation T. None of
the Credit Parties owns any "margin stock".
6.16 Government Regulation. No Credit Party is subject to regulation
under the Public Utility Holding Company Act of 1935, the Federal Power Act, the
Investment Company Act of 1940 or the Interstate Commerce Act, each as amended.
In addition, no Credit Party is (a) an "investment company" registered or
required to be registered under the Investment Company Act of 1940, as amended,
or controlled by such a company, or (b) a "holding company," or a "Subsidiary
company" of a "holding company," or an "affiliate" of a "holding company" or of
a "Subsidiary" or a "holding company," within the meaning of the Public Utility
Holding Company Act of 1935, as amended. No director, executive officer or
principal shareholder of the Borrower or any of its Subsidiaries is a director,
executive officer or principal shareholder of any Lender. For the purposes
hereof the terms "director", "executive officer" and "principal shareholder"
(when used with reference to any Lender) have the respective meanings assigned
thereto in Regulation O issued by the Board of Governors of the Federal Reserve
System.
6.17 Environmental Matters.
(a) Except as would not cause or be reasonably expected to
cause a Material Adverse Effect:
(i) Each of the Properties and all operations
at the Properties are in compliance with all applicable
Environmental Laws, and there is no violation of any
Environmental Law with respect to the Properties or the
businesses operated by a Credit Party (the "Businesses"), and
there are no conditions relating to the Businesses or
Properties that would be reasonably expected to give rise to
liability under any applicable Environmental Laws.
(ii) No Credit Party has received any written
notice of, or inquiry from any Governmental Authority
regarding, any violation, alleged violation, non-compliance,
liability or potential liability regarding Hazardous Materials
or compliance with Environmental Laws with regard to any of
the Properties or the Businesses, nor does any Credit Party
have knowledge that any such notice is being threatened.
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(iii) Hazardous Materials have not been
transported or disposed at or from the Properties, or
generated, treated, stored or disposed of at, on or under any
of the Properties or any other location, in each case by, or
on behalf or with the permission of, a Credit Party in a
manner that would reasonably be expected to give rise to
liability under any applicable Environmental Law.
(iv) No judicial proceeding or governmental or
administrative action is pending or, to the knowledge of a
Credit Party, threatened, under any Environmental Law to which
a Credit Party is or will be named as a party, nor are there
any consent decrees or other decrees, consent orders,
administrative orders or other orders, or other administrative
or judicial requirements outstanding under any Environmental
Law with respect to a Credit Party, the Properties or the
Businesses, in any amount reportable under the federal
Comprehensive Environmental Response, Compensation and
Liability Act or any analogous state law, except releases in
compliance with any Environmental Laws.
(v) There has been no release or threat of
release of Hazardous Materials at or from the Properties, or
arising from or related to the operations (including, without
limitation, disposal) of a Credit Party in connection with the
Properties or otherwise in connection with the Businesses.
(vi) None of the Properties contains, or has
previously contained, any Hazardous Materials at, on or under
the Properties in amounts or concentrations that, if released,
constitute or constituted a violation of, or could give rise
to liability under, Environmental Laws.
(vii) No Credit Party has assumed any liability
of any Person under any Environmental Law.
(b) Each Credit Party has adopted procedures that are designed
to (i) ensure that each Credit Party, any of its operations and each of
the Properties remains in compliance with applicable Environmental Laws
and (ii) minimize any liabilities or potential liabilities that each
Credit Party, any of its operations and each of the Properties may have
under applicable Environmental Laws.
6.18 Intellectual Property. Each Credit Party owns, or has the legal
right to use, all trademarks, tradenames, copyrights, technology, know-how and
processes (the "Intellectual Property") necessary for each of them to conduct
its business as currently conducted except for those the failure to own or have
such legal right to use would not have or be reasonably expected to have a
Material Adverse Effect.
6.19 Solvency. Each Credit Party is and, after consummation of the
transactions contemplated by this Credit Agreement, will be Solvent.
6.20 Disclosure. Neither this Agreement nor any financial statements
delivered to the Lenders nor any other document, certificate or statement
furnished to the Lenders by or on behalf of
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any Credit Party in connection with the transactions contemplated hereby
contains any untrue statement of a material fact or omits to state a material
fact necessary in order to make the statements contained therein or herein not
misleading.
6.21 Licenses, etc. The Credit Parties have obtained and hold in full
force and effect, all franchises, licenses, permits, certificates,
authorizations, qualifications, accreditations, easements, rights of way and
other rights, consents and approvals which are necessary for the operation of
their respective businesses as presently conducted, except where the failure to
obtain same would not have a Material Adverse Effect.
6.22 No Burdensome Restrictions. No Credit Party is a party to any
agreement or instrument or subject to any other obligation or any charter or
corporate restriction or any provision of any applicable law, rule or regulation
which, individually or in the aggregate, would have or be reasonably expected to
have a Material Adverse Effect.
SECTION 7
AFFIRMATIVE COVENANTS
Each Credit Party hereby covenants and agrees that so long as this
Credit Agreement is in effect and until the Loans and LOC Obligations, together
with interest and fees and other obligations hereunder, have been paid in full
and the Commitments and Letters of Credit hereunder shall have terminated:
7.1 Information Covenants. The Borrower will furnish, or cause to be
furnished, to the Administrative Agent and each of the Lenders:
(a) Annual Financial Statements. As soon as available, and in
any event within 120 days after the close of each fiscal year of the
Borrower, (i) a consolidated balance sheet and income statement of the
Credit Parties, as of the end of such fiscal year, together with
related consolidated statements of operations and retained earnings and
of cash flows for such fiscal year, setting forth in comparative form
consolidated figures for the preceding fiscal year, all such financial
information described above to be in reasonable form and detail and
audited by independent certified public accountants of recognized
national standing reasonably acceptable to the Agents and whose opinion
shall be to the effect that such financial statements have been
prepared in accordance with GAAP (except for changes with which such
accountants concur) and shall not be limited as to the scope of the
audit or qualified in any manner, (ii) a detailed schedule for the
Properties to include, without limitation, project names and locations,
percentages of the Borrower's or any Guarantor's ownership interest,
leasing status, net operating income, Adjusted NOI as to the
Properties, current loan balances (if secured), debt service related
thereto (if secured), the source of cash necessary to cover any
operating deficit, the amount of and beneficiary of any cash
distributions, and the amount of cash invested in or received from the
Properties and (iii) a projected income statement (including projected
Capital Expenditures) for the next fiscal year (twelve month period)
for each Property.
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(b) Quarterly Financial Statements. As soon as available, and
in any event within 45 days after the close of each fiscal quarter of
the Borrower, (i) a consolidated balance sheet and income statement of
the Credit Parties, as of the end of such fiscal quarter, together with
related consolidated statements of operations and retained earnings and
of cash flows for such fiscal quarter in each case setting forth in
comparative form consolidated figures for the corresponding period of
the preceding fiscal year, all such financial information described
above to be in reasonable form and detail and reasonably acceptable to
the Administrative Agent, and accompanied by a certificate of the
general partner of the Borrower to the effect that such quarterly
financial statements fairly present in all material respects the
financial condition of the Credit Parties and have been prepared in
accordance with GAAP, subject to changes resulting from normal year-end
audit adjustments, (ii) a schedule of the Properties summarizing total
revenues, expenses, net operating income, Adjusted NOI, and occupancy
rates as of the last day of the applicable quarter, (iii) a listing of
all Properties under development showing the total capital obligation
of the Credit Parties and funds expended to date, (iv) a summary of
land purchases by the Credit Parties for the prior quarter and (v) an
accounting of all Revolving Loans used for the purposes set forth in
the proviso to Section 7.10(c).
(c) Officer's Certificate. At the time of delivery of the
financial statements provided for in Sections 7.1(b) above, a
certificate of the general partner of the Borrower substantially in the
form of Exhibit 7.1(c), (i) demonstrating compliance with the financial
covenants contained in Section 7.2 by calculation thereof as of the end
of each such fiscal period, and (ii) stating that no Default or Event
of Default exists, or if any Default or Event of Default does exist,
specifying the nature and extent thereof and what action the Borrower
proposes to take with respect thereto.
(d) Compliance With Certain Provisions of the Credit
Agreement. Within 120 days after the end of each fiscal year of the
Borrower, a certificate of the general partner of the Borrower
containing information regarding the amount of any Equity Issuances
that were made during the prior fiscal year.
(e) Accountant's Certificate. Within the period for delivery
of the annual financial statements provided in Section 7.1(a), a
certificate of the accountants conducting the annual audit stating that
they have reviewed this Credit Agreement and stating further whether,
in the course of their audit, they have become aware of any Default or
Event of Default and, if any such Default or Event of Default exists,
specifying the nature and extent thereof.
(f) Auditor's Reports. Promptly upon receipt thereof, a copy
of any "management letter" submitted by independent accountants to the
Credit Parties in connection with any annual, interim or special audit
of the books of any Credit Party.
(g) Reports. Promptly upon transmission or receipt thereof,
(a) copies of any filings and registrations with, and reports to or
from, the Securities and Exchange Commission (including, without
limitation, 10-K and 10-Q reports), or any successor agency, and copies
of all financial statements, proxy statements, notices and reports as a
Credit Party shall send to its shareholders or partners generally and
(b) upon the written request of an
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Agent, all reports and written information to and from the United
States Environmental Protection Agency, or any state or local agency
responsible for environmental matters, the United States Occupational
Health and Safety Administration, or any state or local agency
responsible for health and safety matters, or any successor agencies
or authorities concerning environmental, health or safety matters.
(h) Notices. Upon a Credit Party obtaining knowledge thereof,
such Credit Party will give written notice to the Administrative Agent
immediately of (a) the occurrence of an event or condition consisting
of a Default or Event of Default, specifying the nature and existence
thereof and what action the Borrower proposes to take with respect
thereto, and (b) the occurrence of any of the following with respect to
a Credit Party: (i) the pendency or commencement of any litigation,
arbitral or governmental proceeding against a Credit Party which if
adversely determined would have or would be reasonably expected to have
a Material Adverse Effect, or (ii) the institution of any proceedings
against a Credit Party with respect to, or the receipt of notice by
such Person of potential liability or responsibility for violation, or
alleged violation of any federal, state or local law, rule or
regulation, including but not limited to, Environmental Laws, the
violation of which would have or would be reasonably expected to have a
Material Adverse Effect.
(i) ERISA. Upon any of the Credit Parties or any ERISA
Affiliate obtaining knowledge thereof, Borrower will give written
notice to the Administrative Agent and each of the Lenders promptly
(and in any event within five Business Days) of: (i) any event or
condition, including, but not limited to, any Reportable Event, that
constitutes, or might reasonably lead to, a Termination Event; (ii)
with respect to any Multiemployer Plan, the receipt of notice as
prescribed in ERISA or otherwise of any withdrawal liability assessed
against a Credit Party or any of their ERISA Affiliates, or of a
determination that any Multiemployer Plan is in reorganization or
insolvent (both within the meaning of Title IV of ERISA); (iii) the
failure to make full payment on or before the due date (including
extensions) thereof of all amounts which a Credit Party or any of its
ERISA Affiliates is required to contribute to each Plan pursuant to its
terms and as required to meet the minimum funding standard set forth in
ERISA and the Code with respect thereto; or (iv) any change in the
funding status of any Plan that could have a Material Adverse Effect;
together, with a description of any such event or condition or a copy
of any such notice and a statement by the general partner of the
Borrower briefly setting forth the details regarding such event,
condition, or notice, and the action, if any, which has been or is
being taken or is proposed to be taken by the Credit Parties with
respect thereto. Promptly upon request, the Borrower shall furnish the
Administrative Agent and each of the Lenders with such additional
information concerning any Plan as may be reasonably requested,
including, but not limited to, copies of each annual report/return
(Form 5500 series), as well as all schedules and attachments thereto
required to be filed with the Department of Labor and/or the Internal
Revenue Service pursuant to ERISA and the Code, respectively, for each
"plan year" (within the meaning of Section 3(39) of ERISA).
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(j) Environmental.
(i) Subsequent to a notice from any
Governmental Authority that would reasonably cause concern or
during the existence of an Event of Default, and upon the
written request of an Agent, the Borrower will furnish or
cause to be furnished to the Administrative Agent, at the
Borrower's expense, a report of an environmental assessment of
reasonable scope, form and depth, including, where
appropriate, invasive soil or groundwater sampling, by a
consultant reasonably acceptable to the Agents as to the
nature and extent of the presence of any Hazardous Materials
on any property owned, leased or operated by a Credit Party
and as to the compliance by the Credit Parties with
Environmental Laws. If the Borrower fails to deliver such an
environmental report within seventy-five (75) days after
receipt of such written request then the Agents may arrange
for same, and the Credit Parties hereby grant to the Agents
and their representatives access to the Properties and a
license of a scope reasonably necessary to undertake such an
assessment (including, where appropriate, invasive soil or
groundwater sampling).
(ii) Each Credit Party will conduct and
complete all investigations, studies, sampling, and testing
and all remedial, removal, and other actions necessary to
address all Hazardous Materials on, from, or affecting any
real property owned or leased by a Credit Party to the extent
necessary to be in compliance with all Environmental Laws and
all other applicable federal, state, and local laws,
regulations, rules and policies and with the orders and
directives of all Governmental Authorities exercising
jurisdiction over such real property to the extent any failure
would have or be reasonably expected to have a Material
Adverse Effect.
(k) Other Information. With reasonable promptness upon any
such request, such other information regarding the business, properties
or financial condition of the Credit Parties as an Agent may reasonably
request, including, but not limited to, rent rolls for each Property.
7.2 Financial Covenants.
(a) At the end of each fiscal quarter of the Borrower, the
ratio of (i) Adjusted NOI of all Properties during the prior twelve
months (except for the fiscal quarter ending September 30, 1996 for
which Adjusted NOI shall be calculated for the prior nine months and
multiplied by 1.33) to (ii) Total Liabilities shall not be less than
.165 to 1.0.
(b) At all times, the Tangible Net Worth shall be greater than
or equal to the sum of (i) $700 million plus (ii) 85% of the Net Cash
Proceeds of any Equity Issuance subsequent to the Closing Date.
(c) At all times, the ratio of (i) Total Liabilities to (ii)
Total Assets At Cost shall be less than or equal to .50 to 1.0.
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(d) (i) As of September 30, 1996, the ratio of (A) EBITDA for
the prior nine months to (B) the sum of Interest Expense for the prior
nine months plus Capital Expenditures for the prior nine months shall
be greater than or equal to 2.0 to 1.0.
(ii) As of December 31, 1996 and March 31,
1997, the ratio of (A) EBITDA for the prior twelve months to
(B) the sum of Interest Expense for the prior twelve months
plus Capital Expenditures for the prior twelve months shall be
greater than or equal to 2.2 to 1.0.
(iii) As of June 30, 1997 and as of the end of
each fiscal quarter of the Borrower thereafter, the ratio of
(A) EBITDA for the prior twelve months to (B) the sum of
Interest Expense for the prior twelve months plus Capital
Expenditures for the prior twelve months shall be greater than
or equal to 2.5 to 1.0.
(e) At all times, the ratio of (i) Unencumbered Assets at Cost
to (ii) Unsecured Debt shall be greater than or equal to 2.25 to 1.0.
(f) The ratio of (i) Secured Debt to (ii) Total Assets shall
be less than or equal to (A) from the Closing Date to March 31, 1997,
.40 to 1.0, (B) from April 1, 1997 to March 31, 1998, .30 to 1.0 and
(C) from April 1, 1998 thereafter, .25 to 1.0.
(g) At the end of each fiscal quarter of the Borrower, the
ratio of (i) Adjusted NOI for the prior 12 months (except for the
fiscal quarter ending September 30, 1996 for which Adjusted NOI shall
be calculated for the prior nine months) with respect to Properties
that are Unencumbered Assets to (ii) Interest Expense for the prior 12
months (except for the fiscal quarter ending September 30, 1996 for
which Interest Expense shall be calculated for the prior nine months)
paid on Unsecured Debt shall be greater than or equal to 2.25 to 1.0.
(h) At the end of each fiscal quarter of the Borrower, the
ratio of (i) Adjusted NOI for the prior 12 months (except for the
fiscal quarter ending September 30, 1996 for which Adjusted NOI shall
be calculated for the prior nine months and multiplied by 1.33) with
respect to Properties that are Unencumbered Assets to (ii) Unsecured
Debt shall be greater than or equal to .18 to 1.0.
(i) At all times, the ratio of (i) the value at cost of all
Speculative Land (excluding Speculative Land owned by the Borrower as
of September 30, 1995, to the extent it remains Speculative Land owned
by the Borrower) to (ii) the value at cost of all Improved Properties
shall be less than or equal to .02 to 1.0.
7.3 Preservation of Existence, Franchises and REIT Status. Each of the
Credit Parties will do all things necessary to preserve and keep in full force
and effect its existence, rights, franchises and authority. Highwoods Properties
will maintain its status as a REIT.
7.4 Books and Records. Each of the Credit Parties will keep complete
and accurate books and records of its transactions in accordance with good
accounting practices on the basis of GAAP (including the establishment and
maintenance of appropriate reserves).
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7.5 Compliance with Law. Each of the Credit Parties will comply with
all material laws, rules, regulations and orders, and all applicable material
restrictions imposed by all Governmental Authorities, applicable to it and its
property (including, without limitation, Environmental Laws).
7.6 Payment of Taxes and Other Indebtedness. Each of the Credit Parties
will pay, settle or discharge (a) all taxes, assessments and governmental
charges or levies imposed upon it, or upon its income or profits, or upon any of
its properties, before they shall become delinquent, (b) all lawful claims
(including claims for labor, materials and supplies) which, if unpaid, might
give rise to a Lien upon any of its properties, and (c) all of its other
Indebtedness as it shall become due; provided, however, that a Credit Party
shall not be required to pay any such tax, assessment, charge, levy, claim or
Indebtedness which is being contested in good faith by appropriate proceedings
and as to which adequate reserves therefor have been established in accordance
with GAAP, unless the failure to make any such payment (i) would give rise to an
immediate right to foreclose on a Lien securing such amounts or (ii) would have
a Material Adverse Effect.
7.7 Insurance. Each of the Credit Parties will at all times maintain in
full force and effect insurance (including worker's compensation insurance,
liability insurance, casualty insurance and business interruption insurance) in
such amounts, covering such risks and liabilities and with such deductibles or
self-insurance retentions as are in accordance with normal industry practice.
All liability policies shall have the Administrative Agent, on behalf of the
Lenders, as an additional insured and all casualty policies shall have the
Administrative Agent, on behalf of the Lenders, as loss payee. Each such policy
will require and the certificates will state, that no such policy will be
terminated without at least thirty (30) days prior written notice having been
delivered to the Administrative Agent.
7.8 Maintenance of Property. Each of the Credit Parties will maintain
and preserve its properties and equipment in good repair, working order and
condition, normal wear and tear excepted (subject to damage by casualties), and
will make, or cause to be made, in such properties and equipment from time to
time all repairs, renewals, replacements, extensions, additions, betterments and
improvements thereto as may be needed or proper, to the extent and in the manner
customary for companies in similar businesses.
7.9 Performance of Obligations. Each of the Credit Parties will perform
in all material respects all of its obligations under the terms of all material
agreements, indentures, mortgages, security agreements or other debt instruments
to which it is a party or by which it is bound.
7.10 Use of Proceeds. The Credit Parties will use the proceeds of the
Loans solely (a) to repay amounts owing under the Existing Credit Agreement, (b)
to finance the acquisition of Crocker Realty Trust, Inc. and (c) for working
capital and other general purposes of the Credit Parties in the ordinary course
of business; provided that at no time may Revolving Loans be outstanding that
exceed $14,000,000, in the aggregate, that are used for (i) Speculative Land
Acquisition (as defined below), (ii) dividend payments and (iii) Capital
Expenditures in connection with the refurbishment and reletting of space
previously leased by the Credit Parties. Speculative Land Acquisition means the
acquisition of land which is not anticipated to be (or is not) developed within
six months after the acquisition thereof.
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7.11 Audits/Inspections. Upon reasonable notice and during normal
business hours and in a manner that will not unreasonably interfere with its
business operations, each Credit Party will permit representatives appointed by
an Agent, including, without limitation, independent accountants, agents,
attorneys and appraisers to visit and inspect such Credit Party's property,
including its books and records, its accounts receivable and inventory, its
facilities and its other business assets, and to make photocopies or photographs
thereof and to write down and record any information such representative obtains
and shall permit an Agent or its representatives to investigate and verify the
accuracy of information provided to the Lenders, including, without limitation,
to discuss all such matters with the officers, employees and representatives of
the Credit Parties.
7.12 Interest Rate Protection Agreements. The Borrower shall, within 30
days of the Closing Date, enter into, and maintain until the Revolving Loan
Maturity Date, interest rate protection agreements, in form and substance
(including, without limitation, the level thereof) reasonably acceptable to the
Agents, protecting against fluctuations in interest rates, for a period expiring
no earlier than the Revolving Loan Maturity Date and in a notional amount of at
least $80 million. Furthermore, with respect to any other Indebtedness of the
Credit Parties (with a term greater than 12 months) that is subject to a
floating interest rate, such Credit Party shall promptly enter into interest
rate protection agreements, in form and substance reasonably acceptable to the
Agents, protecting against such fluctuation in interest rates.
7.13 Capital Expenditures. Upon the request of the Administrative
Agent, the Borrower shall provide an annual capital expenditure budget of the
Credit Parties which shall be acceptable to the Administrative Agent in its
reasonable discretion.
7.14 Principal Offices. Each Credit Party will maintain its principal
office in Raleigh, North Carolina.
7.15 Management. Each of O. Temple Sloan, Ronald P. Gibson and Carman
Liuzzo shall remain active in the management of the Borrower; provided that upon
the death or disability of any of the above-referenced individuals, the Borrower
shall have six months to provide the Administrative Agent with substitute
personnel as replacement; such substitute personnel to be acceptable to the
Administrative Agent in its sole reasonable discretion.
7.16 Additional Credit Parties. At the time any Person becomes a
Subsidiary of a Credit Party, or if at any time a Non-Guarantor Subsidiary could
become a Credit Party without violating the terms of any material contract,
agreement or document to which it is a party, the Borrower shall so notify the
Administrative Agent and promptly thereafter shall cause such Person to execute
a Joinder Agreement in substantially the same form as Exhibit 7.16. If a Non-
Guarantor Subsidiary executes and delivers a Joinder Agreement it shall no
longer be deemed to be a Non-Guarantor Subsidiary under this Agreement.
7.17 Equity Issuance. All Net Cash Proceeds received from an Equity
Issuance by a Credit Party shall be promptly reported to the Agents and the
amount of such Net Cash Proceeds shall be verified to the satisfaction of the
Agents.
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7.18 Upstream of Excess Cash Flow. Each Credit Party shall cause all
"Excess Cash Flow" (as defined below) of a Non-Guarantor Subsidiary to be
transferred to a Credit Party as promptly as possible but at least once a month.
For the purposes of this Section 7.18, "Excess Cash Flow" means an amount equal
to all net operating income of such Non-Guarantor Subsidiary minus all debt
service payments of such Non-Guarantor Subsidiary minus all amounts required to
fund reserves of such Non-Guarantor Subsidiary.
SECTION 8
NEGATIVE COVENANTS
Each Credit Party hereby covenants and agrees that so long as this
Credit Agreement is in effect and until the Loans and LOC Obligations, together
with interest, fees and other obligations hereunder, have been paid in full and
the Commitments and Letters of Credit hereunder shall have terminated:
8.1 Indebtedness. No Credit Party will, nor will it permit any of its
Subsidiaries to, contract, create, incur, assume or permit to exist any
Indebtedness, except:
(a) Indebtedness arising under this Credit Agreement and the
other Credit Documents;
(b) Indebtedness existing as of the Closing Date as referenced
in Section 6.10 (and renewals, refinancings or extensions thereof on
terms and conditions no more favorable, in the aggregate, to such
Person than such existing Indebtedness and in a principal amount not in
excess of that outstanding as of the date of such renewal, refinancing
or extension);
(c) Indebtedness in respect of current accounts payable and
accrued expenses incurred in the ordinary course of business including,
to the extent not current, accounts payable and accrued expenses that
are subject to bona fide dispute;
(d) Indebtedness arising from obligations of the Credit
Parties evidenced by the interest rate protection agreements referred
to in Section 7.12;
(e) Other unsecured Indebtedness as long as the incurrence of
such unsecured Indebtedness does not cause a breach of the other terms
of this Credit Agreement, including, but not limited to, Section 7.2;
and
(f) Other secured Indebtedness that is nonrecourse to all
Credit Parties (subject to normal and customary recourse carveouts in
the ordinary course of business) as long as the incurrence of such
secured Indebtedness does not cause a breach of the other terms of this
Credit Agreement, including, but not limited to, Section 7.2.
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8.2 Nature of Business. No Credit Party will alter the character of its
business from that conducted as of the Closing Date or engage in any business
other than the business conducted as of the Closing Date.
8.3 Consolidation and Merger. No Credit Party will enter into any
transaction of merger or consolidation or liquidate, wind up or dissolve itself
(or suffer any liquidation or dissolution); provided that notwithstanding the
foregoing provisions of this Section 8.3, any Person (other than the Borrower)
may be merged or consolidated with or into Highwoods Properties if (a) Highwoods
Properties is the continuing or surviving corporation, (b) the Administrative
Agent is given prior written notice of such action, and (c) after giving effect
thereto no Default or Event of Default exists.
8.4 Restrictions on Loans. No Credit Party will make any loans or
engage in any lending activity other than (a) loans to another Credit Party or
(b) loans to tenants of a Credit Party to be used for tenant improvements and to
be repaid during the course of such tenant's lease; provided that the aggregate
amount of such tenant loans made after the Closing Date shall not exceed .20% of
Total Assets.
8.5 Dividends. Other than as set forth below, no Credit Party will,
directly or indirectly, declare or pay any dividends or make any other
distribution upon any shares of its capital stock of any class or make any
distributions to limited partners; provided that (i) the Credit Parties may make
distributions, in the aggregate, in an amount not to exceed one hundred percent
(100%) of Cash Available for Distribution, (ii) Highwoods Properties may pay
such dividends as are necessary to retain its status as a REIT and (iii)
Subsidiaries of the Borrower may make distributions to the Borrower.
8.6 Transactions with Affiliates. No Credit Party will enter into any
transaction or series of transactions, whether or not in the ordinary course of
business, with any officer, director, shareholder, Subsidiary or Affiliate other
than on terms and conditions substantially as favorable as would be obtainable
in a comparable arm's-length transaction with a Person other than an officer,
director, shareholder, Subsidiary or Affiliate.
8.7 Fiscal Year; Organizational Documents. No Credit Party will (a)
change its fiscal year or (b) change its partnership agreement (other than a
change limited solely to add additional limited partners or authorize the
issuance of additional units) or its articles of incorporation or its bylaws.
8.8 Negative Pledges. No Credit Party will enter into, assume or become
subject to any agreement prohibiting or otherwise restricting the creation or
assumption of any Lien upon its properties or assets, whether now owned or
hereafter acquired, or requiring the grant of any security for such obligation
if security is given for some other obligation.
8.9 Non-Guarantor Subsidiaries. Notwithstanding any other provision of
this Agreement, the Credit Parties shall prohibit any Non-Guarantor Subsidiary
from (a) forming or acquiring any new Subsidiary, (b) incurring any new
Indebtedness other than Indebtedness in respect of current accounts payable and
accrued expenses incurred in the ordinary course of business, (c) purchasing or
acquiring any new assets or (d) incurring any change in its
ownership.
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8.10 Investments. No Credit Party shall make (a) any deposit with or
advance, loan or other extension of credit to any Non-Guarantor Subsidiary or
(b) any capital contribution to or investment in any Non-Guarantor Subsidiary,
including, without limitation, any guaranty on behalf of, or for the benefit of,
a Non-Guarantor Subsidiary.
8.11 Liens. No Credit Party shall allow or permit any lien,
encumbrance, assignment, security interest, preference or priority of any kind,
including, without limitation, any agreement to give any of the foregoing, on
its ownership interest in a Non-Guarantor Subsidiary.
8.12 Indenture. The Credit Parties and their Subsidiaries shall not
allow or permit any amendment or modification to the Indenture.
SECTION 9
EVENTS OF DEFAULT
9.1 Events of Default. An Event of Default shall exist upon the
occurrence of any of the following specified events (each an "Event of
Default"):
(a) Payment. Any Credit Party shall default in the payment
within five days of when due of (i) any principal of any of the Loans
or any reimbursement obligation arising from drawings under Letters of
Credit or (ii) any interest on the Loans or (iii) any fees or other
amounts owing hereunder, under any of the other Credit Documents or in
connection herewith.
(b) Representations. Any representation, warranty or statement
made or deemed to be made by any Credit Party herein, in any of the
other Credit Documents, or in any statement or certificate delivered or
required to be delivered pursuant hereto or thereto shall prove untrue
in any material respect on the date as of which it was made or deemed
to have been made.
(c) Covenants. Any Credit Party shall:
(i) default in the due performance or
observance of any term, covenant or agreement contained in
Sections 7.3, 7.10 and Sections 8.1 through 8.12; or
(ii) default in the due performance or
observance by it of any term, covenant or agreement contained
in Sections 7.1 or 7.2 and such default shall continue
unremedied for a period of fifteen days after the earlier of
an Authorized Officer becoming aware of such default or notice
thereof given by an Agent; or
(iii) default in the due performance or
observance by it of any term, covenant or agreement (other
than those referred to in subsections (a), (b) or (c)(i) or
(ii) of this Section 9.1) contained in this Credit Agreement
and such default shall
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continue unremedied for a period of at least 30 days after the
earlier of an Authorized Officer becoming aware of such
default or notice thereof given by an Agent.
(d) Other Credit Documents. (i) Any Credit Party shall default
in the due performance or observance of any term, covenant or agreement
in any of the other Credit Documents and such default shall continue
unremedied for a period of at least 30 days after the earlier of an
officer of a Credit Party becoming aware of such default or notice
thereof given by the Administrative Agent, or (ii) any Credit Document
shall fail to be in full force and effect or any Credit Party shall so
assert or any Credit Document shall fail to give the Agents and/or the
Lenders the rights, powers and privileges purported to be created
thereby.
(e) Guaranties. The guaranty given by the Guarantors hereunder
or any provision thereof shall cease to be in full force and effect, or
any Guarantor or any Person acting by or on behalf of a Guarantor shall
deny or disaffirm such Guarantor's obligations under such guaranty.
(f) Bankruptcy, etc. The occurrence of any of the following
with respect to (i) a court or governmental agency having jurisdiction
in the premises shall enter a decree or order for relief in respect of
a Credit Party in an involuntary case under any applicable bankruptcy,
insolvency or other similar law now or hereafter in effect, or appoint
a receiver, liquidator, assignee, custodian, trustee, sequestrator or
similar official of a Credit Party or for any substantial part of its
property or ordering the winding up or liquidation of its affairs; or
(ii) an involuntary case under any applicable bankruptcy, insolvency or
other similar law now or hereafter in effect is commenced against a
Credit Party and such petition remains unstayed and in effect for a
period of 60 consecutive days; or (iii) a Credit Party shall commence a
voluntary case under any applicable bankruptcy, insolvency or other
similar law now or hereafter in effect, or consent to the entry of an
order for relief in an involuntary case under any such law, or consent
to the appointment or taking possession by a receiver, liquidator,
assignee, custodian, trustee, sequestrator or similar official of such
Person or any substantial part of its property or make any general
assignment for the benefit of creditors; or (iv) a Credit Party shall
admit in writing its inability to pay its debts generally as they
become due or any action shall be taken by such Person in furtherance
of any of the aforesaid purposes.
(g) Defaults under Other Agreements. With respect to any
Indebtedness (other than Indebtedness outstanding under this Credit
Agreement) of a Credit Party in an aggregate principal amount in excess
of $3,000,000 (i) a Credit Party shall (A) default in any payment
(beyond the applicable grace period with respect thereto, if any) with
respect to any such Indebtedness, or (B) default (after giving effect
to any applicable grace period) in the observance or performance
relating to such Indebtedness or contained in any instrument or
agreement evidencing, securing or relating thereto, or any other event
or condition shall occur or condition exist, the effect of which
default or other event or condition is to cause, or permit, the holder
or holders of such Indebtedness (or trustee or agent on behalf of such
holders) to cause (determined without regard to whether any notice or
lapse of time is required) any such Indebtedness to become due prior to
its stated maturity; or (ii) any such Indebtedness shall be declared
due and payable, or required to be prepaid other than by a
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regularly scheduled required prepayment prior to the stated maturity
thereof; or (iii) any such Indebtedness shall mature and remain unpaid.
(h) Judgments. One or more judgments, orders, or decrees shall
be entered against any one or more of the Credit Parties involving a
liability of $1,000,000 or more, in the aggregate, (to the extent not
paid or covered by insurance provided by a carrier who has acknowledged
coverage) and such judgments, orders or decrees (i) are the subject of
any enforcement proceeding commenced by any creditor or (ii) shall
continue unsatisfied, undischarged and unstayed for a period ending on
the first to occur of (A) the last day on which such judgment, order or
decree becomes final and unappealable or (B) 60 days.
(i) ERISA. The occurrence of any of the following events or
conditions: (A) any "accumulated funding deficiency," as such term is
defined in Section 302 of ERISA and Section 412 of the Code, whether or
not waived, shall exist with respect to any Plan, or any lien shall
arise on the assets of the Borrower or any of its Subsidiaries or any
ERISA Affiliate in favor of the PBGC or a Plan; (B) a Termination Event
shall occur with respect to a Single Employer Plan, which is, in the
reasonable opinion of the Administrative Agent, likely to result in the
termination of such Plan for purposes of Title IV of ERISA; (C) a
Termination Event shall occur with respect to a Multiemployer Plan or
Multiple Employer Plan, which is, in the reasonable opinion of the
Administrative Agent, likely to result in (i) the termination of such
Plan for purposes of Title IV of ERISA, or (ii) the Borrower or any of
its Subsidiaries or any ERISA Affiliate incurring any liability in
connection with a withdrawal from, reorganization of (within the
meaning of Section 4241 of ERISA), or insolvency (within the meaning of
Section 4245 of ERISA) of such Plan; or (D) any prohibited transaction
(within the meaning of Section 406 of ERISA or Section 4975 of the
Code) or breach of fiduciary responsibility shall occur which may
subject the Borrower or any of its Subsidiaries or any ERISA Affiliate
to any liability under Sections 406, 409, 502(i), or 502(l) of ERISA or
Section 4975 of the Code, or under any agreement or other instrument
pursuant to which the Borrower or any of its Subsidiaries or any ERISA
Affiliate has agreed or is required to indemnify any person against any
such liability.
(j) Highwoods Properties is no longer the sole general
partner of the Borrower.
9.2 Acceleration; Remedies. Upon the occurrence of an Event of Default,
and at any time thereafter unless and until such Event of Default has been
waived in writing by the Required Lenders (or the Lenders as may be required
hereunder), the Administrative Agent shall, upon the request and direction of
the Required Lenders, (or if in the reasonable judgment of the Administrative
Agent there is not sufficient time to obtain the consent of the Required Lenders
then on its own) by written notice to the Borrower, take any of the following
actions without prejudice to the rights of the Agents or any Lender to enforce
its claims against the Credit Parties, except as otherwise specifically
provided for herein:
(a) Termination of Commitments. Declare the Commitments
terminated whereupon the Commitments shall be immediately terminated.
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(b) Acceleration of Loans. Declare the unpaid principal of and
any accrued interest in respect of all Loans, any reimbursement
obligations arising from drawings under Letters of Credit and any and
all other indebtedness or obligations of any and every kind owing by a
Credit Party to any of the Lenders hereunder to be due whereupon the
same shall be immediately due and payable without presentment, demand,
protest or other notice of any kind, all of which are hereby waived by
the Credit Parties.
(c) Cash Collateral. Direct the Borrower to pay (and the
Borrower agrees that upon receipt of such notice, or upon the
occurrence of an Event of Default under Section 9.1(f), they will
immediately pay) to the Administrative Agent additional cash, to be
held by the Administrative Agent, for the benefit of the Lenders, in
the Cash Collateral Account as additional security for the LOC
Obligations in respect of subsequent drawings under all then
outstanding Letters of Credit in an amount equal to the maximum
aggregate amount which may be drawn under all Letters of Credits then
outstanding.
(d) Enforcement of Rights. Enforce any and all rights and
interests created and existing under the Credit Documents, including,
without limitation, all rights and remedies against the Guarantors and
all rights of set-off.
Notwithstanding the foregoing, if an Event of Default specified in Section
9.1(f) shall occur, then the Commitments shall automatically terminate and all
Loans, all reimbursement obligations under Letters of Credit, all accrued
interest in respect thereof, all accrued and unpaid fees and other indebtedness
or obligations owing to the Lenders hereunder shall immediately become due and
payable without the giving of any notice or other action by the Agents or the
Lenders, which notice or other action is expressly waived by the Credit Parties.
Notwithstanding the fact that enforcement powers reside primarily with the
Administrative Agent, each Lender has, to the extent permitted by law, a
separate right of payment and shall be considered a separate "creditor" holding
a separate "claim" within the meaning of Section 101(5) of the Bankruptcy Code
or any other insolvency statute.
9.3 Allocation of Payments After Event of Default. Notwithstanding any
other provisions of this Credit Agreement, after the occurrence and during the
continuance of an Event of Default, all amounts collected or received by an
Agent or any Lender on account of amounts outstanding under any of the Credit
Documents shall be paid over or delivered as follows:
FIRST, to the payment of all reasonable out-of-pocket costs
and expenses (including without limitation reasonable attorneys' fees)
of the Agents in connection with enforcing the rights of the Lenders
under the Credit Documents;
SECOND, to payment of any fees owed to an Agent or a Issuing
Lender;
THIRD, to the payment of all reasonable out-of-pocket costs
and expenses, (including, without limitation, reasonable attorneys'
fees) of each of the Lenders in connection with enforcing its rights
under the Credit Documents;
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FOURTH, to the payment of all accrued fees and interest
payable to the Lenders hereunder;
FIFTH, to the payment of the outstanding principal amount of
the Loans and unreimbursed drawings under Letters of Credit, and to the
payment or cash collateralization of the outstanding LOC Obligations,
pro rata, as set forth below;
SIXTH, to any principal amounts outstanding under Hedging
Agreements, pro rata, as set forth below;
SEVENTH, to all other obligations which shall have become due
and payable under the Credit Documents and not repaid pursuant to
clauses "FIRST" through "FIFTH" above; and
EIGHTH, to the payment of the surplus, if any, to whoever may
be lawfully entitled to receive such surplus.
In carrying out the foregoing, (a) amounts received shall be applied in the
numerical order provided until exhausted prior to application to the next
succeeding category; (b) each of the Lenders shall receive an amount equal to
its pro rata share (based on the proportion that the then outstanding Loans, LOC
Obligations and obligations under Hedging Agreements held by such Lender bears
to the aggregate then outstanding Loans, LOC Obligations and obligations under
Hedging Agreements) of amounts available to be applied pursuant to clauses
"THIRD", "FOURTH," "FIFTH," "SIXTH" and "SEVENTH" above; and (c) to the extent
that any amounts available for distribution pursuant to clause "FIFTH" above are
attributable to the issued but undrawn amount of outstanding Letters of Credit,
such amounts shall be held by the Administrative Agent in the Cash Collateral
Account and applied (x) first, to reimburse the Issuing Lender from time to time
for any drawings under such Letters of Credit and (y) then, following the
expiration of all Letters of Credit, to all other obligations of the types
described in clauses "FIFTH," "SIXTH" and "SEVENTH" above in the manner provided
in this Section 9.3.
SECTION 10
AGENCY PROVISIONS
10.1 Appointment. Each Lender hereby designates and appoints
NationsBank, N.A. as Administrative Agent and First Union National Bank of North
Carolina as Documentation Agent of such Lender to act as specified herein and
the other Credit Documents, and each such Lender hereby authorizes the Agents,
as the agents for such Lender, to take such action on its behalf under the
provisions of this Credit Agreement and the other Credit Documents and to
exercise such powers and perform such duties as are expressly delegated by the
terms hereof and of the other Credit Documents, together with such other powers
as are reasonably incidental thereto. Notwithstanding any provision to the
contrary elsewhere herein and in the other Credit Documents, the Agents shall
not have any duties or responsibilities, except those expressly set forth herein
and therein, or any fiduciary relationship with any Lender, and no implied
covenants, functions, responsibilities, duties,
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obligations or liabilities shall be read into this Credit Agreement or any of
the other Credit Documents, or shall otherwise exist against the Agents. The
provisions of this Section are solely for the benefit of the Agents and the
Lenders and none of the Credit Parties shall have any rights as a third party
beneficiary of the provisions hereof. In performing its functions and duties
under this Credit Agreement and the other Credit Documents, each Agent shall
act solely as an agent of the Lenders and does not assume and shall not be
deemed to have assumed any obligation or relationship of agency or trust with
or for any Credit Party.
10.2 Delegation of Duties. An Agent may execute any of its duties
hereunder or under the other Credit Documents by or through agents or
attorneys-in-fact and shall be entitled to advice of counsel concerning all
matters pertaining to such duties. An Agent shall not be responsible for the
negligence or misconduct of any agents or attorneys-in-fact selected by it with
reasonable care.
10.3 Exculpatory Provisions. Neither the Agents nor any of their
officers, directors, employees, agents, attorneys-in-fact or affiliates shall be
(a) liable for any action lawfully taken or omitted to be taken by it or such
Person under or in connection herewith or in connection with any of the other
Credit Documents (except for its or such Person's own gross negligence or
willful misconduct) or (b) responsible in any manner to any of the Lenders for
any recitals, statements, representations or warranties made by any of the
Credit Parties contained herein or in any of the other Credit Documents or in
any certificate, report, document, financial statement or other written or oral
statement referred to or provided for in, or received by an Agent under or in
connection herewith or in connection with the other Credit Documents, or
enforceability or sufficiency therefor of any of the other Credit Documents, or
for any failure of the Borrower to perform its obligations hereunder or
thereunder. The Agents shall not be responsible to any Lender for the
effectiveness, genuineness, validity, enforceability, collectibility or
sufficiency of this Credit Agreement, or any of the other Credit Documents or
for any representations, warranties, recitals or statements made herein or
therein or made by the Borrower or any Credit Party in any written or oral
statement or in any financial or other statements, instruments, reports,
certificates or any other documents in connection herewith or therewith
furnished or made by an Agent to the Lenders or by or on behalf of the Credit
Parties to the Agents or any Lender or be required to ascertain or inquire as to
the performance or observance of any of the terms, conditions, provisions,
covenants or agreements contained herein or therein or as to the use of the
proceeds of the Loans or the use of the Letters of Credit or of the existence or
possible existence of any Default or Event of Default or to inspect the
properties, books or records of the Credit Parties. The Agents are not trustees
for the Lenders and owe no fiduciary duty to the Lenders. The Administrative
Agent shall administer the facility evidenced by the Credit Documents similar to
other credits in which the Administrative Agent holds 100% of the credit
exposure.
10.4 Reliance on Communications. The Agents shall be entitled to rely,
and shall be fully protected in relying, upon any note, writing, resolution,
notice, consent, certificate, affidavit, letter, cablegram, telegram, telecopy,
telex or teletype message, statement, order or other document or conversation
believed by it to be genuine and correct and to have been signed, sent or made
by the proper Person or Persons and upon advice and statements of legal counsel
(including, without limitation, counsel to any of the Credit Parties,
independent accountants and other experts selected by the Agents with reasonable
care). The Agents may deem and treat the Lenders as the owner of its interests
hereunder for all purposes unless a written notice of assignment, negotiation or
transfer thereof shall have been filed with the Administrative Agent in
accordance with Section 11.3(b). The
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Agents shall be fully justified in failing or refusing to take any action under
this Credit Agreement or under any of the other Credit Documents unless it shall
first receive such advice or concurrence of the Required Lenders as it deems
appropriate or it shall first be indemnified to its satisfaction by the Lenders
against any and all liability and expense which may be incurred by it by reason
of taking or continuing to take any such action. The Agents shall in all cases
be fully protected in acting, or in refraining from acting, hereunder or under
any of the other Credit Documents in accordance with a request of the Required
Lenders (or to the extent specifically provided in Section 11.6, all the
Lenders) and such request and any action taken or failure to act pursuant
thereto shall be binding upon all the Lenders (including their successors and
assigns).
10.5 Notice of Default. An Agent shall not be deemed to have knowledge
or notice of the occurrence of any Default or Event of Default hereunder (other
than Section 9.1(a)) unless such Agent has received notice from a Lender or a
Credit Party referring to the Credit Document, describing such Default or Event
of Default and stating that such notice is a "notice of default." In the event
that the Administrative Agent receives such a notice, the Administrative Agent
shall give prompt notice thereof to the Lenders. The Administrative Agent shall
take such action with respect to such Default or Event of Default as shall be
reasonably directed by the Required Lenders.
10.6 Non-Reliance on Agents and Other Lenders. Each Lender expressly
acknowledges that neither the Agents, NationsBanc Capital Markets, Inc. ("NCMI")
nor any of their officers, directors, employees, agents, attorneys-in-fact or
affiliates has made any representations or warranties to it and that no act by
the Agents, NCMI or any affiliate thereof hereinafter taken, including any
review of the affairs of any Credit Party, shall be deemed to constitute any
representation or warranty by the Agents or NCMI to any Lender. Each Lender
represents to the Agents and NCMI that it has, independently and without
reliance upon the Agents or NCMI or any other Lender, and based on such
documents and information as it has deemed appropriate, made its own appraisal
of and investigation into the business, assets, operations, property, financial
and other conditions, prospects and creditworthiness of the Credit Parties and
made its own decision to make its Loans hereunder and enter into this Credit
Agreement. Each Lender also represents that it will, independently and without
reliance upon the Agents, NCMI or any other Lender, and based on such documents
and information as it shall deem appropriate at the time, continue to make its
own credit analysis, appraisals and decisions in taking or not taking action
under this Credit Agreement, and to make such investigation as it deems
necessary to inform itself as to the business, assets, operations, property,
financial and other conditions, prospects and creditworthiness of the Credit
Parties. The Administrative Agent shall promptly provide to the Lenders (a)
copies of all notices of Defaults or Events of Default or other notices received
in accordance with Section 11.1, (b) copies of all financial statements,
certificates and other information sent to it by the Borrower pursuant to
Section 7.1, (c) any written information it receives regarding the unsecured
debt rating of Highwoods Properties and (d) such other documents or notices
received by the Administrative Agent pursuant to this Agreement and requested in
writing by a Lender. Except for notices, reports and other documents expressly
required to be furnished to the Lenders by the Administrative Agent hereunder,
the Agents and NCMI shall not have any duty or responsibility to provide any
Lender with any credit or other information concerning the business, operations,
assets, property, financial or other conditions, prospects or creditworthiness
of the Credit Parties which may come into the possession of the Agents, NCMI or
any of their officers, directors, employees, agents, attorneys-in-fact or
affiliates.
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10.7 Indemnification. The Lenders agree to indemnify each Agent in its
capacity as such but not in its capacity as a Lender (to the extent not
reimbursed by the Borrower and without limiting the obligation of the Borrower
to do so), ratably according to their respective Commitments (or if the
Commitments have expired or been terminated, in accordance with the respective
principal amounts of outstanding Loans and Participation Interest of the
Lenders), from and against any and all liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses or disbursements
of any kind whatsoever which may at any time (including without limitation at
any time following payment in full of the Credit Party Obligations) be imposed
on, incurred by or asserted against an Agent in its capacity as such in any way
relating to or arising out of this Credit Agreement or the other Credit
Documents or any documents contemplated by or referred to herein or therein or
the transactions contemplated hereby or thereby or any action taken or omitted
by an Agent under or in connection with any of the foregoing; provided that no
Lender shall be liable for the payment of any portion of such liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses or disbursements (i) resulting from the gross negligence or willful
misconduct of an Agent, (ii) arising solely from an internal or regulatory
matter relating only to the Agent (i.e. a legal lending limit violation by the
Agent) or (iii) resulting from and related solely to a dispute between the Agent
and one or more Lenders in which it is reasonably determined that the Agent did
not prevail. If any indemnity furnished to an Agent for any purpose shall, in
the reasonable judgment of such Agent, be insufficient or become impaired, such
Agent may call for additional indemnity and cease, or not commence, to do the
acts indemnified against until such additional indemnity is furnished. The
agreements in this Section shall survive the payment of the Credit Party
Obligations and all other amounts payable hereunder and under the other Credit
Documents.
10.8 Agents in Their Individual Capacity. Each Agent and its affiliates
may make loans to, accept deposits from and generally engage in any kind of
business with the Borrower or any other Credit Party as though such Agent were
not an Agent hereunder. With respect to the Loans made and Letters of Credit
issued and all obligations owing to it, an Agent shall have the same rights and
powers under this Credit Agreement as any Lender and may exercise the same as
though they were not an Agent, and the terms "Lender" and "Lenders" shall
include each Agent in its individual capacity.
10.9 Successor Agent. Any Agent may, at any time, (and either Agent
shall if such Agent's Revolving Loan Commitment Percentage becomes less than
8.9%) resign upon 20 days written notice to the Lenders. Upon any such
resignation, the Required Lenders shall have the right to appoint a successor
Agent; provided that if no successor Agent shall have been appointed by the
Required Lenders, and shall have accepted such appointment, within 45 days after
the notice of resignation, then the retiring Agent shall select a successor
Agent. In either case, whether selected by the Required Lenders or the retiring
Agent, the successor Agent must be either an existing Lender hereunder or a
commercial bank organized under the laws of the United States of America or of
any State thereof and have total assets of at least $25 billion and a long term
unsecured debt rating of at least BBB+ with S&P or its equivalent. Upon the
acceptance of any appointment as an Agent hereunder by a successor, such
successor Agent shall thereupon succeed to and become vested with all the
rights, powers, privileges and duties of the retiring Agent, and the retiring
Agent shall be discharged from its duties and obligations as an Agent, as
appropriate, under this Credit Agreement and the other Credit Documents and the
provisions of this Section 10.9 shall inure to its benefit as
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to any actions taken or omitted to be taken by it while it was an Agent under
this Credit Agreement.
SECTION 11
MISCELLANEOUS
11.1 Notices. Except as otherwise expressly provided herein, all
notices and other communications shall have been duly given and shall be
effective (a) when delivered by hand, (b) when transmitted via telecopy (or
other facsimile device) to the number set out below, (c) the Business Day
following the day on which the same has been delivered prepaid to a reputable
national overnight air courier service, or (d) the third Business Day following
the day on which the same is sent by certified or registered mail, postage
prepaid, in each case to the respective parties at the address or telecopy
numbers set forth on Schedule 11.1, or at such other address as such party may
specify by written notice to the other parties hereto.
11.2 Right of Set-Off. In addition to any rights now or hereafter
granted under applicable law or otherwise, and not by way of limitation of any
such rights, upon the occurrence of an Event of Default and the commencement of
remedies described in Section 9.2, each Lender is authorized at any time and
from time to time, without presentment, demand, protest or other notice of any
kind (all of which rights being hereby expressly waived), to set-off and to
appropriate and apply any and all deposits (general or special) and any other
indebtedness at any time held or owing by such Lender (including, without
limitation, branches, agencies or Affiliates of such Lender wherever located) to
or for the credit or the account of any Credit Party against obligations and
liabilities of such Credit Party to the Lenders hereunder, under the Notes, the
other Credit Documents or otherwise, irrespective of whether the Administrative
Agent or the Lenders shall have made any demand hereunder and although such
obligations, liabilities or claims, or any of them, may be contingent or
unmatured, and any such set-off shall be deemed to have been made immediately
upon the occurrence of an Event of Default even though such charge is made or
entered on the books of such Lender subsequent thereto. The Credit Parties
hereby agree that any Person purchasing a participation in the Loans and
Commitments hereunder pursuant to Section 11.3(c) or 3.8 may exercise all rights
of set-off with respect to its participation interest as fully as if such Person
were a Lender hereunder.
11.3 Benefit of Agreement.
(a) Generally. This Credit Agreement shall be binding upon and
inure to the benefit of and be enforceable by the respective successors
and assigns of the parties hereto; provided that none of the Credit
Parties may assign and transfer any of its interests without the prior
written consent of the Lenders; and provided further that the rights of
each Lender to transfer, assign or grant participation in its rights
and/or obligations hereunder shall be limited as set forth below in
subsections (b) and (c) of this Section 11.3. Notwithstanding the above
(including anything set forth in subsections (b) and (c) of this
Section 11.3), nothing herein shall restrict, prevent or prohibit any
Lender from (A) pledging its Loans hereunder to a Federal Reserve Bank
in support of borrowings made by such Lender from such Federal Reserve
Bank, or (B) granting assignments or participation in such Lender's
Loans and/or
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Commitments hereunder to its parent company and/or to any Affiliate of
such Lender or to any existing Lender or Affiliate thereof. No action
permitted by this Section 11.3(a) shall require a fee to be paid to the
Administrative Agent.
(b) Assignments. In addition to the assignments permitted in
Section 11.3(a), each Lender may, with the prior written consent of the
Administrative Agent which shall not be unreasonably withheld, assign
all or a portion of its rights and obligations hereunder pursuant to an
assignment agreement substantially in the form of Exhibit 11.3 to one
or more Eligible Assignees; provided that (i) any such assignment shall
be in a minimum aggregate amount of $10,000,000 of the Commitments and
in integral multiples of $1,000,000 above such amount (or the remaining
amount of Commitments held by such Lender) and (ii) each such
assignment shall be of a constant, not varying, percentage of all of
the assigning Lender's rights and obligations under the Commitment
being assigned. Any assignment hereunder shall be effective upon
satisfaction of the conditions set forth above and delivery to the
Administrative Agent (other than assignments by an Agent) of a duly
executed assignment agreement together with a transfer fee of $3,500
payable to the Administrative Agent for its own account, provided that
such transfer fee shall not apply to assignments occurring during the
initial syndication of the Commitments, as determined by the Agents.
Upon the effectiveness of any such assignment, the assignee shall
become a "Lender" for all purposes of this Credit Agreement and the
other Credit Documents and, to the extent of such assignment, the
assigning Lender shall be relieved of its obligations hereunder to the
extent of the Loans and Commitment components being assigned. Along
such lines the Borrower agrees that upon notice of any such assignment
and surrender of the appropriate Note or Notes, it will promptly
provide to the assigning Lender and to the assignee separate promissory
notes in the amount of their respective interests substantially in the
form of the original Note or Notes (but with notation thereon that it
is given in substitution for and replacement of the original Note or
Notes or any replacement notes thereof).
By executing and delivering an assignment agreement in accordance with
this Section 11.3(b), the assigning Lender thereunder and the assignee
thereunder shall be deemed to confirm to and agree with each other and
the other parties hereto as follows: (i) such assigning Lender warrants
that it is the legal and beneficial owner of the interest being
assigned thereby free and clear of any adverse claim and the assignee
warrants that it is an Eligible Assignee; (ii) except as set forth in
clause (i) above, such assigning Lender makes no representation or
warranty and assumes no responsibility with respect to any statements,
warranties or representations made in or in connection with this Credit
Agreement, any of the other Credit Documents or any other instrument or
document furnished pursuant hereto or thereto, or the execution,
legality, validity, enforceability, genuineness, sufficiency or value
of this Credit Agreement, any of the other Credit Documents or any
other instrument or document furnished pursuant hereto or thereto or
the financial condition of any Credit Party or the performance or
observance by any Credit Party of any of its obligations under this
Credit Agreement, any of the other Credit Documents or any other
instrument or document furnished pursuant hereto or thereto; (iii) such
assignee represents and warrants that it is legally authorized to enter
into such assignment agreement; (iv) such assignee confirms that it has
received a copy of this Credit Agreement, the other Credit Documents
and such other documents and information as it has deemed appropriate
to make its own credit analysis and decision to enter into such
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assignment agreement; (v) such assignee will independently and without
reliance upon the Agents, such assigning Lender or any other Lender,
and based on such documents and information as it shall deem
appropriate at the time, continue to make its own credit decisions in
taking or not taking action under this Credit Agreement and the other
Credit Documents; (vi) such assignee appoints and authorizes the Agents
to take such action on its behalf and to exercise such powers under
this Credit Agreement or any other Credit Document as are delegated to
the Agents by the terms hereof or thereof, together with such powers as
are reasonably incidental thereto; and (vii) such assignee agrees that
it will perform in accordance with their terms all the obligations
which by the terms of this Credit Agreement and the other Credit
Documents are required to be performed by it as a Lender.
11.4 No Waiver; Remedies Cumulative. No failure or delay on the part of
an Agent or any Lender in exercising any right, power or privilege hereunder or
under any other Credit Document and no course of dealing between the Borrower or
any Credit Party and the Agents or any Lender shall operate as a waiver thereof;
nor shall any single or partial exercise of any right, power or privilege
hereunder or under any other Credit Document preclude any other or further
exercise thereof or the exercise of any other right, power or privilege
hereunder or thereunder. The rights and remedies provided herein are cumulative
and not exclusive of any rights or remedies which the Agents or any Lender would
otherwise have. No notice to or demand on any Credit Party in any case shall
entitle any Credit Party to any other or further notice or demand in similar or
other circumstances or constitute a waiver of the rights of the Agents or the
Lenders to any other or further action in any circumstances without notice or
demand.
11.5 Payment of Expenses; Indemnification. The Credit Parties agree to:
(a) pay all reasonable out-of-pocket costs and expenses of (i) the Agents, the
Lenders involved in the initial syndication of the Commitments as determined by
the Agents, and NationsBanc Capital Markets, Inc. ("NCMI") in connection with
(A) the negotiation, preparation, execution and delivery and administration of
this Credit Agreement and the other Credit Documents and the documents and
instruments referred to therein (including, without limitation, the reasonable
fees and expenses of Moore & Van Allen, special counsel to the Agents); provided
that reimbursement to any Lender (other than the Agents) for fees and expenses
shall be limited to $7,500 per Lender and (B) any amendment, waiver or consent
relating hereto and thereto including, but not limited to, any such amendments,
waivers or consents resulting from or related to any work-out, renegotiation or
restructure relating to the performance by the Credit Parties under this Credit
Agreement and (ii) the Agents and the Lenders in connection with (A) enforcement
of the Credit Documents and the documents and instruments referred to therein,
including, without limitation, in connection with any such enforcement, the
reasonable fees (at standard hourly rates) and disbursements of counsel for the
Agents and each of the Lenders, and (B) any bankruptcy or insolvency proceeding
of a Credit Party; provided that the Credit Parties shall not be responsible for
the legal fees of the Agents and the Lenders in connection with any proceeding
in which a Credit Party is the prevailing party as determined by a court of
competent jurisdiction and (b) indemnify each Agent, NCMI and each Lender, its
officers, directors, employees, representatives and agents from and hold each of
them harmless against any and all losses, liabilities, claims, damages or
expenses incurred by any of them as a result of, or arising out of, or in any
way related to, or by reason of, any investigation, litigation or other
proceeding (whether or not any Agent, NCMI or Lender is a party thereto) related
to (i) the entering into and/or performance of any Credit Document or the use of
proceeds of any Loans
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(including other extensions of credit) hereunder or the consummation of any
other transactions contemplated in any Credit Document, including, without
limitation, the reasonable fees and disbursements of counsel incurred in
connection with any such investigation, litigation or other proceeding (but
excluding any such losses, liabilities, claims, damages or expenses to the
extent incurred by reason of gross negligence or willful misconduct on the part
of the Person to be indemnified), (ii) any Environmental Claim and (iii) any
claims for Non-Excluded Taxes.
11.6 Amendments, Waivers and Consents. Neither this Credit Agreement
nor any other Credit Document nor any of the terms hereof or thereof may be
amended, changed, waived, discharged or terminated unless such amendment,
change, waiver, discharge or termination is in writing and signed by the
Required Lenders and the Credit Parties; provided that no such amendment,
change, waiver, discharge or termination shall without the consent of each
Lender affected thereby:
(a) extend the final maturity of any Loan or any portion
thereof or postpone any other date fixed for any payment of principal;
(b) reduce the rate or extend the time of payment of interest
(other than as a result of waiving the applicability of any
post-default increase in interest rates) thereon or fees hereunder;
(c) reduce or waive the principal amount of any Loan;
(d) increase the Commitment of a Lender over the amount
thereof in effect (it being understood and agreed that a waiver of any
Default or Event of Default or a waiver of any mandatory reduction in
the Commitments shall not constitute a change in the terms of any
Commitment of any Lender);
(e) release the Borrower or any Guarantor from its obligations
under the Credit Documents;
(f) amend, modify or waive any provision of this Section 11.6
or Section 3.4(a), 3.4(b)(i), 3.7, 3.8, 3.9, 3.10, 3.11, 3.12, 3.13,
3.14, 9.1, 9.2, 11.2, 11.3, 11.5 or 11.10;
(g) reduce any percentage specified in, or otherwise modify,
the definition of Required Lenders;
(h) consent to the assignment or transfer by the Borrower or a
Guarantor of any of its rights and obligations under (or in respect of)
the Credit Documents; or
Notwithstanding the fact that the consent of all the Lenders is required in
certain circumstances as set forth above, (x) each Lender is entitled to vote as
such Lender sees fit on any reorganization plan that affects the Loans or the
Letters of Credit, and each Lender acknowledges that the provisions of Section
1126(c) of the Bankruptcy Code supersedes the unanimous consent provisions set
forth herein and (y) the Required Lenders may consent to allow a Credit Party to
use cash collateral in the context of a bankruptcy or insolvency proceeding.
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11.7 Counterparts. This Credit Agreement may be executed in any number
of counterparts, each of which where so executed and delivered shall be an
original, but all of which shall constitute one and the same instrument. It
shall not be necessary in making proof of this Credit Agreement to produce or
account for more than one such counterpart.
11.8 Headings. The headings of the sections and subsections hereof are
provided for convenience only and shall not in any way affect the meaning or
construction of any provision of this Credit Agreement.
11.9 Defaulting Lender. Each Lender understands and agrees that if such
Lender is a Defaulting Lender then notwithstanding the provisions of Section
11.6 it shall not be entitled to vote on any matter requiring the consent of the
Required Lenders or to object to any matter requiring the consent of all the
Lenders; provided, however, that all other benefits and obligations under the
Credit Documents shall apply to such Defaulting Lender.
11.10 Survival of Indemnification and Representations and Warranties.
All indemnities set forth herein and all representations and warranties made
herein shall survive the execution and delivery of this Credit Agreement, the
making of the Loans, the issuance of the Letters of Credit and the repayment of
the Loans, LOC Obligations and other obligations and the termination of the
Commitments hereunder.
11.11 Governing Law.
THIS AGREEMENT AND THE OTHER CREDIT DOCUMENTS AND THE RIGHTS AND
OBLIGATIONS OF THE PARTIES HEREUNDER AND THEREUNDER SHALL BE GOVERNED BY AND
CONSTRUED AND INTERPRETED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NORTH
CAROLINA.
11.12 Arbitration. Any controversy or claim between or among the
parties hereto including, but not limited to, those arising out of or relating
to this Agreement or any related agreements or instruments, including any claim
based on or arising from an alleged tort, shall be determined by binding
arbitration in accordance with the Federal Arbitration Act (or if not
applicable, the applicable state law), the Rules of Practice and Procedure for
the Arbitration of Commercial Disputes of Judicial Arbitration and Mediation
Services, Inc. (J.A.M.S.), and the "Special Rules" set forth below. In the event
of any inconsistency, the Special Rules shall control. Judgment upon any
arbitration award may be entered in any court having jurisdiction. Any party to
this Agreement may bring an action, including a summary or expedited proceeding,
to compel arbitration of any controversy or claim to which this Agreement
applies in any court having jurisdiction over such action.
(a) Special Rules. The arbitration shall be conducted in the
city of the Borrower's domicile at time of this Agreement's execution
and administered by J.A.M.S. who will appoint an arbitrator; if
J.A.M.S. is unable or legally precluded from administering the
arbitration, then the American Arbitration Association will serve. All
arbitration hearings will be commenced within ninety (90) days of the
demand for arbitration; further, the arbitrator shall
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only, upon a showing of cause, be permitted to extend the commencement
of such hearing for up to an additional sixty (60) days.
(b) Reservations of Rights. Nothing in this Agreement shall be
deemed to (i) limit the applicability of any otherwise applicable
statutes of limitation or repose and any waivers contained in this
Agreement; or (ii) be a waiver by the Lenders of the protection
afforded to it by 12 U.S.C. Section 91 or any substantially equivalent
state law; or (iii) limit the right of the Lenders (A) to exercise self
help remedies such as (but not limited to) setoff, or (B) to foreclose
against any real or personal property collateral, or (C) to obtain from
a court provisional or ancillary remedies such as (but not limited to)
injunctive relief or the appointment of a receiver. The Lenders may
exercise such self help rights, foreclose upon such property, or obtain
such provisional or ancillary remedies before, during or after the
pendency of any arbitration proceeding brought pursuant to this
Agreement. At the Lenders' option, foreclosure under the Credit
Documents may be accomplished by the exercise of a power of sale or a
judicial sale under the Credit Documents or by judicial foreclosure.
Neither the exercise of self help remedies nor the institution or
maintenance of an action for foreclosure or provisional or ancillary
remedies shall constitute a waiver of the right of any party, including
the claimant in any such action, to arbitrate the merits of the
controversy or claim occasioning resort to such remedies.
11.13 Time. All references to time herein shall be references to
Eastern Standard Time or Eastern Daylight time, as the case may be, unless
specified otherwise.
11.14 Severability. If any provision of any of the Credit Documents is
determined to be illegal, invalid or unenforceable, such provision shall be
fully severable and the remaining provisions shall remain in full force and
effect and shall be construed without giving effect to the illegal, invalid or
unenforceable provisions.
11.15 Entirety. This Credit Agreement together with the other Credit
Documents represent the entire agreement of the parties hereto and thereto, and
supersede all prior agreements and understandings, oral or written, if any,
including any commitment letters or correspondence relating to the Credit
Documents or the transactions contemplated herein and therein.
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Each of the parties hereto has caused a counterpart of this Credit
Agreement to be duly executed and delivered as of the date first above written.
BORROWER:
HIGHWOODS/FORSYTH LIMITED PARTNERSHIP,
a North Carolina limited partnership
ATTEST:
By: Highwoods Properties, Inc.,
By:/s/ Edward J. Fritsch a Maryland corporation, its sole
Title:Secretary general partner
By:/s/ Ronald P.Gibson
[CORPORATE SEAL] Name: Ronald P. Gibson
Title: President
GUARANTORS: HIGHWOODS PROPERTIES, INC.,
a Maryland corporation
ATTEST:
By:/s/ Ronald P. Gibson
By:/s/Edward J. Fritsch Name: Ronald P. Gibson
Title: Secretary Title: President
[CORPORATE SEAL]
FORSYTH PROPERTIES SERVICES, INC.,
a North Carolina corporation
ATTEST:
By: /s/ Carman J. Liuzzo
By:/s/ Edward J. Fritsch Name: Carman J. Liuzzo
Title: Secretary Title: Vice President
[CORPORATE SEAL]
HIGHWOODS SERVICES, INC.,
a North Carolina corporation
ATTEST:
By: /s/ Ronald P. Gibson
By:/s/ Edward J. Fritsch Name: Ronald P. Gibson
Title: Secretary Title: President
[CORPORATE SEAL]
<PAGE>
SOUTHEAST REALTY OPTIONS CORP.,
a Delaware corporation
ATTEST:
By:/s/ Ronald P. Gibson
By:/s/ Edward J. Fritsch Name: Ronald P. Gibson
Title: Secretary Title: President
[CORPORATE SEAL]
HIGHWOODS/FLORIDA GP CORP.,
a Delaware corporation
ATTEST:
By:/s/ Ronald P. Gibson
By:/s/ Edward J. Fritsch Name: Ronald P. Gibson
Title: Secretary Title: President
[CORPORATE SEAL]
HIGHWOODS/FLORIDA HOLDINGS GP, L.P.,
a Delaware corporation
By: Highwoods/Florida GP Corp., a Delaware
corporation, its sole general partner
ATTEST:
By:/s/ Ronald P. Gibson
By:/s/ Edward J. Fritsch Name: Ronald P. Gibson
Title: Secretary Title: President
[CORPORATE SEAL]
<PAGE>
HIGHWOODS/FLORIDA HOLDINGS L.P.,
a Delaware corporation
By: Highwoods/Florida Holdings GP, L.P.,
a Delaware limited partnership, its
sole general partner
By: Highwoods/Florida GP Corp., a Delaware
corporation, its sole general partner
ATTEST:
By:/s/ Ronald P. Gibson
By:/s/ Edward J. Fritsch Name: Ronald P. Gibson
Title: Secretary Title: President
[CORPORATE SEAL]
HIGHWOODS/TENNESSEE PROPERTIES,
a Tennessee corporation
ATTEST:
By:/s/ Ronald P. Gibson
By:/s/ Edward J. Fritsch Name: Ronald P.Gibson
Title: Secretary Title: President
[CORPORATE SEAL]
<PAGE>
HIGHWOODS/TENNESSEE HOLDINGS GP, L.P.,
a Tennessee limited partnership
By: Highwoods/Tennessee Properties, Inc.,
a Tennessee corporation, its sole
general partner
ATTEST:
By:/s/ Ronald P. Gibson
By:/s/ Edward J. Fritsch Name: Ronald P. Gibson
Title: Secretary Title: President
[CORPORATE SEAL]
<PAGE>
HIGHWOODS/TENNESSEE HOLDINGS L.P.,
a Tennessee limited partnership
By: Highwoods/Tennessee Holdings GP, L.P.,
a Tennessee limited partnership, its
sole general partner
By: Highwoods/Tennessee Properties, Inc.,
a Delaware corporation, its sole
general partner
ATTEST:
By:/s/ Ronald P. Gibson
By:/s/ Edward J. Fritsch Name: Ronald P.Gibson
Title: Secretary Title: President
[CORPORATE SEAL]
<PAGE>
LENDERS:
NATIONSBANK, N.A.,
individually in its capacity as a
Lender and in its capacity as
Administrative Agent
By:/s/ Dave Klinge
Name: Dave Klinge
Title: Senior Vice President
<PAGE>
FIRST UNION NATIONAL BANK OF NORTH
CAROLINA,
individually in its capacity as a Lender
and in its capacity as Documentation Agent
By:/s/ Neal R. Drews
Name: Neal R. Drews
Title: Vice President
<PAGE>
WACHOVIA BANK OF NORTH CAROLINA, N.A.
By:/s/ James G. Caravello
Name: James G. Caravello
Title: Vice President
<PAGE>
BANK OF AMERICA ILLINOIS
By:/s/ Mark W. Lariviere
Name: Mark W. Lariviere
Title: Vice President
<PAGE>
FLEET NATIONAL BANK
By:/s/ Mark E. Dalton
Name: Mark E. Dalton
Title: Vice President
<PAGE>
WELLS FARGO BANK, NATIONAL ASSOCIATION
By: /s/ Robert W. Belson
Name: Robert W.Belson
Title: Vice President
<PAGE>
DRESDNER BANK AG, NEW YORK BRANCH and
GRAND CAYMAN BRANCH
By:/s/ Johannes Boeckman
Name: Johannes Boeckman
Title: Vice President
By:/s/ Jody Harrison
Name: Jody Harrison
Title: Assistant Treasurer
<PAGE>
AMSOUTH BANK OF ALABAMA
By:/s/ Arthur J. Sharbel, III
Name: Arthur J. Sharbel, III
Title: Vice President
<PAGE>
COMMERZBANK AKTIENGESELLSCHAFT,
ATLANTA AGENCY
By:/s/ Harry Yergey
Name: Harry Yergey
Title: Vice President
By:/s/ Bayard Hollingsworth
Name: Bayard Hollingsworth
Title: Assistant Vice President
<PAGE>
CORESTATES BANK, N.A.
By:/s/ William J. Lloyd, Jr.
Name: William J. Lloyd, Jr.
Title: Vice President
<PAGE>
DG BANK DEUTSCHE GENOSSENSCHAFTSBANK
By:/s/ Linda J. O'Connell
Name: Linda J. O'Connell
Title: Vice President
By:/s/ Karen A. Brinkman
Name: Karen A. Brinkman
Title: Vice President
<PAGE>
MELLON BANK, N.A.
By:/s/ Michael J. DiSanto
Name: Michael J. DiSanto
Title: Vice President
<PAGE>
CRESTAR BANK
By:/s/ Richard O. Dickson
Name: Richard O. Dickson
Title: Senior Vice President
