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): July 3, 1998
HIGHWOODS REALTY LIMITED PARTNERSHIP
(Exact name of registrant specified in its charter)
North Carolina 0-21731 56-1869557
- -------------- ------- ----------
(State of Formation) (Commission File Number) (IRS Employer
Identification No.)
3100 Smoketree Court, Suite 600, Raleigh, North Carolina 27604
(Address of principal executive offices, zip code)
Registrant's telephone number, including area code: (919) 872-4924
<PAGE>
Item 2. ACQUISITION OR DISPOSITION OF ASSETS
On July 13, 1998, Highwoods Properties, Inc. (the "Company") completed
its previously reported merger (the "J.C. Nichols Transaction") with J.C.
Nichols Company, a Missouri real estate operating company ("JCN"), pursuant to a
merger agreement dated as of December 22, 1997 (as amended on April 29, 1998,
the "Merger Agreement"). Prior to consummation of the J.C. Nichols Transaction,
J.C. Nichols had been subject to the information requirements of the Securities
Exchange Act of 1934, as amended, and, in accordance therewith, filed reports
and other information with the Securities and Exchange Commission.
As a result of the J.C. Nichols Transaction, Highwoods Realty Limited
Partnership (the "Operating Partnership") owns or has an ownership interest in
57 office, industrial and retail properties and 17 multifamily communities in
the Kansas City metropolitan area. The following table sets forth certain
information about the properties acquired in the Kansas City metropolitan area
as of June 30, 1998:
JCN KANSAS CITY PROPERTIES
<TABLE>
<CAPTION>
Wholly Partially Weighted Average Rentable
Type of Owned Owned Total Ownership Square Percent
Property Properties Properties Properties Interest Feet Leased
-------- ---------- ---------- ---------- -------- ---- ------
<S><C>
Office 24 2 26 79% 1,459,000 95%
Industrial 13 --- 13 100% 337,000 75%
Retail 18 --- 18 100% 2,443,000 96%
Multifamily 17 --- 17 100% 1,906 Units 96%
</TABLE>
As a result of the J.C. Nichols Transaction, the Operating Partnership
also has an ownership interest in 22 office and industrial properties and one
multifamily community in the Des Moines, Iowa area. The following table sets
forth certain information about the properties acquired in the Des Moines
metropolitan area as of June 30, 1998:
JCN DES MOINES PROPERTIES
<TABLE>
<CAPTION>
Wholly Partially Weighted Average Rentable
Type of Owned Owned Total Ownership Square Percent
Property Properties Properties Properties Interest Feet Leased
-------- ---------- ---------- ---------- -------- ---- ------
<S><C>
Office --- 21 21 56% 1,345,000 96%
Industrial --- 1 1 49.5% 200,000 100%
Multifamily --- 1 1 65% 418 Units 98%
</TABLE>
Additionally, the Operating Partnership acquired over 500 acres of land
for future development in Kansas City and Des Moines.
Under the terms of the Merger Agreement, the Company acquired all of
the outstanding common stock, $.01 par value, of J.C. Nichols ("J.C. Nichols
Common Stock"). Under the Merger Agreement, J.C. Nichols shareholders were
entitled to receive either 2.03 shares of common stock, $.01 par value, of the
Company ("Highwoods Common Stock") or $65 in cash for each share of J.C. Nichols
Common Stock. However, the Merger Agreement limited the aggregate cash payment
to J.C. Nichols shareholders to 40% of the total consideration. The exchange
ratio reflects the average closing price of Highwoods Common Stock over the 20
trading days preceding the closing date of the J.C.
<PAGE>
Nichols Transaction. The J.C. Nichols Transaction was valued at approximately
$544 million and consisted of the issuance of approximately 5.63 million shares
of Highwoods Common Stock, the assumption of approximately $229 million of debt,
the incurrence of approximately $15 million in transaction costs and a cash
payment of approximately $120 million, net of cash acquired of approximately $59
million.
The properties acquired in the J.C. Nichols Transaction include the
Country Club Plaza in Kansas City, of which the Operating Partnership owns
approximately 1.0 million square feet of retail space (encompassing 15 square
blocks), approximately 940,000 square feet of office space and 510 apartment
units. As of June 30, 1998, the Country Club Plaza was approximately 96% leased.
The Country Club Plaza is presently undergoing an expansion and restoration
expected to add approximately 800,000 square feet of retail, office and hotel
space and 350 apartment units with an estimated cost of approximately $240
million. The Operating Partnership intends to complete the development in the
Country Club Plaza previously planned by J.C. Nichols.
Upon completion of the J.C. Nichols Transaction, the Operating
Partnership has succeeded to the interests of J.C. Nichols in a strategic
alliance with Kessinger/Hunter & Company, Inc. ("Kessinger/Hunter") pursuant to
which Kessinger/Hunter manages and leases the office, industrial and retail
properties in the greater Kansas City metropolitan area. The Operating
Partnership currently has a 30% ownership interest in the strategic alliance
with Kessinger/Hunter and has two additional options to acquire up to a 65%
ownership interest in the strategic alliance. The Operating Partnership has also
succeeded to the interests of J.C. Nichols in a strategic alliance with R&R
Investors, Ltd. ("R&R") pursuant to which R&R manages and leases the properties
in which the Operating Partnership has an ownership interest in the Des Moines
area. The Operating Partnership has an ownership interest of 50% or more in each
of the properties in the Des Moines area.
As a result of the J.C. Nichols Transaction, the J.C. Nichols
operations have become a division of the Operating Partnership, Barrett Brady,
former president and chief executive officer of J.C. Nichols, has become a
senior vice president of the Operating Partnership responsible for its midwest
operations and approximately 100 employees of J.C. Nichols have joined the
Operating Partnership. In addition, Kay Nichols Callison has joined the
Company's board of directors.
Item 5. OTHER EVENTS
On July 3, 1998, the Operating Partnership obtained a new $600 million
revolving line of credit (the "Revolving Loan") from a group of 14 lender banks.
The Revolving Loan was arranged and syndicated by NationsBanc Montgomery
Securities LLC. NationsBank is the administrative agent, First Union National
Bank is the syndication agent and Wells Fargo Bank is the documentation agent.
Other lenders include: Managing Agents--Bank of America, CommerzBank AG,
Wachovia Bank, Centura Bank, and PNC Bank; Co-Agents--Fleet National Bank,
AmSouth Bank, and Dresdner Bank AG; and Participants--DG Bank, Mellon Bank and
Firstrust Savings.
The Revolving Loan matures in July 2001 and replaces the Operating
Partnership's two existing revolving loans aggregating $430 million. The
Revolving Loan carries an interest rate based upon the Operating Partnership's
senior unsecured credit rating. At the Operating Partnership's current BBB/Baa2
senior unsecured rating, interest accrues on borrowings at an average interest
rate of LIBOR plus 80 basis points. The Revolving Loan also includes a $300
million competitive bid sub-facility.
The obligations of the Operating Partnership under the Revolving Loan
are guaranteed by the Company, its sole general partner, and certain
subsidiaries of the Company and the Operating Partnership.
Item 7. FINANCIAL STATEMENTS AND EXHIBITS
(a) Financial statements of businesses acquired
It is impracticable to provide the required financial
statements at the time of the filing of this report. The
required financial statements will be filed as soon as
practicable, but not later than September 25,
<PAGE>
1998.
(b) Pro forma financial information
See text at Item 7(a)
(c) Exhibits
10.1 Credit Agreement among Highwoods Realty Limited
Partnership, Highwoods Properties, Inc., the
Subsidiaries named therein and the Lenders named
therein, dated as of July 3, 1998
<PAGE>
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 REALTY LIMITED PARTNERSHIP
By: Highwoods Properties, Inc., its general partner
By: /s/ Carman J. Liuzzo
__________________________________________
Carman J. Liuzzo
Vice President and Chief Financial Officer
Date: July 23, 1998
CREDIT AGREEMENT
dated as of July 3, 1998
among
HIGHWOODS PROPERTIES, INC.,
HIGHWOODS SERVICES, INC., AND
HIGHWOODS REALTY LIMITED PARTNERSHIP,
as Borrowers,
AND CERTAIN SUBSIDIARIES OF THE BORROWERS
FROM TIME TO TIME PARTY HERETO,
as Guarantors,
THE SEVERAL LENDERS
FROM TIME TO TIME PARTY HERETO
NATIONSBANK, N.A.,
as Administrative Agent,
FIRST UNION NATIONAL BANK,
as Syndication Agent, and
WELLS FARGO BANK, NATIONAL ASSOCIATION,
as Documentation Agent
<PAGE>
TABLE OF CONTENTS
Page
----
SECTION 1 DEFINITIONS........................................................2
1.1 Definitions..........................................................2
1.2 Computation of Time Periods.........................................24
1.3 Accounting Terms....................................................24
SECTION 2 CREDIT FACILITIES.................................................25
2.1 Revolving Loans.....................................................25
2.2 Competitive Loan Subfacility........................................27
2.3 Letter of Credit Subfacility........................................30
2.4 Swingline Loan Subfacility..........................................35
2.5 Extension of Maturity Date..........................................38
2.6 Joint and Several Liability of the Borrowers........................38
2.7 Appointment of Parent as Agent for Borrowers........................40
SECTION 3 OTHER PROVISIONS RELATING TO CREDIT FACILITIES....................41
3.1 Default Rate........................................................41
3.2 Extension and Conversion............................................41
3.3 Prepayments.........................................................42
3.4 Termination and Reduction of Revolving Committed Amount.............42
3.5 Fees................................................................43
3.6 Capital Adequacy....................................................44
3.7 Limitation on Eurodollar Loans......................................44
3.8 Illegality..........................................................45
3.9 Requirements of Law.................................................45
3.10 Treatment of Affected Loans........................................46
3.11 Taxes..............................................................47
3.12 Compensation.......................................................48
3.13 Pro Rata Treatment.................................................49
3.14 Sharing of Payments................................................50
3.15 Payments, Computations, Etc........................................51
3.16 Evidence of Debt...................................................53
SECTION 4 GUARANTY..........................................................53
4.1 The Guarantee.......................................................53
4.2 Obligations Unconditional...........................................53
4.3 Reinstatement.......................................................55
4.4 Certain Additional Waivers..........................................55
4.5 Remedies............................................................55
4.6 Rights of Contribution..............................................55
4.7 Continuing Guarantee................................................56
SECTION 5 CONDITIONS........................................................57
5.1 Closing Conditions..................................................57
5.2 Conditions to all Extensions of Credit..............................59
SECTION 6 REPRESENTATIONS AND WARRANTIES....................................60
<PAGE>
6.1 Financial Condition.................................................60
6.2 No Change; Dividends................................................60
6.3 Organization; Existence; Compliance with Law........................60
6.4 Power; Authorization; Enforceable Obligations.......................61
6.5 No Conflicts........................................................61
6.6 No Default..........................................................61
6.7 Ownership...........................................................62
6.8 Indebtedness........................................................62
6.9 Litigation..........................................................62
6.10 Taxes..............................................................62
6.11 Compliance with Laws...............................................62
6.12 ERISA..............................................................62
6.13 Subsidiaries.......................................................63
6.14 Governmental Regulations, Etc......................................64
6.15 Purpose of Loans and Letters of Credit.............................65
6.16 Environmental Matters..............................................65
6.17 Intellectual Property..............................................66
6.18 Solvency...........................................................66
6.19 Investments........................................................66
6.20 Disclosure.........................................................66
6.21 No Burdensome Restrictions.........................................66
6.22 Labor Matters......................................................66
6.23 Year 2000 Compliance...............................................67
6.24 Principal Offices..................................................67
SECTION 7 AFFIRMATIVE COVENANTS.............................................67
7.1 Information Covenants...............................................67
7.2 Preservation of Existence and Franchises............................71
7.3 Books and Records...................................................71
7.4 Compliance with Law.................................................71
7.5 Payment of Taxes and Other Indebtedness.............................71
7.6 Insurance...........................................................71
7.7 Maintenance of Property.............................................72
7.8 Performance of Obligations..........................................72
7.9 Use of Proceeds.....................................................72
7.10 Audits/Inspections.................................................72
7.11 Financial Covenants................................................72
7.12 Additional Credit Parties..........................................73
7.13 Management.........................................................74
7.14 Upstream of Excess Cash Flow.......................................74
7.15 Year 2000 Compliance...............................................74
7.16 Environmental Indemnity............................................74
SECTION 8 NEGATIVE COVENANTS................................................75
8.1 Indebtedness........................................................75
8.2 Liens...............................................................76
8.3 Nature of Business..................................................76
<PAGE>
8.4 Consolidation, Merger, Dissolution, etc.............................76
8.5 Investment in Properties other than For Lease Office and
Industrial Properties.............................................76
8.6 Investments.........................................................76
8.7 Restricted Payments.................................................77
8.8 Prepayments of Indebtedness, etc....................................77
8.9 Transactions with Affiliates........................................77
8.10 Fiscal Year; Organizational Documents..............................77
8.11 Limitation on Restricted Actions...................................77
8.12 Ownership of Subsidiaries..........................................78
8.13 Sale Leasebacks....................................................78
8.14 No Further Negative Pledges........................................78
8.15 Non-Guarantor Subsidiaries.........................................78
8.16 Indenture..........................................................79
8.17 Asset Dispositions.................................................79
SECTION 9 EVENTS OF DEFAULT.................................................79
9.1 Events of Default...................................................79
9.2 Acceleration; Remedies..............................................82
SECTION 10 AGENCY PROVISIONS................................................83
10.1 Appointment, Powers and Immunities.................................83
10.2 Reliance by Administrative Agent...................................83
10.3 Defaults...........................................................84
10.4 Rights as a Lender.................................................84
10.5 Indemnification....................................................84
10.6 Non-Reliance on Administrative Agent and Other Lenders.............85
10.7 Successor Administrative Agent.....................................85
10.8 Minimum Commitments by Agents......................................86
SECTION 11 MISCELLANEOUS....................................................86
11.1 Notices............................................................86
11.2 Right of Set-Off; Adjustments......................................87
11.3 Benefit of Agreement; Assignments..................................88
11.4 No Waiver; Remedies Cumulative.....................................89
11.5 Expenses; Indemnification..........................................90
11.6 Amendments, Waivers and Consents...................................91
11.7 Counterparts.......................................................92
11.8 Headings...........................................................92
11.9 Survival...........................................................92
11.10 Governing Law; Submission to Jurisdiction; Venue..................93
11.11 Severability......................................................93
11.12 Entirety..........................................................94
11.13 Binding Effect; Termination.......................................94
11.14 Confidentiality...................................................94
11.15 Conflict..........................................................94
<PAGE>
SCHEDULES
---------
Schedule 1.1(a) Investments
Schedule 1.1(b) Nichols Documents
Schedule 2.1(a) Lenders
Schedule 2.3(a) Existing Letters of Credit
Schedule 6.12 ERISA Matters
Schedule 6.13 Subsidiaries
Schedule 6.24 Principal Place of Business
Schedule 7.6 Insurance
Schedule 8.1 Indebtedness
EXHIBITS
--------
Exhibit 2.1(b)(i) Form of Notice of Borrowing
Exhibit 2.1(e) Form of Revolving Note
Exhibit 2.2(b) Form of Competitive Bid Request
Exhibit 2.2(c) Form of Competitive Bid
Exhibit 2.2(d) Form of Competitive Bid Accept/Reject Letter
Exhibit 2.2(h) Form of Competitive Note
Exhibit 2.4(d) Form of Swingline Note
Exhibit 3.2 Form of Notice of Extension/Conversion
Exhibit 7.1(c) Form of Officer's Compliance Certificate
Exhibit 7.12 Form of Joinder Agreement
Exhibit 11.3(b) Form of Assignment and Acceptance
<PAGE>
CREDIT AGREEMENT
THIS CREDIT AGREEMENT dated as of July 3, 1998 (as amended, modified,
restated or supplemented from time to time, the "Credit Agreement"), is by and
among HIGHWOODS REALTY LIMITED PARTNERSHIP, a North Carolina limited partnership
("Highwoods Realty"), HIGHWOODS PROPERTIES, INC., a Maryland corporation
("Highwoods Properties") and HIGHWOODS SERVICES, INC., a North Carolina
corporation ("Highwoods Services") (Highwoods Realty, Highwoods Properties and
Highwoods Services are hereinafter referred to individually as a "Borrower" and
collectively as the "Borrowers"), certain Subsidiaries of the Borrowers (such
Subsidiaries are hereinafter referred to individually as a "Guarantor" and
collectively as the "Guarantors"), the Lenders (as defined herein), NATIONSBANK,
N.A., as Administrative Agent for the Lenders (in such capacity, the
"Administrative Agent") FIRST UNION NATIONAL BANK, as Syndication Agent for the
Lenders (in such capacity, the "Syndication Agent"), WELLS FARGO BANK, NATIONAL
ASSOCIATION, as Documentation Agent for the Lenders (in such capacity, the
"Documentation Agent") and the institutions identified herein as Managing
Agents.
W I T N E S S E T H
WHEREAS, Highwoods Realty and the Guarantors identified therein entered
into (i) that certain Credit Agreement dated as of September 27, 1996 which
provided a $280,000,000 credit facility (the "1996 Credit Facility") to
Highwoods Realty (as amended, modified, supplemented or restated from time to
time, the "1996 Credit Agreement") and (ii) that certain Credit Agreement dated
as of December 15, 1997 which provided a $150,000,000 credit facility (the "1997
Credit Facility") to Highwoods Realty (as amended, modified, supplemented or
restated from time to time, the "1997 Credit Agreement");
WHEREAS, the Borrowers have requested that the Lenders provide a
$600,000,000 credit facility to refinance the 1996 Credit Facility and the 1997
Credit Facility and for the other purposes hereinafter set forth; and
WHEREAS, the Lenders have agreed to make the requested credit facility
available to the Borrowers 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:
<PAGE>
SECTION 1
DEFINITIONS
1.1 Definitions.
As used in this Credit Agreement, the following terms shall have the
meanings specified below unless the context otherwise requires:
"Additional Credit Party" means each Person that becomes a
Guarantor after the Closing Date by execution of a Joinder Agreement.
"Adjusted Base Rate" means the Base Rate plus the Applicable
Percentage.
"Adjusted EBITDA" means, for any period, the sum of EBITDA for
such period minus Capital Expenditures for such period minus an amount
equal to any increase in EBITDA for such period attributable to the
Straight-Lining of Rents.
"Adjusted Eurodollar Rate" means the Eurodollar Rate plus the
Applicable Percentage.
"Adjusted Investment Value" means, as of any date, (a) with
respect to the ratio specified in clause (ix) of the definition of
"Permitted Investments", the sum of (i) the total assets as of such
date, as determined in accordance with GAAP, of Non-Wholly Owned
Subsidiaries which are Credit Parties, less (ii) that portion thereof
attributable to the owners thereof other than Highwoods Properties,
Highwoods Realty or any Wholly Owned Subsidiary, and (b) with respect
to the ratio specified in clause (x) of the definition of "Permitted
Investments", the sum of (i) investments in unconsolidated subsidiaries
as shown on the balance sheet of the Consolidated Parties as of such
date of determination, plus (ii) (A) the total assets as of such date,
as determined in accordance with GAAP, of Non-Wholly Owned Subsidiaries
which are not Credit Parties, less (B) that portion thereof
attributable to the owners thereof other than Highwoods Properties,
Highwoods Realty or any Wholly Owned Subsidiary.
"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 Consolidated Parties with respect to the relevant
Property or Properties (but excluding for purposes of determining such
revenues and income, any extraordinary gains, any interest revenue and
any revenue gained outside of the ordinary course of business of the
Consolidated Parties) minus (b) the aggregate of (i) the sum of all
reasonable and customary expenses incurred by the Consolidated Parties
in the operation of such Property or Properties, including, but not
limited to, utility expenses, property taxes and insurance premiums,
(ii) a management fee in the amount of four percent (4%) of such
revenues and income received with respect to the relevant Properties,
(iii) Capital Expenditures, (iv) an amount equal to any increase in
revenues and income attributable to the Straight-Lining of Rents and
(v) an amount equal to
2
<PAGE>
the income and revenues included in subclause (a) above attributable to
each entity not wholly owned by Consolidated Parties and Non-Guarantor
Subsidiaries multiplied by the percentage of the interest in each such
entity owned by any parties which are not owned by Consolidated Parties
and Non-Guarantor Subsidiaries, in each case excluding interest,
depreciation, amortization and income taxes.
"Adjusted Total Assets" means, as of any date, the sum of (i)
Total Assets, as shown on the balance sheet of the Consolidated Parties
as of such date, less (ii) that portion of the total assets as of such
date, as determined in accordance with GAAP, of Non-Wholly Owned
Subsidiaries attributable to any owners thereof other than Highwoods
Properties, Highwoods Realty or any Wholly Owned Subsidiary.
"Administrative Agent" shall have the meaning assigned to such
term in the heading hereof, together with any successors or assigns.
"Affiliate" means, with respect to any Person, any other
Person (i) directly or indirectly controlling or controlled by or under
direct or indirect common control with such Person or (ii) directly or
indirectly owning or holding five percent (5%) or more of the equity
interest in such Person. For purposes of this definition, "control"
when used with respect to any Person means the power to direct the
management and policies of such Person, directly or indirectly, whether
through the ownership of voting securities, by contract or otherwise;
and the terms "controlling" and "controlled" have meanings correlative
to the foregoing.
"Applicable Percentage" means, for any day, the rate per annum
set forth below opposite the applicable Unsecured Long Term Debt Rating
then in effect, it being understood that the Applicable Percentage for
(i) Eurodollar Loans shall be the percentage set forth under column
"Applicable Percentage for Eurodollar Loans", (ii) Base Rate Loans
shall be the percentage set forth under the column "Applicable
Percentage for Base Rate Loans" and (iii) Letter of Credit Fee shall be
the percentage set forth under the column "Applicable Percentage for
Letter of Credit Fee."
<TABLE>
<CAPTION>
- ---------------- --------------- --------------- --------------- ----------------- ------------------ ------------------
Applicable
Applicable Applicable Percentage for
Pricing Moody's Third Debt Percentage for Percentage Base Letter of Credit
Level S&P Rating Rating Rating Eurodollar Loans Rate Loans Fee
- ---------------- --------------- --------------- --------------- ----------------- ------------------ ------------------
<S><C>
I A- or higher A3 or higher A- /A3 0.65% 0% 0.65%
equivalent
or higher
- ---------------- --------------- --------------- --------------- ----------------- ------------------ ------------------
II BBB+ Baa1 BB+/Baa1 0.70% 0% 0.70%
equivalent
- ---------------- --------------- --------------- --------------- ----------------- ------------------ ------------------
III BBB Baa2 BBB/Baa2 0.80% 0% 0.80%
equivalent
- ---------------- --------------- --------------- --------------- ----------------- ------------------ ------------------
IV BBB- Baa3 BBB-/Baa3 0.90% .10% 0.90%
equivalent
- ---------------- --------------- --------------- --------------- ----------------- ------------------ ------------------
V BB+ or Ba1 or BB+/Ba1 1.50% .25% 1.50%
lower lower equivalent
- ---------------- --------------- --------------- --------------- ----------------- ------------------ ------------------
</TABLE>
3
<PAGE>
The Applicable Percentage shall be adjusted effective on the next
Business Day following any change in the Unsecured Long Term Debt
Rating. The Borrowers shall notify the Administrative Agent in writing
promptly after becoming aware of any change in the Unsecured Long Term
Debt Rating of Highwoods Properties.
"Asset Disposition" means the disposition of any assets
(including without limitation the Capital Stock of a Subsidiary) of any
Consolidated Party whether by sale, lease, transfer or otherwise to a
Person other than a Credit Party.
"Bankruptcy Code" means the Bankruptcy Code in Title 11 of the
United States Code, as amended, modified, succeeded or replaced from
time to time.
"Bankruptcy Event" means, with respect to any Person, the
occurrence of any of the following with respect to such Person: (i) a
court or governmental agency having jurisdiction in the premises shall
enter a decree or order for relief in respect of such Person in an
involuntary case under any applicable bankruptcy, insolvency or other
similar law now or hereafter in effect, or appointing a receiver,
liquidator, assignee, custodian, trustee, sequestrator (or similar
official) of such Person or for any substantial part of its Property or
ordering the winding up or liquidation of its affairs; or (ii) there
shall be commenced against such Person an involuntary case under any
applicable bankruptcy, insolvency or other similar law now or hereafter
in effect, or any case, proceeding or other action for the appointment
of a receiver, liquidator, assignee, custodian, trustee, sequestrator
(or similar official) of such Person or for any substantial part of its
Property or for the winding up or liquidation of its affairs, and such
involuntary case or other case, proceeding or other action shall remain
undismissed, undischarged or unbonded for a period of sixty (60)
consecutive days; or (iii) such Person 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 for any
substantial part of its Property or make any general assignment for the
benefit of creditors; or (iv) such Person shall be unable to, or shall
admit in writing its inability to, pay its debts generally as they
become due.
"Base Rate" means, for any day, the rate per annum equal to
the higher of (a) the Federal Funds Rate for such day plus one-half of
one percent (.5%) and (b) the Prime Rate for such day. 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 Federal Funds Rate.
"Base Rate Loan" means any Loan bearing interest at a rate
determined by reference to the Base Rate.
"Borrowers" means the Persons identified as such in the
heading hereof, together with any permitted successors and assigns.
4
<PAGE>
"Business Day" means a day other than a Saturday, Sunday or
other day on which commercial banks in Charlotte, North Carolina are
authorized or required by law to close, except that, when used in
connection with a Eurodollar Loan, such day shall also be a day on
which dealings between banks are carried on in U.S. dollar deposits in
London, England.
"Capital Expenditures" means all expenditures required for the
leasing of space within Properties owned and previously leased by the
Consolidated 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 that Person.
"Capital Stock" means (i) in the case of a corporation,
capital stock, (ii) in the case of an association or business entity,
any and all shares, interests, participations, rights or other
equivalents (however designated) of capital stock, (iii) in the case of
a partnership, partnership interests (whether general or limited), (iv)
in the case of a limited liability company, membership interests and
(v) any other interest or participation that confers on a Person the
right to receive a share of the profits and losses of, or distributions
of assets of, the issuing Person.
"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) Scheduled Funded Debt Payments.
"Cash Equivalents" means (a) securities issued or directly and
fully guaranteed or insured by the United States of America or any
agency or instrumentality thereof (provided that the full faith and
credit of the United States of America is pledged in support thereof)
having maturities of not more than twelve months from the date of
acquisition, (b) U.S. dollar denominated time deposits and certificates
of deposit of (i) any Lender, (ii) any domestic commercial bank of
recognized standing having capital and surplus in excess of
$500,000,000 or (iii) any bank whose short-term commercial paper rating
from S&P is at least A-1 or the equivalent thereof or from Moody's is
at least P-1 or the equivalent thereof (any such bank being an
"Approved Bank"), in each case with maturities of not more than 270
days from the date of acquisition, (c) commercial paper and variable or
fixed rate notes issued by any Approved Bank (or by the parent company
thereof) or any variable rate notes issued by, or guaranteed by, any
domestic corporation rated A-1 (or the equivalent thereof) or better by
S&P or P-1 (or the equivalent thereof) or better by Moody's and
maturing within six months of the date of acquisition, (d) repurchase
agreements with a bank or trust company (including any of the Lenders)
or recognized securities dealer having capital and
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surplus in excess of $500,000,000 for direct obligations issued by or
fully guaranteed by the United States of America in which any Credit
Party shall have a perfected first priority security interest (subject
to no other Liens) and having, on the date of purchase thereof, a fair
market value of at least 100% of the amount of the repurchase
obligations and (e) Investments, classified in accordance with GAAP as
current assets, in money market investment programs registered under
the Investment Company Act of 1940, as amended, which are administered
by reputable financial institutions having capital of at least
$500,000,000 and the portfolios of which are limited to Investments of
the character described in the foregoing subdivisions (a) through (d).
"Change of Control" means the occurrence of any of the
following events: (i) any Person or two or more Persons acting in
concert shall have acquired beneficial ownership, directly or
indirectly, of, or shall have acquired by contract or otherwise, or
shall have entered into a contract or arrangement that, upon
consummation, will result in its or their acquisition of, control over,
Voting Stock of Highwoods Properties (or other securities convertible
into such Voting Stock) representing 35% or more of the combined voting
power of all Voting Stock of Highwoods Properties, or (ii) during any
period of up to 24 consecutive months, commencing after the Closing
Date, individuals who at the beginning of such 24 month period were
directors of Highwoods Properties (together with any new director whose
election by Highwoods Properties' Board of Directors or whose
nomination for election by Highwoods Properties' shareholders was
approved by a vote of at least two-thirds of the directors then still
in office who either were directors at the beginning of such period or
whose election or nomination for election was previously so approved)
cease for any reason to constitute a majority of the directors of
Highwoods Properties then in office, or (iii) Highwoods Properties
shall fail to be the sole general partner of Highwoods Realty or own a
majority of the Capital Stock of Highwoods Services. As used herein,
"beneficial ownership" shall have the meaning provided in Rule 13d-3 of
the Securities and Exchange Commission under the Securities Exchange
Act of 1934.
"Closing Date" means the date hereof.
"Code" means the Internal Revenue Code of 1986, as amended,
and any successor statute thereto, as interpreted by the rules and
regulations issued thereunder, in each case as in effect from time to
time. References to sections of the Code shall be construed also to
refer to any successor sections.
"Commitment" means (i) with respect to each Lender, the
Revolving Commitment of such Lender, (ii) with respect to the Swingline
Lender, the Swingline Commitment, and (iii) with respect to the Issuing
Lender, the LOC Commitment.
"Commitment Percentage" means, for any Lender, the percentage
identified as its Commitment Percentage on Schedule 2.1(a), as such
percentage may be modified in connection with any assignment made in
accordance with the provisions of Section 11.3.
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"Competitive Bid" means an offer by a Lender to make a
Competitive Loan pursuant to the terms of Section 2.2.
"Competitive Bid Rate" means, as to any Competitive Bid made
by a Lender in accordance with the provisions of Section 2.2, the fixed
rate of interest offered by the Lender making the Competitive Bid.
"Competitive Bid Request" means a request by one or more of
the Borrowers for Competitive Bids in accordance with the provisions of
Section 2.2(b) signed by a Responsible Officer.
"Competitive Bid Request Fee" means the Competitive Bid
administration fee of $1,500 paid to the Administrative Agent for its
own account for each Competitive Bid Request.
"Competitive Loan" means a loan made by a Lender in its
discretion pursuant to the provisions of Section 2.2.
"Competitive Loan Lenders" means, at any time, those Lenders
which have Competitive Loans outstanding.
"Competitive Loan Maximum Amount" shall have the meaning
assigned to such term in Section 2.2(a).
"Competitive Note" or "Competitive Notes" means the promissory
notes of the Borrowers in favor of each of the Lenders evidencing the
Competitive Loans provided pursuant to Section 2.2(i), individually or
collectively, as appropriate, as such promissory notes may be amended,
modified, restated, supplemented, extended, renewed or replaced from
time to time.
"Consolidated Parties" means a collective reference to
Highwoods Properties and its consolidated Subsidiaries, including
Highwoods Realty, and "Consolidated Party" means any one of them.
"Continuing Lender" means each Lender which was also a Lender
under and as defined in 1996 Credit Agreement.
"Credit Documents" means a collective reference to this Credit
Agreement, the Notes, the LOC Documents, each Joinder Agreement and all
other related agreements and documents issued or delivered hereunder or
thereunder or pursuant hereto or thereto (in each case, as the same may
be amended, modified, restated, supplemented, extended, renewed or
replaced from time to time) and "Credit Document" means any one of
them.
"Credit Parties" means a collective reference to the Borrowers
and the Guarantors, and "Credit Party" means any one of them.
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"Credit Party Obligations" means, without duplication, (a) all
of the obligations of the Credit Parties to the Lenders (including the
Issuing Lender) and the Administrative Agent, whenever arising, under
this Credit Agreement, the Notes or any of the other Credit Documents
(including, but not limited to, any interest accruing after the
occurrence of a Bankruptcy Event with respect to any Credit Party,
regardless of whether such interest is an allowed claim under the
Bankruptcy Code) and (b) all liabilities and obligations, whenever
arising, owing from any of the Borrowers to any Lender, or any
Affiliate of a Lender, arising under any Hedging Agreement. It is
specifically understood and agreed that the Credit Party Obligations of
each Guarantor include any and all Obligations that such Guarantor may
have as a Borrower hereunder or under any of the other Credit
Documents.
"Default" means any event, act or condition which with notice
or lapse of time, or both, would constitute an Event of Default.
"Documentation Agent" shall have the meaning assigned to such
term in the heading hereof, together with any successors or assigns
"Dollars" and "$" means dollars in lawful currency of the
United States of America.
"Domestic Subsidiary" means, with respect to any Person, any
Subsidiary of such Person which is incorporated or organized under the
laws of any State of the United States or the District of Columbia.
"EBITDA" means, for any period, the sum of (i) Net Income for
such period, plus (ii) an amount which, in the determination of Net
Income for such period, has been deducted for (A) Interest Expense, (B)
total federal, state, local and foreign income, value added and similar
taxes and (C) depreciation and amortization expense, all as determined
in accordance with GAAP.
"Eligible Assignee" means (i) a Lender; (ii) an Affiliate of a
Lender; and (iii) any other Person approved by the Administrative Agent
(such approval not to be unreasonably withheld or delayed) and, unless
an Event of Default has occurred and is continuing at the time any
assignment is effected in accordance with Section 11.3, the Principal
Borrower (such approval not to be unreasonably withheld or delayed by
the Principal Borrower and such approval to be deemed given by the
Principal Borrower if no objection is received by the assigning Lender
and the Administrative Agent from the Principal Borrower within two
Business Days after notice of such proposed assignment has been
provided by the assigning Lender to the Principal Borrower); provided,
however, that neither the Principal Borrower nor an Affiliate of the
Principal Borrower shall qualify as an Eligible Assignee.
"Environmental Laws" means any and all lawful and applicable
Federal, state, local and foreign statutes, laws, regulations,
ordinances, rules, judgments, orders, decrees, permits, concessions,
grants, franchises, licenses, agreements or other governmental
8
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restrictions relating to the environment or to emissions, discharges,
releases or threatened releases of pollutants, contaminants, chemicals,
or industrial, toxic or hazardous substances or wastes into the
environment including, without limitation, ambient air, surface water,
ground water, or land, or otherwise relating to the manufacture,
processing, distribution, use, treatment, storage, disposal, transport,
or handling of pollutants, contaminants, chemicals, or industrial,
toxic or hazardous substances or wastes.
"Equity Issuance" means any issuance by Highwoods Properties
or Highwoods Realty to any Person which is not a Credit Party of (a)
shares of its Capital Stock, (b) any shares of its Capital Stock
pursuant to the exercise of options or warrants or (c) any shares of
its Capital Stock 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 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 of the Borrowers
and which is treated as a single employer under Sections 414(b) or (c)
of the Code.
"ERISA Event" means (i) with respect to any Plan, the
occurrence of a Reportable Event or the substantial cessation of
operations (within the meaning of Section 4062(e) of ERISA); (ii) the
withdrawal by Consolidated 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; (iii) 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; (iv) the institution
of proceedings to terminate or the actual termination of a Plan by the
PBGC under Section 4042 of ERISA; (v) any event or condition which
might constitute grounds under Section 4042 of ERISA for the
termination of, or the appointment of a trustee to administer, any
Plan; (vi) the complete or partial withdrawal of any Consolidated Party
or any ERISA Affiliate from a Multiemployer Plan; (vii) the conditions
for imposition of a lien under Section 302(f) of ERISA exist with
respect to any Plan; or (vii) the adoption of an amendment to any Plan
requiring the provision of security to such Plan pursuant to Section
307 of ERISA.
"Eurodollar Loan" means any Loan that bears interest at a rate
based upon the Eurodollar Rate.
"Eurodollar Rate" means, for any Eurodollar Loan for any
Interest Period therefor, the rate per annum (rounded upwards, if
necessary, to the nearest 1/100 of 1%) determined by the Administrative
Agent to be equal to the quotient obtained by dividing (a) the
Interbank Offered Rate for such Eurodollar Loan for such Interest
Period by (b) 1 minus the Eurodollar Reserve Requirement for such
Eurodollar Loan for such Interest Period.
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<PAGE>
"Eurodollar Reserve Requirement" means, at any time, the
maximum rate at which reserves (including, without limitation, any
marginal, special, supplemental, or emergency reserves) are required to
be maintained under regulations issued from time to time by the Board
of Governors of the Federal Reserve System (or any successor) by member
banks of the Federal Reserve System against "Eurocurrency liabilities"
(as such term is used in Regulation D). Without limiting the effect of
the foregoing, the Eurodollar Reserve Requirement shall reflect any
other reserves required to be maintained by such member banks with
respect to (i) any category of liabilities which includes deposits by
reference to which the Adjusted Eurodollar Rate is to be determined, or
(ii) any category of extensions of credit or other assets which include
Eurodollar Loans. The Adjusted Eurodollar Rate shall be adjusted
automatically on and as of the effective date of any change in the
Eurodollar Reserve Requirement.
"Event of Default" means such term as defined in Section 9.1.
"Existing Letters of Credit" means those Letters of Credit
outstanding on the Closing Date and identified on Schedule 2.3(a)
attached hereto.
"Facility Fee" shall have the meaning assigned to such term in
Section 3.5(a).
"Fees" means all fees payable pursuant to Section 3.5.
"Federal Funds Rate" means, for any day, the rate per annum
(rounded upwards, if necessary, to the nearest 1/100 of 1%) equal to
the weighted average of the rates on overnight Federal funds
transactions with members of the Federal Reserve System arranged by
Federal funds brokers on such day, as published by the Federal Reserve
Bank of New York on the Business Day next succeeding such day; provided
that (a) if such day is not a Business Day, the Federal Funds Rate for
such day shall be such rate on such transactions on the next preceding
Business Day as so published on the next succeeding Business Day, and
(b) if no such rate is so published on such next succeeding Business
Day, the Federal Funds Rate for such day shall be the average rate
charged to the Administrative Agent (in its individual capacity) on
such day on such transactions as determined by the Administrative
Agent.
"First Union" means First Union National Bank and its
successors.
"Fixed Charge Coverage Ratio" means, as of the end of each
fiscal quarter of the Consolidated Parties for the twelve month period
ending on such date, the ratio of (a) Adjusted EBITDA for the
applicable period to (b) the sum of (i) Interest Expense for the
applicable period plus (ii) preferred dividends permitted hereunder for
the applicable period plus (iii) Scheduled Funded Debt Payments for the
applicable period.
"Foreign Subsidiary" means, with respect to any Person, any
Subsidiary of such Person which is not a Domestic Subsidiary of such
Person.
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"Funded Indebtedness" means, with respect to any Person,
without duplication, (a) all Indebtedness of such Person other than
Indebtedness of the types referred to in clause (e), (g) and (i) of the
definition of "Indebtedness" set forth in this Section 1.1, (b) all
Indebtedness of another Person of the type referred to in clause (a)
above secured by (or for which the holder of such Funded 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, (c) all Guaranty Obligations of such
Person with respect to Indebtedness of the type referred to in clause
(a) above of another Person and (d) Indebtedness of the type referred
to in clause (a) above of any partnership or unincorporated joint
venture in which such Person is a general partner or a joint venturer.
"GAAP" means generally accepted accounting principles in the
United States applied on a consistent basis and subject to the terms of
Section 1.3.
"Governmental Authority" means any Federal, state, local or
foreign court or governmental agency, authority, instrumentality or
regulatory body.
"Guarantors" means a collective reference to each of the
Persons identified as a "Guarantor" on the signature pages hereto and
each Additional Credit Party which may hereafter execute a Joinder
Agreement, together with their successors and permitted assigns, and
"Guarantor" means any one of them.
"Guaranty Obligations" means, with respect to any Person,
without duplication, any obligations of such Person (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, (i) to purchase any such Indebtedness or any
Property constituting security therefor, (ii) to advance or provide
funds or other support for the payment or purchase of any such
Indebtedness or to maintain working capital, solvency or other balance
sheet condition of such other Person (including without limitation keep
well agreements, maintenance agreements, comfort letters or similar
agreements or arrangements) for the benefit of any holder of
Indebtedness of such other Person, (iii) to lease or purchase Property,
securities or services primarily for the purpose of assuring the holder
of such Indebtedness, or (iv) to otherwise assure or hold harmless the
holder of such Indebtedness 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. It
is specifically understood and agreed that the Guaranty Obligations of
each Guarantor include any and all Obligations that such Guarantor may
have as a Borrower hereunder or under any of the other Credit
Documents.
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"Hedging Agreement" means any interest rate protection
agreement or foreign currency exchange agreement between any
Consolidated Party and any Lender, or any Affiliate of a Lender.
"Highwoods Realty Limited Partnership Agreement" means that
certain limited partnership agreement of Highwoods Realty dated as of
June 14, 1994, as amended or modified from time to time.
"Indebtedness" of any Person, without duplication, means (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
(other than customary reservations or retentions of title under
agreements with suppliers entered into in the ordinary course of
business), (d) all obligations of such Person issued or assumed as the
deferred purchase price of Property or services purchased by such
Person (other than trade debt incurred in the ordinary course of
business and due within six months of the incurrence thereof) which
would appear as liabilities on a balance sheet of such Person, (e) all
obligations of such Person under take-or-pay or similar arrangements or
under commodities agreements, (f) 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, (g) all Guaranty Obligations of such Person, (h) the principal
portion of all obligations of such Person under Capital Leases, (i) all
obligations of such Person in respect of interest rate protection
agreements, foreign currency exchange agreements, commodity purchase or
option agreements or other interest or exchange rate or commodity price
hedging agreements (including, but not limited to, the Hedging
Agreements), (j) all obligations of such Person to repurchase any
securities which repurchase obligation is related to the issuance
thereof, (k) the maximum amount of all 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), (l) all preferred Capital 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, (m) all other
obligations of such Person under any arrangement or financing structure
classified as debt (for tax purposes) by any nationally recognized
rating agency, (n) the principal portion of all obligations of such
Person under Synthetic Leases and (o) the Indebtedness of any
partnership or unincorporated joint venture in which such Person is a
general partner or a joint venturer.
"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.
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"Interbank Offered Rate" means, for any Eurodollar Loan for
any Interest Period therefor, the rate 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. If for any reason such rate is not
available, the term "Interbank Offered Rate" shall mean, for any
Eurodollar Loan for any Interest Period therefor, the rate 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 (rounded upwards, if
necessary, to the nearest 1/100 of 1%).
"Interest Coverage Ratio" means, with respect to the
Consolidated Parties on a consolidated basis for the twelve month
period ending on the last day of any fiscal quarter of the Consolidated
Parties, the ratio of (a) Adjusted EBITDA for such period to (b)
Interest Expense for such period.
"Interest Expense" means, for any period, the sum of interest
expense (including the interest component under Capital Leases and
Synthetic Leases) of the Consolidated Parties on a consolidated basis
for such period, as determined in accordance with GAAP.
"Interest Payment Date" means (a) as to Base Rate Loans, the
fifteenth day of each calendar month (as to interest through the end of
the prior calendar month) and the Maturity Date, (b) as to Eurodollar
Loans, the last day of each applicable Interest Period and the Maturity
Date, and in addition where the applicable Interest Period for a
Eurodollar Loan is greater than three months, then also the date three
months from the beginning of the Interest Period and each three months
thereafter, and (c) as to Competitive Loans, the last day of the
Interest Period applicable to such Competitive Loan and the Maturity
Date; provided, that if the Interest Period for a Competitive Loan is
greater than 90 days, then also the last day of each fiscal quarter of
the Principal Borrower.
"Interest Period" means (i) as to any Eurodollar Loan, a
period of one, two, three or six months' duration, commencing in each
case, on the date of the borrowing (including continuations and
conversions thereof), (ii) as to any Competitive Loan, a period
commencing in each case on the date of the borrowing and ending on the
date specified in the applicable Competitive Bid whereby the offer to
make such Competitive Loan was extended (such ending date in any event
to be not less than 7 nor more than 180 days from the date of the
borrowing) and (iii) as to any Swingline Loan, a period commencing in
each case on the date of the borrowing and ending on the date agreed to
by one or more of the Borrowers and the Swingline Lender in accordance
with the provisions of Section 2.4(b)(i) (such ending date in any event
to be not more than three (3) Business Days from the date of
borrowing); 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
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(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), (b) no Interest Period shall extend
beyond the Maturity Date and (c) in the case of Eurodollar Loans, 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.
"Investment" means any investment made in cash or by delivery
of property by any Consolidated Party (a) in any Person, whether by (i)
acquisition of assets, shares of Capital Stock, Investment Security,
bonds, notes, debentures, partnership, joint ventures or other
ownership interests or other securities of any Person or (ii) any
deposit with, or advance, loan or other extension of credit to, any
Person (other than deposits made in connection with the purchase of
equipment or other assets in the ordinary course of business) or (iii)
any other capital contribution to or investment in such Person,
including, without limitation, any Guaranty Obligations (including any
support for a letter of credit issued on behalf of such Person)
incurred for the benefit of such Person, or (b) in any Property.
"Investment Security" means "security" as defined in Section
2(1) of the Securities Act of 1933, as amended.
"Issuing Lender" means NationsBank.
"Issuing Lender Fees" shall have the meaning assigned to such
term in Section 3.5(c)(ii).
"Joinder Agreement" means a Joinder Agreement substantially in
the form of Exhibit 7.12 hereto, executed and delivered by an
Additional Credit Party in accordance with the provisions of Section
7.12.
"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.
"Letter of Credit" means the Existing Letters of Credit and
any letter of credit issued by the Issuing Lender for the account of
any Credit Party in accordance with the terms of Section 2.3.
"Letter of Credit Fee" shall have the meaning assigned to such
term in Section 3.5(c)(i).
"Lien" means any mortgage, pledge, hypothecation, assignment,
deposit arrangement, security interest, encumbrance, lien (statutory or
otherwise), preference, priority or charge of any kind (including any
agreement to give any of the foregoing, any conditional sale or other
title retention agreement, any financing or similar statement or
14
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notice filed under the Uniform Commercial Code as adopted and in effect
in the relevant jurisdiction or other similar recording or notice
statute, and any lease in the nature thereof).
"Loan" or "Loans" means the Revolving Loans (or a portion of
any Revolving Loan bearing interest at the Adjusted Base Rate or the
Adjusted Eurodollar Rate and referred to as a Base Rate Loan or a
Eurodollar Loan), the Competitive Loans and/or the Swingline Loans,
individually or collectively, as appropriate.
"LOC Commitment" means the commitment of the Issuing Lender to
issue Letters of Credit in an aggregate face amount at any time
outstanding (together with the amounts of any unreimbursed drawings
thereon) of up to the LOC Committed Amount.
"LOC Committed Amount" shall have the meaning assigned to such
term in Section 2.3.
"LOC Documents" means, with respect to any Letter of Credit,
such Letter of Credit, any amendments thereto, any documents delivered
in connection therewith, any application therefor, and any agreements,
instruments, guarantees or other documents (whether general in
application or applicable only to such Letter of Credit) governing or
providing for (i) the rights and obligations of the parties concerned
or at risk or (ii) any collateral security for such obligations.
"LOC Obligations" means, at any time, the sum of (i) the
maximum amount which is, or at any time thereafter may become,
available to be drawn under Letters of Credit then outstanding,
assuming compliance with all requirements for drawings referred to in
such Letters of Credit plus (ii) the aggregate amount of all drawings
under Letters of Credit honored by the Issuing Lender but not
theretofore reimbursed by the Borrowers.
"Managing Agents" means Bank of America National Trust &
Savings Association, Centura Bank, CommerzBank AG, PNC Bank, National
Association and Wachovia Bank, N.A.
"Material Adverse Effect" means a material adverse effect on
(i) the condition (financial or otherwise), operations, business,
assets, liabilities or prospects of the Consolidated Parties, taken as
a whole, (ii) the ability of any Credit Party to perform any material
obligation under the Credit Documents to which it is a party or (iii)
the material rights and remedies of the Lenders under the Credit
Documents.
"Materials of Environmental Concern" means any gasoline or
petroleum (including crude oil or any fraction thereof) or petroleum
products or any hazardous or toxic substances, materials or wastes,
defined or regulated as such in or under any Environmental Laws,
including, without limitation, asbestos, polychlorinated biphenyls and
urea-formaldehyde insulation.
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"Maturity Date" means July 3, 2001, as such date may be
extended pursuant to Section 2.5.
"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 which is a multiemployer
plan as defined in Sections 3(37) or 4001(a)(3) of ERISA.
"Multiple Employer Plan" means a Plan which any Consolidated
Party or any ERISA Affiliate and at least one employer other than the
Consolidated Parties or any ERISA Affiliate are contributing sponsors.
"NationsBank" means NationsBank, N.A. and its successors.
"Net Cash Proceeds" means the aggregate cash proceeds received
by the Consolidated Parties in respect of any Equity Issuance, net of
(a) direct costs (including, without limitation, legal, accounting and
investment banking fees and sales commissions) and (b) taxes paid or
payable as a result thereof; it being understood that "Net Cash
Proceeds" shall include, without limitation, any cash received upon the
sale or other disposition of any non-cash consideration received by the
Consolidated Parties in any Equity Issuance.
"Net Income" means, for any period, the sum of (i) net income
(excluding extraordinary gains and losses and related tax effects
thereof) after taxes for such period of the Consolidated Parties on a
consolidated basis, as determined in accordance with GAAP, plus (ii) an
amount equal to that portion attributable to Highwoods Realty of the
line item "minority interests" for such period, as shown on the
consolidated income statements of the Consolidated Parties.
"New Lender" means each Lender which was not a Lender under
and as defined in the 1996 Credit Agreement.
"Nichols Documents" means those mortgages with the mortgagees
identified on Schedule 1.1(b) attached hereto, such mortgages dated as
of the dates set forth on such Schedule.
"Nichols Entities" means J.C. Nichols Iowa Partners, Village
Court Associates, Fountain One, Fountain Two, Fountain Three, Dallas
County Partners, Dallas County Partners II, Dallas Partners III, L.C.,
Neptune Building Partners, L.P., Corporate Center Associates, L.P. and
Terrace Place Partners.
"Non-Guarantor Subsidiaries" means AP Southeast Portfolio
Partners, L.P., a Delaware limited partnership, AP-GP Southeast
Portfolio Partners, L.P., a Delaware limited
16
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partnership, Highwoods Realty GP Corp., a Delaware corporation and each
of the Nichols Entities and "Non-Guarantor Subsidiary" means any one of
them.
"Non-Wholly-Owned Subsidiary" means a Subsidiary of Highwoods
Properties which is not a Wholly Owned Subsidiary.
"Note" or "Notes" means the Revolving Notes, the Competitive
Notes and/or the Swingline Note, individually or collectively, as
appropriate.
"Notice of Borrowing" means a written notice of borrowing in
substantially the form of Exhibit 2.1(b)(i), as required by Section
2.1(b)(i) or Section 2.5(b) signed by a Responsible Officer.
"Notice of Extension/Conversion" means the written notice of
extension or conversion in substantially the form of Exhibit 3.2, as
required by Section 3.2 signed by a Responsible Officer.
"Operating Lease" means, as applied to any Person, any lease
(including, without limitation, leases which may be terminated by the
lessee at any time) of any Property (whether real, personal or mixed)
which is not a Capital Lease other than any such lease in which that
Person is the lessor.
"Other Taxes" means such term as is defined in Section 3.11.
"Participation Interest" means, a purchase by a Lender of a
participation in any Letters of Credit or LOC Obligations as provided
in Section 2.3(c), in Swingline Loans as provided in Section
2.4(b)(iii) or in any Loans as provided in Section 3.14.
"PBGC" means the Pension Benefit Guaranty Corporation
established pursuant to Subtitle A of Title IV of ERISA and any
successor thereof.
"Permitted Investments" means Investments which are (i) cash
and Cash Equivalents; (ii) Investments existing on the Closing Date and
set forth on Schedule 1.1(a); (iii) Investments by any Credit Party in
any Wholly Owned Subsidiary that is a Credit Party; (iv) Investments in
any Wholly Owned Subsidiary which is to become a Credit Party pursuant
to the terms of Section 7.12 so long as such Wholly Owned Subsidiary
becomes a Credit Party within the 30 day period required by Section
7.12; (v) Investments by any Credit Party in any Preferred Stock
Subsidiary or any wholly owned Subsidiary of a Preferred Stock
Subsidiary; (vi) Investments by any Credit Party in any Property owned
by such Credit Party and in any personal property incidental to such
Property; (vii) Investments in vehicles, furniture, fixtures and other
personal property including supplies and other similar inventory
purchased by any Credit Party and used in such Consolidated Party's
ordinary course of business; (viii) Investments permitted by Section
8.5; (ix) Investments by Highwoods Realty, Highwoods Properties or any
Wholly Owned Subsidiary that is a Credit Party in any Non-Wholly Owned
Subsidiary that is a Credit Party, provided that the
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Adjusted Investment Value of such Investments does not exceed, in the
aggregate at any time outstanding, an amount equal to 15% of Adjusted
Total Assets less an amount equal to the percentage of Adjusted Total
Assets represented by the Adjusted Investment Value of Investments made
pursuant to clause (x) below; and (x) Investments in any Person that is
not a Consolidated Party provided that the Adjusted Investment Value of
such Investments does not exceed 5% of Adjusted Total Assets in the
aggregate at any one time outstanding.
"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
Consolidated Party 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.
"Preferred Stock Subsidiary" any entity (i) in which a Credit
Party owns at least 90% of the Capital Stock but less than 10% of the
Voting Stock and (ii) with respect to which the Principal Borrower
certifies in writing to the Administrative Agent that such entity was
formed with such an ownership structure such that its income would not
adversely affect the qualification of Highwoods Properties status as a
REIT.
"Prime Rate" means the per annum rate of interest established
from time to time by NationsBank as its prime rate, which rate may not
be the lowest rate of interest charged by NationsBank to its customers.
"Principal Borrower" means Highwoods Properties.
"Pro Forma Compliance Certificate" means a certificate of an
officer of the Principal Borrower delivered to the Administrative Agent
in connection with an Asset Disposition and containing reasonably
detailed calculations, upon giving effect to the applicable transaction
on a pro forma basis, of the financial covenants set forth in Section
7.11.
"Properties" means all real property, together with all
improvements thereon, owned by the Credit Parties and "Property" means
any one of them.
"Register" shall have the meaning given such term in Section
11.3(c).
"Regulation O, T, U, or X" means Regulation O, T, 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.
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"Release" means any spilling, leaking, pumping, pouring,
emitting, emptying, discharging, injecting, escaping, leaching, dumping
or disposing into the environment (including the abandonment or
discarding of barrels, containers and other closed receptacles
containing any Materials of Environmental Concern).
"Reportable Event" means any of the events set forth in
Section 4043(c) of ERISA, other than those events as to which the
notice requirement has been waived by regulation.
"Required Lenders" means, at any time, Lenders which are then
in compliance with their obligations hereunder (as determined by the
Administrative Agent) and holding in the aggregate at least sixty-six
and two-thirds percent (66 2/3%) of (i) the Revolving Commitments (and
Participation Interests therein) or (ii) if the Commitments have
been terminated, the outstanding Loans and Participation Interests
(including the Participation Interests of the Issuing Lender in any
Letters of Credit).
"Requirement of Law" means, as to any Person, the certificate
of incorporation and by-laws or other organizational or governing
documents of such Person, and any law, treaty, rule or regulation or
determination of an arbitrator or a court or other Governmental
Authority, in each case applicable to or binding upon such Person or
any of its material property is subject.
"Responsible Officer" means Carman J. Liuzzo, Mack D. Pridgen,
III, Ronald P. Gibson and Edward J. Fritsch, and any other person
certified by one of the foregoing individuals or by corporate
resolution of Highwoods Properties to the Administrative Agent as
authorized to sign the forms and notices required herein of Highwoods
Properties.
"Restricted Payment" means (i) any dividend or other
distribution, direct or indirect, on account of any shares of any class
of Capital Stock of any Consolidated Party, now or hereafter
outstanding, (ii) any redemption, retirement, sinking fund or similar
payment, purchase or other acquisition for value, direct or indirect,
of any shares of any class of Capital Stock of any Consolidated Party,
now or hereafter outstanding and (iii) any payment made to retire, or
to obtain the surrender of, any outstanding warrants, options or other
rights to acquire shares of any class of Capital Stock of any
Consolidated Party, now or hereafter outstanding; provided, however,
that none of the following shall be deemed to be a Restricted Payment:
(A) any distribution by Highwoods Properties to the
holders of its Capital Stock consisting of shares of Capital
Stock or rights to acquire its Capital Stock;
(B) the redemption by Highwoods Realty of the Capital
Stock of Highwoods Realty upon the demand of a holder thereof
as required by the Highwoods Realty Limited Partnership
Agreement;
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(C) the purchase by Highwoods Realty or Highwoods
Properties of the Capital Stock of either of them in
connection with the net or "cashless exercise" of warrants or
options;
(D) any distribution by a Consolidated Party to a
Wholly Owned Subsidiary other than a Non-Guarantor Subsidiary;
(E) (1) the payment of dividends by Highwoods
Properties to the extent necessary to retain its status as a
REIT and (2) in addition to any amounts distributed pursuant
to subclause (1) above, an aggregate amount not to exceed
$5,000,000 during the term of this Credit Agreement,
(F) any distribution by a Subsidiary of Highwoods
Realty to its parent or to Highwoods Realty;
(G) (1) distributions by Highwoods Realty to
Highwoods Properties to the extent necessary to allow
Highwoods Properties to maintain its status as a REIT and (2)
in addition to any amounts distributed pursuant to subclause
(1) above, an aggregate amount not to exceed $5,000,000 during
the term of this Credit Agreement.
"Revolving Commitment" means, with respect to each Lender, the
commitment of such Lender in an aggregate principal amount at any time
outstanding of up to such Lender's Commitment Percentage of the
Revolving Committed Amount, (i) to make Revolving Loans in accordance
with the provisions of Section 2.1(a), (ii) to purchase Participation
Interests in Letters of Credit in accordance with the provisions of
Section 2.3(c), and (iii) to purchase Participation Interests in the
Swingline Loans in accordance with the provisions of Section
2.4(b)(iii).
"Revolving Committed Amount" shall have the meaning assigned
to such term in Section 2.1(a).
"Revolving Loans" shall have the meaning assigned to such term
in Section 2.1(a).
"Revolving Note" or "Revolving Notes" means the promissory
notes of the Borrowers in favor of each of the Lenders evidencing the
Revolving Loans provided pursuant to Section 2.1(e), individually or
collectively, as appropriate, as such promissory notes may be amended,
modified, restated, supplemented, extended, renewed or replaced from
time to time.
"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.
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"Scheduled Funded Debt Payments" means, as of the end of each
fiscal quarter of the Consolidated Parties, for the Consolidated
Parties on a consolidated basis, the sum of all scheduled payments of
principal on Funded Indebtedness for the applicable period ending on
such date (including the principal component of payments due on Capital
Leases during the applicable period ending on such date); it being
understood that Scheduled Funded Debt Payments shall not include any
balloon payments due on the maturity date of Funded Indebtedness.
"Secured Debt" means the principal amount of Indebtedness
outstanding of the Consolidated Parties that is secured by a Lien on a
Property.
"Single Employer Plan" means any Plan which is covered by
Title IV of ERISA, but which is not a Multiemployer Plan or a Multiple
Employer Plan.
"Solvent" or "Solvency" means, with respect to any Person as
of a particular date, that on such date (i) such Person is able to
realize upon its assets and pay its debts and other liabilities,
contingent obligations and other commitments as they mature in the
normal course of business, (ii) such Person does not intend to, and
does not believe that it will, incur debts or liabilities beyond such
Person's ability to pay as such debts and liabilities mature in their
ordinary course, (iii) such Person is not engaged in a business or a
transaction, and is not about to engage in a business or a transaction,
for which such Person's Property would constitute unreasonably small
capital after giving due consideration to the prevailing practice in
the industry in which such Person is engaged or is to engage, (iv) the
fair value of the Property of such Person is greater than the total
amount of liabilities, including, without limitation, contingent
liabilities, of such Person and (v) the present fair salable 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 Construction" means those individual Properties
of the Consolidated Parties which are in the process of being developed
but for which the Consolidated Parties have not pre-leased at least 85%
of the potential square footage in any such Property pursuant to
fully-executed third party lease agreements.
"Speculative Land" means any Property of any Consolidated
Party which has not been developed or which the Consolidated Party does
not plan to develop within six months after such Property is acquired.
"Straight-Lining of Rents" means, with respect to any lease,
the method by which rent received with respect to such lease is
considered earned equally over the term of such lease despite the
existence of (i) any free rent periods under such lease and (ii) any
rent step-up provisions under such lease.
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"Subsidiary" means, as to any Person, (a) any corporation more
than 50% of whose Capital 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 50% equity interest at any time.
"Swingline Commitment" means the commitment of the Swingline
Lender to make Swingline Loans in an aggregate principal amount at any
time outstanding of up to the Swingline Committed Amount.
"Swingline Committed Amount" shall have the meaning assigned
to such term in Section 2.4(a).
"Swingline Lender" means NationsBank.
"Swingline Loan" shall have the meaning assigned to such term
in Section 2.4(a).
"Swingline Note" means the promissory note of the Borrowers in
favor of the Swingline Lender evidencing the Swingline Loans provided
pursuant to Section 2.4(d), as such promissory note may be amended,
modified, restated, supplemented, extended, renewed or replaced from
time to time.
"Syndication Agent" shall have the meaning assigned to such
term in the heading hereof, together with any successors or assigns.
"Synthetic Lease" means 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
for GAAP purposes.
"Tangible Net Worth" means, as of any date, the sum of (i)
shareholders' equity or net worth of the Consolidated Parties on a
consolidated basis, plus (ii) an amount equal to that portion
attributable to Highwoods Realty of the line item "minority interests",
as shown on the consolidated balance sheet of Highwoods Properties,
less (iii) all intangible assets of the Consolidated Parties on a
consolidated basis, in each as determined in accordance with GAAP.
"Taxes" means such term as is defined in Section 3.11.
"Third Debt Rating" means the unsecured long term debt rating
from a Third Rating Agency.
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"Third Rating Agency" means a nationally recognized rating
agency (other than S&P or Moody's) reasonably satisfactory to the
Administrative Agent.
"Total Assets" means the total assets of the Consolidated
Parties on a consolidated basis, as determined in accordance with GAAP.
"Total Liabilities" means the sum of (i) the total liabilities
of the Consolidated Parties on a consolidated basis, as determined in
accordance with GAAP, plus (ii) without duplication, the Indebtedness
of the Consolidated Parties on a consolidated basis.
"Unencumbered Assets at Cost" means with respect to (a) all
Properties of the Consolidated Parties (i) that are operating and
generate revenues from third parties, (ii) in which at least 75% of the
available space therein is being leased and generating rent payments
and (iii) that are not subject to any Liens and (b) all Properties of
the Consolidated Parties (i) that are in the process of being
developed, (ii) in which at least 75% of the space to be available at
such Property upon completion of construction has been pre-leased and
(iii) that are not subject to any Liens the sum of (I) for all such
Properties of the type referenced in clause (a) and (b) above owned by
the Consolidated Parties on the Closing Date, the undepreciated cost of
such Properties plus (II) for such Properties of the type referenced in
clause (a) and (b) above purchased after the Closing Date, the lesser
of (x) the actual cost of such Properties and (y) the Adjusted NOI for
such Properties for the twelve months prior to its acquisition divided
by ten percent (10%) plus (III) all cash and Cash Equivalents of the
Consolidated Parties.
"Unsecured Debt" means the total aggregate principal amount of
unsecured Indebtedness of the Consolidated 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.
"Unsecured Long Term Debt Rating" means with respect to
Highwoods Properties (i) at such time that Highwoods Properties
maintains an unsecured long term debt rating from each of Moody's, S&P
and the Third Rating Agency, the lower of the two highest of such
publicly announced ratings for the unsecured long term debt rating of
Highwoods Properties, (ii) at such time that Highwoods Properties
maintains an unsecured long term debt rating from only two (2) of the
above-referenced agencies (one of which must be Moody's and S&P), the
lower of the publicly announced ratings from each of such agencies for
the unsecured long term debt rating of Highwoods Properties or (iii) at
such time that Highwoods Properties fails to maintain an unsecured long
term debt rating from at least two (2) of the above-referenced agencies
(one of which must be Moody's and S&P), the unsecured long term debt
rating equivalent to BB+ from S&P and Ba1 from Moody's.
"Upfront Fee" shall have the meaning assigned to such term in
Section 3.5(b).
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"Voting Stock" means, with respect to any Person, Capital
Stock issued by such Person the holders of which are ordinarily, in the
absence of contingencies, entitled to vote for the election of
directors (or persons performing similar functions) of such Person,
even though the right so to vote has been suspended by the happening of
such a contingency.
"Wells Fargo, National Association" means Wells Fargo Bank,
National Association and its successors.
"Wholly Owned Subsidiary" means, (a) with respect to Highwoods
Realty, any direct or indirect Subsidiary of Highwoods Realty 100% of
whose Voting Stock is owned by (i) Highwoods Realty, (ii) Highwoods
Realty and Highwoods Properties, or (iii) Highwoods Realty and one or
more of Highwoods Properties or another Wholly Owned Subsidiary of
Highwoods Realty and (b) with respect to Highwoods Properties, (i)
Highwoods Realty, (ii) any Wholly Owned Subsidiary of Highwoods Realty,
or (iii) any direct or indirect Subsidiary of Highwoods Properties 100%
of whose Voting Stock is owned by Highwoods Properties or by one or
more of Highwoods Realty and a Wholly Owned Subsidiary of Highwoods
Realty.
"1996 Credit Agreement" shall have the meaning assigned to
such term in the Recitals hereof.
"1997 Credit Agreement" shall have the meaning assigned to
such term in the Recitals hereof.
"1996 Credit Facility" shall have the meaning assigned to such
term in the Recitals hereof.
"1997 Credit Facility" shall have the meaning assigned to such
term in the Recitals hereof.
1.2 Computation of Time Periods.
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."
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 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 as at December 31, 1997); provided,
however, if (a) the
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Principal 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) the Administrative Agent or
the Required Lenders shall so object in writing within 30 days after delivery of
such financial statements, then such calculations shall be made on a basis
consistent with the most recent financial statements delivered by the Principal
Borrower to the Lenders as to which no such objection shall have been made.
SECTION 2
CREDIT FACILITIES
2.1 Revolving Loans.
(a) Revolving Commitment. Subject to the terms and conditions
hereof and in reliance upon the representations and warranties set
forth herein, each Lender severally agrees to make available to the
Borrowers such Lender's Commitment Percentage of revolving credit loans
requested by the Borrowers in Dollars ("Revolving Loans") from time to
time from the Closing Date until the Maturity Date, or such earlier
date as the Revolving Commitments shall have been terminated as
provided herein for the purposes hereinafter set forth; provided,
however, that the sum of the aggregate principal amount of outstanding
Revolving Loans shall not exceed SIX HUNDRED MILLION DOLLARS
($600,000,000) (as such aggregate maximum amount may be reduced from
time to time as provided in Section 3.4, the "Revolving Committed
Amount"); provided, further, (i) with regard to each Lender
individually, such Lender's outstanding Revolving Loans shall not
exceed such Lender's Commitment Percentage of the Revolving Committed
Amount, and (ii) with regard to the Lenders collectively, the aggregate
principal amount of outstanding Revolving Loans plus the aggregate
principal amount of outstanding Competitive Loans plus the aggregate
principal amount of outstanding Swingline Loans plus LOC Obligations
outstanding shall not exceed the Revolving Committed Amount. Revolving
Loans may consist of Base Rate Loans or Eurodollar Loans, or a
combination thereof, as the Borrowers may request, and may be repaid
and reborrowed in accordance with the provisions hereof; provided,
however, that no more than ten (10) Eurodollar Loans shall be
outstanding hereunder at any time. For purposes hereof, Eurodollar
Loans with different Interest Periods shall be considered as separate
Eurodollar Loans, even if they begin on the same date, although
borrowings, extensions and conversions may, in accordance with the
provisions hereof, be combined at the end of existing Interest Periods
to constitute a new Eurodollar Loan with a single Interest Period.
Revolving Loans hereunder may be repaid and reborrowed in accordance
with the provisions hereof.
(b) Revolving Loan Borrowings.
(i) Notice of Borrowing. One or more of the Borrowers
shall request a Revolving Loan borrowing by written notice (or
telephonic notice promptly confirmed in writing) to the
Administrative Agent not later than 11:00 A.M.
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(Charlotte, North Carolina time) on the Business Day prior to
the date of the requested borrowing in the case of Base Rate
Loans, and on the third Business Day prior to the date of the
requested borrowing in the case of Eurodollar Loans. Each such
request for borrowing shall be irrevocable and shall specify
(A) that a Revolving Loan is requested, (B) the date of the
requested borrowing (which shall be a Business Day), (C) the
aggregate principal amount to be borrowed, (D) whether the
borrowing shall be comprised of Base Rate Loans, Eurodollar
Loans or a combination thereof, and if Eurodollar Loans are
requested, the Interest Period(s) therefor and (E) the purpose
for which the requested Revolving Loans will be used by the
applicable Borrower. If the applicable Borrower shall fail to
specify in any such Notice of Borrowing the type of Revolving
Loan requested, then such notice shall be deemed to be a
request for a Base Rate Loan hereunder. The Administrative
Agent shall give notice to each Lender promptly upon receipt
of each Notice of Borrowing pursuant to this Section
2.1(b)(i), the contents thereof and each such Lender's share
of any borrowing to be made pursuant thereto.
(ii) Minimum Amounts. Except as provided in Sections
2.3(d) and 2.3(e), each Eurodollar Loan that is a Revolving
Loan shall be in a minimum aggregate principal amount of
$5,000,000 and integral multiples of $500,000 in excess
thereof (or the remaining amount of the Revolving Committed
Amount, if less), and each Base Rate Loan that in a Revolving
Loan shall be in a minimum aggregate principal amount of
$1,000,000 and integral multiples of $500,000 in excess
thereof (or the remaining amount of the Revolving Committed
Amount, if less).
(iii) Advances. Each Lender will make its Commitment
Percentage of each Revolving Loan borrowing available to the
Administrative Agent for the account of one or more of the
Borrowers as specified in Section 3.15(a), or in such other
manner as the Administrative Agent may specify in writing, by
1:00 P.M. (Charlotte, North Carolina time) on the date
specified in the applicable Notice of Borrowing in Dollars and
in funds immediately available to the Administrative Agent.
Such borrowing will then be made available to one or more of
the Borrowers by the Administrative Agent by crediting the
account of the applicable Borrower on the books of such office
with the aggregate of the amounts made available to the
Administrative Agent by the Lenders and in like funds as
received by the Administrative Agent.
(c) Repayment. The principal amount of all Revolving Loans
shall be due and payable in full on the Maturity Date, unless
accelerated sooner pursuant to Section 9.2.
(d) Interest. Subject to the provisions of Section 3.1,
(i) Base Rate Loans. During such periods as Revolving
Loans shall be comprised in whole or in part of Base Rate
Loans, such Base Rate Loans shall bear interest at a per annum
rate equal to the Adjusted Base Rate;
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(ii) Eurodollar Loans. During such periods as
Revolving Loans shall be comprised in whole or in part of
Eurodollar Loans, such Eurodollar Loans shall bear interest at
a per annum rate equal to the Adjusted Eurodollar Rate.
Interest on Revolving Loans shall be payable in arrears on each
applicable Interest Payment Date (or at such other times as may be
specified herein).
(e) Revolving Notes. The Revolving Loans made by each Lender
shall be evidenced by a duly executed promissory note of the Borrowers
to such Lender in substantially the form of Exhibit 2.1(e).
2.2 Competitive Loan Subfacility.
(a) Competitive Loans. So long as Highwoods Realty maintains
an unsecured long term debt rating of at least BBB- from S&P and Baa3
from Moody's, subject to the terms and conditions hereof and in
reliance upon the representations and warranties set forth herein, one
or more of the Borrowers may, from time to time from the Closing Date
until the Maturity Date, request and each Lender may, in its sole
discretion, agree to make, Competitive Loans in Dollars to one or more
of the Borrowers; provided, however, that (i) the aggregate principal
amount of outstanding Competitive Loans shall not at any time exceed
the lesser of (a) THREE HUNDRED MILLION DOLLARS ($300,000,000) and (b)
fifty percent (50%) of the Revolving Committed Amount (the "Competitive
Loan Maximum Amount"), and (ii) the sum of the aggregate principal
amount of outstanding Revolving Loans plus the aggregate principal
amount of outstanding Competitive Loans plus the aggregate principal
amount of outstanding Swingline Loans plus LOC Obligations outstanding
shall not at any time exceed the Revolving Committed Amount. Each
Competitive Loan shall be not less than $10,000,000 in the aggregate
and integral multiples of $1,000,000 in excess thereof (or the
remaining portion of the Competitive Loan Maximum Amount, if less).
(b) Competitive Bid Requests. One or more of the Borrowers may
solicit Competitive Bids by delivery of a Competitive Bid Request
substantially in the form of Exhibit 2.2(b) to the Administrative Agent
by 12:00 Noon (Charlotte, North Carolina time) on a Business Day four
(4) Business Days prior to the date of a requested Competitive Loan
borrowing. A Competitive Bid Request shall specify:
(i) the date of the requested Competitive Loan
borrowing (which shall be a Business Day);
(ii) the amount of the requested Competitive Loan
borrowing;
(iii) the purpose for which the Competitive Loans
will be used by the applicable Borrower; and
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(iv) the applicable Interest Periods requested and
shall be accompanied by payment of the Competitive Bid Request
Fee.
The Administrative Agent shall notify the Lenders of its
receipt of a Competitive Bid Request and the contents thereof and
invite the Lenders to submit Competitive Bids in response thereto. The
Borrowers may not request a Competitive Bid for more than three
different Interest Periods per Competitive Bid Request, and Competitive
Bid Requests may be made no more frequently than once every five
Business Days; provided, that no more than three (3) Competitive Bid
Requests may be made by all of the Borrowers in any thirty (30) day
period.
(c) Competitive Bid Procedure. Each Lender may, in its sole
discretion, make one or more Competitive Bids to the applicable
Borrower in response to a Competitive Bid Request. Each Competitive Bid
must be received by the Administrative Agent not later than 10:00 A.M.
(Charlotte, North Carolina time) on the Business Day next succeeding
the date of receipt by the Administrative Agent of the related
Competitive Bid Request; provided, however, that should the
Administrative Agent, in its capacity as Lender, desire to submit a
Competitive Bid it shall notify the applicable Borrower of its
Competitive Bid and the terms thereof no later than 9:30 A.M. on such
date. A Lender may offer to make all or part of the requested
Competitive Loan borrowing and may submit multiple Competitive Bids in
response to a Competitive Bid Request. The Competitive Bid shall
specify:
(i) the particular Competitive Bid Request as to
which the Competitive Bid is submitted;
(ii) the minimum (which shall be not less than
$5,000,000 and integral multiples of $1,000,000 in excess
thereof) and maximum principal amounts of the requested
Competitive Loan or Loans as to which the Lender is willing to
make; and
(iii) the applicable interest rate or rates and
Interest Period or Periods therefor.
A form of such Competitive Bid is provided in Exhibit 2.2(c).
A Competitive Bid submitted by a Lender in accordance with the
provisions hereof shall be irrevocable. The Administrative Agent shall
promptly notify the applicable Borrower of all Competitive Bids made
and the terms thereof. The Administrative Agent shall send a copy of
each of the Competitive Bids to the applicable Borrower for its records
as soon as practicable.
(d) Acceptance of Competitive Bids. The applicable Borrower
may, in its sole and absolute discretion, subject only to the
provisions of this subsection (d), accept or refuse any Competitive Bid
offered to it. To accept a Competitive Bid, the applicable Borrower
shall give written notification (or telephonic notice promptly
confirmed in writing) substantially in the form of Exhibit 2.2(d)
(which shall be signed by a Responsible Officer) of its acceptance of
any or all such Competitive Bids to the Administrative Agent by 11:00
A.M. (Charlotte, North Carolina time) on the date on which notice of
election to make a
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Competitive Bid is to be given to the Administrative Agent by the
Lenders; provided, however, (i) the failure by the applicable Borrower
to give timely notice of its acceptance of a Competitive Bid shall be
deemed to be a refusal thereof, (ii) the applicable Borrower may accept
Competitive Bids only in ascending order of rates (and where two or
more Lenders submit a Competitive Bid at the same Competitive Bid Rate,
then pro rata between or among such Lenders, unless such pro rata
allocation would result in a Lender making a Competitive Loan in a
principal amount of less than $1,000,000, in which case the applicable
Borrower may accept any one of such Competitive Bids), (iii) the
aggregate amount of Competitive Bids accepted by the applicable
Borrower shall not exceed the principal amount specified in the
Competitive Bid Request, (iv) the applicable Borrower may accept a
portion of a Competitive Bid in the event, and to the extent,
acceptance of the entire amount thereof would cause the applicable
Borrower to exceed the principal amount specified in the Competitive
Bid Request, subject however to the minimum amounts provided herein and
(v) no bid shall be accepted for a Competitive Loan unless such
Competitive Loan is in a minimum principal amount of $5,000,000 and
integral multiples of $1,000,000 in excess thereof, except that where a
portion of a Competitive Bid is accepted in accordance with the
provisions of subsection (iv) hereof, then in a minimum principal
amount of $1,000,000 and integral multiples of $500,000 in excess
thereof (but not in any event less than the minimum amount specified in
the Competitive Bid), and in calculating the pro rata allocation of
acceptances of portions of multiple bids at a particular Competitive
Bid Rate pursuant to subsection (iv) hereof, the amounts shall be
rounded to integral multiples of $500,000 in a manner which shall be in
the discretion of the applicable Borrower. A notice of acceptance of a
Competitive Bid given by the applicable Borrower in accordance with the
provisions hereof shall be irrevocable. The Administrative Agent shall,
not later than 12:00 Noon (Charlotte, North Carolina time) on the date
of receipt by the Administrative Agent of a notification from the
applicable Borrower of its acceptance and/or refusal of Competitive
Bids, notify each affected Lender of its receipt and the contents
thereof. Upon its receipt from the Administrative Agent of notification
of the applicable Borrower's acceptance of its Competitive Bid in
accordance with the terms of this subsection (d), each successful
bidding Lender will thereupon become bound, subject to the other
applicable conditions hereof, to make the Competitive Loan in respect
of which its bid has been accepted. The Administrative Agent agrees to
provide each Lender which has made a Competitive Bid in response to a
particular Competitive Bid Request, with information with respect to
the range of the Competitive Bids made in connection with such
Competitive Bid Request, together with a description of the range of
Competitive Bid(s) accepted by the applicable Borrower.
(e) Funding of Competitive Loans. Each Lender which is to make
a Competitive Loan shall make its Competitive Loan borrowing available
to the Administrative Agent for the account of the applicable Borrower
at the office of the Administrative Agent specified in Schedule 2.1(a),
or at such other office as the Administrative Agent may designate in
writing, by 12:00 Noon (Charlotte, North Carolina time) on the date
specified in the Competitive Bid Request in Dollars and in funds
immediately available to the Administrative Agent. Such borrowing will
then be made available to the applicable Borrower by crediting the
account of the applicable Borrower on
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the books of such office with the aggregate of the amount made
available to the Administrative Agent by the applicable Competitive
Loan Lenders and in like funds as received by the Administrative Agent.
(f) Maturity of Competitive Loans. Each Competitive Loan shall
mature and be due and payable in full on the last day of the Interest
Period applicable thereto, unless accelerated sooner pursuant to
Section 9.2. Unless the applicable Borrower shall give notice to the
Administrative Agent otherwise and provided no Default or Event of
Default then exists, the applicable Borrower shall be deemed to have
requested a Revolving Loan borrowing (which deemed request for a
Revolving Loan borrowing shall constitute a representation and warranty
by the Credit Parties of the correctness of the matters specified in
subsections (b), (c), (d), (e) and (f) of Section 5.2) in the amount of
the maturing Competitive Loan, the proceeds of which will be used to
repay such Competitive Loan.
(g) Interest on Competitive Loans. Subject to the provisions
of Section 3.1, Competitive Loans shall bear interest in each case at
the Competitive Bid Rate applicable thereto. Interest on Competitive
Loans shall be payable in arrears on each Interest Payment Date.
(h) Competitive Loan Notes. The Competitive Loans made by each
Lender shall be evidenced by a duly executed promissory note of the
Borrowers to such Lender in an original principal amount equal to the
Competitive Loan Maximum Amount and substantially in the form of
Exhibit 2.2(h).
2.3 Letter of Credit Subfacility.
(a) Issuance. Subject to the terms and conditions hereof and
of the LOC Documents, if any, and any other terms and conditions which
the Issuing Lender may reasonably require and in reliance upon the
representations and warranties set forth herein, the Issuing Lender
agrees to issue, and each Lender severally agrees to participate in the
issuance by the Issuing Lender of, Letters of Credit in Dollars from
time to time from the Closing Date until the Maturity Date as a
Borrower may request, in a written form acceptable to the Issuing
Lender (such form must be signed by a Responsible Officer and must
include a representation and warranty of the correctness of the matters
specified in subsections (b), (c), (d), (e) and (f) of Sections 5.2);
provided, however, that (i) the LOC Obligations outstanding shall not
at any time exceed THIRTY MILLION DOLLARS ($30,000,000) (the "LOC
Committed Amount") and (ii) the sum of the aggregate principal amount
of outstanding Revolving Loans plus the aggregate principal amount of
outstanding Competitive Loans plus the aggregate principal amount of
outstanding Swingline Loans plus LOC Obligations outstanding shall not
at any time exceed the aggregate Revolving Committed Amount. No Letter
of Credit shall (x) have an original expiry date more than one year
from the date of issuance or (y) as originally issued or as extended,
have an expiry date extending beyond the Maturity Date. Each Letter of
Credit shall comply with the related LOC Documents. The issuance and
expiry dates of each Letter of Credit shall be a Business Day.
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(b) Notice and Reports. The request for the issuance of a
Letter of Credit shall be submitted by a Borrower to the Issuing Lender
at least five (5) Business Days prior to the requested date of
issuance. The Issuing Lender will upon the issuance of a Letter of
Credit and at least quarterly and more frequently upon request,
disseminate to each of 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
beneficiary, the face amount and the expiry date, as well as any
payment or expirations which may have occurred.
(c) Participation. Each Lender, with respect to the Existing
Letters of Credit, hereby purchases a Participation Interest in such
Existing Letters of Credit, and with respect to the Letters of Credit
issued on or after the Closing Date, upon issuance of a Letter of
Credit, shall be deemed to have purchased without recourse a
Participation Interest from the applicable Issuing Lender in such
Letter of Credit and the obligations arising thereunder and any
collateral relating thereto, in each case in an amount equal to its pro
rata share of the obligations under such Letter of Credit (based on the
respective Commitment Percentages of the Lenders) and shall absolutely,
unconditionally and irrevocably assume and be obligated to pay to the
Issuing Lender and discharge when due, its pro rata share of the
obligations arising under such Letter of Credit. Notwithstanding the
preceding sentence, in the event that the Issuing Lender issues a
Letter of Credit hereunder when the officers of the Issuing Lender
directly involved with the credit facilities available to the Borrowers
under this Credit Agreement have actual knowledge that a monetary Event
of Default or material Event of Default (which, for the avoidance of
doubt shall include any violation of any provisions of Section 7.11)
has occurred and is continuing, the Lenders shall have the option but
not the obligation to pay to the Issuing Lender their pro rata share of
the obligations arising under such Letter of Credit as contemplated
herein. Without limiting the scope and nature of each Lender's
Participation Interest 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 Lender shall pay to the Issuing
Lender its pro rata share 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)
below. The obligation of each Lender 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 Borrowers 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
that was the applicant for such Letter of Credit. Unless such Borrower
shall immediately notify the Issuing Lender that such Borrower intends
to otherwise reimburse the Issuing Lender for such drawing, such
Borrower shall be deemed to have requested that the Lenders make a
Revolving Loan in the amount of the drawing as provided in subsection
(e) below on the related Letter of Credit, the proceeds of which will
be used to satisfy the related reimbursement obligations. Each
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Borrower that is an applicant under a Letter of Credit promises to
reimburse the Issuing Lender on the day of drawing under any Letter of
Credit (either with the proceeds of a Revolving Loan obtained hereunder
or otherwise) in same day funds. If such Borrower shall fail to
reimburse the Issuing Lender as provided hereinabove, the unreimbursed
amount of such drawing shall bear interest at a per annum rate equal to
the Adjusted Base Rate plus 2%. Such Borrower's reimbursement
obligations hereunder shall be absolute and unconditional under all
circumstances irrespective of any rights of setoff, counterclaim or
defense to payment such Borrower may claim or have against the Issuing
Lender, the Administrative Agent, 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 such 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 other Lenders of the amount of any
unreimbursed drawing and each Lender 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 Lender's pro
rata share of such unreimbursed drawing. Such payment shall be made on
the day such notice is received by such Lender from the Issuing Lender
if such notice is received at or before 2:00 P.M. (Charlotte, North
Carolina time) otherwise such payment shall be made at or before 12:00
Noon (Charlotte, North Carolina time) on the Business Day next
succeeding the day such notice is received. If such Lender does not pay
such amount to the Issuing Lender in full upon such request, such
Lender 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 of such drawing until such Lender pays such amount
to the Issuing Lender in full at a rate per annum equal to, if paid
within two (2) Business Days of the date that such Lender is required
to make payments of such amount pursuant to the preceding sentence, the
Federal Funds Rate and thereafter at a rate equal to the Base Rate.
Each Lender'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 of any Borrower
hereunder and shall be made without any offset, abatement, withholding
or reduction whatsoever. Simultaneously with the making of each such
payment by a Lender to the Issuing Lender, such Lender shall,
automatically and without any further action on the part of the Issuing
Lender or such Lender, acquire a Participation Interest 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 such Borrower and the other Credit Parties with respect
thereto.
(e) Repayment with Revolving Loans. On any day on which any
Borrower shall have requested, or been deemed to have requested, a
Revolving Loan advance 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 by such Borrower
to be made in connection with a drawing under a Letter of Credit, in
which case a
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Revolving Loan advance comprised of Base Rate Loans (or Eurodollar
Loans to the extent such Borrower has complied with the procedures of
Section 2.1(b)(i) with respect thereto) shall be immediately made to
such Borrower by all Lenders (notwithstanding any termination of the
Commitments pursuant to Section 9.2) pro rata based on the respective
Commitment Percentages of the Lenders (determined before giving effect
to any termination of the Commitments pursuant to Section 9.2) 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 its pro rata share of each such Revolving
Loan immediately upon any such request or deemed request in the amount,
in the manner and on the date specified in the preceding sentence
notwithstanding (i) the amount of such borrowing may not comply with
the minimum amount for advances of Revolving Loans otherwise required
hereunder, (ii) whether any conditions specified in Section 5.2 are
then satisfied, (iii) whether a Default or an Event of Default then
exists, (iv) failure for any such request or deemed request for
Revolving Loan to be made by the time otherwise required hereunder, (v)
whether the date of such borrowing is a date on which Revolving Loans
are otherwise permitted to be made hereunder or (vi) any termination of
the Commitments relating thereto immediately prior to or
contemporaneously with such borrowing. In the event that any Revolving
Loan cannot for any reason be made on the date otherwise required above
(including, without limitation, as a result of the commencement of a
proceeding under the Bankruptcy Code with respect to any one of the
Borrowers or any Credit Party), then each such Lender hereby agrees
that it shall forthwith purchase (as of the date such borrowing would
otherwise have occurred, but adjusted for any payments received from
the Borrowers on or after such date and prior to such purchase) from
the Issuing Lender such Participation Interests in the outstanding LOC
Obligations as shall be necessary to cause each such Lender to share in
such LOC Obligations ratably (based upon the respective Commitment
Percentages of the Lenders (determined before giving effect to any
termination of the Commitments pursuant to Section 9.2)), provided that
at the time any purchase of Participation Interests pursuant to this
sentence is actually made, the purchasing Lender shall be required to
pay to the Issuing Lender, to the extent not paid to the Issuer by the
Borrowers in accordance with the terms of subsection (d) above,
interest on the principal amount of Participation Interests purchased
for each day from and including the day upon which such borrowing would
otherwise have occurred to but excluding the date of payment for such
Participation Interests, at the rate equal to, if paid within two (2)
Business Days of the date of the Revolving Loan advance, the Federal
Funds Rate, and thereafter at a rate equal to the Base Rate.
(f) Renewal, Extension. The renewal or extension of any Letter
of Credit shall, for purposes hereof, be treated in all respects the
same as the issuance of a new Letter of Credit hereunder.
(g) Uniform Customs and Practices. The Issuing Lender may have
the Letters of Credit be subject to The Uniform Customs and Practice
for Documentary Credits, as published as of the date of issue by the
International Chamber of Commerce (the "UCP"), in which case the UCP
may be incorporated therein and deemed in all respects to be a part
thereof.
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(h) Indemnification; Nature of Issuing Lender's Duties.
(i) In addition to its other obligations under this
Section 2.3, each Borrower that is an applicant with respect
to a Letter of Credit hereby agrees to pay, and protect,
indemnify and save each Lender harmless from and against, any
and all claims, demands, liabilities, damages, losses, costs,
charges and expenses (including reasonable attorneys' fees)
that such Lender 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 such 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").
(ii) As between the Borrower that is the applicant
for a Letter of Credit and the Lenders (including the Issuing
Lender), such Borrower shall assume all risks of the acts,
omissions or misuse of any Letter of Credit by the beneficiary
thereof. No Lender (including the Issuing Lender) shall be
responsible: (A) for the form, validity, sufficiency,
accuracy, genuineness or legal effect of any document
submitted by any party in connection with the application for
and issuance of any Letter of Credit, even if it should in
fact prove to be in any or all respects invalid, insufficient,
inaccurate, fraudulent or forged; (B) for the validity or
sufficiency of any instrument transferring or assigning or
purporting to transfer or assign any Letter of Credit or the
rights or benefits thereunder or proceeds thereof, in whole or
in part, that may prove to be invalid or ineffective for any
reason; (C) for errors, omissions, interruptions or delays in
transmission or delivery of any messages, by mail, cable,
telegraph, telex or otherwise, whether or not they be in
cipher; (D) for any loss or delay in the transmission or
otherwise of any document required in order to make a drawing
under a Letter of Credit or of the proceeds thereof; and (E)
for any consequences arising from causes beyond the control of
such 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 any Lender (including the
Issuing Lender), under or in connection with any Letter of
Credit or the related certificates, if taken or omitted in
good faith, shall not put such Lender under any resulting
liability to such 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 each Lender
(including 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 Borrowers (on behalf of
itself and each of the other Credit Parties), including,
without limitation, any and all Government Acts. No Lender
(including the Issuing Lender) shall, in any way, be liable
for any failure by such
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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 such Lender.
(iv) Nothing in this subsection (h) is intended to
limit the reimbursement obligations of the Borrowers contained
in subsection (d) above. The obligations of the Borrowers
under this subsection (h) shall survive the termination of
this Credit Agreement. No act or omissions of any current or
prior beneficiary of a Letter of Credit shall in any way
affect or impair the rights of the Lenders (including the
Issuing Lender) to enforce any right, power or benefit under
this Credit Agreement.
(v) Notwithstanding anything to the contrary
contained in this subsection (h), the Borrowers shall have no
obligation to indemnify any Lender (including the Issuing
Lender) in respect of any liability incurred by such Lender
(A) arising solely out of the gross negligence or willful
misconduct of such Lender, as determined by a court of
competent jurisdiction, or (B) caused by such Lender's failure
to pay under any Letter of Credit after presentation to it of
a request strictly complying with the terms and conditions of
such Letter of Credit, as determined by a court of competent
jurisdiction, unless such payment is prohibited by any law,
regulation, court order or decree.
(i) Responsibility of Issuing Lender. It is expressly
understood and agreed that the obligations of the Issuing Lender
hereunder to the Lenders 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 5.2 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 2.3 shall be deemed to prejudice the
right of any Lender to recover from the Issuing Lender any amounts made
available by such Lender to the Issuing Lender pursuant to this Section
2.3 in the event that it is determined by a court of competent
jurisdiction that the payment with respect to a Letter of Credit
constituted gross negligence or willful misconduct on the part of the
Issuing Lender.
(j) Conflict with LOC Documents. In the event of any conflict
between this Credit Agreement and any LOC Document (including any
letter of credit application), this Credit Agreement shall control.
2.4 Swingline Loan Subfacility.
(a) Swingline Commitment. Subject to the terms and conditions
hereof and in reliance upon the representations and warranties set
forth herein, the Swingline Lender, in its individual capacity, agrees
to make certain revolving credit loans requested by the Borrowers in
Dollars to the Borrowers (each a "Swingline Loan" and, collectively,
the "Swingline Loans") from time to time from the Closing Date until
the Maturity Date for the purposes hereinafter set forth; provided,
however, (i) the aggregate principal amount of Swingline Loans
outstanding at any time shall not exceed TWENTY FIVE MILLION DOLLARS
($25,000,000) (the "Swingline Committed Amount"), and (ii) the
aggregate
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principal amount of outstanding Revolving Loans plus the aggregate
principal amount of outstanding Competitive Loans plus the aggregate
principal amount of outstanding Swingline Loans plus LOC Obligations
outstanding shall not exceed the Revolving Committed Amount. Swingline
Loans hereunder shall be made as Base Rate Loans and may be repaid and
reborrowed in accordance with the provisions hereof.
(b) Swingline Loan Advances.
(i) Notices; Disbursement. Whenever one or more of
the Borrowers desires a Swingline Loan advance hereunder it
shall give written notice (or telephonic notice promptly
confirmed in writing) to the Swingline Lender not later than
11:00 A.M. (Charlotte, North Carolina time) on the Business
Day of the requested Swingline Loan advance. Each such notice
shall be irrevocable and shall specify (A) that a Swingline
Loan advance is requested, (B) the date of the requested
Swingline Loan advance (which shall be a Business Day), (C)
the principal amount of the Swingline Loan advance requested
and (D) the purpose for which the requested Swingline Loan
will be used by the applicable Borrower. Each Swingline Loan
shall be made as a Base Rate Loan and shall have such maturity
date (which maturity date shall not be a date more than three
(3) Business Days from the date of advance thereof) as the
Swingline Lender and the applicable Borrower shall agree upon
receipt by the Swingline Lender of any such notice from the
applicable Borrower. The Swingline Lender shall initiate the
transfer of funds representing the Swingline Loan advance to
the applicable Borrower by 3:00 P.M. (Charlotte, North
Carolina time) on the Business Day of the requested borrowing.
(ii) Minimum Amounts. Each Swingline Loan advance
shall be in a minimum principal amount of $1,000,000 and in
integral multiples of $500,000 in excess thereof (or the
remaining amount of the Swingline Committed Amount, if less).
(iii) Repayment of Swingline Loans. The principal
amount of all Swingline Loans shall be due and payable on the
earlier of (A) the maturity date agreed to by the Swingline
Lender and the applicable Borrower with respect to such Loan
(which maturity date shall not be a date more than three (3)
Business Days from the date of advance thereof) and (B) the
Maturity Date, at which time the Borrowers shall be deemed to
have requested a Revolving Loan borrowing (which deemed
request for a Revolving Loan borrowing shall constitute a
representation and warranty by the Credit Parties of the
correctness of the matters specified in subsections (b), (c),
(d), (e) and (f) of Section 5.2) in the amount of the maturing
Swingline Loan, the proceeds of which will be used to repay
such Swingline Loan. The Swingline Lender may, at any time, in
its sole discretion, by written notice to the Principal
Borrower and the Lenders, demand repayment of its Swingline
Loans by way of a Revolving Loan advance, in which case the
Borrowers shall be deemed to have requested a Revolving Loan
advance (which deemed request for a Revolving Loan borrowing
shall constitute a representation and warranty by the
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Credit Parties of the correctness of the matters specified in
subsections (b), (c), (d), (e) and (f) of Section 5.2)
comprised solely of Base Rate Loans in the amount of such
Swingline Loans; provided, however, that any such demand shall
be deemed to have been given one Business Day prior to the
Maturity Date and on the date of the occurrence of any Event
of Default described in Section 9.1 and upon acceleration of
the indebtedness hereunder and the exercise of remedies in
accordance with the provisions of Section 9.2. Each Lender
hereby irrevocably agrees to make its pro rata share of each
such Revolving Loan in the amount, in the manner and on the
date specified in the preceding sentence notwithstanding (I)
the amount of such borrowing may not comply with the minimum
amount for advances of Revolving Loans otherwise required
hereunder, (II) whether any conditions specified in Section
5.2 are then satisfied, (III) whether a Default or an Event of
Default then exists, (IV) failure of any such request or
deemed request for Revolving Loan to be made by the time
otherwise required hereunder, (V) whether the date of such
borrowing is a date on which Revolving Loans are otherwise
permitted to be made hereunder or (VI) any termination of the
Commitments relating thereto immediately prior to or
contemporaneously with such borrowing. Notwithstanding the
preceding sentence, in the event that the Swingline Lender
funds a Swingline Loan hereunder when the officers of the
Swingline Lender directly involved with the credit facilities
available to the Borrowers under this Credit Agreement have
actual knowledge that a monetary Event of Default or material
Event of Default (which, for the avoidance of doubt shall
include any violation of any provisions of Section 7.11) has
occurred and is continuing, the Lenders shall have the option
but not the obligation to make Revolving Loans to fund their
ratable shares of such Swingline Loan as contemplated herein.
In the event that any Revolving Loan cannot for any reason be
made on the date otherwise required above (including, without
limitation, as a result of the commencement of a proceeding
under the Bankruptcy Code with respect to any one of the
Borrowers or any other Credit Party), then each Lender hereby
agrees that it shall forthwith purchase (as of the date such
borrowing would otherwise have occurred, but adjusted for any
payments received from the Borrowers on or after such date and
prior to such purchase) from the Swingline Lender such
Participations Interest in the outstanding Swingline Loans as
shall be necessary to cause each such Lender to share in such
Swingline Loans ratably based upon its Commitment Percentage
of the Revolving Committed Amount (determined before giving
effect to any termination of the Commitments pursuant to
Section 3.4), provided that (A) all interest payable on the
Swingline Loans shall be for the account of the Swingline
Lender until the date as of which the respective Participation
Interest is purchased and (B) at the time any purchase of
Participation Interests pursuant to this sentence is actually
made, the purchasing Lender shall be required to pay to the
Swingline Lender, to the extent not paid to the Swingline
Lender by the Borrowers in accordance with the terms of
subsection (c)(ii) below, interest on the principal amount of
Participation Interests purchased for each day from and
including the day upon which such borrowing would otherwise
have occurred to but excluding the date of payment for such
Participation Interests, at the rate equal to the Federal
Funds Rate.
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(c) Interest on Swingline Loans.
(i) Interest. Subject to the provisions of Section
3.1, each Swingline Loan shall bear interest at a per annum
rate (computed on the basis of the actual number of days
elapsed over a year of 365 days) equal to the Adjusted Base
Rate.
(ii) Payment of Interest. Interest on Swingline Loans
shall be payable in arrears on each applicable Interest
Payment Date (or at such other times as may be specified
herein), unless accelerated sooner pursuant to Section 9.2.
(d) Swingline Note. The Swingline Loans shall be
evidenced by a duly executed promissory note of the Borrowers
to the Swingline Lender in an original principal amount equal
to the Swingline Committed Amount substantially in the form of
Exhibit 2.4(d).
2.5 Extension of Maturity Date.
Not more than 90 days and not less than 60 days prior to the date
occurring two years from the Closing Date (the "Extension Date"), the Principal
Borrower may request in writing that the Lenders extend the Maturity Date for an
additional one year period. Each Lender shall provide the Administrative Agent
and the Principal Borrower, not less than 20 days prior to the Extension Date,
with written notice regarding whether it agrees to extend the Maturity Date.
Each decision by a Lender shall be in its sole discretion and failure by a
Lender to give timely written notice hereunder shall be deemed a decision by
such Lender not to extend the Maturity Date. If all of the Lenders timely agree
in writing to extend the Maturity Date, then the Maturity Date shall be extended
for an additional one year period pursuant to a duly executed written amendment
to this Credit Agreement so long as (i) no Default or Event of Default exists
and (ii) the Borrowers pay a fee to the Administrative Agent on behalf of the
Lenders equal to 0.125% of the Revolving Committed Amount. If any Lender fails
to agree to extend the Maturity Date, then the Borrowers shall, on or before the
Maturity Date, pay all outstanding Credit Party Obligations in full, together
with accrued and unpaid interest thereon and all other sums with respect
thereto.
2.6 Joint and Several Liability of the Borrowers.
(a) Each of the Borrowers is accepting joint and several
liability hereunder in consideration of the financial accommodation to
be provided by the Lenders under this Credit Agreement, for the mutual
benefit, directly and indirectly, of each of the Borrowers and in
consideration of the undertakings of each of the Borrowers to accept
joint and several liability for the obligations of each of them.
(b) Each of the Borrowers jointly and severally hereby
irrevocably and unconditionally accepts, not merely as a surety but
also as a co-debtor, joint and several liability with the other
Borrowers with respect to the payment and performance of all of the
Obligations arising under this Credit Agreement and the other Credit
Documents, it
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being the intention of the parties hereto that all the Obligations
shall be the joint and several obligations of each of the Borrowers
without preferences or distinction among them.
(c) If and to the extent that any of the Borrowers shall fail
to make any payment with respect to any of the obligations hereunder as
and when due or to perform any of such obligations in accordance with
the terms thereof, then in each such event, the other Borrowers will
make such payment with respect to, or perform, such obligation.
(d) The obligations of each Borrower under the provisions of
this Section 2.6 constitute full recourse obligations of such Borrower,
enforceable against it to the full extent of its properties and assets,
irrespective of the validity, regularity or enforceability of this
Credit Agreement or any other circumstances whatsoever.
(e) Except as otherwise expressly provided herein, each
Borrower hereby waives notice of acceptance of its joint and several
liability, notice of occurrence of any Default or Event of Default
(except to the extent notice is expressly required to be given pursuant
to the terms of this Credit Agreement), or of any demand for any
payment under this Credit Agreement, notice of any action at any time
taken or omitted by the Lender under or in respect of any of the
Obligations hereunder, any requirement of diligence and, generally, all
demands, notices and other formalities of every kind in connection with
this Credit Agreement. Each Borrower hereby assents to, and waives
notice of, any extension or postponement of the time for the payment of
any of the Obligations hereunder, the acceptance of any partial payment
thereon, any waiver, consent or other action or acquiescence by the
Lenders at any time or times in respect of any default by any Borrower
in the performance or satisfaction of any term, covenant, condition or
provision of this Credit Agreement, any and all other indulgences
whatsoever by the Lenders in respect of any of the Obligations
hereunder, and the taking, addition, substitution or release, in whole
or in part, at any time or times, of any security for any of such
Obligations or the addition, substitution or release, in whole or in
part, of any Borrower. Without limiting the generality of the
foregoing, each Borrower assents to any other action or delay in acting
or any failure to act on the part of the Lender, including, without
limitation, any failure strictly or diligently to assert any right or
to pursue any remedy or to comply fully with applicable laws or
regulations thereunder which might, but for the provisions of this
Section 2.6, afford grounds for terminating, discharging or relieving
such Borrower, in whole or in part, from any of its obligations under
this Section 2.6, it being the intention of each Borrower that, so long
as any of the Obligations hereunder remain unsatisfied, the obligations
of such Borrower under this Section 2.6 shall not be discharged except
by performance and then only to the extent of such performance. The
obligations of each Borrower under this Section 2.6 shall not be
diminished or rendered unenforceable by any winding up, reorganization,
arrangement, liquidation, reconstruction or similar proceeding with
respect to any reconstruction or similar proceeding with respect to any
Borrower or any Lender. The joint and several liability of the
Borrowers hereunder shall continue in full force and effect
notwithstanding any
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absorption, merger, amalgamation or any other change whatsoever in the
name, membership, constitution or place of formation of any Borrower or
any Lender.
(f) The provisions of this Section 2.6 are made for the
benefit of the Administrative Agent and the Lenders and their
respective successors and assigns, and may be enforced by any such
Person from time to time against any of the Borrowers as often as
occasion therefor may arise and without requirement on the part of any
Lender first to marshal any of its claims or to exercise any of its
rights against any of the other Borrowers or to exhaust any remedies
available to it against any of the other Borrowers or to resort to any
other source or means of obtaining payment of any of the Obligations or
to elect any other remedy. Without limiting the generality of the
foregoing, each Borrower hereby specifically waives the benefits of
N.C. Gen. Stat. ss.ss.26-7 through 26-9, inclusive, to the extent
applicable. The provisions of this Section 2.6 shall remain in effect
until all the Obligations hereunder shall have been paid in full or
otherwise fully satisfied. If at any time, any payment, or any part
thereof, made in respect of any of the Obligations, is rescinded or
must otherwise be restored or returned by the Lenders upon the
insolvency, bankruptcy or reorganization of any of the Borrowers, or
otherwise, the provisions of this Section 2.6 will forthwith be
reinstated and in effect as though such payment had not been made.
(g) Notwithstanding any provision to the contrary contained
herein or in any other of the Credit Documents or Hedging Agreements,
the obligations of each Borrower hereunder shall be limited to an
aggregate amount equal to the largest amount that would not render its
obligations hereunder subject to avoidance under Section 548 of the
Bankruptcy Code or any comparable provisions of any applicable state
law.
2.7 Appointment of Principal Borrower as Agent for Borrowers.
Each of the Borrowers hereby appoints the Principal Borrower to act as
its exclusive agent for all purposes under this Credit Agreement and the other
Credit Documents (including, without limitation, with respect to all matters
related to the borrowing and repayment of loans as described in Section 2 and
Section 3 hereof). Each of the Borrowers acknowledges and agrees that (a) the
Principal Borrower may execute such documents on behalf of all the Borrowers as
the Principal Borrower deems appropriate in its sole discretion and each
Borrower shall be bound by and obligated by all of the terms of any such
document executed by the Principal Borrower on its behalf, (b) any notice or
other communication delivered by the Administrative Agent or any Lender
hereunder to the Principal Borrower shall be deemed to have been delivered to
each of the Borrowers and (c) the Administrative Agent and each of the Lenders
shall accept (and shall be permitted to rely on) any document or agreement
executed by the Principal Borrower on behalf of the Borrowers (or any of them).
The Borrowers must act through the Principal Borrower for all purposes under
this Credit Agreement and the other Credit Documents.
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SECTION 3
OTHER PROVISIONS RELATING TO CREDIT FACILITIES
3.1 Default Rate.
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
shall bear interest, payable on demand, at a per annum rate 2% greater than the
rate which would otherwise be applicable (or if no rate is applicable, whether
in respect of interest, fees or other amounts, then the Adjusted Base Rate plus
2%).
3.2 Extension and Conversion.
Subject to the terms of Section 5.2, the Borrowers shall have the
option, on any Business Day, to extend existing Loans into a subsequent
permissible Interest Period or to convert Loans into Loans of another interest
rate type; provided, however, that (i) except as provided in Section 3.8,
Eurodollar Loans may be converted into Base Rate Loans only on the last day of
the Interest Period applicable thereto, (ii) Eurodollar Loans may be extended,
and Base Rate Loans may be converted into Eurodollar Loans, only if no Default
or Event of Default is in existence on the date of extension or conversion,
(iii) Loans extended as, or converted into, Eurodollar Loans shall be subject to
the terms of the definition of "Interest Period" set forth in Section 1.1 and
shall be in such minimum amounts as provided in, with respect to Revolving
Loans, Section 2.1(b)(ii), (iv) no more than ten (10) Eurodollar Loans shall be
outstanding hereunder at any time (it being understood that, for purposes
hereof, Eurodollar Loans with different Interest Periods shall be considered as
separate Eurodollar Loans, even if they begin on the same date, although
borrowings, extensions and conversions may, in accordance with the provisions
hereof, be combined at the end of existing Interest Periods to constitute a new
Eurodollar Loan with a single Interest Period) and (v) Competitive Loans and
Swingline Loans may not be extended or converted pursuant to this Section 3.2.
Each such extension or conversion shall be effected by the Borrowers by giving a
Notice of Extension/Conversion (or telephonic notice promptly confirmed in
writing) to the office of the Administrative Agent specified in specified in
Schedule 2.1(a), or at such other office as the Administrative Agent may
designate in writing, prior to 11:00 A.M. (Charlotte, North Carolina time) on
the Business Day of, in the case of the conversion of a Eurodollar Loan into a
Base Rate Loan, and on the third Business Day prior to, in the case of the
extension of a Eurodollar Loan as, or conversion of a Base Rate Loan into, a
Eurodollar Loan, the date of the proposed extension or conversion, specifying
the date of the proposed extension or conversion and the Loans to be so extended
or converted, the types of Loans into which such Loans are to be converted. Each
request for extension or conversion shall be irrevocable and shall constitute a
representation and warranty by the Borrowers of the matters specified in
subsections (b), (c), (d), (e) and (f) of Section 5.2. In the event the
Borrowers fail to request extension or conversion of any Eurodollar Loan in
accordance with this Section, or any such conversion or extension is not
permitted or required by this Section, then such Eurodollar Loan shall be
automatically converted into a Base Rate Loan at the end of the Interest Period
applicable thereto. The Administrative Agent shall give each Lender notice as
promptly as practicable of any such proposed extension or conversion affecting
any Loan.
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3.3 Prepayments.
(a) Voluntary Prepayments. The Borrowers shall have the right
to prepay Loans (other than the Swingline Loans and Competitive Loans)
in whole or in part from time to time; provided, however, that each
partial prepayment of Loans shall be in the case of Revolving Loans and
Competitive Loans, in a minimum principal amount of $1,000,000 and
integral multiples of $1,000,000. Subject to the foregoing terms,
amounts prepaid under this Section 3.3(a) shall be applied as the
Borrowers may elect; provided that if the Borrowers fail to specify a
voluntary prepayment then such prepayment shall be applied first to
Revolving Loans that are Base Rate Loans and then to Eurodollar Loans
in direct order of Interest Period maturities and then to Competitive
Loans. All prepayments under this Section 3.3(a) shall be subject to
Section 3.12, but otherwise without premium or penalty.
(b) Mandatory Prepayments.
(i) If at any time, (A) the sum of the aggregate
principal amount of outstanding Revolving Loans plus the
aggregate principal amount of outstanding Competitive Loans
plus the aggregate principal amount of outstanding Swingline
Loans plus LOC Obligations outstanding shall exceed the
Revolving Committed Amount, (B) the aggregate principal amount
of outstanding Competitive Loans shall exceed the Competitive
Loan Maximum Amount, (C) the aggregate amount of outstanding
Swingline Loans exceeds the Swingline Committed Amount or (D)
the aggregate amount of LOC Obligations outstanding exceeds
the LOC Committed Amount, the Borrowers shall immediately make
payment on the Loans and/or to a cash collateral account in
respect of the LOC Obligations, in an amount sufficient to
eliminate such excess.
(ii) Application of Mandatory Prepayments. All
amounts required to be paid pursuant to this Section 3.3(b)
(i) shall be applied first, to Revolving Loans (and after all
Revolving Loans have been paid), second, to Swingline Loans,
third, to a cash collateral account in respect of LOC
Obligations and fourth, to Competitive Loans pro rata among
the Lenders holding same. Within the parameters of the
applications set forth above, prepayments shall be applied
first to Base Rate Loans and then to Eurodollar Loans in
direct order of Interest Period maturities. All prepayments
under this Section 3.3(b) shall be subject to Section 3.12.
3.4 Termination and Reduction of Revolving Committed Amount.
(a) Voluntary Reductions. The Borrowers may from time to time
permanently reduce or terminate the Revolving Committed Amount in whole
or in part (in minimum aggregate amounts of $5,000,000 or in integral
multiples of $1,000,000 in excess thereof (or, if less, the full
remaining amount of the then applicable Revolving Committed
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Amount)) upon five Business Days' prior written notice to the
Administrative Agent; provided, however, no such termination or
reduction shall be made which would cause the aggregate principal
amount of outstanding Revolving Loans plus the aggregate principal
amount of outstanding Competitive Loans plus the aggregate principal
amount of outstanding Swingline Loans plus LOC Obligations outstanding
to exceed the Revolving Committed Amount unless, concurrently with such
termination or reduction, the Revolving Loans and/or Competitive Loans
are repaid to the extent necessary to eliminate such excess. The
Administrative Agent shall promptly notify each affected Lender of
receipt by the Administrative Agent of any notice from the Borrowers
pursuant to this Section 3.4(a).
(b) General. The Borrowers shall pay to the Administrative
Agent for the account of the Lenders in accordance with the terms of
Section 3.5(b), on the date of each termination or reduction of the
Revolving Committed Amount, the Facility Fee accrued through the date
of such termination or reduction on the amount of the Revolving
Committed Amount so terminated or reduced.
3.5 Fees.
(a) Facility Fee. In consideration of the Revolving Committed
Amount being made available by the Lenders hereunder, the Borrowers
agree to pay to the Administrative Agent for the pro rata benefit of
the Lenders (based on each Lender's Commitment Percentage of the
Revolving Committed Amount) a fee (the "Facility Fee") equal to 0.150%
per annum on the Revolving Committed Amount. The Facility Fee shall
commence to accrue on the Closing Date and shall be due and payable in
arrears on the last business day of each fiscal quarter of the
Principal Borrower (as well as on the Maturity Date and on any date
that the Revolving Committed Amount is reduced as provided in Section
3.4(a)) for the immediately preceding quarter (or portion thereof),
beginning with the first of such dates to occur after the Closing Date.
(b) Upfront Fee. On the Closing Date, the Borrowers shall pay
(i) to each Continuing Lender, a fee (the "Upfront Fee") equal to (A)
0.15% on that portion of such Lender's Revolving Commitment which does
not exceed the amount of such Lender's aggregate commitment to make
loans under the 1996 Credit Agreement and (B) 0.25% on that portion of
such Lender's Revolving Commitment which does exceed the amount of such
Lender's aggregate commitment to make loans under the 1996 Credit
Agreement and (ii) to each New Lender, a fee equal to 0.25% of such
Lender's Revolving Commitment.
(c) Letter of Credit Fees.
(i) Letter of Credit Fee. In consideration of the
issuance of Letters of Credit hereunder, the Borrowers promise
to pay to the Administrative Agent for the account of each
Lender a fee (the "Letter of Credit Fee") on such Lender's
Commitment Percentage of the average daily maximum amount
available to be drawn under each such standby Letter of Credit
computed at a per annum rate for each day from the date of
issuance to the date of expiration equal to the Applicable
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Percentage. The Standby Letter of Credit Fee will be payable
quarterly in arrears on the last Business Day of each March,
June, September and December for the immediately preceding
quarter (or a portion thereof).
(ii) Issuing Lender Fees. In addition to the Letter
of Credit Fee payable pursuant to clause (i) above, the
Borrowers promise to 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 and (B)
customary charges from time to time of the Issuing Lender with
respect to the issuance, amendment, transfer, administration,
cancellation and conversion of, and drawings under, such
Letters of Credit (collectively, the "Issuing Lender Fees").
3.6 Capital Adequacy.
If any Lender has determined, after the date hereof, 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 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 capital or assets as a consequence of its commitments or
obligations hereunder to a level below that which such Lender could have
achieved but for such adoption, effectiveness, change or compliance (taking into
consideration such Lender's policies with respect to capital adequacy), then,
upon notice from such Lender to the Principal Borrower, the Borrowers shall be
obligated to pay to such Lender such additional amount or amounts as will
compensate such Lender 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.
3.7 Limitation on Eurodollar Loans.
If on or prior to the first day of any Interest Period for any
Eurodollar Loan:
(a) the Administrative Agent determines (which determination
shall be conclusive) 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; or
(b) the Required Lenders determine (which determination shall
be conclusive) and notify the Administrative Agent that the Eurodollar
Rate will not adequately and fairly reflect the cost to the Lenders of
funding Eurodollar Loans for such Interest Period;
then the Administrative Agent shall give the Principal Borrower prompt notice
thereof, and so long as such condition remains in effect, the Lenders shall be
under no obligation to make additional
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Eurodollar Loans, continue Eurodollar Loans, or to convert Base Rate Loans into
Eurodollar Loans and the Borrowers shall, on the last day(s) of the then current
Interest Period(s) for the outstanding Eurodollar Loans, either prepay such
Eurodollar Loans or convert such Eurodollar Loans into Base Rate Loans in
accordance with the terms of this Credit Agreement.
3.8 Illegality.
Notwithstanding any other provision of this Credit Agreement, in the
event that it becomes unlawful for any Lender to make, maintain, or fund
Eurodollar Loans hereunder, then such Lender shall promptly notify the Principal
Borrower thereof and such Lender's obligation to make or continue Eurodollar
Loans and to convert Base Rate Loans into Eurodollar Loans shall be suspended
until such time as such Lender may again make, maintain, and fund Eurodollar
Loans (in which case the provisions of Section 3.10 shall be applicable).
3.9 Requirements of Law.
(a) If, after the date hereof, the adoption of any applicable
law, rule, or regulation, or any change in any applicable law, rule, or
regulation, or any change in the interpretation or administration
thereof by any Governmental Authority, central bank, or comparable
agency charged with the interpretation or administration thereof, or
compliance by any Lender with any request or directive (whether or not
having the force of law) of any such Governmental Authority, central
bank, or comparable agency:
(i) shall subject such Lender to any tax, duty, or
other charge with respect to any Eurodollar Loans, its Notes,
or its obligation to make Eurodollar Loans, or change the
basis of taxation of any amounts payable to such Lender under
this Credit Agreement or its Notes in respect of any
Eurodollar Loans (other than taxes imposed on the overall net
income of such Lender by the jurisdiction in which such Lender
has its principal office);
(ii) shall impose, modify, or deem applicable any
reserve, special deposit, assessment, or similar requirement
(other than the Eurodollar Reserve Requirement utilized in the
determination of the Adjusted Eurodollar Rate) relating to any
extensions of credit or other assets of, or any deposits with
or other liabilities or commitments of, such Lender, including
the Commitment of such Lender hereunder; or
(iii) shall impose on such Lender or on the United
States market for certificates of deposit or the London
interbank market any other condition affecting this Credit
Agreement or its Notes or any of such extensions of credit or
liabilities or commitments;
and the result of any of the foregoing is to increase the cost to such
Lender of making, converting into, continuing, or maintaining any
Eurodollar Loans or to reduce any sum received or receivable by such
Lender under this Credit Agreement or its Notes with respect
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to any Eurodollar Loans, then the Borrowers shall pay to such Lender on
demand such amount or amounts as will compensate such Lender for such
increased cost or reduction. If any Lender requests compensation by the
Borrowers under this Section 3.9(a), the Borrowers may, by notice to
such Lender (with a copy to the Administrative Agent), suspend the
obligation of such Lender to make or continue Eurodollar Loans, or to
convert Base Rate Loans into Eurodollar Loans, until the event or
condition giving rise to such request ceases to be in effect (in which
case the provisions of Section 3.10 shall be applicable); provided that
such suspension shall not affect the right of such Lender to receive
the compensation so requested.
(b) Each Lender shall promptly notify the Principal Borrower
and the Administrative Agent of any event of which it has knowledge,
occurring after the date hereof, which will entitle such Lender to
compensation pursuant to this Section 3.9 and will designate a
different Applicable Lending Office if such designation will avoid the
need for, or reduce the amount of, such compensation and will not, in
the judgment of such Lender, be otherwise disadvantageous to it. Any
Lender claiming compensation under this Section 3.9 shall furnish to
the Principal Borrower and the Administrative Agent a statement setting
forth the additional amount or amounts to be paid to it hereunder which
shall be conclusive in the absence of manifest error. In determining
such amount, such Lender may use any reasonable averaging and
attribution methods.
3.10 Treatment of Affected Loans.
If the obligation of any Lender to make any Eurodollar Loan or to
continue, or to convert Base Rate Loans into, Eurodollar Loans shall be
suspended pursuant to Section 3.8 or 3.9 hereof, such Lender's Eurodollar Loans
shall be automatically converted into Base Rate Loans on the last day(s) of the
then current Interest Period(s) for such Eurodollar Loans (or, in the case of a
conversion required by Section 3.8 hereof, on such earlier date as such Lender
may specify to the Principal Borrower with a copy to the Administrative Agent)
and, unless and until such Lender gives notice as provided below that the
circumstances specified in Section 3.8 or 3.9 hereof that gave rise to such
conversion no longer exist:
(a) to the extent that such Lender's Eurodollar Loans have
been so converted, all payments and prepayments of principal that would
otherwise be applied to such Lender's Eurodollar Loans shall be applied
instead to its Base Rate Loans; and
(b) all Loans that would otherwise be made or continued by
such Lender as Eurodollar Loans shall be made or continued instead as
Base Rate Loans, and all Base Rate Loans of such Lender that would
otherwise be converted into Eurodollar Loans shall remain as Base Rate
Loans.
If such Lender gives notice to the Principal Borrower (with a copy to the
Administrative Agent) that the circumstances specified in Section 3.8 or 3.9
hereof that gave rise to the conversion of such Lender's Eurodollar Loans
pursuant to this Section 3.10 no longer exist (which such Lender agrees to do
promptly upon such circumstances ceasing to exist) at a time when Eurodollar
Loans made by
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other Lenders are outstanding, such Lender's Base Rate Loans shall be
automatically converted, on the first day(s) of the next succeeding Interest
Period(s) for such outstanding Eurodollar Loans, to the extent necessary so
that, after giving effect thereto, all Loans held by the Lenders holding
Eurodollar Loans and by such Lender are held pro rata (as to principal amounts,
interest rate basis, and Interest Periods) in accordance with their respective
Commitments.
3.11 Taxes.
(a) Any and all payments by the Borrowers to or for the
account of any Lender or the Administrative Agent hereunder or under
any other Credit Document shall be made free and clear of and without
deduction for any and all present or future taxes, duties, levies,
imposts, deductions, charges or withholdings, and all liabilities with
respect thereto, excluding, in the case of each Lender and the
Administrative Agent, taxes imposed on its income, and franchise taxes
imposed on it, by the jurisdiction under the laws of which such Lender
(or its Applicable Lending Office) or the Administrative Agent (as the
case may be) is organized or any political subdivision thereof (all
such non-excluded taxes, duties, levies, imposts, deductions, charges,
withholdings, and liabilities being hereinafter referred to as
"Taxes"). If the Borrowers shall be required by law to deduct any Taxes
from or in respect of any sum payable under this Credit Agreement or
any other Credit Document to any Lender or the Administrative Agent,
(i) the sum payable shall be increased as necessary so that after
making all required deductions (including deductions applicable to
additional sums payable under this Section 3.11) such Lender or the
Administrative Agent receives an amount equal to the sum it would have
received had no such deductions been made, (ii) the Borrowers shall
make such deductions, (iii) the Borrowers shall pay the full amount
deducted to the relevant taxation authority or other authority in
accordance with applicable law, and (iv) the Borrowers shall furnish to
the Administrative Agent, at its address referred to in Section 11.1,
the original or a certified copy of a receipt evidencing payment
thereof.
(b) In addition, the Borrowers agree to pay any and all
present or future stamp or documentary taxes and any other excise or
property taxes or charges or similar levies which arise from any
payment made under this Credit Agreement or any other Credit Document
or from the execution or delivery of, or otherwise with respect to,
this Credit Agreement or any other Credit Document (hereinafter
referred to as "Other Taxes").
(c) The Borrowers agree to indemnify each Lender and the
Administrative Agent for the full amount of Taxes and Other Taxes
(including, without limitation, any Taxes or Other Taxes imposed or
asserted by any jurisdiction on amounts payable under this Section
3.11) paid by such Lender or the Administrative Agent (as the case may
be) and any liability (including penalties, interest, and expenses)
arising therefrom or with respect thereto.
(d) Each Lender organized under the laws of a jurisdiction
outside the United States, on or prior to the date of its execution and
delivery of this Credit Agreement in the case of each Lender listed on
the signature pages hereof and on or prior to the date on which it
becomes a Lender in the case of each other Lender, and from time to
time
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thereafter if requested in writing by the Principal Borrower or the
Administrative Agent (but only so long as such Lender remains lawfully
able to do so), shall provide the Principal Borrower and the
Administrative Agent with (i) Internal Revenue Service Form 1001 or
4224, as appropriate, or any successor form prescribed by the Internal
Revenue Service, certifying that such Lender is entitled to benefits
under an income tax treaty to which the United States is a party which
reduces the rate of withholding tax on payments of interest or
certifying that the income receivable pursuant to this Credit Agreement
is effectively connected with the conduct of a trade or business in the
United States, (ii) Internal Revenue Service Form W-8 or W-9, as
appropriate, or any successor form prescribed by the Internal Revenue
Service, and (iii) any other form or certificate required by any taxing
authority (including any certificate required by Sections 871(h) and
881(c) of the Internal Revenue Code), certifying that such Lender is
entitled to an exemption from or a reduced rate of tax on payments
pursuant to this Credit Agreement or any of the other Credit Documents.
(e) For any period with respect to which a Lender has failed
to provide the Principal Borrower and the Administrative Agent with the
appropriate form pursuant to Section 3.11(d) (unless such failure is
due to a change in treaty, law, or regulation occurring subsequent to
the date on which a form originally was required to be provided), such
Lender shall not be entitled to indemnification under Section 3.11(a)
or 3.11(b) with respect to Taxes imposed by the United States;
provided, however, that should a Lender, which is otherwise exempt from
or subject to a reduced rate of withholding tax, become subject to
Taxes because of its failure to deliver a form required hereunder, the
Borrowers shall take such steps as such Lender shall reasonably request
to assist such Lender to recover such Taxes.
(f) If the Borrowers are required to pay additional amounts to
or for the account of any Lender pursuant to this Section 3.11, then
such Lender will agree to use reasonable efforts to change the
jurisdiction of its applicable lending office so as to eliminate or
reduce any such additional payment which may thereafter accrue if such
change, in the judgment of such Lender, is not otherwise
disadvantageous to such Lender.
(g) Within thirty (30) days after the date of any payment of
Taxes, the Borrowers shall furnish to the Administrative Agent the
original or a certified copy of a receipt evidencing such payment.
(h) Without prejudice to the survival of any other agreement
of the Borrowers hereunder, the agreements and obligations of the
Borrowers contained in this Section 3.11 shall survive the repayment of
the Loans, LOC Obligations and other obligations under the Credit
Documents and the termination of the Commitments hereunder.
3.12 Compensation.
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Upon the request of any Lender, the Borrowers shall pay to such Lender
such amount or amounts as shall be sufficient (in the reasonable opinion of such
Lender) to compensate it for any loss, cost, or expense (including loss of
anticipated profits) incurred by it as a result of:
(a) any payment, prepayment, or conversion of a Eurodollar
Loan for any reason (including, without limitation, the acceleration of
the Loans pursuant to Section 9.2) on a date other than the last day of
the Interest Period for such Loan; or
(b) any failure by the Borrowers for any reason (including,
without limitation, the failure of any condition precedent specified in
Section 5 to be satisfied) to borrow, convert, continue, or prepay a
Eurodollar Loan on the date for such borrowing, conversion,
continuation, or prepayment specified in the relevant notice of
borrowing, prepayment, continuation, or conversion under this Credit
Agreement.
With respect to Eurodollar Loans, such indemnification may include an amount
equal to the excess, if any, of (a) 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 therein, if any) over (b) 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 covenants of
the Borrowers set forth in this Section 3.12 shall survive the repayment of the
Loans, LOC Obligations and other obligations under the Credit Documents and the
termination of the Commitments hereunder.
3.13 Pro Rata Treatment.
Except to the extent otherwise provided herein:
(a) Loans. Each Loan, each payment or (subject to the terms of
Section 3.3) prepayment of principal of any Loan or reimbursement
obligations arising from drawings under Letters of Credit, each payment
of interest on the Loans or reimbursement obligations arising from
drawings under Letters of Credit, each payment of Fees, each payment of
the Letter of Credit Fee, each reduction of the Revolving Committed
Amount and each conversion or extension of any Loan, shall be allocated
pro rata among the Lenders in accordance with the respective principal
amounts of their outstanding Loans and Participation Interests. With
respect to Competitive Loans, if the Borrowers fail to specify the
particular Competitive Loan or Loans as to which any payment or other
amount should be applied and it is not otherwise clear as to the
particular Competitive Loan or Loans to which such payment or other
amounts relate, or any such payment or other amount is to be applied to
Competitive Loans without regard to any such direction by the
Borrowers, then each payment or prepayment of principal on Competitive
Loans and each payment of interest or other amount on or in respect of
Competitive Loans, shall be allocated pro rata
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among the relevant Competitive Loan Lenders in accordance with the then
outstanding amounts of their respective Competitive Loans.
(b) Advances. No Lender shall be responsible for the failure
or delay by any other Lender in its obligation to make its ratable
share of a borrowing 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
requested borrowing that such Lender does not intend to make available
to the Administrative Agent its ratable share of such borrowing 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 borrowing, 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 Borrowers 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
Principal Borrower, and the Borrowers shall immediately pay such
corresponding amount to the Administrative Agent. The Administrative
Agent shall also be entitled to recover from the Lender or the
Borrowers, 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 Borrowers to the date such
corresponding amount is recovered by the Administrative Agent at a per
annum rate equal to (i) from the Borrowers at the applicable rate for
the applicable borrowing pursuant to the Notice of Borrowing and (ii)
from a Lender at the Federal Funds Rate.
3.14 Sharing of Payments.
The Lenders agree among themselves that, in the event that any Lender
shall obtain payment in respect of any Loan, 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 Title 11 of the United States Code or other security
or interest arising from, or in lieu of, such secured claim, received by such
Lender under any 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
purchase from the other Lenders a Participation Interest 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 repurchase of a
Participation Interest 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 Borrowers agree that any Lender so purchasing
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such a Participation Interest 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 Interest as fully as if such Lender were a
holder of such Loan, LOC Obligations or other obligation in the amount of such
Participation Interest. Except as otherwise expressly provided in this Credit
Agreement, if any Lender or the Administrative Agent shall fail to remit to the
Administrative Agent or any other Lender an amount payable by such Lender or the
Administrative Agent to the Administrative 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 the Administrative 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 3.14 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 3.14 to share in the benefits of any recovery on such secured claim.
3.15 Payments, Computations, Etc.
(a) Except as otherwise specifically provided herein, all
payments hereunder shall be made to the Administrative Agent in dollars
in immediately available funds, without setoff, deduction, counterclaim
or withholding of any kind, at the Administrative Agent's office
specified in Schedule 2.1(a) not later than 12:00 Noon (Charlotte,
North Carolina time) on the date when due. Payments received after such
time shall be deemed to have been received on the next succeeding
Business Day. The Administrative Agent may (but shall not be obligated
to) debit the amount of any such payment which is not made by such time
to any ordinary deposit account of any of the Borrowers maintained with
the Administrative Agent (with notice to the Principal Borrower). The
Borrowers (or any one of them) shall, at the time it makes any payment
under this Credit Agreement, specify to the Administrative Agent the
Loans, LOC Obligations, Fees, interest or other amounts payable by the
Borrowers hereunder to which such payment is to be applied (and in the
event that it fails so to specify, or if such application would be
inconsistent with the terms hereof, the Administrative Agent shall
distribute such payment to the Lenders in such manner as the
Administrative Agent may determine to be appropriate in respect of
obligations owing by the Borrowers hereunder, subject to the terms of
Section 3.13(a)). The Administrative Agent will distribute such
payments to such Lenders, if any such payment is received prior to
12:00 Noon (Charlotte, North Carolina time) on a Business Day in like
funds as received prior to the end of such Business Day and otherwise
the Administrative Agent will distribute such payment to such 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 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.
Except as expressly provided otherwise herein, all computations of
interest and fees shall be made on the basis of actual number of days
elapsed over a year of 360 days, except with respect to computation of
interest on Base Rate Loans which (unless the Base Rate is determined
by
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reference to the Federal Funds Rate) shall be calculated based on a
year of 365 or 366 days, as appropriate. Interest shall accrue from and
include the date of borrowing, but exclude the date of payment.
(b) Allocation of Payments After Event of Default.
Notwithstanding any other provisions of this Credit Agreement to the
contrary, after the occurrence and during the continuance of an Event
of Default, all amounts collected or received by the Administrative
Agent or any Lender on account of the Credit Party Obligations or any
other 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 Administrative Agent in connection with enforcing the rights of
the Lenders under the Credit Documents;
SECOND, to payment of any fees owed to the Administrative
Agent;
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 or otherwise with respect to the Credit Party
Obligations owing to such Lender;
FOURTH, to the payment of all of the Credit Party Obligations
consisting of accrued fees and interest;
FIFTH, to the payment of the outstanding principal amount of
the Credit Party Obligations (including the payment or cash
collateralization of the outstanding LOC Obligations);
SIXTH, to all other Credit Party Obligations and other
obligations which shall have become due and payable under the Credit
Documents or otherwise and not repaid pursuant to clauses "FIRST"
through "FIFTH" above; and
SEVENTH, to the payment of the surplus, if any, to whoever may
be lawfully entitled to receive such surplus.
In carrying out the foregoing, (i) amounts received shall be applied in
the numerical order provided until exhausted prior to application to
the next succeeding category; (ii) each of the Lenders shall receive an
amount equal to its pro rata share (based on the proportion that the
then outstanding Loans and LOC Obligations held by such Lender bears to
the aggregate then outstanding Loans and LOC Obligations) of amounts
available to be applied pursuant to clauses "THIRD", "FOURTH", "FIFTH"
and "SIXTH" above; and (iii) 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 a cash collateral
account and applied (A) first, to reimburse the Issuing Lender from
time to time for any drawings
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under such Letters of Credit and (B) then, following the expiration of
all Letters of Credit, to all other obligations of the types described
in clauses "FIFTH" and "SIXTH" above in the manner provided in this
Section 3.15(b).
3.16 Evidence of Debt.
Each Lender shall maintain an account or accounts evidencing each Loan
made by such Lender to the Borrowers from time to time, including the amounts of
principal and interest payable and paid to such Lender from time to time under
this Credit Agreement. Each Lender will make reasonable efforts to maintain the
accuracy of its account or accounts and to promptly update its account or
accounts from time to time, as necessary.
SECTION 4
GUARANTY
4.1 The Guarantee.
Each of the Guarantors hereby jointly and severally guarantees to each
Lender, each Affiliate of a Lender that enters into a Hedging Agreement and the
Administrative Agent as hereinafter provided the prompt payment of the Credit
Party Obligations in full when due (whether at stated maturity, as a mandatory
prepayment, by acceleration or otherwise) strictly in accordance with the terms
thereof. The Guarantors hereby further agree that if any of the Credit Party
Obligations are not paid in full when due (whether at stated maturity, as a
mandatory prepayment, by acceleration or otherwise), the Guarantors will,
jointly and severally, promptly pay the same, without any demand or notice
whatsoever, and that in the case of any extension of time of payment or renewal
of any of the Credit Party Obligations, the same will be promptly paid in full
when due (whether at extended maturity, as a mandatory prepayment, by
acceleration or otherwise) in accordance with the terms of such extension or
renewal.
Notwithstanding any provision to the contrary contained herein or in
any other of the Credit Documents or Hedging Agreements, the obligations of each
Guarantor hereunder shall be limited to an aggregate amount equal to the largest
amount that would not render its obligations hereunder subject to avoidance
under Section 548 of the Bankruptcy Code or any comparable provisions of any
applicable state law.
4.2 Obligations Unconditional.
The obligations of the Guarantors under Section 4.1 are joint and
several, absolute and unconditional, irrespective of the value, genuineness,
validity, regularity or enforceability of any of the Credit Documents or Hedging
Agreements, or any other agreement or instrument referred to therein, or any
substitution, release, impairment or exchange of any other guarantee of or
security for any of the Credit Party Obligations, and, to the fullest extent
permitted by applicable law, irrespective of any other circumstance whatsoever
which might otherwise constitute a legal or
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equitable discharge or defense of a surety or guarantor, it being the intent of
this Section 4.2 that the obligations of the Guarantors hereunder shall be
absolute and unconditional under any and all circumstances. Each Guarantor
agrees that such Guarantor shall have no right of subrogation, indemnity,
reimbursement or contribution against any of the Borrowers or any other
Guarantor of the Credit Party Obligations for amounts paid under this Section 4
until such time as the Lenders (and any Affiliates of Lenders entering into
Hedging Agreements) have been paid in full, all Commitments under this 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 or Hedging
Agreements. Without limiting the generality of the foregoing, it is agreed that,
to the fullest extent permitted by law, the occurrence of any one or more of the
following shall not alter or impair the liability of any Guarantor hereunder
which shall remain absolute and unconditional as described above:
(a) at any time or from time to time, without notice to any
Guarantor, the time for any performance of or compliance with any of
the Credit Party Obligations shall be extended, or such performance or
compliance shall be waived;
(b) any of the acts mentioned in any of the provisions of any
of the Credit Documents, any Hedging Agreement or any other agreement
or instrument referred to in the Credit Documents or Hedging Agreements
shall be done or omitted;
(c) the maturity of any of the Credit Party Obligations shall
be accelerated, or any of the Credit Party Obligations shall be
modified, supplemented or amended in any respect, or any right under
any of the Credit Documents, any Hedging Agreement or any other
agreement or instrument referred to in the Credit Documents or Hedging
Agreements shall be waived or any other guarantee of any of the Credit
Party Obligations or any security therefor shall be released, impaired
or exchanged in whole or in part or otherwise dealt with;
(d) any Lien granted to, or in favor of, the Administrative
Agent or any Lender or Lenders as security for any of the Credit Party
Obligations shall fail to attach or be perfected; or
(e) any of the Credit Party Obligations shall be determined to
be void or voidable (including, without limitation, for the benefit of
any creditor of any Guarantor) or shall be subordinated to the claims
of any Person (including, without limitation, any creditor of any
Guarantor).
With respect to its obligations hereunder, each Guarantor hereby expressly
waives diligence, presentment, demand of payment, protest and all notices
whatsoever, and any requirement that the Administrative Agent or any Lender
exhaust any right, power or remedy or proceed against any Person under any of
the Credit Documents, any Hedging Agreement or any other agreement or instrument
referred to in the Credit Documents or Hedging Agreements, or against any other
Person under any other guarantee of, or security for, any of the Credit Party
Obligations.
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4.3 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 Administrative Agent and each Lender on demand for all reasonable costs and
expenses (including, without limitation, fees and expenses of counsel) incurred
by the Administrative 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.
4.4 Certain Additional Waivers.
Without limiting the generality of the provisions of this Section 4,
each Guarantor hereby specifically waives the benefits of N.C. Gen. Stat. ss.ss.
26-7 through 26-9, inclusive, to the extent applicable. Each Guarantor further
agrees that such Guarantor shall have no right of recourse to security for the
Credit Party Obligations, except through the exercise of the rights of
subrogation pursuant to Section 4.2 and through the exercise of rights of
contribution pursuant to Section 4.6.
4.5 Remedies.
The Guarantors agree that, to the fullest extent permitted by law, as
between the Guarantors, on the one hand, and the Administrative Agent and the
Lenders, on the other hand, the Credit Party Obligations may be declared to be
forthwith due and payable as provided in Section 9.2 (and shall be deemed to
have become automatically due and payable in the circumstances provided in said
Section 9.2) for purposes of Section 4.1 notwithstanding any stay, injunction or
other prohibition preventing such declaration (or preventing the Credit Party
Obligations from becoming automatically due and payable) as against any other
Person and that, in the event of such declaration (or the Credit Party
Obligations being deemed to have become automatically due and payable), the
Credit Party Obligations (whether or not due and payable by any other Person)
shall forthwith become due and payable by the Guarantors for purposes of Section
4.1.
4.6 Rights of Contribution.
The Guarantors hereby agree as among themselves that, if any Guarantor
shall make an Excess Payment (as defined below), such Guarantor shall have a
right of contribution from each other Guarantor in an amount equal to such other
Guarantor's Contribution Share (as defined below) of such Excess Payment. The
payment obligations of any Guarantor under this Section 4.6 shall be subordinate
and subject in right of payment to the prior payment in full to the
Administrative Agent and the Lenders of the Guaranteed Obligations, and none of
the Guarantors shall exercise any right or remedy under this Section 4.6 against
any other Guarantor until payment and satisfaction in full of all of any
Guaranteed Obligations. For purposes of this Section 4.6, (a) "Guaranteed
Obligations" shall mean any obligations arising under the other provisions of
this
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Section 4; (b) "Excess Payment" shall mean the amount paid by any Guarantor
in excess of its Pro Rata Share of such Guaranteed Obligations; (c) "Pro Rata
Share" shall mean, for any Guarantor in respect of any payment of Guaranteed
Obligations, the ratio (expressed as a percentage) as of the date of such
payment of Guaranteed Obligations of (i) the amount by which the aggregate
present fair salable value of all of its assets and properties exceeds the
amount of all debts and liabilities of such Guarantor (including contingent,
subordinated, unmatured, and unliquidated liabilities, but excluding the
obligations of such Guarantor hereunder) to (ii) the amount by which the
aggregate present fair salable value of all assets and other properties of the
Borrowers and all of the Guarantors exceeds the amount of all of the debts and
liabilities (including contingent, subordinated, unmatured, and unliquidated
liabilities, but excluding the obligations of the Borrowers and the Guarantors
hereunder) of the Borrowers and all of the Guarantors; provided, however, that,
for purposes of calculating the Pro Rata Shares of the Guarantors in respect of
any payment of Guaranteed Obligations, any Guarantor that became a Guarantor
subsequent to the date of any such payment shall be deemed to have been a
Guarantor on the date of such payment and the financial information for such
Guarantor as of the date such Guarantor became a Guarantor shall be utilized for
such Guarantor in connection with such payment; and (d) "Contribution Share"
shall mean, for any Guarantor in respect of any Excess Payment made by any other
Guarantor, the ratio (expressed as a percentage) as of the date of such Excess
Payment of (i) the amount by which the aggregate present fair salable value of
all of its assets and properties exceeds the amount of all debts and liabilities
of such Guarantor (including contingent, subordinated, unmatured, and
unliquidated liabilities, but excluding the obligations of such Guarantor
hereunder) to (ii) the amount by which the aggregate present fair salable value
of all assets and other properties of the Borrowers and all of the Guarantors
other than the maker of such Excess Payment exceeds the amount of all of the
debts and liabilities (including contingent, subordinated, unmatured, and
unliquidated liabilities, but excluding the obligations of the Borrowers and the
Guarantors hereunder) of the Borrowers and all of the Guarantors other than the
maker of such Excess Payment; provided, however, that, for purposes of
calculating the Contribution Shares of the Guarantors in respect of any Excess
Payment, any Guarantor that became a Guarantor subsequent to the date of any
such Excess Payment shall be deemed to have been a Guarantor on the date of such
Excess Payment and the financial information for such Guarantor as of the date
such Guarantor became a Guarantor shall be utilized for such Guarantor in
connection with such Excess Payment. This Section 4.6 shall not be deemed to
affect any right of subrogation, indemnity, reimbursement or contribution that
any Guarantor may have under applicable law against any of the Borrowers in
respect of any payment of Guaranteed Obligations. Notwithstanding the foregoing,
all rights of contribution against any Guarantor shall terminate from and after
such time, if ever, that such Guarantor shall be relieved of its obligations
pursuant to Section 8.4.
4.7 Continuing Guarantee.
The guarantee in this Section 4 is a continuing guarantee, and shall
apply to all Credit Party Obligations whenever arising.
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SECTION 5
CONDITIONS
5.1 Closing Conditions.
The obligation of the Lenders to enter into this Credit Agreement and
to make the initial Loans or the Issuing Lender to issue the initial Letter of
Credit, whichever shall occur first, shall be subject to satisfaction of the
following conditions (in form and substance acceptable to the Lenders):
(a) Executed Credit Documents. Receipt by the Administrative
Agent of duly executed copies of: (i) this Credit Agreement; (ii) the Notes; and
(iii) all other Credit Documents, each in form and substance acceptable to the
Lenders in their sole discretion.
(b) Corporate Documents. Receipt by the Administrative
Agent of the following:
(i) Charter Documents. Copies of the articles
or certificates of incorporation or other charter documents of each Credit Party
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 such Credit Party to be
true and correct as of the Closing Date.
(ii) Bylaws. A copy of the bylaws of each Credit
Party certified by a secretary or assistant secretary of such Credit Party to be
true and correct as of the Closing Date.
(iii) Resolutions. Copies of resolutions of the Board
of Directors of each Credit Party 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 such Credit Party to be true and correct and in force and effect as of the
Closing Date.
(iv) Good Standing. Copies of certificates of
good standing, existence or its equivalent with respect to each Credit Party
certified as of a recent date by the appropriate Governmental Authorities of the
state or other jurisdiction of incorporation and each other jurisdiction in
which the failure to so qualify and be in good standing could reasonably be
expected to have a Material Adverse Effect.
(v) Incumbency. An incumbency certificate of
each Credit Party certified by a secretary or assistant secretary to be true and
correct as of the Closing Date.
(c) Financial Statements. Receipt by the Administrative Agent
and the Lenders of (i) the consolidated financial statements of the Consolidated
Parties, including balance sheets and income and cash flow statements for the
fiscal quarter ended March 31, 1998 and (ii) such other
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information relating to the Consolidated Parties as the Administrative Agent may
reasonably require in connection with the structuring and syndication of credit
facilities of the type described herein.
(d) Opinions of Counsel. The Administrative Agent shall have
received an opinion, or opinions (which shall cover among other things,
authority, legality, validity, binding effect and enforceability) reasonably
satisfactory to the Administrative Agent addressed to the Administrative Agent
and the Lenders, dated as of the Closing Date, from legal counsel to the Credit
Parties.
(e) Material Adverse Effect. No material adverse change shall
have occurred since December 31, 1997 in the condition (financial or otherwise),
business, assets, operations, management or prospects of the Consolidated
Parties taken as a whole.
(f) Litigation. There shall not exist any pending or
threatened action, suit, investigation or proceeding against a Consolidated
Party that could reasonably be expected to have a Material Adverse Effect.
(g) Officer's Certificates. The Administrative Agent shall
have received a certificate or certificates executed by an authorized officer of
the Principal Borrower as of the Closing Date stating that (A) each Consolidated
Party is in compliance with all existing financial obligations, (B) all
governmental, shareholder and third party consents and approvals, if any, with
respect to the Credit Documents and the transactions contemplated thereby have
been obtained, (C) no action, suit, investigation or proceeding is pending or
threatened in any court or before any arbitrator or governmental instrumentality
that purports to affect any Consolidated Party or any transaction contemplated
by the Credit Documents, if such action, suit, investigation or proceeding could
reasonably be expected to have a Material Adverse Effect, and (D) immediately
after giving effect to this Credit Agreement, the other Credit Documents and all
the transactions contemplated therein to occur on such date, (1) each of the
Credit Parties is Solvent, (2) no Default or Event of Default exists, (3) all
representations and warranties contained herein and in the other Credit
Documents are true and correct in all material respects, and (4) the Credit
Parties are in compliance with each of the financial covenants set forth in
Section 7.11.
(h) Fees and Expenses. Payment by the Credit Parties of all
fees and expenses owed by them to the Lenders and the Administrative Agent.
(i) Payment of 1996 Credit Facility and 1997 Credit Facility.
Receipt by the Administrative Agent of evidence that the 1996 Credit Facility
and the 1997 Credit Facility shall have been terminated and (ii) all obligations
under the 1996 Credit Facility and the 1997 Credit Facility have been paid in
full.
(j) Year 2000. Receipt by the Administrative Agent and the
Lenders of evidence that (a) the Consolidated Parties are taking all necessary
and appropriate steps to ascertain the extent of, and to quantify and
successfully address, business and financial risks facing the Consolidated
Parties as a result of what is commonly referred to as the `Year 2000 problem'
(i.e.,
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the inability of certain computer applications to recognize correctly and
perform date-sensitive functions involving certain dates prior to and after
December 31, 1999), including risks resulting from the failure of key vendors
and customers of the Consolidated Parties to successfully address the Year 2000
problem, and (b) each Consolidated Party's material computer applications and
those of its key vendors and customers will, on a timely basis, adequately
address the Year 2000 problem in all material respects.
(k) Other. Receipt by the Lenders of such other documents,
instruments, agreements or information as reasonably 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 Consolidated Parties.
5.2 Conditions to all Extensions of Credit.
The obligations of each Lender to make, convert or extend any Loan and
of the Issuing Lender to issue or extend any Letter of Credit (including the
initial Loans and the initial Letter of Credit) are subject to satisfaction of
the following conditions in addition to satisfaction on the Closing Date of the
conditions set forth in Section 5.1:
(a) The Borrowers shall have delivered (i) in the case of any
Revolving Loan, an appropriate Notice of Borrowing or Notice of
Extension/Conversion or (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 2.3(b);
(b) The representations and warranties set forth in Section 6
shall be, subject to the limitations set forth therein, true and correct in all
material respects as of such date (except for those which expressly relate to an
earlier date);
(c) There shall not have been commenced against any Credit
Party an involuntary case under any applicable bankruptcy, insolvency or other
similar law now or hereafter in effect, or any case, proceeding or other action
for the appointment of a receiver, liquidator, assignee, custodian, trustee,
sequestrator (or similar official) of such Person or for any substantial part of
its Property or for the winding up or liquidation of its affairs, and such
involuntary case or other case, proceeding or other action shall remain
undismissed, undischarged or unbonded;
(d) No Default or Event of Default shall exist and be
continuing either prior to or after giving effect thereto;
(e) No development or event which has had or could reasonably
be expected to have a Material Adverse Effect shall have occurred since December
31, 1997; and
(f) Immediately after giving effect to the making of such Loan
(and the application of the proceeds thereof) or to the issuance of such Letter
of Credit, as the case may be, (i) the sum of the aggregate principal amount of
outstanding Revolving Loans plus the aggregate
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principal amount of outstanding Competitive Loans plus the aggregate principal
amount of outstanding Swingline Loans plus LOC Obligations outstanding shall not
exceed the Revolving Committed Amount, and (ii) the LOC Obligations shall not
exceed the LOC Committed Amount.
The delivery of each Notice of Borrowing, each Notice of Extension/Conversion
and each request for a Letter of Credit pursuant to Section 2.3(b) shall
constitute a representation and warranty by the Borrowers 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 Administrative Agent and
each Lender that:
6.1 Financial Condition.
The financial statements delivered to the Lenders pursuant to Section
5.1(c) 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 Consolidated Parties as of such date and for
such periods. Since December 31, 1997, there has been no sale, transfer or other
disposition by any Consolidated Party of any material part of the business or
property of any Consolidated 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 Consolidated
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 Administrative Agents.
6.2 No Change; Dividends.
Since December 31, 1997, (a) there has been no development or event
relating to or affecting a Consolidated Party which has had or could reasonably
be expected to have a Material Adverse Effect and (b) except as otherwise
permitted under this Credit Agreement, no dividends or other distributions have
been declared, paid or made upon the Capital Stock in a Consolidated Party nor
has any of the Capital Stock in a Consolidated Party been redeemed, retired,
purchased or otherwise acquired for value by such Person other than in
connection with the redemption of the Capital Stock of Highwoods Realty pursuant
to the terms of the Highwoods Realty Limited Partnership Agreement.
6.3 Organization; Existence; Compliance with Law.
Each of the Consolidated Parties (a) is duly organized, validly
existing and is in good standing under the laws of the jurisdiction of its
incorporation or organization, (b) has the corporate or other necessary power
and authority, and the legal right, to own and operate its property, to lease
the property it operates as lessee and to conduct the business in which it is
currently engaged, and
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(c) is duly qualified as a foreign entity and in good standing under the laws of
each jurisdiction where its ownership, lease or operation of property or the
conduct of its business requires such qualification, other than in such
jurisdictions where the failure to be so qualified and in good standing could
not reasonably be expected to have a Material Adverse Effect.
6.4 Power; Authorization; Enforceable Obligations.
Each of the Credit Parties has the corporate or other necessary power
and authority, and the legal right, to make, deliver and perform the Credit
Documents to which it is a party, and in the case of the Borrowers, to obtain
extensions of credit hereunder, and has taken all necessary corporate action to
authorize the borrowings and other extensions of credit on the terms and
conditions of this Credit Agreement and to authorize the execution, delivery and
performance of the Credit Documents to which it is a party. No consent or
authorization of, filing with, notice to or other similar act by or in respect
of, any Governmental Authority or any other Person is required to be obtained or
made by or on behalf of any Credit Party in connection with the borrowings or
other extensions of credit hereunder or with the execution, delivery,
performance, validity or enforceability of the Credit Documents to which such
Credit Party is a party. This Credit Agreement has been, and each other Credit
Document to which any Credit Party is a party will be, duly executed and
delivered on behalf of the Credit Parties. This Credit Agreement constitutes,
and each other Credit Document to which any Credit Party is a party when
executed and delivered will constitute, a legal, valid and binding obligation of
such Credit Party enforceable against such party in accordance with its terms,
except as enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting the enforcement of
creditors' rights generally and by general equitable principles (whether
enforcement is sought by proceedings in equity or at law).
6.5 No Conflicts.
Neither the execution and delivery of the Credit Documents, nor the
consummation of the transactions contemplated therein, nor the performance of
and compliance with the terms and provisions thereof by such Credit Party will
(a) violate or conflict with any provision of its articles or certificate of
incorporation or bylaws or other organizational or governing documents of such
Person, (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, 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 reasonably be expected to
have a Material Adverse Effect, or (d) result in or require the creation of any
Lien (other than those contemplated in or created in connection with the Credit
Documents) upon or with respect to its properties.
6.6 No Default.
No Consolidated 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
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which any of its properties is bound which default could reasonably be 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.
6.7 Ownership.
Each Consolidated Party is the owner of, and has good and marketable
title to, all of its respective assets and none of such assets is subject to any
Lien other than Liens permitted hereunder.
6.8 Indebtedness.
Except as otherwise permitted under Section 8.1, the Consolidated
Parties have no Indebtedness.
6.9 Litigation.
There are no actions, suits or legal, equitable, arbitration or
administrative proceedings, pending or, to the knowledge of any Credit Party,
threatened against any Consolidated Party which could reasonably be expected to
have a Material Adverse Effect.
6.10 Taxes.
Each Consolidated 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
(including mortgage recording taxes, documentary stamp taxes and intangibles
taxes) 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 as of the Closing Date of any proposed tax assessments
against it or any other Consolidated Party.
6.11 Compliance with Laws.
Each Consolidated 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 could not reasonably be expected to have a Material
Adverse Effect.
6.12 ERISA.
(a) Except as set forth in Schedule 6.12, during the five-year
period prior to the date on which this representation is made or deemed
made: (i) no ERISA 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 ERISA Event could reasonably be expected to
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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 which could individually or in the aggregate have a
Material Adverse Effect; (iii) each Plan has been maintained, operated,
and funded in material 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 of 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"
(as defined in Section 4001(a)(16) of ERISA), whether or not vested,
under each Single Employer Plan, as of the last annual valuation date
prior to the date on which this representation is made or deemed made
(determined, in each case, in accordance with Financial Accounting
Standards Board Statement 87, utilizing the actuarial assumptions used
in such Plan's most recent actuarial valuation report), did not exceed
as of such valuation date the fair market value of the assets of such
Plan.
(c) Except as set forth in Schedule 6.12, neither any
Consolidated Party nor any ERISA Affiliate would become subject to any
withdrawal liability under ERISA if any Consolidated Party or any ERISA
Affiliate were to withdraw completely from all Multiemployer Plans and
Multiple Employer Plans as of the valuation date most closely preceding
the date on which this representation is made or deemed made. Neither
any Consolidated Party 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 may subject any Consolidated Party 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 any Consolidated Party or any ERISA Affiliate has
agreed or is required to indemnify any person against any such
liability, which could individually or in the aggregate have a Material
Adverse Effect.
(e) Neither any Consolidated Party nor any ERISA Affiliates
has any material liability with respect to "expected post-retirement
benefit obligations" within the meaning of the Financial Accounting
Standards Board Statement 106. 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 of such sections.
6.13 Subsidiaries.
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Set forth on Schedule 6.13 is a complete and accurate list of all
Subsidiaries of each Consolidated Party. Information on Schedule 6.13 includes
(a) jurisdiction of incorporation or organization and (b) with respect to any
Subsidiary that is not a Wholly Owned Subsidiary, the number of shares of each
class of Capital Stock outstanding, the number and percentage of outstanding
shares of each class owned (directly or indirectly) by such Subsidiary, and the
number and effect, if exercised, of all outstanding options, warrants, rights of
conversion or purchase and all other similar rights with respect thereto. The
outstanding Capital Stock of all such Subsidiaries is validly issued, fully paid
and non-assessable and is owned by each such Consolidated Party, directly or
indirectly, free and clear of all Liens (other than those arising under or
contemplated in connection with the Credit Documents). Other than as set forth
in Schedule 6.13, no Subsidiary that is not a Wholly Owned Subsidiary has
outstanding any securities convertible into or exchangeable for its Capital
Stock nor does any such Person have outstanding any rights to subscribe for or
to purchase or any options for the purchase of, or any agreements providing for
the issuance (contingent or otherwise) of, or any calls, commitments or claims
of any character relating to its Capital Stock. Schedule 6.13 may be updated
from time to time by the Borrowers by giving written notice thereof to the
Administrative Agent.
6.14 Governmental Regulations, Etc.
(a) No part of the Letters of Credit or proceeds of the Loans
will be used, directly or indirectly, for the purpose of purchasing or
carrying any "margin stock" within the meaning of Regulation U, or for
the purpose of purchasing or carrying or trading in any securities. If
requested by any Lender or the Administrative Agent, the Borrowers will
furnish to the Administrative Agent and each Lender a statement to the
foregoing effect in conformity with the requirements of FR Form U-1
referred to in Regulation U. No indebtedness being reduced or retired
out of the proceeds of the Loans was or will be incurred for the
purpose of purchasing or carrying any margin stock within the meaning
of Regulation U or any "margin security" within the meaning of
Regulation T. "Margin stock" within the meaning of Regulation U does
not constitute more than 25% of the value of the consolidated assets of
the Consolidated Parties. None of the transactions contemplated by this
Credit Agreement (including, without limitation, the direct or indirect
use of the proceeds of the Loans) will violate or result in a violation
of the Securities Act of 1933, as amended, or the Securities Exchange
Act of 1934, as amended, or regulations issued pursuant thereto, or
Regulation T, U or X.
(b) No Consolidated Party is subject to regulation under the
Public Utility Holding Company Act of 1935, the Federal Power Act or
the Investment Company Act of 1940, each as amended. In addition, no
Consolidated Party is (i) an "investment company" registered or
required to be registered under the Investment Company Act of 1940, as
amended, and is not controlled by such a company, or (ii) a "holding
company", or a "subsidiary company" of a "holding company", or an
"affiliate" of a "holding company" or of a "subsidiary" of a "holding
company", within the meaning of the Public Utility Holding Company Act
of 1935, as amended.
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(c) Except as disclosed to the Administrative Agent in
writing, no director, executive officer or principal shareholder of any
Consolidated Party is an "insider" as such term is defined in
Regulation O such that any Lender would be in violation of Regulation O
with respect to any Loan hereunder.
(d) Each Consolidated Party has obtained and holds 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 ownership of its respective Property and to the conduct of its
respective businesses as presently conducted.
(e) No Consolidated Party is in violation of any applicable
statute, regulation or ordinance of the United States of America, or of
any state, city, town, municipality, county or any other jurisdiction,
or of any agency thereof (including without limitation, environmental
laws and regulations), which violation could reasonably be expected to
have a Material Adverse Effect.
(f) Each Consolidated Party is current with all material
reports and documents, if any, required to be filed with any state or
federal securities commission or similar agency and is in full
compliance in all material respects with all applicable rules and
regulations of such commissions.
6.15 Purpose of Loans and Letters of Credit.
The proceeds of the Loans hereunder shall be used solely by the
Borrowers (a) to repay amounts owing under the 1996 Credit Facility and the 1997
Credit Facility, (b) to finance the acquisition of (i) for lease office and
industrial properties, (ii) subject to Section 8.5, properties other than for
lease office and industrial properties, (iii) Persons whose primary business is
the ownership, leasing and management of for lease office and industrial
properties and (iv) subject to Section 8.5, Persons whose primary business is
the ownership, leasing and management of properties other than for lease office
and industrial properties, (c) to finance the development of (i) new office and
industrial properties and (ii) subject to Section 8.5, to finance the
development of properties other than for lease office and industrial properties,
and (d) for working capital and other general corporate purposes. The Letters of
Credit shall be used only for or in connection with appeal bonds, reimbursement
obligations arising in connection with surety and reclamation bonds,
reinsurance, domestic or international trade transactions and obligations not
otherwise aforementioned relating to transactions entered into by the applicable
account party in the ordinary course of business. In addition, Letters of Credit
may be used to provide credit enhancement for any Indebtedness of a Credit
Party.
6.16 Environmental Matters.
(a) There is no violation of any Environmental Law with
respect to the facilities and properties owned, leased or operated by
the Consolidated Parties or the businesses
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operated by the Consolidated Parties which would, in the aggregate,
result in anticipated clean-up costs in excess of $25 million.
(b) No Consolidated Party has been notified of any material
action, suit, proceeding or investigation which calls into question
compliance by any Consolidated Party with any Environmental Laws or
which seeks to suspend, revoke or terminate any license, permit or
approval necessary for the generation, handling, storage, treatment or
disposal of any Hazardous Material in any material respect of the
Consolidated Parties taken as a whole.
6.17 Intellectual Property.
Each Consolidated 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 could not have a Material Adverse Effect.
6.18 Solvency.
Each Credit Party is and, after consummation of the transactions
contemplated by this Credit Agreement, will be Solvent.
6.19 Investments.
All Investments of each Consolidated Party are Permitted Investments.
6.20 Disclosure.
Neither this Credit 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 any Consolidated 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 No Burdensome Restrictions.
No Consolidated 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, could reasonably be expected to have a Material Adverse Effect.
6.22 Labor Matters.
There are no collective bargaining agreements or Multiemployer Plans
covering the employees of a Consolidated Party as of the Closing Date and none
of the Consolidated Parties has
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suffered any strikes, walkouts, work stoppages or other material labor
difficulty within the last five years.
6.23 Year 2000 Compliance.
Each Credit Party has (i) initiated a review and assessment of all
areas within its and each of its Subsidiaries' business and operations
(including those affected by suppliers, vendors and customers) that could be
adversely affected by the "Year 2000 Problem" (that is, the risk that computer
applications used by such Credit Party or any of its Subsidiaries (or suppliers,
vendors and customers) may be unable to recognize and perform properly
date-sensitive functions involving certain dates prior to and any date after
December 31, 1999), (ii) developed a plan and timeline for addressing the Year
2000 Problem on a timely basis, and (iii) to date, implemented that plan in
accordance with the timetable. Based on the foregoing, each Credit Party
believes that all computer applications (including those of its suppliers,
vendors and customers) that are material to its and any of its Subsidiaries'
business and operations are reasonably expected on a timely basis to be able to
perform properly date-sensitive functions for all dates before and after January
1, 2000 (that is, be "Year 2000 compliant"), except to the extent that a failure
to do so could not reasonably be expected to have Material Adverse Effect.
6.24 Principal Offices.
Set forth on Schedule 6.24 is the chief executive office and principal
place of business of each Credit Party. Schedule 6.24 may be updated from time
to time by the Borrowers by giving written notice thereof to the Administrative
Agent.
SECTION 7
AFFIRMATIVE COVENANTS
Each Credit Party hereby covenants and agrees that so long as this
Credit Agreement is in effect or any amounts payable hereunder or under any
other Credit Document shall remain outstanding, and until all of the Commitments
hereunder shall have terminated:
7.1 Information Covenants.
The Principal Borrower will furnish, or cause to be furnished, to the
Administrative Agent for distribution to 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
Consolidated Parties, (i) a consolidated and consolidating balance
sheet and income statement of the Consolidated Parties, as of the end
of such fiscal year, together with related consolidated and
consolidating 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
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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 Administrative Agent 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 as to the status of the Consolidated Parties
as a going concern, (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 and (iii) a
projection of Capital Expenditures for the next fiscal year for each
Property of a Consolidated Party.
(b) Quarterly Financial Statements. As soon as available, and
in any event within 45 days after the close of each fiscal quarter of
the Consolidated Parties (other than the fourth fiscal quarter, in
which case 120 days after the end thereof) (i) a consolidated and
consolidating balance sheet and income statement of the Consolidated
Parties, as of the end of such fiscal quarter, together with related
consolidated and consolidating 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 chief financial officer of the Principal Borrower to
the effect that such quarterly financial statements fairly present in
all material respects the financial condition of the Consolidated
Parties and have been prepared in accordance with GAAP, subject to
changes resulting from audit and 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) a summary of all Net Cash
Proceeds received by the Credit Parties during such fiscal quarter,
together with a verification of the amount of such Net Cash Proceeds
satisfactory to the Administrative Agent.
(c) Officer's Certificate. At the time of delivery of the
financial statements provided for in Sections 7.1(a) and 7.1(b) above,
a certificate of the chief financial officer of the Principal Borrower
substantially in the form of Exhibit 7.1(c), (i) demonstrating
compliance with the financial covenants contained in Section 7.11 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 Credit Parties propose 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
Principal Borrower, a certificate of the chief financial officer of the
Principal Borrower containing information regarding the amount of all
Equity Issuances that were made during the prior fiscal year.
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(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 other report or "management letter" submitted by independent
accountants to any Consolidated Party in connection with any annual,
interim or special audit of the books of such Person.
(g) Reports. Promptly, (i)(A) copies of any 10-K, 10-Q and S-4
filed, (B) all other registration statements and prospectuses sent to
or received from, the Securities and Exchange Commission, or any
successor agency, as may be requested by the Administrative Agent and
(C) copies of all proxy statements as any Consolidated Party shall send
to its shareholders or partners generally and (ii) upon the request of
the Administrative 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 obtaining knowledge thereof, such Credit
Party will give written notice to the Administrative Agent immediately
of (i) 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 Credit Parties propose to take with respect thereto,
and (ii) the occurrence of any of the following with respect to any
Consolidated Party (A) the pendency or commencement of any litigation,
arbitral or governmental proceeding against such Person which if
adversely determined could reasonably be expected to have a Material
Adverse Effect, (B) the institution of any proceedings against such
Person 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 could reasonably be expected to have a Material Adverse Effect,
or (C) any notice or determination concerning the imposition of any
withdrawal liability by a Multiemployer Plan against such Person or any
ERISA Affiliate, the determination that a Multiemployer Plan is, or is
expected to be, in reorganization within the meaning of Title IV of
ERISA or the termination of any Plan.
(i) ERISA. Upon obtaining knowledge thereof, any Credit Party
will give written notice to the Administrative Agent promptly (and in
any event within five business days) of: (i) of any event or condition,
including, but not limited to, any Reportable Event, that constitutes,
or might reasonably lead to, an ERISA Event; (ii) with respect to any
Multiemployer Plan, the receipt of notice as prescribed in ERISA or
otherwise of any withdrawal liability assessed against the Borrowers or
any of their ERISA Affiliates, or of a determination that any
Multiemployer Plan is in reorganization or insolvent (both within the
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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 any Consolidated Party or any ERISA Affiliate 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,
provided that the foregoing events individually or in combination could
reasonably be expected to 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 chief financial officer of the Principal
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 Credit Parties shall
furnish the Administrative Agent and 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).
(j) Environmental.
(i) Upon the reasonable written request of the
Administrative Agent, the Borrowers will furnish or cause to
be furnished to the Administrative Agent, at the Borrowers'
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 Administrative Agent 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 Borrowers fail to deliver such an environmental report
within seventy-five (75) days after receipt of such written
request then the Administrative Agent may arrange for same,
and the Credit Parties hereby grant to the Administrative
Agent 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 could reasonably be
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 any
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Consolidated Party as the Administrative Agent or the Required Lenders
may reasonably request.
7.2 Preservation of Existence and Franchises.
Except as a result of or in connection with a merger of a Subsidiary
permitted by Section 8.4 or as a result of an Asset Disposition permitted by
Section 8.17, each Credit Party will, and will cause each of its material
Subsidiaries to, 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.
7.3 Books and Records.
Each Credit Party will, and will cause each of its Subsidiaries to,
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).
7.4 Compliance with Law.
Each Credit Party will, and will cause each of its Subsidiaries to,
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 except to
the extent the failure to comply with Environmental Laws would not, in the
aggregate, result in anticipated clean-up costs in excess of $25 million).
7.5 Payment of Taxes and Other Indebtedness.
Each Credit Party will, and will cause each of its Subsidiaries to, pay
and 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) except as prohibited hereunder, all of its other
Indebtedness as it shall become due; provided, however, that no Consolidated
Party shall 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 could reasonably be
expected to have a Material Adverse Effect.
7.6 Insurance.
Each Credit Party will, and will cause each of its Subsidiaries to, 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. The present insurance coverage of the Consolidated
Parties is outlined as to carrier, policy
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number, expiration date, type and amount on Schedule 7.6. 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.
7.7 Maintenance of Property.
Each Credit Party will, and will cause each of its Subsidiaries to,
maintain and preserve its properties and equipment in good repair, working order
and condition, normal wear and tear and casualty and condemnation excepted, 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.
7.8 Performance of Obligations.
Each Credit Party will, and will cause each of its Subsidiaries to,
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.
7.9 Use of Proceeds.
The Borrowers will use the proceeds of the Loans and will use the
Letters of Credit solely for the purposes set forth in Section 6.15.
7.10 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, and will cause each of its Subsidiaries to, permit representatives
appointed by the Administrative Agent, including, without limitation,
independent accountants, agents, attorneys, and appraisers to visit and inspect
its 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 the Administrative Agent or its
representatives to investigate and verify the accuracy of information provided
to the Lenders and to discuss all such matters with the officers, employees and
representatives of such Person.
7.11 Financial Covenants.
(a) Total Liabilities to Total Assets. As of the last day of
each fiscal quarter of the Consolidated Parties, the ratio of (i) Total
Liabilities on the last day of such period to (ii) Total Assets on the
last day of such period shall be less than or equal to .50 to 1.0.
(b) Unencumbered Assets at Cost to Unsecured Debt. At all
times, the ratio of (i) Unencumbered Assets at Cost to (ii) Unsecured
Debt shall be greater than or equal to 2.0 to 1.0.
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(c) Secured Debt to Total Assets. At all times, the ratio of
(i) Secured Debt to (ii) Total Assets shall be less than or equal to
0.25 to 1.0.
(d) Interest Coverage Ratio. The Interest Coverage Ratio, as
of the last day of each fiscal quarter of the Consolidated Parties,
shall be greater than 2.25 to 1.0.
(e) Fixed Charge Coverage Ratio. The Fixed Charge Coverage
Ratio, as of the last day of each fiscal quarter of the Consolidated
Parties, shall be greater than 1.75 to 1.0.
(f) Unsecured Debt Coverage Ratio. As of the end of each
fiscal quarter of the Consolidated Parties for the twelve month period
ending on such date, the ratio of (i) Adjusted NOI for the Properties
that are not subject to any Liens for such period to (ii) Interest
Expense paid on Unsecured Debt for such period shall be greater than
2.25 to 1.0.
(g) Tangible Net Worth. At all times the Tangible Net Worth
shall be greater than or equal to the sum of $1,779,000,000, increased
on a cumulative basis as of the end of each fiscal quarter of the
Consolidated Parties, commencing with the fiscal quarter ending June
30, 1998 by an amount equal to 85% of the Net Cash Proceeds of any
Equity Issuance received by the Consolidated Parties subsequent to the
Closing Date.
(h) Speculative Land to Total Assets. At all times, the ratio
of (i) the value at cost of all Speculative Land to (ii) Total Assets
shall be less than or equal to .10 to 1.0.
(i) Speculative Construction Ratio. At all times, the ratio of
(i) the amount of potential square footage in all Speculative
Construction to (ii) the amount of square footage in all Properties of
the Consolidated Parties that have been fully completed and are
generating a positive cash flow on a stand alone basis shall be less
than or equal to .20 to 1.0.
7.12 Additional Credit Parties.
As soon as practicable and in any event within 30 days after any Person
becomes a Subsidiary of any Credit Party or upon the formation of any Preferred
Stock Subsidiary or if at any time any Non-Guarantor Subsidiary (other than the
Nichols Entities) could become a Credit Party without violating the terms of any
material contract, agreement or document to which it is a party, the Principal
Borrower shall provide the Administrative Agent with written notice thereof and
shall (a) if such Person is a Domestic Subsidiary of a Credit Party or a
Preferred Stock Subsidiary, cause such Person to execute a Joinder Agreement in
substantially the same form as Exhibit 7.12 and (b) cause such Person to deliver
such other documentation as the Administrative Agent may reasonably request in
connection with the foregoing, including, without limitation, certified
resolutions and other organizational and authorizing documents of such Person,
favorable opinions of counsel to such Person (which shall cover, among other
things, the legality, validity, binding effect and enforceability of the
documentation referred to above), all in form, content and scope reasonably
satisfactory to the Administrative Agent. If a Non-Guarantor
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Subsidiary executes and delivers a Joinder Agreement it shall no longer be
deemed to be a Non-Guarantor Subsidiary under this Credit Agreement.
7.13 Management.
Each of O. Temple Sloan, Ronald P. Gibson, Carman Liuzzo and Edward J.
Fritsch shall remain active in the management of Highwoods Properties; provided
that upon the death, disability or retirement of any of the above-referenced
individuals, Highwoods Properties shall have six months to provide the
Administrative Agent with substitute personnel as replacements; such substitute
personnel to be acceptable to the Administrative Agent in its reasonable
discretion.
7.14 Upstream of Excess Cash Flow.
Each Credit Party shall cause all "Excess Cash Flow" (as defined below)
of a Non-Guarantor Subsidiary (other than the Nichols Entities) to be
transferred to a Credit Party as promptly as possible but at least once a month.
For the purposes of this Section 7.14, "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.
7.15 Year 2000 Compliance.
Each Credit Party will promptly notify the Administrative Agent in the
event such Credit Party discovers or determines that any computer application
(including those of its suppliers, vendors and customers) that is material to
its or any of its Subsidiaries' business and operations will not be Year 2000
compliant, except to the extent that such failure could not reasonably be
expected to have a Material Adverse Effect.
7.16 Environmental Indemnity.
The Credit Parties agree that they will reimburse the Lenders for and
hereby hold the Lenders harmless from all fines or penalties made or levied
against any of the Lenders by any Governmental Authority as a result of or in
connection with (i) the use of Materials of Environmental Concern at the
Properties, (ii) the use of Materials of Environmental Concern at the facilities
thereon, or (iii) the use, generation, storage, transportation, discharge,
release or handling of any Materials of Environmental Concern at the Properties,
or as a result of any release of any Materials of Environmental Concern onto the
ground or into the water or air from or upon the Properties at any time. The
Credit Parties also agree that they will reimburse the Lenders for and indemnify
and hold the Lenders harmless from any and all costs, expenses (including
reasonably attorneys' fees) and for all civil claims, judgments or penalties
incurred entered, assessed, or levied against any of the Lenders as a result of
any of the Credit Parties' use of Materials of Environmental Concern at the
Properties or as a result of any release of any Materials of Environmental
Concern on the ground or into the water or air by any of the Credit Parties from
or upon the Properties. Such reimbursement or indemnification shall include but
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not be limited to any and all judgments or penalties to recover the costs of
cleanup of any such release by any of the Credit Parties from or upon Properties
and all reasonable expenses incurred by the Lenders as a result of such a civil
action, including but not limited to reasonable attorneys' fees. The Credit
Parties' obligations under this section shall survive the repayment of the
Loans.
SECTION 8
NEGATIVE COVENANTS
Each Credit Party hereby covenants and agrees that, so long as this
Credit Agreement is in effect or any amounts payable hereunder or under any
other Credit Document shall remain outstanding, and until all of the Commitments
hereunder shall have terminated:
8.1 Indebtedness.
The Credit Parties will not permit any Consolidated Party 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 set forth in Schedule 8.1 (and renewals,
refinancings and extensions thereof (i) on terms and conditions no less
favorable to such Person than such existing Indebtedness or (ii) in the
case such existing Indebtedness becomes unsecured, on terms and
conditions consistent with then prevailing market standards for such
unsecured Indebtedness) and in a principal amount not in excess of that
outstanding as of the date of such renewal, refinancing or extension;
(c) Indebtedness arising from obligations of the Credit
Parties evidenced by the interest rate protection agreements entered
into in order to manage existing or anticipated interest rate or
exchange rate risks and not for speculative purposes;
(d) Other unsecured Indebtedness;
(e) Other secured Indebtedness that is nonrecourse to any
Credit Party (subject to normal and customary recourse carveouts in the
ordinary course of business);
(f) Other secured Indebtedness that is recourse to any Credit
Party provided that such secured Indebtedness, in the aggregate, shall
not exceed at any one time a principal amount greater than 5% of Total
Assets;
(g) Indebtedness evidenced by the Indenture in an aggregate
amount not to exceed $140,000,000; and
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(h) Indebtedness in respect of letters of credit (other than
Letters of Credit issued under and pursuant to this Credit Agreement)
issued by financial institutions to secure liability obligations of the
Consolidated Parties in an aggregate principal amount up to $30,000,000
at any one time outstanding.
8.2 Liens.
The Credit Parties will not permit any Consolidated Party to contract,
create, incur, assume or permit to exist any Lien with respect to any ownership
interest in a Non-Guarantor Subsidiary.
8.3 Nature of Business.
Except as provided in Section 8.5, the Credit Parties will not permit
the Consolidated Parties as a whole to substantially alter the character or
conduct of the business conducted by such Person as of the Closing Date.
8.4 Consolidation, Merger, Dissolution, etc.
The Credit Parties will not permit any Consolidated Party to 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 8.4, (a) each of the
Borrowers may merge or consolidate with any of its Subsidiaries so long as (i)
such Borrower shall be the continuing or surviving entity and (ii) after giving
effect thereto no Default or Event of Default exists, (b) any Person may be
merged or consolidated with or into Highwoods Properties so long as (i)
Highwoods Properties is the continuing or surviving corporation and (ii) after
giving effect thereto no Default or Event of Default exists and (c) any
Consolidated Party other than Highwoods Properties or a Borrower may merge or
consolidate with any Person other than Highwoods Properties or a Borrower so
long as the Person surviving such merger or consolidation is or becomes a Credit
Party pursuant to Section 7.12 hereof.
8.5 Investment in Properties other than For Lease Office and
Industrial Properties
The Credit Parties will not permit any Consolidated Party to, directly
or indirectly, acquire, develop or otherwise make an Investment in any
properties other than for lease office and industrial properties which in the
aggregate shall exceed at any one time an amount greater than 15% of Total
Assets.
8.6 Investments.
The Credit Parties will not permit any Consolidated Party to lend money
or extend credit or make advances to any Person or purchase or acquire any
stock, obligations or securities of, or any other interest in, or make any
capital contribution to, or otherwise make an Investment in any Person except
for Permitted Investments.
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8.7 Restricted Payments.
The Credit Parties will not permit any Consolidated Party to, directly
or indirectly, declare, order, make or set apart any sum for or pay any
Restricted Payment, except the Credit Parties may make distributions, in the
aggregate, in an amount not to exceed one hundred percent (100%) of Cash
Available for Distribution.
8.8 Prepayments of Indebtedness, etc..
The Credit Parties will not permit any Consolidated Party to (a) if any
Default or Event of Default has occurred and is continuing or would be directly
or indirectly caused as a result thereof, after the issuance thereof, amend or
modify (or permit the amendment or modification of) any of the terms of any
Indebtedness if such amendment or modification would add or change any terms in
a manner adverse to the issuer of such Indebtedness, or shorten the final
maturity or average life to maturity or require any payment to be made sooner
than originally scheduled or increase the interest rate applicable thereto or
change any subordination provision thereof, or (b) if any Default or Event of
Default has occurred and is continuing or would be directly or indirectly caused
as a result thereof, make (or give any notice with respect thereto) any
voluntary or optional payment or prepayment or redemption or acquisition for
value of (including without limitation, by way of depositing money or securities
with the trustee with respect thereto before due for the purpose of paying when
due), refund, refinance or exchange of any other Indebtedness.
8.9 Transactions with Affiliates.
The Credit Parties will not permit any Consolidated Party to enter into
or permit to exist any transaction or series of transactions, whether or not in
the ordinary course of business, with any officer, director, shareholder,
Subsidiary or Affiliate of such Person other than (i) transactions permitted by
Section 8.6, (ii) customary fees paid to directors in the ordinary course of
business, (iii) the payment of compensation to employees and officers in the
ordinary course of business, (iv) the creation of Preferred Stock Subsidiaries
and (v) on terms and conditions substantially as favorable to such Person as
would be obtainable by it in a comparable arms-length transaction with a Person
other than an officer, director, shareholder, Subsidiary or Affiliate.
8.10 Fiscal Year; Organizational Documents.
The Credit Parties will not permit any Consolidated Party to (a) change
its fiscal year without the prior written consent of the Required Lenders or (b)
amend, modify or change its partnership agreement (other than a change limited
solely to add additional limited partners or authorize the issuance of
additional units) or articles of incorporation (or corporate charter or other
similar organizational document) or bylaws (or other similar document) in any
manner that would reasonably be likely to adversely affect the rights of the
Lenders.
8.11 Limitation on Restricted Actions.
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Without providing prior written notice to the Administrative Agent, the
Credit Parties will not permit any Consolidated Party to, directly or
indirectly, create or otherwise cause or suffer to exist or become effective any
encumbrance or restriction on the ability of any such Person to (a) pay
dividends or make any other distributions to any Credit Party on its Capital
Stock or with respect to any other interest or participation in, or measured by,
its profits, (b) pay any Indebtedness or other obligation owed to any Credit
Party, (c) make loans or advances to any Credit Party or (d) sell, lease or
transfer any of its properties or assets to any Credit Party, except (in respect
of any of the matters referred to in clauses (a) through (d) above) for such
encumbrances or restrictions existing under or by reason of this Credit
Agreement and the other Credit Documents.
8.12 Ownership of Subsidiaries.
Notwithstanding any other provisions of this Credit Agreement to the
contrary, Credit Parties will not permit any Consolidated Party other than
Highwoods Properties, Highwoods Realty or any Preferred Stock Subsidiary to
issue any shares of preferred Capital Stock to any Person other than a Credit
Party. Furthermore, Highwoods Realty and Highwoods Properties shall at all times
maintain ownership, directly or indirectly, all of the Capital Stock of AP
Southeast Portfolio Partners, L.P., a Delaware limited partnership, AP-GP
Southeast Portfolio Partners, L.P., a Delaware limited partnership and Highwoods
Realty GP Corp., a Delaware corporation.
8.13 Sale Leasebacks.
Except as could not reasonably be expected to have a Material Adverse
Effect, the Credit Parties will not permit any Consolidated Party to, directly
or indirectly, become or remain liable as lessee or as guarantor or other surety
with respect to any lease, whether an Operating Lease or a Capital Lease, of any
Property (whether real or personal or mixed), whether now owned or hereafter
acquired, (a) which such Consolidated Party has sold or transferred or is to
sell or transfer to a Person which is not a Consolidated Party or (b) which such
Consolidated Party intends to use for substantially the same purpose as any
other Property which has been sold or is to be sold or transferred by such
Consolidated Party to another Person which is not a Consolidated Party in
connection with such lease.
8.14 No Further Negative Pledges.
The Credit Parties will not permit any Consolidated Party to 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
except pursuant to any document or instrument governing Indebtedness incurred
pursuant to Section 8.1(b), Section 8.1(e) or Section 8.1(f), provided that any
such restriction contained therein relates only to the properties or assets
constructed or acquired in connection with such Indebtedness.
8.15 Non-Guarantor Subsidiaries.
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Notwithstanding any other provision of this Credit 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.
8.16 Indenture.
The Credit Parties and their Subsidiaries shall not allow or permit any
amendment or modification to the Indenture.
8.17 Asset Dispositions.
The Credit Parties will not permit any Consolidated Party to make any
Asset Disposition in which the value of the assets sold or otherwise disposed
pursuant to such Asset Disposition exceeds $15,000,000 unless the Principal
Borrower shall have delivered to the Administrative Agent a Pro Forma Compliance
Certificate demonstrating that, upon giving effect to such Asset Disposition, on
a pro forma basis the Credit Parties shall be in compliance with all of the
covenants in Section 7.11. Furthermore, the Credit Parties will not permit the
Consolidated Parties to make Asset Dispositions in any fiscal year in which the
aggregate value of the assets sold or otherwise disposed of during such fiscal
year exceeds $30,000,000 unless the Principal Borrower shall have delivered to
the Administrative Agent a Pro Forma Compliance Certificate demonstrating that
upon giving effect to such transactions on a pro forma basis, the Credit Parties
shall be in compliance with all of the covenants set forth in Section 7.11.
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
(i) default in the payment when due of any principal
of any of the Loans or of any reimbursement obligations
arising from drawings under Letters of Credit, or
(ii) default, and such default shall continue for
three (3) or more Business Days, in the payment when due of
any interest on the Loans or on any reimbursement obligations
arising from drawings under Letters of Credit, or of any
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Fees or other amounts owing hereunder, under any of the other
Credit Documents or in connection herewith or therewith; or
(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; or
(c) Covenants. Any Credit Party shall
(i) default in the due performance or observance of
any term, covenant or agreement contained in Sections 7.2,
7.4, 7.9, 7.11, 7.12 or 8.1 through 8.16, inclusive;
(ii) default in the due performance or observance of
any term, covenant or agreement contained in Sections 7.1(a),
(b) (c) or (d) and such default shall continue unremedied for
a period of at least 5 days after the earlier of a responsible
officer of a Credit Party becoming aware of such default or
notice thereof by the Administrative 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), (c)(i) or (c)(ii) of this
Section 9.1) contained in this Credit Agreement and such
default shall continue unremedied for a period of at least 30
days after the earlier of a responsible officer of a Credit
Party becoming aware of such default or notice thereof by the
Administrative Agent; or
(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 (subject to applicable
grace or cure periods, if any), or (ii) any Credit Document shall fail
to be in full force and effect or to give the Administrative Agent
and/or the Lenders the rights, powers and privileges purported to be
created thereby, or any Credit Party shall so state in writing; or
(e) Guaranties. The guaranty given by any Guarantor
hereunder (including any Additional Credit Party) or any provision
thereof shall cease to be in full force and effect, or any Guarantor
(including any Additional Credit Party) hereunder or any Person acting
by or on behalf of such Guarantor shall deny or disaffirm such
Guarantor's obligations under such guaranty, or any Guarantor shall
default in the due performance or observance of any term, covenant or
agreement on its part to be performed or observed pursuant to any
guaranty; or
(f) Bankruptcy, etc. Any Bankruptcy Event shall occur
with respect to any Consolidated Party; or
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(g) Defaults under Other Agreements.
(i) Any Consolidated Party shall default in the
performance or observance (beyond the applicable grace period
with respect thereto, if any) of any obligation or condition
of any contract or lease of such Consolidated Party such that
the default would have a Material Adverse Effect; or
(ii) With respect to any Indebtedness (other than
Indebtedness outstanding under this Credit Agreement or the
Nichols Documents) in excess of $7,500,000 in the aggregate
for the Consolidated Parties taken as a whole, (A) any
Consolidated Party shall (1) default in any payment (beyond
the applicable grace period with respect thereto, if any) with
respect to any such Indebtedness, or (2) the occurrence and
continuance of a default 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 Administrative 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 (B) any such Indebtedness
shall be declared due and payable, or required to be prepaid
other than by a regularly scheduled required prepayment, prior
to the stated maturity thereof.
(h) Judgments. One or more judgments or decrees shall be
entered against one or more of the Consolidated Parties involving a
liability of $5,000,000 or more in the aggregate (to the extent not
paid or fully covered by insurance provided by a carrier who has
acknowledged coverage and has the ability to perform) and any such
judgments or decrees shall not have been vacated, discharged or stayed
or bonded pending appeal within 30 days from the entry thereof; or
(i) ERISA. Any of the following events or conditions, if
such event or condition could have a Material Adverse Effect: (i) 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 any Consolidated Party or any ERISA Affiliate in favor of the PBGC
or a Plan; (ii) an ERISA 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; (iii) an ERISA 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 (A) the termination of such Plan for purposes of Title IV of
ERISA, or (B) any Consolidated Party 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 or (within
the meaning of Section 4245 of ERISA) such Plan; or (iv) 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
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subject any Consolidated Party 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
any Consolidated Party or any ERISA Affiliate has agreed or is required
to indemnify any person against any such liability; or
(j) Ownership. There shall occur a Change of Control; or
(k) Nichols Documents. There shall occur a default or an
event of default under the Nichols Documents and such default or event
of default shall continue unremedied for a period of at least 90 days
after the earlier of a responsible officer of a Credit Party becoming
aware of such default or notice thereof by the Administrative Agent.
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 by the Required Lenders
or all of the Lenders, as applicable (pursuant to the voting requirements of
Section 11.6) or cured to the satisfaction of the Required Lenders or all of the
Lenders, as applicable (pursuant to the voting procedures in Section 11.6), the
Administrative Agent shall, upon the request and direction of the Required
Lenders, by written notice to the Credit Parties take any of the following
actions:
(a) Termination of Commitments. Declare the Commitments
terminated whereupon the Commitments shall be immediately terminated.
(b) Acceleration. 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 the
Borrowers to the Administrative Agent and/or 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 Borrowers.
(c) Cash Collateral. Direct the Borrowers to pay (and the
Borrowers agree that upon receipt of such notice, or upon the
occurrence of an Event of Default under Section 9.1(f), it will
immediately pay) to the Administrative Agent additional cash, to be
held by the Administrative Agent, for the benefit of the Lenders, in a
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 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 arising from drawings under Letters
of Credit, all accrued interest in respect thereof, all accrued and
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unpaid Fees and other indebtedness or obligations owing to the Administrative
Agent and/or any of the Lenders hereunder automatically shall immediately become
due and payable without the giving of any notice or other action by the
Administrative Agent or the Lenders.
SECTION 10
AGENCY PROVISIONS
10.1 Appointment, Powers and Immunities.
Each Lender hereby irrevocably appoints and authorizes the
Administrative Agent to act as its Administrative Agent under this Credit
Agreement and the other Credit Documents with such powers and discretion as are
specifically delegated to the Administrative Agent by the terms of this Credit
Agreement and the other Credit Documents, together with such other powers as are
reasonably incidental thereto. The Administrative Agent (which term as used in
this sentence and in Section 10.5 and the first sentence of Section 10.6 hereof
shall include its Affiliates and its own and its Affiliates' officers,
directors, employees, and Administrative Agents): (a) shall not have any duties
or responsibilities except those expressly set forth in this Credit Agreement
and shall not be a trustee or fiduciary for any Lender; (b) shall not be
responsible to the Lenders for any recital, statement, representation, or
warranty (whether written or oral) made in or in connection with any Credit
Document or any certificate or other document referred to or provided for in, or
received by any of them under, any Credit Document, or for the value, validity,
effectiveness, genuineness, enforceability, or sufficiency of any Credit
Document, or any other document referred to or provided for therein or for any
failure by any Credit Party or any other Person to perform any of its
obligations thereunder; (c) shall not be responsible for or have any duty to
ascertain, inquire into, or verify the performance or observance of any
covenants or agreements by any Credit Party or the satisfaction of any condition
or to inspect the property (including the books and records) of any Credit Party
or any of its Subsidiaries or Affiliates; (d) shall not be required to initiate
or conduct any litigation or collection proceedings under any Credit Document;
and (e) shall not be responsible for any action taken or omitted to be taken by
it under or in connection with any Credit Document, except for its own gross
negligence or willful misconduct. The Administrative Agent may employ agents and
attorneys-in-fact and shall not be responsible for the negligence or misconduct
of any such agents or attorneys-in-fact selected by it with reasonable care.
10.2 Reliance by Administrative Agent.
The Administrative Agent shall be entitled to rely upon any
certification, notice, instrument, writing, or other communication (including,
without limitation, any thereof by telephone or telecopy) believed by it to be
genuine and correct and to have been signed, sent or made by or on behalf of the
proper Person or Persons, and upon advice and statements of legal counsel
(including counsel for any Credit Party), independent accountants, and other
experts selected by the Administrative Agent. The Administrative Agent may deem
and treat the payee of any Note as the holder thereof for all purposes hereof
unless and until the Administrative
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Agent receives and accepts an Assignment and Acceptance executed in accordance
with Section 11.3(b) hereof. As to any matters not expressly provided for by
this Credit Agreement, the Administrative Agent shall not be required to
exercise any discretion or take any action, but shall be required to act or to
refrain from acting (and shall be fully protected in so acting or refraining
from acting) upon the instructions of the Required Lenders, and such
instructions shall be binding on all of the Lenders; provided, however, that the
Administrative Agent shall not be required to take any action that exposes the
Administrative Agent to personal liability or that is contrary to any Credit
Document or applicable law or unless 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 any such action.
10.3 Defaults.
The Administrative Agent shall not be deemed to have knowledge or
notice of the occurrence of a Default or Event of Default unless the
Administrative Agent has received written notice from a Lender or one of the
Borrowers specifying 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 of the occurrence of a Default or Event of Default, the
Administrative Agent shall give prompt notice thereof to the Lenders. The
Administrative Agent shall (subject to Section 10.2 hereof) take such action
with respect to such Default or Event of Default as shall reasonably be directed
by the Required Lenders, provided that, unless and until the Administrative
Agent shall have received such directions, the Administrative Agent may (but
shall not be obligated to) take such action, or refrain from taking such action,
with respect to such Default or Event of Default as it shall deem advisable in
the best interest of the Lenders.
10.4 Rights as a Lender.
With respect to its Commitment and the Loans made by it, NationsBank
(and any successor acting as Administrative Agent) in its capacity as a Lender
hereunder shall have the same rights and powers hereunder as any other Lender
and may exercise the same as though it were not acting as the Administrative
Agent, and the term "Lender" or "Lenders" shall, unless the context otherwise
indicates, include the Administrative Agent in its individual capacity.
NationsBank (and any successor acting as Administrative Agent) and its
Affiliates may (without having to account therefor to any Lender) accept
deposits from, lend money to, make investments in, provide services to, and
generally engage in any kind of lending, trust, or other business with any
Credit Party or any of its Subsidiaries or Affiliates as if it were not acting
as Administrative Agent, and NationsBank (and any successor acting as
Administrative Agent) and its Affiliates may accept fees and other consideration
from any Credit Party or any of its Subsidiaries or Affiliates for services in
connection with this Credit Agreement or otherwise without having to account for
the same to the Lenders.
10.5 Indemnification.
The Lenders agree to indemnify the Administrative Agent only in its
capacity as Administrative Agent (to the extent not reimbursed under Section
11.5 hereof, but without
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limiting the obligations of the Borrowers under such Section) ratably in
accordance with their respective Commitments, for any and all liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses (including attorneys' fees), or disbursements of any kind and nature
whatsoever that may be imposed on, incurred by or asserted against the
Administrative Agent (including by any Lender) in any way relating to or arising
out of any Credit Document or the transactions contemplated thereby or any
action taken or omitted by the Administrative Agent under any Credit Document;
provided that no Lender shall be liable for any of the foregoing to the extent
they arise from the gross negligence or willful misconduct of the Person to be
indemnified. Without limitation of the foregoing, each Lender agrees to
reimburse the Administrative Agent promptly upon demand for its ratable share of
any costs or expenses payable by the Borrowers under Section 11.5, to the extent
that the Administrative Agent is not promptly reimbursed for such costs and
expenses by the Borrowers. The agreements in this Section 10.5 shall survive the
repayment of the Loans, LOC Obligations and other obligations under the Credit
Documents and the termination of the Commitments hereunder.
10.6 Non-Reliance on Administrative Agent and Other Lenders.
Each Lender agrees that it has, independently and without reliance on
the Administrative Agent or any other Lender, and based on such documents and
information as it has deemed appropriate, made its own credit analysis of the
Credit Parties and their Subsidiaries and decision to enter into this Credit
Agreement and that it will, independently and without reliance upon the
Administrative Agent or any other Lender, and based on such documents and
information as it shall deem appropriate at the time, continue to make its own
analysis and decisions in taking or not taking action under the Credit
Documents. Except for notices, reports, and other documents and information
expressly required to be furnished to the Lenders by the Administrative Agent
hereunder, the Administrative Agent shall not have any duty or responsibility to
provide any Lender with any credit or other information concerning the affairs,
financial condition, or business of any Credit Party or any of its Subsidiaries
or Affiliates that may come into the possession of the Administrative Agent or
any of its Affiliates.
10.7 Successor Administrative Agent.
The Administrative Agent may resign at any time by giving notice
thereof to the Lenders and the Principal Borrower. The Administrative Agent may
be removed at any time with cause by the Required Lenders, provided that the
Principal Borrower and the other Lenders shall be promptly notified thereof.
Upon any such resignation or removal, the Required Lenders shall have the right
to appoint a successor Administrative Agent. If no successor Administrative
Agent shall have been so appointed by the Required Lenders and shall have
accepted such appointment within thirty (30) days after the retiring
Administrative Agent's giving of notice of resignation or the Required Lender's
removal, then the retiring Administrative Agent may, on behalf of the Lenders,
appoint a successor Administrative Agent which shall be a commercial bank
organized or licensed under the laws of the United States of America having
combined capital and surplus of at least $100,000,000. Upon the acceptance of
any appointment as Administrative Agent hereunder by a successor, such successor
shall thereupon succeed to and become vested with all the rights, powers,
discretion, privileges, and duties of the retiring
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Administrative Agent, and the retiring Administrative Agent shall be discharged
from its duties and obligations hereunder. After any retiring Administrative
Agent's resignation or removal hereunder as Administrative Agent, the provisions
of this Section 10 shall continue in effect for its benefit in respect of any
actions taken or omitted to be taken by it while it was acting as Administrative
Agent.
10.8 Minimum Commitments by Agents.
Subsequent to the Closing Date, each of NationsBank, First Union and
Wells Fargo agree to maintain a Revolving Commitment in an amount equal to or
greater than Twenty Five Million Dollars ($25,000,000) for so long as (i) no
Event of Default has occurred and is continuing and (ii) each of NationsBank,
First Union and Wells Fargo remain as Administrative Agent, Syndication Agent
and Documentation Agent, respectively; provided that each of NationsBank, First
Union and Wells Fargo may participate or assign any of such amount to a Federal
Reserve Bank or to a parent or a majority owned subsidiary of each of
NationsBank, First Union and Wells Fargo, respectively.
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, (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, in the case of the Borrowers, Guarantors and
the Administrative Agent, set forth below, and, in the case of the Lenders, set
forth on Schedule 2.1(a), or at such other address as such party may specify by
written notice to the other parties hereto:
if to the Borrowers:
Highwoods Properties, Inc.
3100 Smoketree Court, Suite 600
Raleigh, North Carolina 27604
Attn: Carman Liuzzo
Telephone: (919) 872-4924
Telecopy: (919) 876-2448
if to a Guarantor:
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[Name of Guarantor]
c/o Highwoods Realty Limited Partnership
3100 Smoketree Court, Suite 600
Raleigh, North Carolina 27604
Attn: Carman Liuzzo
Telephone: (919) 872-4924
Telecopy: (919) 876-2448
if to the Administrative Agent:
NationsBank, N.A.
Real Estate Loan Administration
One Hannover Square, Suite 301
Raleigh, North Carolina 27601
Attn: Patricia Gardenhire
Telephone: (919) 829-6683
Telecopy: (919) 829-6713
with a copy to:
NationsBank, N.A.
NationsBank Corporate Center
100 North Tryon Street, 11th Floor
Charlotte, North Carolina 28255
Attn: Terence Hatton
Telephone: (704)386-8034
Telecopy: (704)388-0617
11.2 Right of Set-Off; Adjustments.
Upon the occurrence and during the continuance of any Event of Default,
each Lender (and each of its Affiliates) is hereby authorized at any time and
from time to time, to the fullest extent permitted by law, to set off and apply
any and all deposits (general or special, time or demand, provisional or final)
at any time held and other indebtedness at any time owing by such Lender (or any
of its Affiliates) to or for the credit or the account of any Credit Party
against any and all of the obligations of such Person now or hereafter existing
under this Credit Agreement, under the Notes, under any other Credit Document or
otherwise, irrespective of whether such Lender shall have made any demand under
hereunder or thereunder and although such obligations may be unmatured. Each
Lender agrees promptly to notify any affected Credit Party after any such
set-off and application made by such Lender; provided, however, that the failure
to give such notice shall not affect the validity of such set-off and
application. The rights of each Lender under this Section 11.2 are in addition
to other rights and remedies (including, without limitation, other rights of
set-off) that such Lender may have.
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11.3 Benefit of Agreement; Assignments.
(a) 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 or transfer any of its interests and obligations without
prior written consent of the Lenders; provided further that the rights
of each Lender to transfer, assign or grant participations in its
rights and/or obligations hereunder shall be limited as set forth in
this Section 11.3.
(b) Each Lender may assign to one or more Eligible Assignees
all or a portion of its rights and obligations under this Credit
Agreement (including, without limitation, all or a portion of its
Loans, its Notes, and its Commitment); provided, however, that
(i) each such assignment shall be to an Eligible
Assignee;
(ii) except in the case of an assignment to another
Lender or an assignment of all of a Lender's rights and
obligations under this Credit Agreement, any such partial
assignment shall be in an amount at least equal to $10,000,000
(or, if less, the remaining amount of the Commitment being
assigned by such Lender) or an integral multiple of $1,000,000
in excess thereof;
(iii) each such assignment by a Lender shall be of a
constant, and not varying, percentage of all of its rights and
obligations under this Credit Agreement and the Notes; and
(iv) the parties to such assignment shall execute
and deliver to the Administrative Agent for its acceptance an
Assignment and Acceptance in the form of Exhibit 11.3(b)
hereto, together with any Note subject to such assignment and
a processing fee of $3,500.
Upon execution, delivery, and acceptance of such Assignment and
Acceptance, the assignee thereunder shall be a party hereto and, to the
extent of such assignment, have the obligations, rights, and benefits
of a Lender hereunder and the assigning Lender shall, to the extent of
such assignment, relinquish its rights and be released from its
obligations under this Credit Agreement. Upon the consummation of any
assignment pursuant to this Section 11.3(b), the assignor, the
Administrative Agent and the Borrowers shall make appropriate
arrangements so that, if required, new Notes are issued to the assignor
and the assignee. If the assignee is not incorporated under the laws of
the United States of America or a state thereof, it shall deliver to
the Principal Borrower and the Administrative Agent certification as to
exemption from deduction or withholding of Taxes in accordance with
Section 3.11.
(c) The Administrative Agent shall maintain at its address
referred to in Section 11.1 a copy of each Assignment and Acceptance
delivered to and accepted by it and a register for the recordation of
the names and addresses of the Lenders and the
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Commitment of, and principal amount of the Loans owing to, each Lender
from time to time (the "Register"). The entries in the Register shall
be conclusive and binding for all purposes, absent manifest error, and
the Borrowers, the Administrative Agent and the Lenders may treat each
Person whose name is recorded in the Register as a Lender hereunder for
all purposes of this Credit Agreement. The Register shall be available
for inspection by the Borrowers or any Lender at any reasonable time
and from time to time upon reasonable prior notice.
(d) Upon its receipt of an Assignment and Acceptance executed
by the parties thereto, together with any Note subject to such
assignment and payment of the processing fee, the Administrative Agent
shall, if such Assignment and Acceptance has been completed and is in
substantially the form of Exhibit 11.3(b) hereto, (i) accept such
Assignment and Acceptance, (ii) record the information contained
therein in the Register and (iii) give prompt notice thereof to the
parties thereto.
(e) Each Lender may sell participations to one or more Persons
in all or a portion of its rights, obligations or rights and
obligations under this Credit Agreement (including all or a portion of
its Commitment or its Loans); provided, however, that (i) such Lender's
obligations under this Credit Agreement shall remain unchanged, (ii)
such Lender shall remain solely responsible to the other parties hereto
for the performance of such obligations, (iii) the participant shall be
entitled to the benefit of the yield protection provisions contained in
Sections 3.7 through 3.12, inclusive, and the right of set-off
contained in Section 11.2, and (iv) the Borrowers shall continue to
deal solely and directly with such Lender in connection with such
Lender's rights and obligations under this Credit Agreement, and such
Lender shall retain the sole right to enforce the obligations of the
Borrowers relating to its Loans and its Notes and to approve any
amendment, modification, or waiver of any provision of this Credit
Agreement (other than amendments, modifications, or waivers decreasing
the amount of principal of or the rate at which interest is payable on
such Loans or Notes, extending any scheduled principal payment date or
date fixed for the payment of interest on such Loans or Notes, or
extending its Commitment).
(f) Notwithstanding any other provision set forth in this
Credit Agreement, any Lender may at any time assign and pledge all or
any portion of its Loans and its Notes to any Federal Reserve Bank as
collateral security pursuant to Regulation A and any Operating Circular
issued by such Federal Reserve Bank. No such assignment shall release
the assigning Lender from its obligations hereunder.
(g) Any Lender may furnish any information concerning the
Borrowers or any of their Subsidiaries in the possession of such Lender
from time to time to assignees and participants (including prospective
assignees and participants), subject, however, to the provisions of
Section 11.14 hereof.
11.4 No Waiver; Remedies Cumulative.
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No failure or delay on the part of the Administrative 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 Administrative Agent or any
Lender and any of the Credit Parties 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 Administrative Agent or any Lender
would otherwise have. No notice to or demand on any Credit Party in any case
shall entitle the Borrowers or any other Credit Party to any other or further
notice or demand in similar or other circumstances or constitute a waiver of the
rights of the Administrative Agent or the Lenders to any other or further action
in any circumstances without notice or demand.
11.5 Expenses; Indemnification.
(a) The Borrowers agree to pay on demand all costs and
expenses of the Administrative Agent in connection with the
syndication, preparation, execution, delivery, administration,
modification, and amendment of this Credit Agreement, the other Credit
Documents, and the other documents to be delivered hereunder,
including, without limitation, the reasonable fees and expenses of
counsel for the Administrative Agent (including the cost of internal
counsel) with respect thereto and with respect to advising the
Administrative Agent as to its rights and responsibilities under the
Credit Documents. The Borrowers further agree to pay on demand all
costs and expenses of the Administrative Agent and the Lenders, if any
(including, without limitation, reasonable attorneys' fees and expenses
and the cost of internal counsel), in connection with the enforcement
(whether through negotiations, legal proceedings, or otherwise) of the
Credit Documents and the other documents to be delivered hereunder.
(b) The Borrowers agree to indemnify and hold harmless the
Administrative Agent and each Lender and each of their Affiliates and
their respective officers, directors, employees, agents, and advisors
(each, an "Indemnified Party") from and against any and all claims,
damages, losses, liabilities, costs, and expenses (including, without
limitation, reasonable attorneys' fees) that may be incurred by or
asserted or awarded against any Indemnified Party, in each case arising
out of or in connection with or by reason of (including, without
limitation, in connection with any investigation, litigation, or
proceeding or preparation of defense in connection therewith) the
Credit Documents, any of the transactions contemplated herein or the
actual or proposed use of the proceeds of the Loans, except to the
extent such claim, damage, loss, liability, cost, or expense is found
in a final, non-appealable judgment by a court of competent
jurisdiction to have resulted from such Indemnified Party's gross
negligence or willful misconduct. In the case of an investigation,
litigation or other proceeding to which the indemnity in this Section
11.5 applies, such indemnity shall be effective whether or not such
investigation, litigation or proceeding is brought by a Borrower, its
directors, shareholders or creditors or an Indemnified Party or any
other Person or any Indemnified Party is otherwise a party thereto and
whether or not the transactions contemplated hereby are consummated.
The Borrowers agree not to assert any claim against the Administrative
Agent, any Lender,
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any of their Affiliates, or any of their respective directors,
officers, employees, attorneys, agents, and advisers, on any theory of
liability, for special, indirect, consequential, or punitive damages
arising out of or otherwise relating to the Credit Documents, any of
the transactions contemplated herein or the actual or proposed use of
the proceeds of the Loans.
(c) Without prejudice to the survival of any other agreement
of the Borrowers hereunder, the agreements and obligations of the
Borrowers contained in this Section 11.5 shall survive the repayment of
the Loans, LOC Obligations and other obligations under the Credit
Documents and the termination of the Commitments hereunder.
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 entered into by, or approved in writing by, the Required Lenders and the
Principal Borrower, provided, however, that:
(a) without the consent of each Lender affected thereby, neither this
Credit Agreement nor any of the other Credit Documents may be amended
to
(i) extend the final maturity of any Loan or the
time of payment of any reimbursement obligation, or any
portion thereof, arising from drawings under Letters of
Credit,
(ii) 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,
(iii) reduce or waive the principal amount of any
Loan or of any reimbursement obligation, or any portion
thereof, arising from drawings under Letters of Credit,
(iv) 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 mandatory
reduction in the Commitments shall not constitute a change in
the terms of any Commitment of any Lender),
(v) release (i) any Borrower, or (ii) except as
permitted by Section 8.17, any other Credit Party, from its or
their obligations under the Credit Documents,
(vi) amend, modify or waive any provision of this
Section 11.6 or Section 3.6, 3.7, 3.8, 3.9, 3.10, 3.11, 3.12,
3.13, 3.14, 3.15(b), 9.1(a), 11.2, 11.3, 11.5 or 11.9,
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(vii) reduce any percentage specified in, or
otherwise modify, the definition of Required Lenders, or
(viii) consent to the assignment or transfer by any
Borrower (or another Credit Party) of any of its rights and
obligations under (or in respect of) the Credit Documents
except as permitted thereby;
(b) without the consent of the Administrative Agent, no
provision of Section 10 may be amended;
(c) without the consent of the Issuing Lender, no provision of
Section 2.2 may be amended.
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 bankruptcy reorganization plan
that affects the Loans, 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.
The Administrative Agent shall have the exclusive authority to release
any Guarantor disposed of by a Credit Party pursuant to the terms of Section
8.17.
11.7 Counterparts.
This Credit Agreement may be executed in any number of counterparts,
each of which when so executed and delivered shall be an original, but all of
which shall constitute one and the same instrument. It shall not be necessary in
making proof of this Credit Agreement to produce or account for more than one
such counterpart for each of the parties hereto. Delivery by facsimile by any of
the parties hereto of an executed counterpart of this Credit Agreement shall be
as effective as an original executed counterpart hereof and shall be deemed a
representation that an original executed counterpart hereof will be delivered.
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 Survival.
All indemnities set forth herein, including, without limitation, in
Section 2.3(i), 3.11, 3.12, 10.5 or 11.5 shall survive the execution and
delivery of this Credit Agreement, the making of the Loans, the issuance of the
Letters of Credit, the repayment of the Loans, LOC Obligations and other
obligations under the Credit Documents and the termination of the Commitments
hereunder, and all
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representations and warranties made by the Credit Parties herein shall survive
delivery of the Notes and the making of the Loans hereunder.
11.10 Governing Law; Submission to Jurisdiction; Venue.
(a) THIS CREDIT 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. Any legal action or proceeding
with respect to this Credit Agreement or any other Credit Document may
be brought in the courts of the State of North Carolina in Mecklenburg
County, or of the United States for the Western District of North
Carolina, and, by execution and delivery of this Credit Agreement, each
of the Credit Parties hereby irrevocably accepts for itself and in
respect of its property, generally and unconditionally, the
nonexclusive jurisdiction of such courts. Each of the Credit Parties
further irrevocably consents to the service of process out of any of
the aforementioned courts in any such action or proceeding by the
mailing of copies thereof by registered or certified mail, postage
prepaid, to it at the address set out for notices pursuant to Section
11.1, such service to become effective three (3) days after such
mailing. Nothing herein shall affect the right of the Administrative
Agent or any Lender to serve process in any other manner permitted by
law or to commence legal proceedings or to otherwise proceed against
any Credit Party in any other jurisdiction.
(b) Each of the Credit Parties hereby irrevocably waives any
objection which it may now or hereafter have to the laying of venue of
any of the aforesaid actions or proceedings arising out of or in
connection with this Credit Agreement or any other Credit Document
brought in the courts referred to in subsection (a) above and hereby
further irrevocably waives and agrees not to plead or claim in any such
court that any such action or proceeding brought in any such court has
been brought in an inconvenient forum.
(c) TO THE EXTENT PERMITTED BY LAW, EACH OF THE ADMINISTRATIVE
AGENT, THE LENDERS, THE BORROWERS AND THE CREDIT PARTIES HEREBY
IRREVOCABLY WAIVES ALL RIGHT TO TRIAL BY JURY IN ANY ACTION, PROCEEDING
OR COUNTERCLAIM ARISING OUT OF OR RELATING TO THIS CREDIT AGREEMENT,
ANY OF THE OTHER CREDIT DOCUMENTS OR THE TRANSACTIONS CONTEMPLATED
HEREBY.
11.11 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.
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11.12 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.
11.13 Binding Effect; Termination.
(a) This Credit Agreement shall become effective at such time
when all of the conditions set forth in Section 5.1 have been satisfied
or waived by the Lenders and it shall have been executed by the
Borrowers, the Guarantors and the Administrative Agent, and the
Administrative Agent shall have received copies hereof (telefaxed or
otherwise) which, when taken together, bear the signatures of each
Lender, and thereafter this Credit Agreement shall be binding upon and
inure to the benefit of the Borrowers, the Guarantors, the
Administrative Agent and each Lender and their respective successors
and assigns.
(b) The term of this Credit Agreement shall be until no Loans,
LOC Obligations or any other amounts payable hereunder or under any of
the other Credit Documents shall remain outstanding, no Letters of
Credit shall be outstanding, all of the Credit Party Obligations have
been irrevocably satisfied in full and all of the Commitments hereunder
shall have expired or been terminated.
11.14 Confidentiality.
The Administrative Agent and each Lender (each, a "Lending Party")
agrees to keep confidential any information furnished or made available to it by
the Borrowers pursuant to this Credit Agreement that is marked confidential;
provided that nothing herein shall prevent any Lending Party from disclosing
such information (a) to any other Lending Party or any Affiliate of any Lending
Party, or any officer, director, employee, agent, or advisor of any Lending
Party or Affiliate of any Lending Party, (b) to any other Person if reasonably
incidental to the administration of the credit facility provided herein, (c) as
required by any law, rule, or regulation, (d) upon the order of any court or
administrative agency, (e) upon the request or demand of any regulatory agency
or authority, (f) that is or becomes available to the public or that is or
becomes available to any Lending Party other than as a result of a disclosure by
any Lending Party prohibited by this Credit Agreement, (g) in connection with
any litigation to which such Lending Party or any of its Affiliates may be a
party, (h) to the extent necessary in connection with the exercise of any remedy
under this Credit Agreement or any other Credit Document, and (i) subject to
provisions substantially similar to those contained in this Section 11.14, to
any actual or proposed participant or assignee.
11.15 Conflict.
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To the extent that there is a conflict or inconsistency between any
provision hereof, on the one hand, and any provision of any Credit Document, on
the other hand, this Credit Agreement shall control.
[Signature Page to Follow]
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<PAGE>
IN WITNESS WHEREOF, 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.
BORROWERS: HIGHWOODS REALTY LIMITED PARTNERSHIP,
a North Carolina limited partnership
By: Highwoods Properties, Inc., a Maryland
corporation, its sole general partner
By:______________________________
Name: Ronald P. Gibson
____________________________
Title: President
___________________________
HIGHWOODS PROPERTIES, INC.,
a Maryland corporation
By:______________________________
Name: Ronald P. Gibson
____________________________
Title: President
___________________________
HIGHWOODS SERVICES, INC.,
a North Carolina corporation
By:______________________________
Name: Ronald P. Gibson
____________________________
Title: President
___________________________
GUARANTORS: SOUTHEAST REALTY OPTIONS CORP.,
a Delaware corporation
By:______________________________
Name: Ronald P. Gibson
____________________________
Title: President
___________________________
HIGHWOODS/FLORIDA GP CORP.,
a Delaware corporation
By:______________________________
Name: Ronald P. Gibson
____________________________
Title: President
___________________________
<PAGE>
HIGHWOODS/TENNESSEE PROPERTIES, INC.,
a Tennessee corporation
By:______________________________
Name: Ronald P. Gibson
____________________________
Title: President
___________________________
JACKSON ACQUISITION CORP.,
a Maryland corporation
By:______________________________
Name: Ronald P. Gibson
____________________________
Title: President
___________________________
FLORIDA TRANSITION CO. II,
a Delaware corporation
By:______________________________
Name: Ronald P. Gibson
____________________________
Title: President
___________________________
ATRIUM ACQUISITIONS CORP.,
a Maryland corporation
By:______________________________
Name: Ronald P. Gibson
____________________________
Title: President
___________________________
5565 SERRETT PLACE, INC.,
a Maryland corporation
By:______________________________
Name: Ronald P. Gibson
____________________________
Title: President
___________________________
[Signatures continue]
2
<PAGE>
PIKESVILLE SPORTSMAN CLUB, INC.,
a Maryland corporation
By:______________________________
Name: Ronald P. Gibson
____________________________
Title: President
___________________________
HIGHWOODS/FLORIDA HOLDINGS, LP.,
a Delaware limited partnership
By: Highwoods/Florida GP Corp.,
general partner
By:______________________________
Name: Ronald P. Gibson
____________________________
Title: President
___________________________
HIGHWOODS/TENNESSEE HOLDINGS L.P.,
a Tennessee limited partnership
By: Highwoods/Tennessee Properties, Inc.
general partner
By:______________________________
Name: Ronald P. Gibson
____________________________
Title: President
___________________________
PINELLAS NORTHSIDE PARTNERS, LTD.,
a Florida limited partnership
By:______________________________
Name: Ronald P. Gibson
____________________________
Title: President
___________________________
[Signatures continue]
3
<PAGE>
INTERSTATE BUSINESS PARK, LTD.,
a Florida limited partnership
By: Highwoods/Florida Holdings, L.P.,
general partner
By: Highwoods/Florida GP Corp.,
general partner
By:______________________________
Name: Ronald P. Gibson
____________________________
Title: President
___________________________
PINELLAS BAY VISTA PARTNERS, LTD.,
a Florida limited partnership
By: Highwoods/Florida Holdings, L.P.,
general partner
By: Highwoods/Florida GP Corp.,
general partner
By:______________________________
Name: Ronald P. Gibson
____________________________
Title: President
___________________________
PINELLAS PINEBROOK PARTNERS, LTD.,
a Florida limited partnership
By: Highwoods/Florida Holdings, L.P.,
general partner
By: Highwoods/Florida GP Corp.,
general partner
By:______________________________
Name: Ronald P. Gibson
____________________________
Title: President
___________________________
[Signatures continue]
4
<PAGE>
DOWNTOWN CLEARWATER TOWER, LTD.,
a Florida limited partnership
By: Highwoods/Florida Holdings, L.P.,
general partner
By: Highwoods/Florida GP Corp.,
general partner
By:______________________________
Name: Ronald P. Gibson
____________________________
Title: President
___________________________
BDBP, LTD.,
a Florida limited partnership
By: Highwoods/Florida Holdings, L.P.,
general partner
By: Highwoods/Florida GP Corp.,
general partner
By:______________________________
Name: Ronald P. Gibson
____________________________
Title: President
___________________________
CROSS BAYOU, LTD.,
a Florida limited partnership
By: Highwoods/Florida Holdings, L.P.,
general partner
By: Highwoods/Florida GP Corp.,
general partner
By:______________________________
Name: Ronald P. Gibson
____________________________
Title: President
___________________________
[Signatures continue]
5
<PAGE>
SISBROS, LTD.,
a Florida limited partnership
By: Highwoods/Florida Holdings, L.P.,
general partner
By: Highwoods/Florida GP Corp.,
general partner
By:______________________________
Name: Ronald P. Gibson
____________________________
Title: President
___________________________
SHOCKOE PLAZA INVESTORS, L.C.,
a Virginia limited liability company
By: Highwoods Realty Limited Partnership,
manager
By: Highwoods Properties, Inc.,
general partner
By:______________________________
Name: Ronald P. Gibson
____________________________
Title: President
___________________________
RC ONE LLC,
a Maryland limited liability company
By: Highwoods Services, Inc.,
manager
By:______________________________
Name: Ronald P. Gibson
____________________________
Title: President
___________________________
[Signatures continue]
6
<PAGE>
SEVEN CRONDALL ASSOCIATES LLC,
a Maryland limited liability company
By: Highwoods Realty Limited Partnership,
manager
By: Highwoods Properties, Inc.,
general partner
By:______________________________
Name: Ronald P. Gibson
____________________________
Title: President
___________________________
EIGHT CRONDALL ASSOCIATES LLC,
a Maryland limited liability company
By: Highwoods Realty Limited Partnership,
manager
By: Highwoods Properties, Inc.,
general partner
By:______________________________
Name: Ronald P. Gibson
____________________________
Title: President
___________________________
NINE CRONDALL ASSOCIATES LLC,
a Maryland limited liability company
By: Highwoods Realty Limited Partnership,
manager
By: Highwoods Properties, Inc.,
general partner
By:______________________________
Name: Ronald P. Gibson
____________________________
Title: President
___________________________
[Signatures continue]
7
<PAGE>
9690 DEERECO ROAD LLC
a Maryland limited liability company
By: Highwoods Realty Limited Partnership,
manager
By: Highwoods Properties, Inc.,
general partner
By:______________________________
Name: Ronald P. Gibson
____________________________
Title: President
___________________________
HPI TITLE AGENCY, LLC
a North Carolina limited liability company
By: Highwoods Realty, Limited Partnership,
manager
By: Highwoods Properties, Inc.
general partner
By:______________________________
Name: Ronald P. Gibson
____________________________
Title: President
___________________________
[Signatures continue]
8
<PAGE>
LENDERS: NATIONSBANK, N.A.,
individually in its capacity as a
Lender and in its capacity as Administrative Agent
By:______________________________
Name: Terence Hatton
____________________________
Title: Senior Vice President
___________________________
FIRST UNION NATIONAL BANK
By:______________________________
Name:
____________________________
Title:
___________________________
WELLS FARGO BANK, NATIONAL ASSOCIATION
By:______________________________
Name:
____________________________
Title:
___________________________
BANK OF AMERICA NATIONAL TRUST
& SAVINGS ASSOCIATION
By:______________________________
Name:
____________________________
Title:
___________________________
COMMERZBANK AG, ATLANTA AGENCY
By:______________________________
Name:
____________________________
Title:
___________________________
By:______________________________
Name:
____________________________
Title:
___________________________
[Signatures continue]
9
<PAGE>
WACHOVIA BANK, N.A.
By:______________________________
Name:
____________________________
Title:
___________________________
CENTURA BANK
By:______________________________
Name:
____________________________
Title:
___________________________
PNC BANK, NATIONAL ASSOCIATION
By:______________________________
Name:
____________________________
Title:
___________________________
FLEET NATIONAL BANK
By:______________________________
Name:
____________________________
Title:
___________________________
AMSOUTH BANK
By:______________________________
Name:
____________________________
Title:
___________________________
DRESDNER BANK AG, NEW YORK BRANCH
AND GRAND CAYMAN BRANCH
By:______________________________
Name:
____________________________
Title:
___________________________
[Signatures continue]
10
<PAGE>
DG BANK DEUTSCHE GENOSSENSCHAFTSBANK,
CAYMAN ISLAND BRANCH
By:______________________________
Name:
____________________________
Title:
___________________________
By:______________________________
Name:
____________________________
Title:
___________________________
MELLON BANK, N.A.
By:______________________________
Name:
____________________________
Title:
___________________________
FIRSTRUST SAVINGS BANK
By:______________________________
Name:
____________________________
Title:
___________________________
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