PURCHASE AGREEMENT
THIS PURCHASE AGREEMENT is made as of the 28th day of August, 1997, by and
among Highwoods Properties, Inc. (the "Company"), a corporation organized under
the laws of the State of Maryland and UBS Limited, an English corporation ("UBS
Limited") and Union Bank of Switzerland, London Branch, acting through its agent
UBS Securities LLC ("UBS-LB") (UBS Limited and UBS-LB being hereinafter
collectively called the "UBS Parties" and sometimes individually, a UBS Party").
IN CONSIDERATION of the mutual covenants contained in this Purchase
Agreement, the Company and the UBS Parties agree as follows:
SECTION 1. Authorization of Sale of the Shares. Subject to the terms and
conditions of this Purchase Agreement, the Company has authorized the sale to
UBS Limited of up to an aggregate of 1,800,000 shares of common stock (the
"Common Shares"), $.01 par value per share (the "Purchase Shares"), of the
Company. In addition, the Company may issue to UBS-LB additional Common Shares
in settlement of certain of its obligations under the Forward Stock Purchase,
dated August 28, 1997 (the "Forward Stock Purchase Agreement"), between the
Company and UBS-LB (the "Additional Shares"). The Purchase Shares and the
Additional Shares are hereinafter collectively called the "Shares".
SECTION 2. Agreement to Sell and Purchase the Purchase Shares. Subject to
the terms and conditions of this Purchase Agreement, on the Closing Date (as
defined in Section 3 hereof), the Company will sell to UBS Limited the Purchase
Shares, the number of which shall equal 1,800,000, for a per share purchase
price equal to the Closing Price. The "Closing Price" shall equal the closing
price reported on the New York Stock Exchange for a Common Share on the business
day immediately preceding the Closing Date.
SECTION 3. Delivery of the Shares at the Closing.
3.1. Closing. The completion of the purchase and sale of the Purchase
Shares (the "Closing") shall occur as soon as practicable, on such date to be
agreed upon by the Company and the UBS Parties (hereinafter, the "Closing
Date").
3.2. Conditions. At Closing, the Company shall deliver to the UBS Limited
one or more stock certificates registered in the name of UBS Limited
representing the number of Purchase Shares set forth in Section 2 above.
The Company's obligation to complete the purchase and sale of the Purchase
Shares and deliver such stock certificate(s) to UBS Limited at the Closing shall
be subject to the following conditions, any one or more of which may be waived
by the Company: (i) receipt by the Company of Federal Funds (or other mutually
agreed upon form of payment) in the full
amount of the purchase price for the Purchase Shares being purchased hereunder,
(ii) the accuracy in all material respects, as of the Closing Date, of the
representations and warranties made by the UBS Parties herein and the
fulfillment of in all material respects those undertakings of the UBS Parties
therein to be fulfilled prior to the Closing, (iii) the Forward Stock Purchase
Agreement shall have been fully executed by the parties thereto and (iv) receipt
by the Company of a cross-receipt with respect to the Purchase Shares executed
by UBS Limited and a certificate by an officer or authorized representative of
UBS Limited to the effect that the representations and warranties of UBS Limited
set forth in Section 5 hereof are true and correct as of the date of this
Agreement and as of the Closing Date.
UBS Limited's obligation to accept delivery of such stock certificate(s)
and to pay for the Purchase Shares evidenced thereby shall be subject to the
following conditions: (i) the accuracy in all material respects, as of the
Closing Date, of the representations and warranties made by the Company herein
and the fulfillment in all material respects, as of the Closing Date, of those
undertakings of the Company to be fulfilled prior to Closing; and (ii) the UBS
Parties shall have received all opinions and certificates to be delivered
pursuant to this Agreement.
SECTION 4. Representations, Warranties and Covenants of the Company. The
Company hereby represents and warrants to, and covenants with, the UBS Parties
as follows:
4.1. Organization and Qualification. The Company is a corporation duly
organized, validly existing and in good standing under the laws of Maryland and
has all requisite corporate power and authority to conduct its business as
currently conducted.
4.2. Authorized Capital Stock. The Company has authorized and outstanding
capital stock as set forth in the Most Recent Financial Statements (as defined
below); the issued and outstanding shares of the Company's Common Shares have
been duly authorized and validly issued, are fully paid and nonassessable, have
been issued in compliance with all federal and state securities laws, were not
issued in violation of or subject to any preemptive rights or other rights to
subscribe for or purchase securities, and conform to the description thereof
incorporated by reference in the Registration Statement. Other than as described
in the Company's SEC Filings (as defined below), the Company does not have
outstanding any options to purchase, or any preemptive rights or other rights to
subscribe for or to purchase, any securities or obligations convertible into, or
any contracts or commitments to issue or sell, shares of its capital stock or
any such options, rights, convertible securities or obligations. The description
of the Company's stock, stock bonus and other stock plans or arrangements and
the options or other rights granted and exercised thereunder in the Company's
SEC Fillings accurately and fairly presents the information required to be shown
with respect to such plans, arrangements, options and rights.
4.3. Issuance, Sale and Delivery of the Shares. The Purchase Shares to be
sold by the Company have been duly authorized and, when issued, delivered and
paid for in the manner set forth in this Agreement, will be duly authorized,
validly issued, fully paid and nonassessable, and will conform to the
description thereof incorporated by reference in the Registration Statement. The
Additional Shares, if and when issued pursuant to the Forward Stock Purchase
Agreement, will be duly authorized, validly issued, fully paid and
nonassessable, and will
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conform to the description thereof incorporated by reference in the Registration
Statement. None of the Shares when issued and delivered to the UBS Parties shall
be subject to any lien, security interest, claim, charge or encumbrance of any
nature. Other than the UBS Parties, no shareholder of the Company has any right,
which has not been waived or has not expired by reason of lapse of time
following notification of the Company's intent to file the Registration
Statement (as defined below), to require the Company to register the sale of any
shares owned by such shareholder under the Securities Act of 1933, as amended
(the "Securities Act"), in the Registration Statement. No further approval or
authority of the shareholders or the Board of Directors of the Company will be
required for the issuance and/or sale of the Shares to be sold by the Company as
contemplated herein or in the Forward Stock Purchase Agreement, except such as
shall have been obtained on or before the Closing Date. The issuance and/or sale
of the Shares to the UBS Parties by the Company pursuant to this Agreement or
the Forward Stock Purchase Agreement (as the case may be), the compliance by the
Company with the other provisions of this Agreement or the Forward Stock
Purchase Agreement and the consummation of the other transactions contemplated
hereby or thereby do not require the consent, approval, authorization,
registration or qualification of or with any governmental authority, except such
as shall have been obtained on or before the Closing Date other than the
registration of the resale of the Shares by the UBS Parties with the Securities
and Exchange Commission (the "SEC") and any required Blue Sky filings within the
States. The Company meets and will continue to meet the requirements for use of
Form S-3 under the Securities Act and the rules and regulations promulgated
thereunder (the "Rules and Regulations"). The Company has filed and will file
all documents which it is required to file under the Securities Exchange Act of
1934, as amended (the "Exchange Act") and all such documents (the "Company's SEC
Filings") comply in all material respects with the requirements of the Exchange
Act and the rules and regulations thereunder, as applicable, and none of such
documents, when so filed, contained or will contain any untrue statement of a
material fact or omitted to state a material fact required to be stated therein
or necessary in order to make the statements therein, in light of the
circumstances under which they were made, not misleading, and any documents so
filed and incorporated by reference subsequent to the effective date of the
Registration Statement shall, when they are filed with the SEC, conform in all
material respects with the requirements of the Securities Act and the Rules and
Regulations and the Exchange Act and the rules and regulations thereunder, as
applicable. No Registration Statement filed in respect of any of the Shares,
when so filed, contained or will contain any untrue statement of a material fact
required to be stated therein or necessary in order to make the statements
therein, in light of the circumstances under which they were made, not
misleading.
4.4. Due Execution, Delivery and Performance of the Agreement. The Company
has full legal right, power and authority to enter into the Purchase Agreement
and the Forward Stock Purchase Agreement and perform the transactions
contemplated hereby and thereby. The Purchase Agreement and the Forward Stock
Purchase Agreement have been duly authorized, executed and delivered by the
Company. The making and performance of the Purchase Agreement and the Forward
Stock Purchase Agreement by the Company and the consummation of the transactions
herein and therein contemplated will not violate any provision of the articles
of incorporation or bylaws, or other organizational documents, of the Company,
and will not conflict with, result in the breach or violation of, or constitute,
either by itself or upon notice or
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the passage of time or both, a default under any material agreement, mortgage,
deed of trust, lease, franchise, license, indenture, permit or other instrument
to which the Company is a party or by which the Company or its properties may be
bound or affected, any statute or any authorization, judgment, decree, order,
rule or regulation of any court or any regulatory body, administrative agency or
other governmental body applicable to the Company or any of its properties. No
consent, approval, authorization or other order of any court, regulatory body,
administrative agency or other governmental body is required for the execution
and delivery of this Agreement, the Forward Stock Purchase Agreement or the
consummation of the transactions contemplated hereby or thereby, except in
connection with the filing of any Registration Statements pursuant to Section 7
below or for compliance with the Blue Sky laws applicable to the offering of the
Shares. Upon the execution and delivery hereof, each of the Purchase Agreement
and the Forward Stock Purchase Agreement will constitute the valid and binding
obligation of the Company, enforceable in accordance with its terms, except as
enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting creditors' and contracting
parties' rights generally and except as enforceability may be subject to general
principles of equity (regardless of whether such enforceability is considered in
a proceeding in equity or at law) and except as the indemnification agreements
of the Company in Section 7.5 hereof may be legally unenforceable.
4.5. Accountants. The Company's independent certified public accountants,
who have expressed their opinion with respect to the Most Recent Financial
Statements (as defined below) are independent accountants as required by the
Securities Act and the Rules and Regulations. The Company shall cause the
independent certified public accountants to deliver, on the effective date of
Registration Statement, and at the time of sale pursuant to the Registration
Statement of Shares, a letter stating that such accountants are independent
public accountants within the meaning of the Securities Act and otherwise in
customary form and covering such financial and accounting matters as are
customarily covered by letters of independent certified public accountants
delivered in connection with underwritten public offerings of equity securities.
4.6. No Defaults. Except as to defaults, violations and breaches which
individually or in the aggregate would not be material to the Company, the
Company is not in violation or default of any provision of its articles of
incorporation or bylaws, or other organizational documents, or is not in breach
of or default with respect to any provision of any agreement, judgment, decree,
order, mortgage, deed of trust, lease, franchise, license, indenture, permit or
other instrument to which it is a party or by which it or any of its properties
are bound; and there does not exist any state of fact which constitutes an event
of default on the part of the Company as defined in such documents or which,
with notice or lapse of time or both, would constitute such an event of default
except such defaults which individually or in the aggregate would not be
material to the Company.
4.7. Contracts. Neither the Company, nor to the best of the Company's
knowledge, any other party is in breach of or default under any of such
contracts to which the Company is a party except such breach or default which
individually or in the aggregate would not be material to the Company.
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4.8. No Actions. There are no legal or governmental actions, suits or
proceedings pending or, to the best of the Company's knowledge, threatened to
which the Company is or may be a part or of which property owned or leased by
the Company is or may be the subject, or related to environmental or
discrimination matters, which actions, suits or proceedings might, individually
or in the aggregate, prevent or adversely affect the transactions contemplated
by this Agreement or result in a material adverse change in the condition
(financial or otherwise), of the properties, business, results of operations or
prospects of the Company, and no labor disturbance by the employees of the
Company exists or is imminent which might be expected to affect adversely such
condition, properties, business, results of operations or prospects. The Company
is neither a party nor subject to the provisions of any material injunction,
judgment, decree or order of any court, regulatory body administrative agency or
other governmental body.
4.9. Properties. The Company has good and marketable title to all the
properties and assets reflected as owned by it in the financial statements
included in the Most Recent Financial Statements, subject to no lien, mortgage,
pledge, charge or encumbrance of any kind except (i) those, if any, reflected in
such financial statements or the Company's SEC Filings, or (ii) those which are
not material in amount and do not adversely affect the use made and promised to
be made of such property by the Company. The Company holds its leased properties
under valid and binding leases, with such exceptions as are not materially
significant in relation to the business of the Company. The Company owns or
leases all such properties as are necessary to its operations as now conducted.
The Company qualified as a real estate investment trust under the Internal
Revenue Code of 1986, as amended, with respect to its taxable years ended
December 31, 1994, December 31, 1995 and December 31, 1996, and is organized in
conformity with the requirements for qualification as a real estate investment
trust, and its manner of operation has enabled it to meet the requirements for
qualification as a real estate investment trust as of the date hereof, and its
proposed manner of operation will enable it to meet the requirements for
qualification as a real estate investment trust in the future.
4.10. No Material Change. Since the date of the Most Recent Financial
Statements, and except as otherwise disclosed in the Company's SEC Filings as of
the Closing Date or in writing to the UBS Parties (i) the Company has not
incurred any material liabilities or obligations, indirect, or contingent, or
entered into any material verbal or written agreement or other transaction which
is not in the ordinary course of business (it being agreed that for purposes of
this sentence the Company's ordinary course of business shall include the
acquisition, directly indirectly, of real estate properties or businesses of a
type that may be owned by a "real estate investment trust" (as defined under the
Internal Revenue Code) or which could reasonably be expected to result in a
material reduction in the future earnings of the Company; (ii) the Company has
not sustained any material loss or interference with its businesses or
properties from fire, flood, windstorm, accident or other calamity, whether or
not covered by insurance; (iii) the Company is not in default in the payment of
principal or interest on any outstanding debt obligations; (iv) there has not
been any change in the capital stock of the Company (other than the sale of the
Purchase Shares hereunder and the sale of Common Stock under the Company's
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Dividend Reinvestment and Stock Purchase Plan), or indebtedness material to the
Company (other than in the ordinary course of business); and (v) there has not
been any material adverse change in the condition (financial or otherwise),
business, properties, results of operations or prospects of the Company.
4.11. Intellectual Property. The Company believes it has sufficient
trademarks, trade names, patent rights, copyrights, licenses, approvals and
governmental authorizations to conduct its businesses as now conducted; and the
Company has no knowledge of any material infringement by it of trademark, trade
name rights, patent rights, copyrights, licenses, trade secrets or other similar
rights of others, and no claim has been made against the Company regarding
trademark, trade name, patent, copyright, license, trade secrecy or other
infringement which could have a material adverse effect on the condition
(financial or otherwise), business, results of operations or prospects of the
Company.
4.12. Compliance. The Company has not been advised, and has no reason to
believe, that it is not conducting business in compliance with all applicable
laws, rules and regulations of the jurisdictions in which it is conducting
business, including, without limitation, all applicable local, state and federal
environmental laws and regulations; except where failure to be so in compliance
would not materially adversely affect the condition (financial or otherwise),
business, results of operations or prospects of the Company.
4.13. Taxes. The Company has filed all necessary federal, state and foreign
income and franchise tax returns and has paid or accrued all taxes shown as due
thereon, and the Company has no knowledge of any tax deficiency which has been
or might be asserted or threatened against the Company which could materially
adversely affect the business condition (financial or otherwise), results of
operations or prospects of the Company.
4.14. Transfer Taxes. On the Closing Date, all stock transfer or other
taxes (other than income taxes) which are required to be paid in connection with
the sale and transfer of the Purchase Shares to be sold to UBS Limited hereunder
will be, or will have been, fully paid or provided for by the Company and all
laws imposing such taxes will be or will have been fully complied with.
4.15. Investment Company. The Company is not required to register as an
"investment company" as such term is defined in the Investment Company Act of
1940, as amended.
4.16. Offering Materials. The Company has not distributed and will not
distribute prior to the Closing Date any offering material in connection with
the offering and sale of the Purchase Shares other than the documents provided
to the UBS Parties pursuant to Section 4.18, except as set forth at Section 5.5.
4.17. Insurance. The Company maintains insurance (or insurance is
maintained on its behalf) of the types and in the amounts generally deemed
adequate under customary industry standards for its business, including, but not
limited to, insurance covering all real and
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personal property owned or leased by the Company against theft, damage,
destruction, acts of vandalism and all other risks customarily insured against,
all of which insurance is in full force and effect.
4.18. SEC Filings. The Company represents and warrants that the information
contained in the following documents, which the Company has furnished to the UBS
Parties, or will furnish prior to the Closing, is or will be true and correct in
all material respects as of their respective filing dates:
(a) Annual Report on Form 10-K for the year ended December 31, 1996, which
Annual Report includes the Company's most recently available audited
financial statements together with the report thereon of the
independent certified public accountants (the "Most Recent Financial
Statements");
(b) Quarterly Report on Form 10-Q for the quarters ended March 31, 1997
and June 30, 1997;
(c) the Company's proxy statements on Form 14A relating to (i) the most
recent Annual Meeting of the Company's Shareholders and (ii) any
Special Meetings of the Company's Shareholders which occurred during
the 12-month period prior to the date hereof or for which a meeting
date has been fixed and a proxy statement distributed; and
(d) all other documents, if any, filed by or with respect to the Company
with the SEC since January 1, 1997 pursuant to Sections 13, 15(d) or
16(a) of the Exchange Act; and
(e) a covenant compliance certification stating that the Company and its
subsidiaries are not in default under the $280 million unsecured
revolving line of credit from a syndicate of lenders, evidenced by
that certain Credit Agreement by and among Highwoods/Forsyth Limited
Partnership as borrower, the Company and certain subsidiaries as
guarantors, the lenders named therein, NationsBank, N.A. as
administrative agent and First Union National Bank as documentation
agent.
4.19. Legal Opinion. Prior to the Closing, counsel to the Company will
deliver its legal opinion to the UBS Parties in substantially the form of
Exhibit A hereto.
4.20 ERISA. The Company and its affiliates are in compliance in all
material respects with all applicable provisions of the Employee Retirement
Income Security Act of 1974, as amended and the rules and regulations
promulgated thereunder ("ERISA"). Neither a Reportable Event (as defined under
ERISA) nor a Prohibited Transaction (as defined under ERISA) has occurred with
respect to any Plan (as defined below) of the Company and/or its affiliates; no
notice of intent to terminate a Plan has been filed nor has any Plan been
terminated
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within the past five years; no circumstance exists which constitutes grounds
under Section 402 of ERISA entitling the Pension Benefit Guaranty Corporation
("PBGC") to institute proceedings to terminate, or appoint a trustee to
administer, a Plan, nor has the PBGC instituted any such proceedings; the
Company and its affiliates have not completely or partially withdrawn under
Sections 4201 or 4202 of ERISA from any Multiemployer Plan (as defined therein);
the Company and its affiliates have met the minimum funding requirements of
Section 412 of the Internal Revenue Code of 1986, as amended (the "Code") and
Section 302 of ERISA with respect to each Plan and there is no unfunded current
liability (as defined below) with respect to any Plan; the Company and its
affiliates have not incurred any liability to the PBGC under ERISA (other than
for the payment of premiums under Section 4007 of ERISA); no part of the funds
to be used by the Company in satisfaction of its obligations under this Purchase
Agreement or the Forward Stock Purchase Agreement constitute "plan assets" of
any "employee benefit plan" within the meaning of ERISA or of any "plan" within
the meaning of Section 4975(e)(1) of the Code, as interpreted by the Internal
Revenue Service and the U.S. Department of Labor in rules, regulations, releases
and bulletins or as interpreted under applicable case law. As used below, "Plan"
means an "employee benefit plan" or "plan" as described in Section 3(3) of
ERISA; and "unfunded current liability" has the meaning provided in Section
302(d)(8)(A) of ERISA.
4.21. Certificate. A certificate of the Company executed by the Chairman of
the Board or President and the chief financial or accounting officer of the
Company, to be dated the Closing Date in form and substance satisfactory to the
UBS Parties to the effect that the representations and warranties of the Company
set forth in this Section 4 are true and correct as of the date of this
Agreement and as of the Closing Date, and the Company has complied with all the
agreements and satisfied all the conditions on its part to be performed or
satisfied on or prior to such Closing Date.
4.23 Environmental Protection. To the Company's knowledge, except as
disclosed in the Company's SEC Filings, none of the Company's or its affiliates'
properties contain any Hazardous Materials that, under any Environmental Law,
(i) would impose liability on the Company or any affiliate that is likely to
have a material adverse effect on the condition (financial or other), business,
results of operations, or prospects, of the Company or (ii) is likely to result
in the imposition of a lien on any assets owned, directly or indirectly, by the
Company. To the Company's knowledge, neither it nor any affiliate is subject to
any existing, pending or threatened investigation or proceeding by any
governmental agency or authority with respect or pursuant to any Environmental
Law, except any which, if adversely determined, would not have a material
adverse effect on the condition (financial or other), business, results of
operations or prospects of the Company. As used herein, "Environmental Laws"
mean all federal, state, local and foreign environmental, health and safety
laws, codes and ordinances and all rules and regulations promulgated thereunder,
including, without limitation laws relating 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, air, surface water, ground water, land surface or subsurface strata)
or otherwise relating to the manufacture, processing, distribution, use,
treatment, storage, disposal, transport or handling of pollutants, contaminants,
chemicals, or industrial, solid, toxic or hazardous substances or wastes; and
"Hazardous Material" includes, without limitation, (i) all substances which are
designated
8
pursuant to Section 311(b)(2)(A) of the Federal Water Pollution Control Act
("FWPCA"), 33 U.S.C ss.1251 et seq.; (ii) any element, compound, mixture,
solution, or substance which is designated pursuant to Section 102 of the
Comprehensive Environmental Response, Compensation and Liability Act ("CERCLA"),
42 U.S.C. ss.9601 et seq.; (iii) any hazardous waste having the characteristics
which are identified under or listed pursuant to Section 3001 of the Resource
Conservation and Recovery Act ("RCRA"), 42 U.S.C. ss.6901 et seq.; (iv) any
toxic pollutant listed under Section 307(a) of the FWPCA; (v) any hazardous air
pollutant which is listed under Section 112 of the Clean Air Act, 42 U.S.C.
ss.7401 et seq.; (vi) any imminently hazardous chemical substance or mixture
with respect to which action has been taken pursuant to Section 7 of the Toxic
Substances Control Act, 15 U.S.C. ss.2601 et seq.; and (vii) petroleum,
petroleum products, petroleum by-products, petroleum decomposition by-products,
and waste oil.
SECTION 5. Representations, Warranties and Covenants of the UBS Parties.
5.1. Investment. UBS Limited and/or UBS-LB represents and warrants to, and
covenants with, the Company that: (i) UBS Limited, taking into account the
personnel and resources it can practically bring to bear on the purchase of the
Purchase Shares contemplated hereby, is knowledgeable, sophisticated and
experienced in making, and is qualified to make, decisions with respect to
investments in shares presenting an investment decision like that involved in
the purchase of the Purchase Shares, including investments in securities issued
by the Company, and has requested, received, reviewed and considered all
information it deems relevant in making an informed decision to purchase the
Purchase Shares; (ii) UBS Limited is acquiring the number of Purchase Shares set
forth in Section 2 above in the ordinary course of its business and for its own
account for investment (as defined for purposes of the Hart-Scott-Rodino
Antitrust Improvements Act of 1976 and the regulations thereunder) only and with
no present intention of distributing any of such Purchase Shares or any
arrangement or understanding with any other persons regarding the distribution
of such Shares (this representation and warranty not limiting the rights of
either UBS Party to sell pursuant to any Registration Statement); (iii) neither
UBS Party will, directly or indirectly, sell or otherwise dispose of (or solicit
any offers to purchase or otherwise acquire) any of the Shares except in
compliance with the Securities Act, the Rules and Regulations and any applicable
state securities or blue sky laws or pursuant to an available exemption or
exclusion therefrom; (iv) each UBS Party has completed or caused to be completed
the Registration Statement Questionnaire and the Stock Certificate
Questionnaire, both attached hereto as Appendix I, for use in preparation of the
Registration Statement and the answers thereto are true and correct to the best
knowledge of the UBS Parties as of the date hereof and will be true and correct
as of the effective date of the Registration Statement; (v) the UBS Parties
have, in connection with their decision to purchase the number of Purchase
Shares set forth in Section 2 above, relied solely upon the documents identified
in Section 4.18, the information referred to in Section 5.5 and the
representations and warranties of the Company contained herein; (vi) each of the
UBS Parties is an "accredited investor" within the meaning of Rule 501 of
Regulation D promulgated under the Securities Act; (vii) the UBS Parties do not
directly or indirectly have an interest of five percent or more of the Common
Shares outstanding as shown in the Company's Quarterly Report on Form 10-Q for
the quarter ended June 30, 1997 and (viii) the Purchaser understands that the
Shares will contain a legend to the following effect:
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THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933. THE SHARES HAVE
BEEN ACQUIRED FOR INVESTMENT AND MAY NOT BE SOLD, TRANSFERRED
OR ASSIGNED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION
STATEMENT FOR THESE SHARES UNDER THE SECURITIES ACT OF 1933 OR
AN OPINION OF THE COMPANY'S COUNSEL THAT REGISTRATION IS NOT
REQUIRED UNDER SAID ACT.
5.2. Resale. Each UBS Party acknowledges and agrees that the Shares are not
transferable on the books of the Company unless the certificate submitted to the
transfer agent evidencing the Shares is accompanied by a separate officer's
certificate: (i) in the form of Appendix II hereto, (ii) executed by an officer
of, or other authorized person designated by, the UBS Parties, and (iii) to the
effect that (A) the Shares have been sold in accordance with the Registration
Statement, the Securities Act and the Rules and Regulations and any applicable
state securities or blue sky laws or pursuant to valid exemptions or exclusions
therefrom and (B) the requirement under the Securities Act of delivering a
current prospectus has been satisfied. Each UBS Party acknowledges that there
may occasionally be times when the Company must suspend the right of the UBS
Parties to effect sales of the Shares through use of the Prospectus forming a
part of the Registration Statement until such time as an amendment to the
Registration Statement has been filed by the Company and declared effective by
the SEC, or until such time as the Company has filed an appropriate report with
the SEC pursuant to the Exchange Act (each, a "Black-out Period"); provided that
no Black-out Period shall exceed 60 consecutive days and such Black-out Periods
shall not during any 12-month period exceed 120 days in the aggregate. Each UBS
Party hereby covenants that it will not sell any Shares pursuant to said
Prospectus during the period commencing at the time at which the Company gives
the UBS Parties written notice of the suspension of the use of said Prospectus
and ending at the time the Company gives the UBS Parties written notice that the
UBS Parties may thereafter effect sales pursuant to said Prospectus. Each UBS
Party further covenants to notify the Company promptly of the sale of all of its
Shares.
5.3. Due Execution, Delivery and Performance of this Agreement. The UBS
Parties further represent and warrant to, and covenant with, the Company that
(i) each UBS Party has full right, power, authority and capacity to enter into
this Agreement and to consummate the transactions contemplated hereby and has
taken all necessary action to authorize the execution, delivery and performance
of this Agreement, and (ii) upon the execution and delivery of this Agreement,
this Agreement shall constitute a valid and binding obligation of the UBS
Parties enforceable in accordance with its terms, except as enforceability may
be limited by applicable bankruptcy, insolvency, reorganization, moratorium or
similar laws affecting creditors' and contracting parties' rights generally and
except as enforceability may be subject to general principles of equity
(regardless of whether such enforceability is considered in a proceeding in
equity or at law) and except as the indemnification agreements of the UBS
Parties in Section 7.3 hereof may be legally unenforceable.
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5.4 Residence of UBS Limited. UBS Limited is organized under the laws of
England and has its principal place of business in London.
5.5 Pending Acquisition. UBS Limited represents and warrants to the Company
that: (i) UBS Limited has been informed by the Company of a non-public material
pending acquisition (the "Transaction"), which is the subject of a letter of
intent between the Company and certain sellers dated as of August 14, 1997, and
that UBS Limited has had the opportunity to discuss fully the Transaction with
the Company's officers; (ii) UBS Limited has been informed by the Company that
(x) such discussions and any written material regarding the Transaction contain
forward-looking statements and (y) actual results could differ materially from
those contained in the forward-looking statements as a result of factors such as
increased development of office space in the Company's markets or changes in the
financial condition of the Company's tenants or other factors detailed in the
Company's Annual Report on Form 10-K for the year ending December 31, 1996,
(iii) no UBS Party will disclose any information regarding the Transaction and
(iv) no UBS Party will trade in securities of the Company (other than the
purchase of the Shares contemplated hereby) until two business days after the
Company has made a public announcement regarding the Transaction.
SECTION 6. Survival of Representations, Warranties and Agreements.
Notwithstanding any investigation made by any party to this Purchase Agreement,
all covenants, agreements, representations and warranties made by the Company,
and the UBS Parties herein and in the certificates for the Shares delivered
pursuant hereto shall survive the execution of this Purchase Agreement, the
Forward Stock Purchase Agreement, the delivery to UBS Limited of the Purchase
Shares being purchased and the payment therefor.
SECTION 7. Registration of the Shares; Compliance with the Securities Act.
7.1. Registration Procedures and Expenses. The Company shall:
(a) as soon as practicable after the Closing, prepare and file with the
SEC a Registration Statement (as defined below) covering the resale by
the UBS Parties, from time to time, of up to a number of Shares equal
to 130% of the number of Purchase Shares through the facilities of the
New York Stock Exchange, the automated quotation system of The Nasdaq
Stock Market or the facilities of any other national securities
exchange on which the Company's common stock is then traded or in
privately negotiated transactions (the "Initial Registration
Statement"). If the total number of Shares exceeds the number of
Shares covered by the Initial Registration Statement, then the Company
shall prepare and file with the SEC such additional Registration
Statement or Statements as shall be necessary to cover the resale by
UBS-LB of such excess Shares in the same manner as contemplated by the
Initial Registration Statement for the Shares covered thereby (each,
an "Additional Registration Statement"); provided that prior to
issuing any such excess Shares to UBS-LB, the Company shall cause such
Registration Statement to have become effective. For purposes of
11
this Purchase Agreement, "Registration Statement" means a registration
statement under the Securities Act on Form S-3 covering the resale by
one or both UBS Parties of up to a specified number of Shares, filed
and maintained effective by the Company pursuant to the provisions of
this Section 7, including the Prospectus (as defined below) contained
therein, any amendments and supplements to such registration
statement, including all post-effective amendments thereto, and all
exhibits and all material incorporated by reference into such
registration statement;
(b) use all reasonable best efforts to cause the SEC to notify the Company
of the SEC's willingness to declare the Initial Registration Statement
effective within 60 days after the Registration Statement is filed by
the Company; provided that the Company will use its best efforts to
cause such Initial Registration Statement to become effective no later
than 90 days after the Closing Date;
(c) prepare and file with the SEC such amendments and supplements to the
Registration Statement and the prospectus used in connection therewith
(the "Prospectus") as may be necessary to keep the Registration
Statement effective until the date on which the Shares may be resold
by the UBS Parties without registration, by reason of Rule 144(k)
under the Securities Act or any other rule of similar effect;
(d) furnish to the UBS Parties with respect to the Shares registered under
the Registration Statement (and to each underwriter, if any, of such
Shares) such reasonable number of copies of Prospectuses, including
any supplements and amendments thereto, an opinion from counsel to the
Company covering the matters set forth on Exhibit B hereto and such
other documents as the UBS Parties may reasonably request, in order to
facilitate the public sale or other disposition of all or any of the
Shares by the UBS Parties;
(e) use its best efforts to prevent the happening of any event that would
cause such Registration Statement to contain a material misstatement
or omission or to be not effective and usable for resale of the Shares
during the period that such Registration Statement is required to be
effective and usable; provided that this paragraph (e) shall in no way
limit the Company's right to suspend the right of the UBS Parties to
effect sales under the Registration Statement during any Black-out
Period as specified at Section 5.2 above.
(f) file documents required of the Company for normal blue sky clearance
in states specified in writing by the UBS Parties, provided, however,
that the Company shall not be required to qualify to do business or
consent to
12
service of process in any jurisdiction in which it is not now so
qualified or has not so consented; and
(g) bear all expenses in connection with the procedures in paragraphs (a)
through (f) of this Section 7.1 and the registration of the Shares
pursuant to the Registration Statement, including the fees and
expenses of counsel or other advisers to the UBS Parties, other than
underwriting discounts, brokerage fees and commissions incurred by the
UBS Parties, if any.
7.2. Covenants in Connection With Registration.
(a) The Company hereby covenants with the UBS Parties that (i) it shall not
file any Registration Statement or Prospectus or any amendment or supplement
thereto, unless a copy thereof shall have been first submitted to the UBS
Parties and the UBS Parties did not object thereto in good faith (provided that
if the UBS Parties do not object within two business days of receiving any such
material, they shall be deemed to have no objection thereto); (ii) it shall
immediately notify the UBS Parties of the issuance by the SEC of any stop order
suspending the effectiveness of such Registration Statement or the initiation of
any proceedings for such purpose; (iii) it shall make every reasonable effort to
obtain the withdrawal of any order suspending the effectiveness of such
Registration Statement at the earliest possible moment; (iv) it shall notify the
UBS Parties of the receipt of any notification with respect to the suspension of
the qualification of the Shares for sale under the securities or blue sky laws
of any jurisdiction or the initiation of any proceeding for such purpose; and
(v) it shall as soon as practicable notify the UBS Parties in writing of the
existence of any fact which results in any Registration Statement, any amendment
or post-effective amendment thereto, the Prospectus, any prospectus supplement,
or any document incorporated therein by reference containing an untrue statement
of a material fact or omitting to state a material fact required to be stated
therein or necessary to make the statements therein not misleading and shall
prepare a supplement or post-effective amendment to such Registration Statement
or the Prospectus or any document incorporated therein by reference or file any
other required document so that, as thereafter delivered to the purchasers of
the Shares, the Prospectus will not contain an untrue statement of a material
fact or omit to state any material fact necessary to make the statements therein
not misleading; provided that this clause (v) shall in no way limit the
Company's right to suspend the right of the UBS Parties to effect sales under
the Registration Statement during any Black-out Period as specified at Section
5.2 above.
(b) The UBS Parties shall notify the Company at least two business days
prior to the date on which it intends to commence effecting any resales of
Shares under a Registration Statement and if the Company does not, within such
two-day period, advise the UBS Parties of the existence of any facts of the type
referred to in Section 7.2(a)(iv) above, then the Company shall be deemed to
have certified and represented to the UBS Parties that no such facts then exist
and the UBS Parties may rely on such certificate and representation in making
such sales. The preceding sentence shall in no way limit the Company's
obligations under Section 7.2(a) above.
13
7.3. Extension of Required Effectiveness. In the event that the Company
shall give any notice required by Section 7.2(a)(v) hereof, the period during
which the Company is required to keep such Registration Statement effective and
useable shall be extended by the number of days during the period from and
including the date of the giving of such notice to and including the date when
the UBS Parties are advised in writing by the Company that the use of the
Prospectus may be resumed.
7.4. Transfer of Shares After Registration. Each UBS Party agrees that it
will not effect any disposition of the Shares or its right to purchase the
Shares that would constitute a sale within the meaning of the Securities Act or
pursuant to any applicable state securities or blue sky laws except as
contemplated in each Registration Statement referred to in Section 7.1 or except
pursuant to any exemption from the registration requirements of the Securities
Act (including, without limitation, Rule 144 promulgated thereunder and any
successor thereto) and that it will promptly notify the Company of any changes
in the information set forth in any such Registration Statement regarding the
UBS Parties or its Plan of Distribution.
7.5. Indemnification. For the purpose of this Section 7.5, the term
"Registration Statement" shall include any final prospectus, exhibit, supplement
or amendment included in or relating to any Registration Statement referred to
in Section 7.1.
(a) Indemnification by Company. The Company agrees to indemnify and hold
harmless the UBS Parties and each person, if any, who controls either UBS Party
within the meaning of the Securities Act, against any losses, claims, damages,
liabilities or expenses, joint or several, to which the UBS Parties or such
controlling person may become subject (including in settlement of any
litigation, if such settlement is effected with the written consent of the
Company), insofar as such losses, claims, damages, liabilities or expenses (or
actions in respect thereof as contemplated below) arise out of or are based upon
any untrue statement or alleged untrue statement of any material fact contained
in any Registration Statement, including the Prospectus, financial statements
and schedules, and all other documents filed as a part thereof, as amended at
the time of effectiveness of such Registration Statement, including any
information deemed to be a part thereof as of the time of effectiveness pursuant
to paragraph (b) of Rule 430A, or pursuant to Rule 434, of the Rules and
Regulations, or the Prospectus, in the form first filed with the SEC pursuant to
Rule 424(b) of the Regulations, or filed as part of such Registration Statement
at the time of effectiveness if no Rule 424(b) filing is required, or any
amendment or supplement thereto, or arise out of or are based upon the omission
or alleged omission to state in any of them a material fact required to be
stated therein or necessary to make the statements in any of them not
misleading, and will reimburse each UBS Party and each such controlling person
for any legal and other expenses as such expenses are reasonably incurred by the
UBS Parties or such controlling person in connection with investigating,
defending, settling, compromising or paying any such loss, claim, damage,
liability, expense or action. The Company will also indemnify selling brokers,
dealers and similar securities industry professionals participating in the sale
or resale of the Shares, their officers, directors and partners and each person
who controls any such person within the meaning of the Securities Act, provided,
however, that the Company will not be liable in any such case to the extent that
any such loss, claim, damage, liability or expense arises out of or is based
upon an untrue statement
14
or alleged untrue statement or omission or alleged omission made in such
Registration Statement, such Prospectus or any amendment or supplement thereto
in reliance upon and in conformity with written information furnished to the
Company (i) by or on behalf of the UBS Parties expressly for use therein or (ii)
any statement or omission in any Prospectus that is corrected in any subsequent
Prospectus that was delivered to a UBS Party prior to the pertinent sale or
sales by such UBS Party and not delivered by such UBS Party in connection with
such sale or sales.
(b) Indemnification by UBS Parties. The UBS Parties will indemnify and hold
harmless the Company, each of its directors, each of its officers who signed any
Registration Statement and each person, if any, who controls the Company within
the meaning of the Securities Act, against any losses, claims, damages,
liabilities or expenses, joint and several, to which the Company, each of its
directors, each of its officers who signed any Registration Statement or any
controlling person may become subject (including in settlement of any
litigation, if such settlement is effected with the written consent of the UBS
Parties) insofar as such losses, claims, damages, liabilities or expenses (or
actions in respect thereof as contemplated below) arise out of or are based upon
any untrue or alleged untrue statement of any material fact contained in such
Registration Statement, such Prospectus, or any amendment or supplement thereto,
or arise out of or are based upon the omission or alleged omission to state
therein a material fact required to be stated therein or necessary to make the
statements therein not misleading, in each case to the extent, but only to the
extent, that such untrue statement or alleged untrue statement or omission or
alleged omission was made in such Registration Statement, such Prospectus, or
any amendment or supplement thereto, in reliance upon and in conformity with
written information furnished to the Company by or on behalf of the UBS Parties
expressly for use therein, and will reimburse the Company, each of its
directors, each of its officers who signed such Registration Statement and each
controlling person for any legal and other expense reasonably incurred by the
Company, each of its directors, each of its officers who signed such
Registration Statement or controlling person in connection with investigating,
defending, settling, compromising or paying any such loss, claim, damage,
liability, expense or action.
(c) Proceedings. Promptly after receipt by an indemnified party under this
Section 7.5 of notice of the commencement of any action, such indemnified party
will, if a claim in respect thereof is to be made against an indemnifying party
under this Section 7.5 notify the indemnifying party in writing of the
commencement thereof; but the omission so to notify the indemnifying party will
not relieve it from any liability which it may have to any indemnified party for
contribution or otherwise than under the indemnity agreement contained in this
Section 7.5 or to the extent it is not prejudiced as a proximate result of such
failure. In case any such action is brought against any indemnified party and
such indemnified party seeks or intends to seek indemnity from an indemnifying
party, the indemnifying party will be entitled to participate in, and, to the
extent that it may wish, jointly with all other indemnifying parties similarly
notified, to assume the defense thereof with counsel reasonably satisfactory to
such indemnified party; provided, however, if the defendants in any such action
include both the indemnified party and the indemnifying party and the
indemnified party shall have reasonably concluded that there may be a conflict
between the positions of the indemnifying party and the indemnified party in
conducting the defense of any such action or that there may be legal defenses
available to it
15
and/or other indemnified parties which are different from or additional to those
available to the indemnifying party, the indemnified party or parties shall have
the right to select separate counsel to assume such legal defenses and to
otherwise participate in the defense of such action on behalf of such
indemnified party or parties. Upon receipt of notice from the indemnifying party
to such indemnified party of its election so to assume the defense of such
action and approval by the indemnified party of counsel, the indemnifying party
will not be liable to such indemnified party under this Section 7.5 for any
reasonable legal or other expenses subsequently incurred by such indemnified
party in connection with the defense thereof unless (i) the indemnified party
shall have employed such counsel in connection with the assumption of legal
defenses in accordance with the proviso to the preceding sentence (it being
understood, however, that the indemnifying party shall be not liable for the
expenses of more than one separate counsel, approved by such indemnifying party
in the case of paragraph (a), representing the indemnified parties who are
parties to such action) or (ii) the indemnifying party shall not have employed
counsel reasonably satisfactory to the indemnified party to represent the
indemnified party within a reasonable time after notice of commencement of
action, in each of which cases the fees and expenses of counsel shall be at the
expense of the indemnifying party.
(d) Contribution. If the indemnification provided for in this Section 7.5
is required by its terms but is for any reason held to be unavailable to or
otherwise insufficient to hold harmless an indemnified party under paragraphs
(a), (b) or (c) of this Section 7.5 in respect of any losses, claims, damages,
liabilities or expenses referred to herein, then each applicable indemnifying
party shall contribute to the amount paid or payable by such indemnified party
as a result of any losses, claims, damages, liabilities or expenses referred to
herein in such proportion as is appropriate to reflect the relative benefits
received by the Company and the UBS Parties from the purchase and sale of the
Shares and the relative fault of the Company and the UBS Parties in connection
with the statements or omissions or inaccuracies in the representations and
warranties in this Agreement which resulted in such losses, claims, damages,
liabilities or expenses, as well as any other relevant equitable considerations.
The respective relative benefits received by the Company on the one hand and the
UBS Parties on the other shall be deemed to be in the same proportion as the
amount paid by the UBS Parties to the Company pursuant to this Agreement for the
Shares purchased by the UBS Parties that were sold pursuant to any Registration
Statement bears to the difference (the "Difference") between the amount the UBS
Parties paid for the Shares that were sold pursuant to such Registration
Statement and the amount received by the UBS Parties from such sale. The
relative fault of the Company and the UBS Parties shall be determined by
reference to, among other things, whether the untrue or alleged untrue statement
of a material fact or the omission or alleged omission to state a material fact
or the inaccurate or the alleged inaccurate representation and/or warranty
relates to information supplied by the Company or by the UBS Parties and the
parties' relative intent, knowledge, access to information and opportunity to
correct or prevent such statement or omission. The amount paid or payable by a
party as a result of the losses, claims, damages, liabilities and expenses
referred to above shall be deemed to include, subject to the limitations set
forth in paragraph (c) of this Section 7.5 any reasonable legal or other fees or
expenses incurred by such party in connection with investigating or defending
any action or claim. The provisions set forth in paragraph (c) of this Section
7.5 with respect to notice of commencement of any action shall apply if a claim
for contribution is to be made under this paragraph (d); provided, however, that
16
no additional notice shall be required with respect to any action for which
notice has been given under paragraph (c) for purposes of indemnification. The
Company and the UBS Parties agree that it would not be just and equitable if
contribution pursuant to this Section 7.5 were determined solely by pro rata
allocation or by any other method of allocation which does not take account of
the equitable considerations referred to in this paragraph. Notwithstanding the
provisions of this Section 7.5, the UBS Parties shall not be required to
contribute any amount in excess of the amount by which the aggregate proceeds
received by the UBS Parties from the transactions contemplated hereby exceeds
the amount of any damages that the UBS Parties has otherwise been required to
pay by reason of such untrue or alleged untrue statement or omission or alleged
omission. No person guilty of fraudulent misrepresentation (within the meaning
of Section 11(f) of the Securities Act) shall be entitled to contribution from
any person who was not guilty of such fraudulent misrepresentation.
7.6. Termination of Conditions and Obligations. The conditions precedent
imposed by Section 5 or this Section 7 upon the transferability of the Shares
shall cease and terminate as to any particular number of the Purchase Shares
upon the passage of twenty-four months from the purchase of such Shares by UBS
Limited, as to any particular number of the Additional Shares upon the passage
of twenty-four months from the issuance of such Shares to UBS-LB or as to any
particular number of the Shares at such time as an opinion of counsel
satisfactory to the Company shall have been rendered to the effect that such
conditions are not necessary in order to comply with the Securities Act. At such
time, the Company's obligation to maintain an effective Registration Statement
with respect to such Shares shall cease.
7.7. Information Available. So long as any Registration Statement covering
the resale of any Shares owned by either UBS Party is effective, the Company
will furnish to the UBS Parties:
(a) as soon as practicable after available, one copy of (i) its Annual
Report to Shareholders, (ii) its Annual Report on Form 10-K, (iii) its
Quarterly Reports to Shareholders, (iv) its quarterly reports on Form
10-Q, (v) a full copy of the particular Registration Statement
covering the Shares (the foregoing, in each case, excluding exhibits)
and (vi) upon request, any or all other public filings under the
Exchange Act by the Company; and
(b) upon the reasonable request of either UBS Party, a reasonable number
of copies of the Prospectuses to supply to any other party requiring
such Prospectuses;
and the Company, upon the reasonable request of the UBS Parties, will meet with
the UBS Parties or a representative thereof at the Company's headquarters to
discuss all information relevant for disclosure in such Registration Statement
covering the Shares, subject to appropriate confidentiality limitations.
7.8 Non-Exclusivity. The rights and remedies provided under Section 7.5
hereof shall not be in limitation or exclusion of any other rights or remedies
available to a party, whether
17
by agreement, at law, in equity or otherwise, with respect to the inaccuracy of
any representation or warranty by, or the breach of any covenant of, the other
party made herein or in the Forward Stock Purchase Agreement.
7.9 Notice Requirement. The Company covenants and agrees that it will
notify the UBS Parties at any time it becomes aware that as a result of a change
in the Company's capital stock the UBS Parties beneficially hold more than 4.9%
of the Company's Common Shares.
7.10 Transfer of Shares. The Company covenants and agrees to use its best
efforts to cause the transfer agent to effect promptly any transfer of the
Shares requested by the UBS Parties and to cause the transfer agent to remove
promptly the restrictive legend from the Shares upon presentation to the
transfer agent of all necessary documentation.
SECTION 8. Registration Exemptions. For so long as the Company is subject
to the reporting requirements of Section 13 or 15 of the Exchange Act, the
Company covenants that it will file the reports required to be filed by it under
the Securities Act and Section 13(a) and 15(d) of the Exchange Act and the rules
and regulations adopted by the Commission thereunder.
SECTION 9. Broker's Fee. Other than any fees payable under or in connection
with the Forward Stock Purchase Agreement, each of the parties hereto hereby
represents that, on the basis of any actions and agreements by it, there are no
brokers or finders entitled to compensation in connection with the sale or
issuance of the Shares to the UBS Parties.
SECTION 10. Notices. All notices, requests, consents and other
communications hereunder shall be in writing, shall be mailed by first-class
registered or certified airmail, by telegram or telecopy or sent by nationally
recognized overnight express courier postage prepaid, and shall be deemed given
when so mailed or for telecopies, when transmitted and receipt confirmed, and
shall be delivered as addressed as follows:
(a) if to the Company, to:
3100 Smoketree Court
Suite 600
Raleigh, North Carolina 27604
Attn: Mark D. Pridgen, III
with a copy so mailed to:
Smith Helms Mulliss & Moore, L.L.P.
2800 Two Hanover Square
Raleigh, North Carolina 27601
Attn: Brad S. Markoff
18
or to such other person at such other place as the
Company shall designate to the UBS Parties in
writing; and
(b) if to the UBS Parties, c/o UBS Securities, LLC, 299
Park Avenue, New York, New York 10171, or at such
other address or addresses as may have been furnished
to the Company in writing.
SECTION 11. Changes. This Agreement may not be modified or amended except
pursuant to an instrument in writing signed by the Company and the UBS Parties.
SECTION 12. Headings. The headings of the various sections of this
Agreement have been inserted for convenience of reference only and shall not be
deemed to be part of this Agreement.
SECTION 13. Severability. In case any provision contained in this Agreement
should be invalid, illegal or unenforceable in any respect, the validity,
legality and enforceability of the remaining provisions contained herein shall
not in any way be affected or impaired thereby.
SECTION 14. Governing Law; Jurisdiction.
14.1 This Agreement shall be governed by and construed in accordance with
the laws of the State of New York (without regard to the conflicts of law
principles thereof) and of the federal law of the United States of America.
14.2 The Company (i) hereby irrevocably submits to the jurisdiction of, and
agrees that any suit shall be brought in, the state and federal courts located
in the City and County of New York for the purpose of any suit, action or other
proceeding arising out of or based upon this Agreement or the transactions
contemplated hereby and (ii) hereby waives to the extent not prohibited by
applicable law, and agrees not to assert, by way of motion, as a defense or
otherwise, in any such proceeding, any claim that it is not subject personally
to the jurisdiction of the above-named courts, that its property is exempt or
immune from attachment or execution, that any such proceeding brought in one of
the above-named courts is brought in an inconvenient forum, that the venue of
any such proceeding brought in one of the above-named courts is improper, or
that this Agreement, or the transactions contemplated hereby may not be enforced
in or by such court.
SECTION 15. Transfer to Affiliate. Notwithstanding anything herein to the
contrary, UBS Limited may transfer the Purchase Shares to any affiliate of UBS
Limited, together with all of UBS Limited's rights hereunder; provided that (i)
such affiliate shall assume and be subject to all of UBS Limited's obligations
hereunder; (ii) such affiliate shall be an "accredited investor" within the
meaning of Rule 501 of Regulation D promulgated under the Securities Act; and
(iii) such transfer shall be consistent with the investment representations set
forth at Section 5.1 hereto. In the event of such an assignment, such affiliate
shall in all respects be substituted for UBS Limited as a party hereto.
19
SECTION 16. Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall constitute an original, but all of which, when
taken together, shall constitute but one instrument, and shall become effective
when one or more counterparts have been signed by each party hereto and
delivered to the other parties.
SECTION 17. Waiver of Trial by Jury. EACH PARTY HEREBY IRREVOCABLY WAIVES
ANY RIGHT IT MAY HAVE TO JURY TRIAL IN CONNECTION WITH ANY ACTION OR PROCEEDING
ARISING OUT OF OR RELATING TO THIS AGREEMENT.
20
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their duly authorized representatives as of the day and year first
above written.
Highwood Properties, Inc.
By:________________________________
Name:
Title:
UBS Limited
By:________________________________
Name:
Title:
By:________________________________
Name:
Title:
Union Bank of Switzerland
London Branch
By:________________________________
Name:
Title:
By:________________________________
Name:
Title:
21
Appendix I
(one of two)
STOCK CERTIFICATE QUESTIONNAIRE
Pursuant to Section 3 of the Agreement, please provide us with the
following information:
1. The exact name that your Shares are to be registered in (this is the name
that will appear on your stock certificate(s)). You may use a nominee name
if appropriate: ____________________________
2. All relationships between each UBS Party and the Registered Holder listed
in response to Item 1 above:
____________________________
____________________________
____________________________
3. The mailing address of the Registered Holder listed in response to item 1
above:
____________________________
____________________________
____________________________
____________________________
4. The Social Security Number or Tax Identification Number of the Registered
Holder listed in response to item 1 above:
____________________________
Appendix I
(two of two)
REGISTRATION STATEMENT QUESTIONNAIRE
In connection with the preparation of the Registration Statement, please
provide us with the following information:
1. Pursuant to the "Selling Shareholders" section of the Registration
Statement, please state your or your organization's name exactly as it
should appear in the Registration Statement:
2. Please provide the number of shares that you or your organization
will own immediately after Closing, including those Shares purchased by you
or your organization pursuant to this Purchase Agreement and those shares
purchased by you or your organization through other transactions:
3. Have you or your organization had any position, office or other
material relationship within the past three years with the Company or its
affiliates?
_____ Yes _____ No
If yes, please indicate the nature of any such relationships below:
______________________________________________________________________________
______________________________________________________________________________
______________________________________________________________________________
APPENDIX II
Attention:
PURCHASER'S CERTIFICATE OF SUBSEQUENT SALE
The undersigned, [an officer of, or other person duly authorized by]
_______________________________________ hereby certifies that he/she [fill in
official name of individual or institution] [said institution] is the Purchaser
of the shares evidenced by the attached certificate, and as such, sold such
shares on _______ in accordance with Registration Statement
[date]
number ___________________________________________________________________,
[fill in the number of or otherwise identify Registration Statement]
the Securities Act of 1933, as amended, and any applicable state securities or
blue sky laws and the requirement of delivering a current prospectus by the
Company has been complied with in connection with such sale.
Print or Type:
Name of Purchaser
(Individual or
Institution): ____________________________________
Name of Individual
representing
Purchaser (if an
Institution) ____________________________________
Title of Individual
representing
Purchaser (if an
Institution): ____________________________________
Signature by:
Individual Purchaser
or Individual repre-
senting Purchaser: ____________________________________
EXHIBIT A
[Form of Closing Opinion of Counsel to the Company]
August __, 1997
Union Bank of Switzerland
London Branch
[Address]
Ladies and Gentlemen:
We have acted as counsel to Highwood Properties, Inc., a Maryland real
estate investment trust (the "Company"), in connection with (i) the issuance and
sale by the Company of [Number] shares of the Company's common stock, par value
$.01 per share ("Common Shares"), pursuant to that certain Purchase Agreement,
dated August __, 1997 (the "Purchase Agreement"), by and between the Company and
Union Bank of Switzerland, London Branch, acting through its agent UBS
Securities LLC, (the "Purchaser") and (ii) the forward stock purchase
transaction evidenced by the letter agreement, dated August __, 1997 (the
"Confirmation") between the Company and the Purchaser. This opinion is being
rendered to you pursuant to Section 4.17 of the Purchase Agreement in connection
with the Closing of the sale of the Shares. Capitalized terms not otherwise
defined in this opinion have the meaning given them in the Purchase Agreement.
In connection with the opinions expressed herein we have made such
examination of matters of law and of fact as we considered appropriate or
advisable for purposes hereof. As to matters of fact material to the opinions
expressed herein, we have relied upon the representations and warranties as to
factual matters contained in and made by the Company pursuant to the Purchase
Agreement and upon certificates and statements of government officials and of
officers of the Company. We have also examined originals or copies of such
corporate documents or records of the Company as we have considered appropriate
for the opinions expressed herein. We have assumed for the purposes of this
opinion that the signatures on documents and instruments examined by us are
authentic, that each document is what it purports to be, and that all documents
submitted to us as copies conform with the originals, which facts we have not
independently verified.
Union Bank of Switzerland
London Branch
[Date]
Page 2
In rendering this opinion we have also assumed that the Purchase Agreement
and the Confirmation have each been duly and validly executed and delivered by
the other parties to such agreements and constitute valid, binding and
enforceable obligations of such other parties.
In our capacity as counsel to the Company, we have examined, among other
things, originals, or copies identified to our satisfaction as being true
copies, of the following: [List]
This opinion relates solely to the laws of the State of _________, and the
federal securities law of the United States, and we express no opinion with
respect to the effect or applicability of the laws in other areas or of other
jurisdictions.
Our opinion in paragraph 4 below is subject to the effect of bankruptcy,
insolvency, moratorium, fraudulent conveyance and similar laws relating to or
affecting creditors' rights generally and we express no opinion with respect to
the application of equitable principles in any proceeding, whether at law or in
equity.
Based upon the foregoing and subject to the limitations, exceptions,
qualifications and assumptions set forth herein, we are of the opinion that as
of the date hereof:
1. The Company is a real estate investment trust duly organized, validly
existing and in good standing under the laws of the State of Maryland, and the
Company has the requisite corporate power and authority to own its properties
and to conduct its business as presently conducted.
2. The Purchase Shares and the Additional Shares have been duly authorized
and, when issued and delivered by the Company in accordance with and subject to
the terms of the Purchase Agreement or the Confirmation (as the case may be),
will be validly issued, nonassessable and fully paid, and are not subject to any
preemptive or similar rights.
3. The Company has the power and authority to execute, deliver and perform
the Purchase Agreement and the Confirmation, including issuing, selling and
delivering the Purchase Shares and Additional Shares as contemplated thereby.
4. Each of the Purchase Agreement and the Confirmation have been duly
authorized, executed and delivered by the Company and is a valid and binding
obligation of the Company, enforceable in accordance with its terms.
5. The execution and delivery by the Company of, and the performance by the
Company of its obligations under, the Purchase Agreement and the Confirmation
will not contravene any provision of applicable law or the declaration of trust
or bylaws of the Company, or, to the best of our knowledge, any judgment order
or decree of any governmental body, agency or court having jurisdiction over the
Company or any of its property, or, to the best of our
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Union Bank of Switzerland
London Branch
[Date]
Page 3
knowledge, constitute a breach or default under any agreement or other
instrument binding upon the Company and filed as an exhibit to the Company's
filings with the Securities and Exchange Commission.
6. No consent, approval, authorization or order of or qualification with
any governmental body or agency is required for the performance by the Company
of its obligations under the Purchase Agreement and the Confirmation, except
such as may be required by the securities or blue sky laws of the various states
(on which we express no opinion) in connection with the purchase and sale of the
Shares and except such as may be required in connection with providing the
registration statements contemplated by the Purchase Agreement or the
Confirmation.
7. To the best of our knowledge, and except as disclosed in the Company's
public filings with the Securities and Exchange Commission, there is no action,
suit or proceeding pending or threatened in writing against the Company, at law
or in equity, or before any court or governmental agency or instrumentality
which, if resolved against the Company, may materially adversely affect the
financial or business condition of the Company or would prevent the Company from
entering into or performing its obligations under the Purchase Agreement or the
Confirmation.
8. The authorized capital stock of the Company conforms as to legal matters
in all material respects under the heading ["Capitalization"] in the Company's
public filings with the Securities and Exchange Commission, and the form of
certificate used to evidence the Shares complies in all material respects with
all applicable statutory requirements. The outstanding shares of Common Stock of
the Company have been duly and validly authorized and issued, and are, to our
knowledge, fully paid and nonassessable.
[While we have not verified, and are not passing upon and do not assume any
responsibility for, the accuracy, completeness or fairness of the statements
contained in the Registration Statement or Final Prospectus, we have
participated in reviews and discussions in connection with the preparation of
the Registration Statement and Final Prospectus, and advise you that, in the
course of such reviews and discussions, nothing has come to our attention which
would lead us to believe (i) that the Registration Statement at the time it
became effective (except for the financial statements and the notes thereto and
the other financial data included or incorporated by reference therein, as to
which we express no belief) contained any untrue statement of a material fact or
omitted to state any material fact necessary to make the statements therein not
misleading or (ii) that the Final Prospectus on the date thereof or on the date
of this opinion (except for the financial statements and the notes thereto and
the other financial data included or incorporated by reference therein, as to
which we express no belief) contained any untrue statement of a material fact or
omitted to state any material fact necessary to make the statements therein, in
light of the circumstances under which they were made, not misleading.]
24
Union Bank of Switzerland
London Branch
[Date]
Page 4
Our opinions expressed above are specifically subject to the following
limitations, exceptions, qualifications and assumptions:
(A) We are not called upon to express, and do not express, any view,
opinion or belief as to the financial statements, schedules, statistical data
and other financial data contained in any filings with the Securities and
Exchange Commission.
(B) We express no opinion as to the Company's compliance or noncompliance
with applicable federal or state antitrust statutes, laws, rules and
regulations.
(C) We express no opinion concerning the past, present or future fair
market value of any securities.
This opinion is rendered solely for your benefit in connection with the
Purchase Agreement and the Confirmation and may not be delivered to, quoted or
relied upon by any person other than you, or for any other purpose, without our
prior written consent. Our opinion is expressly limited to the matters set forth
above and we render no opinion, whether by implication or otherwise, as to any
other matters relating to the Company. We assume no obligation to advise you of
facts, circumstances, events or developments which hereinafter may be brought to
our attention and which may alter, affect or modify the opinions expressed
herein.
Very truly yours,
Smith Helms Mulliss & Moore, L.L.P.
EXHIBIT B
Opinion Matters for Additional Registration Statements
[opinion paragraphs to be delivered in connection with resale registration
statements]
1. The Company is a corporation duly organized, validly existing and in
good standing under the laws of the State of Maryland, and the Company has the
requisite corporate power and authority to own its properties and to conduct is
business as presently conducted.
2. The Additional Shares have been duly authorized and are validly issued,
nonassessable and fully paid, and are not subject to any preemptive or similar
rights.
3. The Registration Statement has been declared effective under the
Securities Act; to our knowledge, no stop order suspending the effectiveness of
the Registration Statement has been issued and no proceedings for that purpose
have been instituted or threatened; and the Registration Statement, the Final
Prospectus, and each amendment thereof or supplement thereto (except for the
financial statements, schedules and the notes thereto and the other financial
data included or incorporated by reference therein, as to which we express no
opinion) comply as to form in all material respects with the requirements of the
Securities Act and the Exchange Act and the respective rules of the Commission
thereunder.
While we have not verified, and are not passing upon and do not assume any
responsibility for, the accuracy, completeness or fairness of the statements
contained in the Registration Statement or Final Prospectus, we have
participated in reviews and discussions in connection with the preparation of
the Registration Statement and Final Prospectus, and advise you that, in the
curse of such reviews and discussions, nothing has come to our attention which
would lead us to believe (i) that the Registration Statement at the time it
became effective (except for the financial statements and the notes thereto and
the other financial data included or incorporated by reference therein, as to
which we express no belief) contained any untrue statement of a material fact or
omitted to state any material fact necessary to make the statements therein not
misleading or (ii)that the Final Prospectus on the date thereof or on the date
of this opinion (except for the financial statements and the notes thereto and
the other financial data included or incorporated by reference therein, as to
which we express no belief) contained any untrue statement of a material fact or
omitted to state any material fact necessary to make the statements therein, in
light of the circumstances under which they were made, not misleading.