CREDIT AGREEMENT
among
HIGHWOODS/FORSYTH LIMITED PARTNERSHIP,
as Borrower
AND
HIGHWOODS PROPERTIES, INC.,
and certain Subsidiaries of the Borrower and Highwoods Properties, Inc.
as Guarantors
AND
NATIONSBANK, N.A.,
as Agent and a Lender
AND
THE OTHER LENDERS IDENTIFIED HEREIN (IF ANY)
DATED AS OF December 15, 1997
TABLE OF CONTENTS
Page
----
SECTION 1 DEFINITIONS AND ACCOUNTING TERMS....................................1
1.1 Definitions................................................................1
1.2 Computation of Time Periods and Other Definitional Provisions..............8
SECTION 2 CREDIT FACILITIES. .................................................9
2.1 Revolving Loans............................................................9
SECTION 3 GENERAL PROVISIONS APPLICABLE TO LOANS.............................11
3.1 Interest..................................................................11
3.2 Place and Manner of Payments..............................................11
3.3 Prepayments...............................................................12
3.4 Unused Fees...............................................................12
3.5 Payment in full at Maturity...............................................13
3.6 Computations of Interest and Fees.........................................13
3.7 Pro Rata Treatment........................................................14
3.8 Sharing of Payments.......................................................14
3.9 Capital Adequacy..........................................................15
3.10 Inability To Determine Eurodollar Rate...................................15
3.11 Illegality to Make Eurodollar Loans......................................16
3.12 Changes in Requirements of Law...........................................16
3.13 Taxes....................................................................17
3.14 Indemnity as to Eurodollar Loans.........................................18
SECTION 4 GUARANTY...........................................................19
4.1 Guaranty of Payment.......................................................18
4.2 Obligations Unconditional.................................................19
4.3 Modifications.............................................................19
4.4 Waiver of Rights..........................................................20
4.5 Reinstatement.............................................................20
4.6 Remedies..................................................................20
4.7 Limitation of Guaranty....................................................21
SECTION 5 CONDITIONS PRECEDENT...............................................21
5.1 Closing Conditions........................................................21
5.2 Conditions to All Loans...................................................23
SECTION 6 REPRESENTATIONS AND WARRANTIES.....................................25
SECTION 7 AFFIRMATIVE COVENANTS..............................................25
SECTION 8 NEGATIVE COVENANTS.................................................26
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SECTION 9 EVENTS OF DEFAULT..................................................26
9.2 Events of Default.........................................................27
9.3 Acceleration; Remedies....................................................27
9.4 Allocation of Payments After Event of Default.............................28
SECTION 10 AGENCY PROVISIONS.................................................29
10.1 Appointment..............................................................29
10.2 Delegation of Duties.....................................................29
10.3 Exculpatory Provisions...................................................29
10.4 Reliance on Communications...............................................30
10.5 Notice of Default........................................................30
10.6 Non-Reliance on Agent and Other Lenders..................................31
10.7 Indemnification..........................................................31
10.8 Agent in Its Individual Capacity.........................................32
10.9 Successor Agent..........................................................32
SECTION 11 MISCELLANEOUS......................................................33
11.1 Notices..................................................................32
11.2 Right of Set-Off.........................................................33
11.3 Benefit of Agreement.....................................................33
11.4 No Waiver; Remedies Cumulative...........................................35
11.5 Payment of Expenses; Indemnification.....................................35
11.6 Amendments, Waivers and Consents.........................................36
11.7 Counterparts.............................................................36
11.8 Headings.................................................................37
11.9 Defaulting Lender........................................................37
11.10 Survival of Indemnification and
Representations and Warranties.........................................37
11.11 Governing Law..........................................................37
11.12 Arbitration............................................................37
11.13 Time...................................................................38
11.14 Severability...........................................................38
11.15 Entirety...............................................................38
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SCHEDULES
Schedule 1.1(a) Commitment Percentages
Schedule 11.1 Notices
EXHIBITS
Exhibit 2.1(b) Form of Notice of Borrowing
Exhibit 2.1(d) Form of Notice of Continuation/Conversion
Exhibit 2.1(f) Form of Revolving Note
Exhibit 7.1(c) Form of Officer's Certificate
Exhibit 7.16 Form of Joinder Agreement
Exhibit 11.3 Form of Assignment Agreement
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CREDIT AGREEMENT
THIS CREDIT AGREEMENT, dated as of December 15, 1997 (this "Credit
Agreement"), is entered into by and among HIGHWOODS/FORSYTH LIMITED PARTNERSHIP,
a North Carolina limited partnership (the "Borrower"), HIGHWOODS PROPERTIES,
INC., a Maryland corporation ("Highwoods Properties") (Highwoods Properties and
certain Subsidiaries of the Borrower and Highwoods Properties, individually a
"Guarantor" and collectively the "Guarantors"), the Lenders (as defined herein)
and NATIONSBANK, N.A., (the "Bank"), as Agent for the Lenders.
R E C I T A L S
WHEREAS, the Borrower has requested that the Lenders provide a $150,000,000
credit facility for the purposes hereinafter set forth; and
WHEREAS, the Lenders have agreed to make the requested credit facility
available to the Borrower on the terms and conditions hereinafter set forth.
NOW, THEREFORE, IN CONSIDERATION of the premises and other good and
valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the parties hereto agree as follows:
SECTION 1
DEFINITIONS AND ACCOUNTING TERMS
1.1 Definitions.
As used herein, the following terms shall have the meanings herein
specified unless the context otherwise requires. Defined terms herein shall
include in the singular number the plural and in the plural the singular:
"Additional Credit Party" means each Person that becomes a Guarantor
under the Related Facility.
"Adjusted Base Rate" means the Base Rate plus the Applicable
Percentage.
"Adjusted Eurodollar Rate" means the Eurodollar Rate plus the
Applicable Percentage.
"Agent" means NationsBank, N.A. (or any successor thereto) or any
successor administrative agent appointed pursuant to Section 10.
"Affiliate" means a Person: (a) which directly or indirectly through
one or more intermediaries controls or is controlled by, or is under common
control of the Borrower or a Guarantor; or (b) which beneficially owns or
holds five percent (5%) or more of any class of the voting stock of a
Guarantor or more than five percent (5%) of the partnership interests of
the Borrower; or (c) of which five percent (5%) or more of the voting stock
(or in the case of a Person which is not a corporation, five percent (5%)
or more of the equity interest) is beneficially owned or held by the
Borrower or a Guarantor.
"Applicable Percentage" means, at any time, and with respect to all
Eurodollar Loans and Base Rate Loans then outstanding, the applicable
percentage as follows:
APPLICABLE APPLICABLE
PERCENTAGE PERCENTAGE
FOR EURODOLLAR BASE RATE
LOANS LOANS
----- -----
0.90% 0%
"Authorized Officer" means the President, Chief Executive Officer,
Chief Operating Officer, Chief Financial Officer, Secretary or Chairman of
the Board of Highwoods Properties.
"Bankruptcy Code" means the Bankruptcy Code in Title 11 of the United
States Code, as amended, modified, succeeded or replaced from time to time.
"Base Rate" means, for any day, the rate per annum (rounded upwards,
if necessary, to the nearest whole multiple of 1/100 of 1%) equal to the
greater of (a) the Federal Funds Rate in effect on such day plus 1/2 of 1%
or (b) the Prime Rate in effect on such day. If for any reason the Agent
shall have determined (which determination shall be conclusive absent
manifest error) that it is unable after due inquiry to ascertain the
Federal Funds Rate for any reason, including the inability or failure of
the Agent to obtain sufficient quotations in accordance with the terms
hereof, the Base Rate shall be determined without regard to clause (a) of
the first sentence of this definition until the circumstances giving rise
to such inability no longer exist. Any change in the Base Rate due to a
change in the Prime Rate or the Federal Funds Rate shall be effective on
the effective date of such change in the Prime Rate or the Federal Funds
Rate, respectively.
"Base Rate Loan" means any Loan bearing interest at a rate determined
by reference to the Base Rate.
"Borrower" means Highwoods/Forsyth Limited Partnership, a North
Carolina limited partnership, together with any permitted successors and
assigns.
"Business Day" means any day other than a Saturday or Sunday or a
legal holiday in Charlotte, North Carolina, or a day on which banking
institutions are authorized by law or
2
other governmental action to close; provided, however, if the applicable
day relates to the determination of the Eurodollar Rate, such day must also
be a day upon which banks are open for the transaction of business in
London, England and dealings in U.S. dollar deposits are carried on in the
London interbank market.
"Closing Date" means the date hereof.
"Commitments" means the commitment of each Lender with respect to the
Revolving Committed Amount.
"Credit Documents" means, collectively, this Agreement and the Note.
"Credit Parties" means the Borrower and the Guarantors and "Credit
Party" means any one of them.
"Credit Party Obligations" means, without duplication all of the
obligations of the Credit Parties to the Lenders and the Agent, whenever
arising, under this Credit Agreement, the Notes, or any of the other Credit
Documents to which the Borrower or any Guarantor is a party.
"Default" means any event, act or condition which with notice or lapse
of time, or both, would constitute an Event of Default.
"Defaulting Lender" means, at any time, any Lender that, (a) has
failed to make a Loan required pursuant to the terms of this Credit
Agreement, (b) has failed to pay to the Agent or any Lender an amount owed
by such Lender pursuant to the terms of this Credit Agreement (but only for
so long as such amount has not been repaid) or (c) has been deemed
insolvent or has become subject to a bankruptcy or insolvency proceeding or
to a receiver, trustee or similar official.
"Dollars" and "$" means dollars in lawful currency of the United
States of America.
"Effective Date" means the date on which the conditions set forth in
Section 5.1 shall have been fulfilled (or waived in the sole discretion of
the Lenders) and on which the initial Loans shall have been made.
"Eligible Assignee" means (a) any Lender or Affiliate or subsidiary of
a Lender and (b) any other commercial bank, financial institution,
institutional lender or "accredited investor" (as defined in Regulation D
of the Securities and Exchange Commission) with total assets of at least
$10 billion and with a rating on their long term unsecured debt of at least
BBB with S&P or its equivalent and organized under the laws of the United
States or a state thereof.
"Environmental Claim" means any investigation, written notice,
violation, written demand, written allegation, action, suit, injunction,
judgment, order, consent decree, penalty, fine, lien, proceeding, or
written claim whether administrative, judicial, or private
3
in nature arising (a) pursuant to, or in connection with, an actual or
alleged violation of, any Environmental Law, (b) in connection with any
Hazardous Material, (c) from any assessment, abatement, removal, remedial,
corrective, or other response action in connection with an Environmental
Law or other order of a Governmental Authority or (d) from any actual or
alleged damage, injury, threat, or harm to health, safety, natural
resources, or the environment.
"Environmental Laws" means any current or future legal requirement of
any Governmental Authority pertaining to (a) the protection of health,
safety, and the indoor or outdoor environment, (b) the conservation,
management, or use of natural resources and wildlife, (c) the protection or
use of surface water and groundwater, (d) the management, manufacture,
possession, presence, use, generation, transportation, treatment, storage,
disposal, release, threatened release, abatement, removal, remediation or
handling of, or exposure to, any hazardous or toxic substance or material
or (e) pollution (including any release to land surface water and
groundwater) and includes, without limitation, the Comprehensive
Environmental Response, Compensation, and Liability Act of 1980, as amended
by the Superfund Amendments and Reauthorization Act of 1986, 42 USC 9601 et
seq., Solid Waste Disposal Act, as amended by the Resource Conservation and
Recovery Act of 1976 and Hazardous and Solid Waste Amendment of 1984, 42
USC 6901 et seq., Federal Water Pollution Control Act, as amended by the
Clean Water Act of 1977, 33 USC 1251 et seq., Clean Air Act of 1966, as
amended, 42 USC 7401 et seq., Toxic Substances Control Act of 1976, 15 USC
2601 et seq., Hazardous Materials Transportation Act, 49 USC App. 1801 et
seq., Occupational Safety and Health Act of 1970, as amended, 29 USC 651 et
seq., Oil Pollution Act of 1990, 33 USC 2701 et seq., Emergency Planning
and Community Right-to-Know Act of 1986, 42 USC 11001 et seq., National
Environmental Policy Act of 1969, 42 USC 4321 et seq., Safe Drinking Water
Act of 1974, as amended, 42 USC 300(f) et seq., any analogous implementing
or successor law, and any amendment, rule, regulation, order, or directive
issued thereunder.
"Eurodollar Loan" means a Loan bearing interest based at a rate
determined by reference to the Eurodollar Rate.
"Eurodollar Rate" means, for the Interest Period for each Eurodollar
Loan comprising part of the same borrowing (including conversions,
extensions and renewals), a per annum interest rate determined pursuant to
the following formula:
Eurodollar Rate = London Interbank Offered Rate
---------------------------------
1 - Eurodollar Reserve Percentage
"Eurodollar Reserve Percentage" means for any day, that percentage
(expressed as a decimal) which is in effect from time to time under
Regulation D of the Board of Governors of the Federal Reserve System (or
any successor), as such regulation may be amended from time to time or any
successor regulation, as the maximum reserve requirement (including,
without limitation, any basic, supplemental, emergency, special, or
marginal reserves) applicable with respect to Eurocurrency liabilities as
that term is defined in Regulation D (or against any other category of
liabilities that includes deposits by reference to which the interest rate
of Eurodollar Loans is determined), whether or not a Lender has any
4
Eurocurrency liabilities subject to such reserve requirement at that time.
Eurodollar Loans shall be deemed to constitute Eurocurrency liabilities and
as such shall be deemed subject to reserve requirements without benefits of
credits for proration, exceptions or offsets that may be available from
time to time to a Lender. The Eurodollar Rate shall be adjusted
automatically on and as of the effective date of any change in the
Eurodollar Reserve Percentage.
"Event of Default" means any of the events or circumstances described
in Section 9.
"Extension of Credit" means the making of any loans (including the
extension of, or conversion into, a Eurodollar Loans).
"Federal Funds Rate" means for any day the rate per annum (rounded
upward, if necessary, to the nearest 1/100th of 1%) equal to the weighted
average of the rates on overnight Federal funds transactions with members
of the Federal Reserve System arranged by Federal funds brokers on such
day, as published by the Federal Reserve Bank of New York on the Business
Day next succeeding such day; provided that (a) if such day is not a
Business Day, the Federal Funds Rate for such day shall be such rate on
such transactions on the next preceding Business Day and (b) if no such
rate is so published on such next preceding Business Day, the Federal Funds
Rate for such day shall be the average rate quoted to the Agent on such day
on such transactions as determined by the Agent.
"Fee Letter" means that certain letter agreement, dated as of Closing
Date, between the Bank and the Borrower, as amended, modified, supplemented
or replaced from time to time.
"GAAP" means generally accepted accounting principles in the United
States applied on a consistent basis.
"Governmental Authority" means any Federal, state, local, provincial
or foreign court or governmental agency, authority, instrumentality or
regulatory body.
"Guarantors" means Highwoods Properties, Inc., a Maryland corporation,
each of the Subsidiaries of Highwoods Properties and the Borrower (other
than the Non-Guarantor Subsidiaries) and each Additional Credit Party that
has executed a Joinder Agreement.
"Interest Payment Date" means (a) as to Base Rate Loans, on the
fifteenth (15th) day of each month and on the Revolving Loan Maturity Date
and (b) as to Eurodollar Loans, on the last day of each applicable Interest
Period and on the Revolving Loan Maturity Date.
"Interest Period" means, as to Eurodollar Loans, a period of one
month's duration, commencing, in each case, on the date of the borrowing
(including continuations and conversions thereof); provided, however, (a)
if any Interest Period would end on a day which is not a Business Day, such
Interest Period shall be extended to the next succeeding Business Day
(except that when the next succeeding Business Day falls in the next
succeeding calendar month, then on the next preceding Business Day), (b) no
Interest
5
Period shall extend beyond the Revolving Loan Maturity Date and (c) where
an Interest Period begins on a day for which there is no numerically
corresponding day in the calendar month in which the Interest Period is to
end, such Interest Period shall end on the last Business Day of such
calendar month.
"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.
"Lien" means any mortgage, pledge, hypothecation, assignment, deposit
arrangement, security interest, encumbrance, lien (statutory or otherwise),
preference, priority or charge of any kind, including, without limitation,
any agreement to give any of the foregoing, any conditional sale or other
title retention agreement, and any lease in the nature thereof.
"Loan" or "Loans" mean revolving loans made hereunder.
"London Interbank Offered Rate" means, with respect to any Eurodollar
Loan for the Interest Period applicable thereto, the rate of interest per
annum (rounded upwards, if necessary, to the nearest 1/100 of 1%) appearing
on Telerate Page 3750 (or any successor page) as the London interbank
offered rate for deposits in Dollars at approximately 11:00 A.M. (London
time) two Business Days prior to the first day of such Interest Period for
a term comparable to such Interest Period; provided, however, if more than
one rate is specified on Telerate Page 3750, the applicable rate shall be
the arithmetic mean of all such rates. If, for any reason, such rate is not
available, the term "London Interbank Offered Rate" shall mean, with
respect to any Eurodollar Loan for the Interest Period applicable thereto,
the rate of interest per annum (rounded upwards, if necessary, to the
nearest 1/100 of 1%) appearing on Reuters Screen LIBO Page as the London
interbank offered rate for deposits in Dollars at approximately 11:00 A.M.
(London time) two Business Days prior to the first day of such Interest
Period for a term comparable to such Interest Period; provided, however, if
more than one rate is specified on Reuters Screen LIBO Page, the applicable
rate shall be the arithmetic mean of all such rates.
"Material Adverse Effect" means a material adverse effect on (a) the
operations, financial condition, business or prospects of the Borrower or a
Guarantor, (b) the ability of the Borrower or a Guarantor to perform its
respective obligations under this Credit Agreement or any of the other
Credit Documents, or (c) the validity or enforceability of this Credit
Agreement, any of the other Credit Documents, or the rights and remedies of
the Lenders hereunder or thereunder taken as a whole.
"Non-Excluded Taxes" has the meaning set forth in Section 3.13.
"Non-Guarantor Subsidiaries" means AP Southeast Portfolio Partners,
L.P., AP-GP Southeast Portfolio Partners, L.P., a Delaware limited
partnership, Highwoods Realty GP Corp., a Delaware limited partnership and
Forsyth-Carter Brokerage, L.L.C.
6
"Note" or "Notes" means the Revolving Loan Notes, individually or
collectively, as appropriate.
"Notice of Borrowing" means a request by the Borrower for a Revolving
Loan, in the form of Exhibit 2.1(b).
"Notice of Continuation/Conversion" means a request by the Borrower to
continue an existing Eurodollar Loan to a new Interest Period or to convert
a Eurodollar Loan to a Base Rate Loan or a Base Rate Loan to a Eurodollar
Loan, in the form of Exhibit 2.1(d).
"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.
"Prime Rate" means the per annum rate of interest established from
time to time by the Bank at its principal office in Charlotte, North
Carolina (or such other principal office of the Bank as communicated in
writing to the Borrower and the Lenders) as its Prime Rate. Any change in
the interest rate resulting from a change in the Prime Rate shall become
effective as of 12:01 a.m. of the Business Day on which each change in the
Prime Rate is announced by the Bank. The Prime Rate is a reference rate
used by the Bank in determining interest rates on certain loans and is not
intended to be the lowest rate of interest charged on any extension of
credit to any debtor.
"Related Credit Agreement" means that certain Credit Agreement between
the Credit Parties, NationsBank, N.A., as "Agent", First Union National
Bank of North Carolina, as "Documentation Agent", and certain other
financial institutions identified therein as "Lenders" dated as of
September 27, 1996, as amended by (i) that certain First Amendment and
Restatement of Credit Agreement dated as of May 27, 1997, and (ii) that
certain letter agreement among such parties dated August 20, 1997 (the
"Letter Agreement"), and as further amended, modified, extended or replaced
from time to time.
"Related Credit Facilities" means those credit facilities provided
under the Related Credit Agreement.
"Related Credit Facility Lenders" means those lenders party to the
Related Credit Agreement.
"Required Lenders" means all Lenders; provided, however, that if any
Lender shall be a Defaulting Lender at such time then such Defaulting
Lender shall be excluded from the determination of Required Lenders at such
time.
"Requirement of Law" means, as to any Person, the articles or
certificate of incorporation and by-laws or other organizational or
governing documents of such Person, and any law, treaty, rule or regulation
or final, non-appealable determination of an arbitrator or a court or other
Governmental Authority, in each case applicable to or binding upon such
Person or to which any of its material property is subject.
7
"Revolving Committed Amount" means ONE HUNDRED FIFTY MILLION DOLLARS
($150,000,000).
"Revolving Loan Commitment Percentage" means, for each Lender, the
percentage identified as its Revolving Loan Commitment Percentage on
Schedule 1.1(a), as such percentage may be modified in connection with any
assignment made in accordance with the provisions of Section 11.3.
"Revolving Loan Maturity Date" means June 30, 1998.
"Revolving Loans" means the Revolving Loans made to the Borrower
pursuant to Section 2.
"Revolving Note" or "Revolving Notes" means the promissory notes of
the Borrower in favor of each of the Lenders evidencing the Revolving Loans
provided pursuant to Section 2, individually or collectively, as
appropriate, as such promissory notes may be amended, modified,
supplemented, extended, renewed or replaced from time to time and as
evidenced in the form of Exhibit 2.1f.
"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.
"Subsidiary" means, as to any Person, (a) any corporation more than
50% of whose stock of any class or classes having by the terms thereof
ordinary voting power to elect a majority of the directors of such
corporation (irrespective of whether or not at the time, any class or
classes of such corporation shall have or might have voting power by reason
of the happening of any contingency) is at the time owned by such Person
directly or indirectly through Subsidiaries, and (b) any partnership,
association, joint venture or other entity in which such person directly or
indirectly through Subsidiaries has more than a 50% equity interest at any
time.
"Unused Commitment" means, for any period, the amount by which (a) the
then applicable aggregate Revolving Committed Amount exceeds (b) the daily
average sum for such period of the outstanding aggregate principal amount
of all Revolving Loans.
"Unused Fee Percentage" means 0.15% per annum.
1.2 Computation of Time Periods and Other Definitional Provisions.
For purposes of computation of periods of time hereunder, the word "from"
means "from and including" and the words "to" and "until" each mean "to but
excluding." References in this Agreement to "Articles", "Sections", "Schedules"
or "Exhibits" shall be to Articles, Sections, Schedules or Exhibits of or to
this Agreement unless otherwise specifically provided.
8
SECTION 2
CREDIT FACILITIES
2.1 Revolving Loans.
(a) Revolving Loan Commitment. Subject to the terms and conditions set
forth herein, each Lender severally agrees to make revolving loans (each a
"Revolving Loan" and collectively the "Revolving Loans") to the Borrower, in
Dollars, at any time and from time to time, during the period from and including
the Effective Date to but not including the Revolving Loan Maturity Date (or
such earlier date if the Revolving Committed Amount has been terminated as
provided herein); provided, however, that (i) the sum of the aggregate amount of
Revolving Loans outstanding shall not exceed the Revolving Committed Amount and
(ii) with respect to each individual Lender, the Lender's pro rata share of
outstanding Revolving Loans shall not exceed such Lender's Revolving Loan
Commitment Percentage of the Revolving Committed Amount. Subject to the terms of
this Credit Agreement (including Section 3.3), the Borrower may borrow, repay
and reborrow Revolving Loans.
(b) Method of Borrowing for Revolving Loans. By no later than 10:00 a.m.
(i) one Business Day prior to the requested borrowing of Revolving Loans that
will be Base Rate Loans or (ii) two Business Days prior to the date of the
requested borrowing of Revolving Loans that will be Eurodollar Loans, the
Borrower shall submit a written Notice of Borrowing in the form of Exhibit
2.1(b) to the Agent (which notice may be by telecopy with the original to
follow) setting forth (A) the amount requested, (B) whether such Revolving Loans
shall accrue interest at the Adjusted Base Rate or the Adjusted Eurodollar Rate,
(C) how the proceeds from such Revolving Loans will be used and (D)
certification that the Borrower has complied in all respects with Section 5;
(c) Funding of Revolving Loans. Upon receipt of a Notice of Borrowing, the
Agent shall promptly inform the Lenders as to the terms thereof. Each Lender
shall make its Revolving Loan Commitment Percentage of the requested Revolving
Loans available to the Agent by 2:00 p.m. on the date specified in the Notice of
Borrowing by deposit, in Dollars, of immediately available funds at the offices
of the Agent at its principal office in Charlotte, North Carolina or at such
other address as the Agent may designate in writing. The amount of the requested
Revolving Loans will then be made available to the Borrower by the Agent by
crediting the account of the Borrower on the books of such office of the Agent,
to the extent the amount of such Revolving Loans are made available to the
Agent.
No Lender shall be responsible for the failure or delay by any other Lender
in its obligation to make Revolving Loans hereunder; provided, however, that the
failure of any Lender to fulfill its obligations hereunder shall not relieve any
other Lender of its obligations hereunder. Unless the Agent shall have been
notified by any Lender prior to the date of any such Revolving Loan that such
Lender does not intend to make available to the Agent its portion of the
Revolving Loans to be made on such date, the Agent may assume that such Lender
has made such amount available to the
9
Agent on the date of such Revolving Loans, and the Agent in reliance upon such
assumption, may (in its sole discretion but without any obligation to do so)
make available to the Borrower a corresponding amount. If such corresponding
amount is not in fact made available to the Agent, the Agent shall be able to
recover such corresponding amount from such Lender. If such Lender does not pay
such corresponding amount forthwith upon the Agent's demand therefor, the Agent
will promptly notify the Borrower, and the Borrower shall immediately pay such
corresponding amount to the Agent. The Agent shall also be entitled to recover
from the Lender or the Borrower, as the case may be, interest on such
corresponding amount in respect of each day from the date such corresponding
amount was made available by the Agent to the Borrower to the date such
corresponding amount is recovered by the Agent at a per annum rate equal to (i)
from the Borrower at the applicable rate for such Revolving Loan pursuant to the
Notice of Borrowing and (ii) from a Lender at the Federal Funds Rate.
(d) Continuations and Conversions. Upon receipt of a Notice of
Continuation/Conversion, the Agent shall promptly inform the Lenders as to the
terms thereof. Subject to the terms of Section 5.2, the Borrower shall have the
option, on any Business Day, to continue existing Eurodollar Loans for a
subsequent Interest Period, to convert Base Rate Loans into Eurodollar Loans or
to convert Eurodollar Loans into Base Rate Loans; provided, however, that (i)
each such continuation or conversion must be requested by the Borrower pursuant
to a written Notice of Continuation/Conversion, in the form of Exhibit 2.1(d),
in compliance with the terms set forth below, (ii) except as provided in Section
3.11, Eurodollar Loans may only be continued or converted into Base Rate Loans
on the last day of the Interest Period applicable thereto, (iii) Eurodollar
Loans may not be continued nor may Base Rate Loans be converted into Eurodollar
Loans during the existence and continuation of a Default or Event of Default and
(iv) any request to continue a Eurodollar Loan that fails to comply with the
terms hereof or any failure to request a continuation of a Eurodollar Loan at
the end of an Interest Period shall constitute a conversion to a Base Rate Loan
on the last day of the applicable Interest Period. Each continuation or
conversion must be requested by the Borrower no later than 11:00 a.m. (A) one
Business Day prior to a requested conversion of a Eurodollar Loan to a Base Rate
Loan or (B) two Business Days prior to the date for a requested continuation of
a Eurodollar Loan or conversion of a Base Rate Loan to a Eurodollar Loan, in
each case pursuant to a written Notice of Continuation/Conversion submitted to
the Agent.
(e) Minimum Amounts. Each request for a borrowing, conversion or
continuation shall be subject to the requirements that (i) each Eurodollar Loan
shall be in a minimum amount of $5,000,000 and in integral multiples of $500,000
in excess thereof, (ii) each Base Rate Loan shall be in a minimum amount of the
lesser of $1,000,000 (and integral multiples of $500,000 in excess thereof) or
the remaining amount available under the Revolving Committed Amount and (iii) no
more than five (5) Eurodollar Loans shall be outstanding hereunder at any one
time.
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(f) Notes. The Revolving Loans made by each Lender shall be evidenced by a
duly executed promissory note of the Borrower to each applicable Lender in the
face amount of its Revolving Loan Commitment Percentage of the Revolving
Committed Amount in substantially the form of Exhibit 2.1(f).
SECTION 3
GENERAL PROVISIONS APPLICABLE TO LOANS
3.1 Interest.
(a) Interest Rate. All Base Rate Loans shall accrue interest at the
Adjusted Base Rate and all Eurodollar Loans shall accrue interest at the
Adjusted Eurodollar Rate.
(b) Default Rate of Interest. Upon the occurrence, and during the
continuance, of an Event of Default, the principal of and, to the extent
permitted by law, interest on the Loans and any other amounts owing hereunder or
under the other Credit Documents (including without limitation fees and
expenses) shall bear interest, payable on demand, at a per annum rate equal to
4% plus the rate which would otherwise be applicable (or if no rate is
applicable, then the rate for Revolving Loans that are Base Rate Loans plus four
percent (4%) per annum).
(c) Late Charges. In the event any payment of interest or principal is
delinquent more than fifteen (15) days, the Borrower will pay to the Agent for
the benefit of the Lenders a late charge of four percent (4%) of the amount of
the overdue payment. This provision for late charges shall not be deemed to
extend the time for payment or be a "grace period" or "cure period" that gives
the Borrower a right to cure a Default or Event of Default. Imposition of such
late charges is not contingent upon giving of any notice or the lapse of any
cure period provided for in the Credit Agreement.
(d) Interest Payments. Interest on Loans shall be due and payable in
arrears on each Interest Payment Date. If an Interest Payment Date falls on a
date which is not a Business Day, such Interest Payment Date shall be deemed to
be the next succeeding Business Day, except that in the case of Eurodollar Loans
where the next succeeding Business Day falls in the next succeeding calendar
month, then on the next preceding Business Day.
3.2 Place and Manner of Payments.
All payments of principal, interest, fees, expenses and other amounts to be
made by a Credit Party under this Agreement shall be received not later than
12:00 noon on the date when due, in Dollars and in immediately available funds,
by the Agent at its offices in Charlotte, North Carolina. Payments received
after such time shall be deemed to have been received on the next Business Day.
The Borrower shall, at the time it makes any payment under this Agreement,
specify to the Agent, the Loans, fees or other amounts payable by the Borrower
hereunder to which such payment is to be
11
applied (and in the event that it fails to specify, or if such application would
be inconsistent with the terms hereof, the Agent shall, subject to Section 3.7,
distribute such payment to the Lenders in such manner as the Agent may deem
appropriate). The Agent will distribute such payments to the Lenders on the date
received if any such payment is received prior to 12:00 p.m.; otherwise the
Agent will distribute such payment to the Lenders on the next succeeding
Business Day. Whenever any payment hereunder shall be stated to be due on a day
which is not a Business Day, the due date thereof shall be extended to the next
succeeding Business Day (subject to accrual of interest and fees for the period
of such extension), except that in the case of Eurodollar Loans, if the
extension would cause the payment to be made in the next following calendar
month, then such payment shall instead be made on the next preceding Business
Day. If the Agent fails to timely forward payment to a Lender it shall pay such
Lender interest at the Federal Funds Rate until such payment is made.
3.3 Prepayments.
(a) Voluntary Prepayments. The Borrower shall have the right to prepay
Loans in whole or in part from time to time without premium or penalty;
provided, however, that (i) Eurodollar Loans may only be prepaid on two Business
Days' prior written notice to the Agent and any prepayment of Eurodollar Loans
will be subject to Section 3.14 and (ii) each such partial prepayment of Loans
shall be in the minimum principal amount of $100,000 and integral multiples of
$100,000 in excess thereof.
(b) Mandatory Prepayments. If at any time the sum of the aggregate amount
of Revolving Loans outstanding exceeds the Revolving Committed Amount, the
Borrower shall immediately make a principal payment to the Agent in the manner
and in an amount necessary to be in compliance with Section 2.1.
(c) Application of Prepayments. All amounts required to be paid pursuant to
Section 3.3(b) shall be applied first to Base Rate Loans. If the amount required
to be paid under Section 3.3(b) exceeds the aggregate amount of Base Rate Loans
outstanding, such excess shall be applied second to Eurodollar Loans. All
prepayments hereunder shall be subject to Section 3.14.
3.4 Unused Fees.
In consideration of the Revolving Committed Amount being made available by
the Lenders hereunder, the Borrower agrees to pay to the Agent, for the pro rata
benefit of each applicable Lender (based on each Lender's Revolving Loan
Percentage of the Revolving Committed Amount), a fee equal to the Unused Fee
Percentage on the Unused Commitment (the "Unused Fees"). The accrued Unused Fees
shall commence to accrue on the Closing Date, shall be calculated as of the last
day of December 1997 and March 1998 and the Revolving Loan Maturity Date and
shall be due and payable in arrears on January 15 and April 15, 1998 (as well as
on the Revolving Loan Maturity Date and on any date that the Revolving Committed
Amount is reduced) for the immediately preceding calendar quarter (or portion
thereof), beginning with the first of such dates to occur after the Closing
Date.
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3.5 Payment in full at Maturity.
On the Revolving Loan Maturity Date, the entire outstanding principal
balance of all Revolving Loans, together with accrued but unpaid interest and
all other sums owing with respect thereto, shall be due and payable in full,
unless accelerated sooner pursuant to Section 9.
3.6 Computations of Interest and Fees.
(a) All computations of interest and fees hereunder shall be made on the
basis of the actual number of days elapsed over a year of 360 days. Interest
shall accrue from and include the date of borrowing (or continuation or
conversion) but exclude the date of payment.
(b) It is the intent of the Lenders and the Credit Parties to conform to
and contract in strict compliance with applicable usury law from time to time in
effect. All agreements between the Lenders and the Borrower are hereby limited
by the provisions of this paragraph which shall override and control all such
agreements, whether now existing or hereafter arising and whether written or
oral. In no way, nor in any event or contingency (including but not limited to
prepayment or acceleration of the maturity of any obligation), shall the
interest taken, reserved, contracted for, charged, or received under this Credit
Agreement, under the Notes or otherwise, exceed the maximum nonusurious amount
permissible under applicable law. If, from any possible construction of any of
the Credit Documents or any other document, interest would otherwise be payable
in excess of the maximum nonusurious amount, any such construction shall be
subject to the provisions of this paragraph and such documents shall be
automatically reduced to the maximum nonusurious amount permitted under
applicable law, without the necessity of execution of any amendment or new
document. If any Lender shall ever receive anything of value which is
characterized as interest on the Loans under applicable law and which would,
apart from this provision, be in excess of the maximum lawful amount, an amount
equal to the amount which would have been excessive interest shall, without
penalty, be applied to the reduction of the principal amount owing on the Loans
and not to the payment of interest, or refunded to the Borrower or the other
payor thereof if and to the extent such amount which would have been excessive
exceeds such unpaid principal amount of the Loans. The right to demand payment
of the Loans or any other indebtedness evidenced by any of the Credit Documents
does not include the right to receive any interest which has not otherwise
accrued on the date of such demand, and the Lenders do not intend to charge or
receive any unearned interest in the event of such demand. All interest paid or
agreed to be paid to the Lenders with respect to the Loans shall, to the extent
permitted by applicable law, be amortized, prorated, allocated, and spread
throughout the full stated term (including any renewal or extension) of the
Loans so that the amount of interest on account of such indebtedness does not
exceed the maximum nonusurious amount permitted by applicable law.
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3.7 Pro Rata Treatment.
Except to the extent otherwise provided herein each Revolving Loan
borrowing, each payment or prepayment of principal and/or interest of any Loan,
each payment of fees (other than the Administrative Fees retained by the Agent
for its own account), each reduction of the Revolving Committed Amount, and each
conversion or continuation of any Loan, shall (except as otherwise provided in
Section 3.11) be allocated pro rata among the relevant Lenders in accordance
with the respective Revolving Loan Commitment Percentages of such Lenders (or,
if the Commitments of such Lenders have expired or been terminated, in
accordance with the respective principal amounts of the outstanding Loans of
such Lenders); provided that, if any Lender shall have failed to pay its
applicable pro rata share of any Revolving Loan, then any amount to which such
Lender would otherwise be entitled pursuant to this subsection (a) shall instead
be payable to the Agent until the share of such Loan not funded by such Lender
has been repaid; provided further, that in the event any amount paid to any
Lender pursuant to this subsection (a) is rescinded or must otherwise be
returned by the Agent, each Lender shall, upon the request of the Agent, repay
to the Agent the amount so paid to such Lender, with interest for the period
commencing on the date such payment is returned by the Agent until the date the
Agent receives such repayment at a rate per annum equal to, during the period to
but excluding the date two Business Days after such request, the Federal Funds
Rate, and thereafter, the Base Rate plus two percent (2%) per annum; and
3.8 Sharing of Payments.
The Lenders agree among themselves that, except to the extent otherwise
provided herein, in the event that any Lender shall obtain payment in respect of
any Loan or any other obligation owing to such Lender under this Credit
Agreement through the exercise of a right of setoff, banker's lien or
counterclaim, or pursuant to a secured claim under Section 506 of the Bankruptcy
Code or other security or interest arising from, or in lieu of, such secured
claim, received by such Lender under any applicable bankruptcy, insolvency or
other similar law or otherwise, or by any other means, in excess of its pro rata
share of such payment as provided for in this Credit Agreement, such Lender
shall promptly pay in cash or purchase from the other Lenders a participation in
such Loans and other obligations in such amounts, and make such other
adjustments from time to time, as shall be equitable to the end that all Lenders
share such payment in accordance with their respective ratable shares as
provided for in this Credit Agreement. The Lenders further agree among
themselves that if payment to a Lender obtained by such Lender through the
exercise of a right of setoff, banker's lien, counterclaim or other event as
aforesaid shall be rescinded or must otherwise be restored, each Lender which
shall have shared the benefit of such payment shall, by payment in cash or a
repurchase of a participation theretofore sold, return its share of that benefit
(together with its share of any accrued interest payable with respect thereto)
to each Lender whose payment shall have been rescinded or otherwise restored.
The Borrower agrees that any Lender so purchasing such a participation may, to
the fullest extent permitted by law, exercise all rights of payment, including
setoff, banker's lien or counterclaim, with respect to such participation as
fully as if such Lender were a holder of such Loan or other obligation in the
amount of such participation. Except as otherwise expressly provided in this
Credit Agreement, if any Lender or an Agent shall fail to remit to the Agent or
any other Lender an amount payable by such Lender or such Agent to such Agent or
such other Lender pursuant to this Credit Agreement on the date when such amount
is due, such payments shall be made together with interest thereon for each date
from
14
the date such amount is due until the date such amount is paid to such Agent or
such other Lender at a rate per annum equal to the Federal Funds Rate. If under
any applicable bankruptcy, insolvency or other similar law, any Lender receives
a secured claim in lieu of a setoff to which this Section 3.8 applies, such
Lender shall, to the extent practicable, exercise its rights in respect of such
secured claim in a manner consistent with the rights of the Lenders under this
Section 3.8 to share in the benefits of any recovery on such secured claim.
3.9 Capital Adequacy.
If, after the date hereof, any Lender has determined that the adoption or
the becoming effective of, or any change in, or any change by any Governmental
Authority, central bank or comparable agency charged with the interpretation or
administration thereof in the interpretation or administration of, any
applicable law, rule or regulation regarding capital adequacy, or compliance by
such Lender, or its parent corporation, with any request or directive regarding
capital adequacy (whether or not having the force of law) of any such authority,
central bank or comparable agency, has or would have the effect of reducing the
rate of return on such Lender's (or parent corporation's) capital or assets as a
consequence of its commitments or obligations hereunder to a level below that
which such Lender, or its parent corporation, could have achieved but for such
adoption, effectiveness, change or compliance (taking into consideration such
Lender's (or parent corporation's) policies with respect to capital adequacy),
then, upon notice from such Lender to the Borrower, the Borrower shall be
obligated to pay to such Lender such additional amount or amounts as will
compensate such Lender on an after-tax basis (after taking into account
applicable deductions and credits in respect of the amount indemnified) for such
reduction. Each determination by any such Lender of amounts owing under this
Section shall, absent manifest error, be conclusive and binding on the parties
hereto. This covenant shall survive the termination of this Credit Agreement and
the payment of the Loans and all other amounts payable hereunder.
3.10 Inability To Determine Eurodollar Rate.
If prior to the first day of any Interest Period, the Agent shall have
determined in good faith (which determination shall be conclusive and binding
upon the Borrower) that, by reason of circumstances affecting the relevant
market, adequate and reasonable means do not exist for ascertaining the
Eurodollar Rate for such Interest Period, the Agent shall give telecopy or
telephonic notice thereof to the Borrower and the Lenders as soon as practicable
thereafter, and will also give prompt written notice to the Borrower when such
conditions no longer exist. If such notice is given (a) any Eurodollar Loans
requested to be made on the first day of such Interest Period shall be made as
Base Rate Loans, (b) any Loans that were to have been converted on the first day
of such Interest Period to or continued as Eurodollar Loans shall be converted
to or continued as Base Rate Loans and (c) any outstanding Eurodollar Loans
shall be converted, on the first day of such Interest Period, to Base Rate
Loans. Until such notice has been withdrawn by the Agent, no further Eurodollar
Loans shall be made or continued as such, nor shall the Borrower have the right
to convert Base Rate Loans to Eurodollar Loans.
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3.11 Illegality to Make Eurodollar Loans.
Notwithstanding any other provision herein, if the adoption of or any
change in any Requirement of Law or in the interpretation or application thereof
occurring after the Closing Date shall make it unlawful for any Lender to make
or maintain Eurodollar Loans as contemplated by this Credit Agreement, (a) such
Lender shall promptly give written notice of such circumstances to the Borrower
and the Agent (which notice shall be withdrawn whenever such circumstances no
longer exist), (b) the commitment of such Lender hereunder to make Eurodollar
Loans, continue Eurodollar Loans as such and convert a Base Rate Loan to
Eurodollar Loans shall forthwith be canceled and, until such time as it shall no
longer be unlawful for such Lender to make or maintain Eurodollar Loans, such
Lender shall then have a commitment only to make a Base Rate Loan when a
Eurodollar Loan is requested and (c) such Lender's Loans then outstanding as
Eurodollar Loans, if any, shall be converted automatically to Base Rate Loans on
the respective last days or the then current Interest Periods with respect to
such Loans or within such earlier period as required by law. If any such
conversion of a Eurodollar Loan occurs on a day which is not the last day of the
then current Interest Period with respect thereto, the Borrower shall pay to
such Lender such amounts, if any, as may be required pursuant to Section 3.14.
3.12 Changes in Requirements of Law.
If the adoption of or any change in any Requirement of Law or in the
interpretation or application thereof applicable to any Lender, or compliance by
any Lender with any request or directive (whether or not having the force of
law) from any central bank or other Governmental Authority, in each case made
subsequent to the Closing Date (or, if later, the date on which such Lender
becomes a Lender):
(a) shall subject such Lender to any tax of any kind whatsoever with
respect to any Eurodollar Loans made by it or its obligation to make
Eurodollar Loans, or change the basis of taxation of payments to such
Lender in respect thereof (except for Non-Excluded Taxes covered by Section
3.13 (including Non-Excluded Taxes imposed solely by reason of any failure
of such Lender to comply with its obligations under Section 3.13(b)) and
changes in taxes measured by or imposed upon the overall net income, or
franchise tax (imposed in lieu of such net income tax), of such Lender or
its applicable lending office, branch, or any affiliate thereof);
(b) shall impose, modify or hold applicable any reserve, special
deposit, compulsory loan or similar requirement against assets held by,
deposits or other liabilities in or for the account of, advances, loans or
other extensions of credit by, or any other acquisition of funds by, any
office of such Lender which is not otherwise included in the determination
of the Eurodollar Rate hereunder; or
(c) shall impose on such Lender any other condition (excluding any tax
of any kind whatsoever);
and the result of any of the foregoing is to increase the cost to such Lender,
by an amount which such Lender deems to be material, of making, converting into,
continuing or maintaining Eurodollar
16
Loans or to reduce any amount receivable hereunder in respect thereof, then, in
any such case, upon notice to the Borrower from such Lender, through the Agent,
in accordance herewith, the Borrower shall be obligated to promptly pay such
Lender, upon its demand, any additional amounts necessary to compensate such
Lender on an after-tax basis (after taking into account applicable deductions
and credits in respect of the amount indemnified) for such increased cost or
reduced amount receivable, provided that, in any such case, the Borrower may
elect to convert the Eurodollar Loans made by such Lender hereunder to Base Rate
Loans by giving the Agent at least one Business Day's notice of such election,
in which case the Borrower shall promptly pay to such Lender, upon demand,
without duplication, such amounts, if any, as may be required pursuant to
Section 3.14. If any Lender becomes entitled to claim any additional amounts
pursuant to this Section 3.12, it shall provide prompt notice thereof to the
Borrower, through the Agent, certifying (x) that one of the events described in
this Section 3.12 has occurred and describing in reasonable detail the nature of
such event, (y) as to the increased cost or reduced amount resulting from such
event and (z) as to the additional amount demanded by such Lender and a
reasonably detailed explanation of the calculation thereof. Such a certificate
as to any additional amounts payable pursuant to this Section 3.12 submitted by
such Lender, through the Agent, to the Borrower shall be conclusive and binding
on the parties hereto in the absence of manifest error. This covenant shall
survive the termination of this Credit Agreement and the payment of the Loans
and all other amounts payable hereunder.
3.13 Taxes.
Except as provided below in this Section 3.13, all payments made by the
Borrower under this Credit Agreement and any Notes shall be made free and clear
of, and without deduction or withholding for or on account of, any present or
future income, stamp or other taxes, levies, imposts, duties, charges, fees,
deductions or withholdings, now or hereafter imposed, levied, collected,
withheld or assessed by any court, or governmental body, agency or other
official, excluding taxes measured by or imposed upon the overall net income of
any Lender or its applicable lending office, or any branch or affiliate thereof,
and all franchise taxes, branch taxes, taxes on doing business or taxes on the
overall capital or net worth of any Lender or its applicable lending office, or
any branch or affiliate thereof, in each case imposed in lieu of net income
taxes: (i) by the jurisdiction under the laws of which such Lender, applicable
lending office, branch or affiliate is organized or is located, or in which its
principal executive office is located, or any nation within which such
jurisdiction is located or any political subdivision thereof; or (ii) by reason
of any connection between the jurisdiction imposing such tax and such Lender,
applicable lending office, branch or affiliate other than a connection arising
solely from such Lender having executed, delivered or performed its obligations,
or received payment under or enforced, this Credit Agreement or any Notes. If
any such non-excluded taxes, levies, imposts, duties, charges, fees, deductions
or withholdings ("Non-Excluded Taxes") are required to be withheld from any
amounts payable to an Agent or any Lender hereunder or under any Notes, (A) the
amounts so payable to an Agent or such Lender shall be increased to the extent
necessary to yield to an Agent or such Lender (after payment of all Non-Excluded
Taxes) interest or any such other amounts payable hereunder at the rates or in
the amounts specified in this Credit Agreement and any Notes, provided, however,
that the Borrower shall be entitled to deduct and withhold any Non-Excluded
Taxes and shall not be required to increase any such amounts payable to any
Lender that is not organized under the laws of the United States of America or a
state thereof if such Lender fails to comply with the requirements of paragraph
(b) of this Section 3.13 whenever any Non-Excluded Taxes are payable by the
17
Borrower, and (B) as promptly as possible after requested the Borrower shall
send to such Agent for its own account or for the account of such Lender, as the
case may be, a certified copy of an original official receipt received by the
Borrower showing payment thereof. If the Borrower fails to pay any Non-Excluded
Taxes when due to the appropriate taxing authority or fails to remit to the
Agent the required receipts or other required documentary evidence, the Borrower
shall indemnify the Agent and any Lender for any incremental taxes, interest or
penalties that may become payable by the Agent or any Lender as a result of any
such failure. The agreements in this subsection shall survive the termination of
this Credit Agreement and the payment of the Loans and all other amounts payable
hereunder.
3.14 Indemnity as to Eurodollar Loans.
The Borrower promises to indemnify each Lender and to hold each Lender
harmless from any loss or expense which such Lender may sustain or incur as a
consequence of (a) default by the Borrower in making a borrowing of, conversion
into or continuation of Eurodollar Loans after the Borrower has given a notice
requesting the same in accordance with the provisions of this Credit Agreement,
(b) default by the Borrower in making any prepayment of a Eurodollar Loan after
the Borrower has given a notice thereof in accordance with the provisions of
this Credit Agreement and (c) the making of a prepayment of Eurodollar Loans on
a day which is not the last day of an Interest Period with respect thereto. Such
indemnification may include an amount equal to (i) the amount of interest which
would have accrued on the amount so prepaid, or not so borrowed, converted or
continued, for the period from the date of such prepayment or of such failure to
borrow, convert or continue to the last day of the applicable Interest Period
(or, in the case of a failure to borrow, convert or continue, the Interest
Period that would have commenced on the date of such failure) in each case at
the applicable rate of interest for such Eurodollar Loans provided for herein
(excluding, however, the Applicable Percentage included therein, if any) minus
(ii) the amount of interest (as reasonably determined by such Lender) which
would have accrued to such Lender on such amount by placing such amount on
deposit for a comparable period with leading banks in the interbank Eurodollar
market. The agreements in this Section shall survive the termination of this
Credit Agreement and the payment of the Loans and all other amounts payable
hereunder.
SECTION 4
GUARANTY
4.1 Guaranty of Payment.
Subject to Section 4.7 below, each of the Guarantors hereby, jointly and
severally, unconditionally guarantees to each Lender and the Agent the prompt
payment of the Credit Party Obligations in full when due (whether at stated
maturity, as a mandatory prepayment, by acceleration or otherwise). The
Guarantors additionally, jointly and severally, unconditionally guarantee to
each Lender, and the Agent the timely performance of all other obligations under
the Credit Documents. This Guaranty is a guaranty of payment and not of
collection and is a continuing guaranty and shall apply to all Credit Party
Obligations whenever arising.
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4.2 Obligations Unconditional.
The obligations of the Guarantors hereunder are absolute and unconditional,
irrespective of the value, genuineness, validity, regularity or enforceability
of any of the Credit Documents, or any other agreement or instrument referred to
therein, to the fullest extent permitted by applicable law, irrespective of any
other circumstance whatsoever which might otherwise constitute a legal or
equitable discharge or defense of a surety or guarantor. Each Guarantor agrees
that this Guaranty may be enforced by the Lenders without the necessity at any
time of resorting to or exhausting any other security or collateral and without
the necessity at any time of having recourse to the Notes or any other of the
Credit Documents or any collateral, if any, hereafter securing the Credit Party
Obligations or otherwise and each Guarantor hereby waives the right (including,
without limitation, any rights under Section 26-7 et seq. of North Carolina
General Statutes) to require the Lenders to proceed against the Borrower or any
other Person (including a co-guarantor) or to require the Lenders to pursue any
other remedy or enforce any other right. Each Guarantor further agrees that it
shall have no right of subrogation, indemnity, reimbursement or contribution
against the Borrower or any other Guarantor of the Credit Party Obligations for
amounts paid under this Guaranty until such time as the Lenders have been paid
in full, all Commitments under the Credit Agreement have been terminated and no
Person or Governmental Authority shall have any right to request any return or
reimbursement of funds from the Lenders in connection with monies received under
the Credit Documents. Each Guarantor further agrees that nothing contained
herein shall prevent the Lenders from suing on the Notes or any of the other
Credit Documents or foreclosing its security interest in or Lien on any
collateral, if any, securing the Credit Party Obligations or from exercising any
other rights available to it under this Credit Agreement, the Notes, any other
of the Credit Documents, or any other instrument of security, if any, and the
exercise of any of the aforesaid rights and the completion of any foreclosure
proceedings shall not constitute a discharge of any of any Guarantor's
obligations hereunder; it being the purpose and intent of each Guarantor that
its obligations hereunder shall be absolute, independent and unconditional under
any and all circumstances. Neither any Guarantor's obligations under this
Guaranty nor any remedy for the enforcement thereof shall be impaired, modified,
changed or released in any manner whatsoever by an impairment, modification,
change, release or limitation of the liability of the Borrower or by reason of
the bankruptcy or insolvency of the Borrower. Each Guarantor waives any and all
notice of the creation, renewal, extension or accrual of any of the Credit Party
Obligations and notice of or proof of reliance of by any Agent or any Lender
upon this Guarantee or acceptance of this Guarantee. The Credit Party
Obligations, and any of them, shall conclusively be deemed to have been created,
contracted or incurred, or renewed, extended, amended or waived, in reliance
upon this Guarantee. All dealings between the Borrower and any of the
Guarantors, on the one hand, and the Agent and the Lenders, on the other hand,
likewise shall be conclusively presumed to have been had or consummated in
reliance upon this Guarantee.
4.3 Modifications.
Each Guarantor agrees that (a) all or any part of the security now or
hereafter held for the Credit Party Obligations, if any, may be exchanged,
compromised or surrendered from time to time; (b) the Lenders shall not have any
obligation to protect, perfect, secure or insure any such security interests,
liens or encumbrances now or hereafter held, if any, for the Credit Party
Obligations or the properties subject thereto; (c) the time or place of payment
of the Credit Party Obligations may be
19
changed or extended, in whole or in part, to a time certain or otherwise, and
may be renewed or accelerated, in whole or in part; (d) the Borrower and any
other party liable for payment under the Credit Documents may be granted
indulgences generally; (e) any of the provisions of the Notes or any of the
other Credit Documents may be modified, amended or waived; (f) any party
(including any co-guarantor) liable for the payment thereof may be granted
indulgences or be released; and (g) any deposit balance for the credit of the
Borrower or any other party liable for the payment of the Credit Party
Obligations or liable upon any security therefor may be released, in whole or in
part, at, before or after the stated, extended or accelerated maturity of the
Credit Party Obligations, all without notice to or further assent by such
Guarantor, which shall remain bound thereon, notwithstanding any such exchange,
compromise, surrender, extension, renewal, acceleration, modification,
indulgence or release.
4.4 Waiver of Rights.
Each Guarantor expressly waives to the fullest extent permitted by
applicable law: (a) notice of acceptance of this Guaranty by the Lenders and of
all extensions of credit to the Borrower by the Lenders; (b) presentment and
demand for payment or performance of any of the Credit Party Obligations; (c)
protest and notice of dishonor or of default (except as specifically required in
the Credit Agreement) with respect to the Credit Party Obligations or with
respect to any security therefor; (d) notice of the Lenders obtaining, amending,
substituting for, releasing, waiving or modifying any security interest, lien or
encumbrance, if any, hereafter securing the Credit Party Obligations, or the
Lenders' subordinating, compromising, discharging or releasing such security
interests, liens or encumbrances, if any; (e) all other notices to which such
Guarantor might otherwise be entitled; and (f) demand for payment under this
Guaranty.
4.5 Reinstatement.
The obligations of the Guarantors under this Section 4 shall be
automatically reinstated if and to the extent that for any reason any payment by
or on behalf of any Person in respect of the Credit Party Obligations is
rescinded or must be otherwise restored by any holder of any of the Credit Party
Obligations, whether as a result of any proceedings in bankruptcy or
reorganization or otherwise, and each Guarantor agrees that it will indemnify
the Agent and each Lender on demand for all reasonable costs and expenses
(including, without limitation, reasonable fees of counsel) incurred by the
Agent or such Lender in connection with such rescission or restoration,
including any such costs and expenses incurred in defending against any claim
alleging that such payment constituted a preference, fraudulent transfer or
similar payment under any bankruptcy, insolvency or similar law.
4.6 Remedies.
The Guarantors agree that, as between the Guarantors, on the one hand, and
the 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 (and shall
be deemed to have become automatically due and payable in the circumstances
provided in Section 9) notwithstanding any stay, injunction or other prohibition
preventing such declaration (or preventing such Credit Party Obligations from
becoming automatically due and payable) as against any other Person and that, in
the event of such
20
declaration (or such Credit Party Obligations being deemed to have become
automatically due and payable), such Credit Party Obligations (whether or not
due and payable by any other Person) shall forthwith become due and payable by
the Guarantors.
4.7 Limitation of Guaranty.
Notwithstanding any provision to the contrary contained herein or in any of
the other Credit Documents, to the extent the obligations of any Guarantor shall
be adjudicated to be invalid or unenforceable for any reason (including, without
limitation, because of any applicable state or federal law relating to
fraudulent conveyances or transfers) then the obligations of such Guarantor
hereunder shall be limited to the maximum amount that is permissible under
applicable law (whether federal or state and including, without limitation, the
Bankruptcy Code).
SECTION 5
CONDITIONS PRECEDENT
5.1 Closing Conditions.
The obligation of the Lenders to enter into this Credit Agreement and make
the initial Extension of Credit is subject to satisfaction of the following
conditions:
(a) Executed Credit Documents. Receipt by the Agent of duly executed
copies of: (i) this Credit Agreement; (ii) the Notes; and (iii) all other
Credit Documents, each in form and substance reasonably acceptable to the
Agent in its sole discretion.
(b) Partnership Documents. Receipt by the Agent of the following:
(i) Certificates of Authorization. Certificate of authorization
of the general partner of the Borrower (and each other Credit Party
that is a partnership) as of the Effective Date, approving and
adopting the Credit Documents to be executed by the Borrower (or such
other Credit Party) and authorizing the execution and delivery
thereof.
(ii) Partnership Agreement. Certified copies of the partnership
agreement of the Borrower (and each other Credit Party that is a
partnership), together with all amendments thereto.
(iii) Certificates of Good Standing or Existence. Certificate of
good standing or existence for the Borrower (and each other Credit
Party that is a partnership) issued as of a recent date by its state
of organization and each other state where the failure to qualify or
be in good standing could have a Material Adverse Effect.
(c) Corporate Documents. Receipt by the Agent of the following:
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(i) Charter Documents. Copies of the articles or certificates of
incorporation or other charter documents of Highwoods Properties (and
each other Credit Party that is a corporation) certified to be true
and complete as of a recent date by the appropriate Governmental
Authority of the state or other jurisdiction of its incorporation and
certified by a secretary or assistant secretary of Highwoods
Properties (and each other Credit Party that is a corporation) to be
true and correct as of the Effective Date.
(ii) Bylaws. A copy of the bylaws of Highwoods Properties (and
each other Credit Party that is a corporation) certified by a
secretary or assistant secretary of Highwoods Properties to be true
and correct as of the Effective Date.
(iii) Resolutions. Copies of resolutions of the Board of
Directors of Highwoods Properties (and each other Credit Party that is
a corporation) approving and adopting the Credit Documents to which it
is a party, the transactions contemplated therein and authorizing
execution and delivery thereof, certified by a secretary or assistant
secretary of Highwoods Properties (and each other Credit Party that is
a corporation) to be true and correct and in force and effect as of
the Effective Date.
(iv) Good Standing. Copies of (A) certificates of good standing,
existence or its equivalent with respect to Highwoods Properties (and
each other Credit Party that is a corporation) certified as of a
recent date by the appropriate Governmental Authorities of the state
or other jurisdiction of incorporation and each other jurisdiction in
which the failure to so qualify and be in good standing could have a
Material Adverse Effect and (B) to the extent available, a certificate
indicating payment of all corporate franchise taxes certified as of a
recent date by the appropriate governmental taxing authorities.
(v) Incumbency. An incumbency certificate of Highwoods Properties
(and each other Credit Party that is a corporation) certified by a
secretary or assistant secretary to be true and correct as of the
Effective Date.
(d) Financial Statements. Receipt by the Agent and the Lenders of the
audited consolidated financial statements of the Credit Parties, dated as
of December 31, 1996, and the unaudited consolidated financial statements
of the Credit Parties dated as of September 30, 1997.
(e) Opinion of Counsel. Receipt by the Agent of an opinion, or
opinions (which shall cover, among other things, authority, legality,
validity, binding effect, and enforceability), reasonably satisfactory to
the Agent, addressed to the Agent on behalf of the Lenders and dated as of
the Effective Date, from legal counsel to the Credit Parties.
(f) Evidence of Insurance. Receipt by the Agent of copies of insurance
policies or certificates of insurance of the Credit Parties evidencing
liability and casualty insurance
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meeting the requirements set forth in the Credit Documents, including, but
not limited to, naming the Agent as secondary loss payee on behalf of the
Lenders subject only to a first priority loss payee clause relating to the
Related Credit Facilities.
(g) Material Adverse Effect. There shall not have occurred a change
since December 31, 1996 that has had or could reasonably be expected to
have a Material Adverse Effect.
(h) Litigation. There shall not exist any pending or threatened
action, suit, investigation or proceeding against a Credit Party that would
have or would reasonably be expected to have a Material Adverse Effect.
(i) Officer's Certificates. The Agent shall have received a
certificate or certificates executed by the general partner of the Borrower
and the chief financial officer of the Highwoods Properties as of the
Effective Date stating that (i) each of the Borrower and Highwoods
Properties is in compliance with all existing material financial
obligations, (ii) no action, suit, investigation or proceeding is pending
or threatened in any court or before any arbitrator or governmental
instrumentality that purports to effect any Credit Party or any transaction
contemplated by the Credit Documents, if such action, suit, investigation
or proceeding could have or could be reasonably expected to have a Material
Adverse Effect, (iii) the financial statements and information delivered
pursuant to Section 5.1(d) are true and accurate in all material respects
and (iv) except for the matters noted in such certificates, immediately
after giving effect to this Credit Agreement, the other Credit Documents
and all the transactions contemplated therein to occur on such date, (A)
each Credit Party is Solvent, (B) no Default or Event of Default exists,
(C) all representations and warranties contained herein and in the other
Credit Documents are true and correct in all material respects, and (D) the
Credit Parties are in compliance with all requirements of the Related
Credit Facilities.
(j) Fees and Expenses. Payment by the Credit Parties of all fees and
expenses owed by them to the Lenders and the Agent, including, without
limitation, payment to the Agent of the fees set forth in the Fee Letter.
(k) Other. Receipt by the Lenders of such other documents,
instruments, agreements or information as reasonably and timely requested
by any Lender, including, but not limited to, information regarding
litigation, tax, accounting, labor, insurance, pension liabilities (actual
or contingent), real estate leases, material contracts, debt agreements,
property ownership and contingent liabilities of the Credit Parties.
5.2 Conditions to All Loans.
In addition to the conditions precedent stated elsewhere herein, the
Lenders shall not be obligated to make Loans (or continue or convert Loans)
unless:
(a) Notice. The Borrower shall have delivered a Notice of Borrowing,
duly executed and completed, by the time specified in Section 2.1.
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(b) Representations and Warranties. The representations and warranties
made by the Credit Parties in any Credit Document are true and correct in
all material respects at and as if made as of such date except to the
extent they expressly relate to an earlier date;
(c) No Default. No Default or Event of Default shall exist or be
continuing either prior to or after giving effect thereto;
(d) No Material Adverse Effect. There shall not have occurred any
Material Adverse Effect;
(e) Availability. Immediately after giving effect to the making of a
Revolving Loan (and the application of the proceeds thereof), the sum of
the Revolving Loans outstanding shall not exceed the Revolving Commitment
Amount; and
(f) Related Facility Conditions. All other conditions precedent to the
obligation of the Related Facility Lenders to make a loan under the Related
Credit Facility shall have been and remain satisfied;
provided that the matters referred to in the certificate required by Section
5.1(i) hereto shall not excuse a Lender from its obligations hereunder. The
delivery of each Notice of Borrowing and each Notice of Continuation/Conversion
shall constitute a representation and warranty by the Borrower of the
correctness of the matters specified in this Section 5.2.
SECTION 6
REPRESENTATIONS AND WARRANTIES
6.1 Incorporation. The representations and warranties contained in the
Related Credit Agreement (the "Incorporated Representations") as in effect as of
the date thereof are incorporated herein by reference as such Incorporated
Representations relate to the Closing Date, this Agreement and the credit
facilities provided hereunder with the same effect as if stated at length. The
Credit Parties affirm and represent and warrant to the Agent and the Lenders
that the Incorporated Representations are true and correct in all material
respects as of the date hereof, provided that (i) such Incorporated
Representations as incorporated herein shall reflect that they are delivered to
and run in favor of the Agent and the Lenders hereunder, and references therein
to the "Credit Agreement" and "Credit Documents" shall be deemed for purposes
hereof to include this Credit Agreement and the Credit Documents relating
hereto, (ii) any amendments or modifications to such Incorporated
Representations subsequent to the date hereof must be consented to in writing by
the Lenders hereunder, and (iii) in the event that the Related Credit Agreement
shall be refinanced or replaced by another credit agreement or shall otherwise
expire or terminate, then the Incorporated Representations shall be as in effect
immediately prior to such refinancing, replacement, expiration or termination.
All capitalized terms used in such Incorporated Representations shall have the
meaning ascribed thereto in the Related Credit
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Agreement, but as such meaning would be determined relative to this Credit
Agreement and the Credit Documents.
6.2 Material Adverse Effect. The financial statements delivered by the
Credit Parties pursuant to Section 5.1(d) accurately reflect the financial
condition of the Credit Parties as of the respective dates of such financial
statements and there has been no material change in the financial condition of
the Credit Parties since September 30, 1997 and no other change in the business
or assets of the Credit Parties which has resulted or could result in a Material
Adverse Effect.
SECTION 7
AFFIRMATIVE COVENANTS
7.1 Incorporation. The affirmative covenants contained in the Related
Credit Agreement other than those set forth in all of Section 7.10 (other than
Section 7.10(c) which is incorporated hereby), and Section 7.12 thereof (the
"Incorporated Affirmative Covenants") as in effect as of the date thereof are
incorporated herein by reference as such Incorporated Affirmative Covenants
relate to the Closing Date, this Agreement and the credit facilities provided
hereunder with the same effect as if stated at length. The Credit Parties affirm
and represent and warrant to the Agent and the Lenders that the Incorporated
Affirmative Covenants shall be as binding on the Credit Parties as if fully set
forth herein, provided that (i) such Incorporated Affirmative Covenants as
incorporated herein shall reflect that they are delivered to and run in favor of
the Agent and the Lenders hereunder, and references therein to the "Credit
Agreement" and "Credit Documents" shall be deemed for purposes hereof to include
this Credit Agreement and the Credit Documents relating hereto, (ii) any
amendments or modifications to such Incorporated Affirmative Covenants
subsequent to the date hereof must be consented to in writing by the Lenders
hereunder, and (iii) in the event that the Related Credit Agreement shall be
refinanced or replaced by another credit agreement or shall otherwise expire or
terminate, then the Incorporated Representations shall be as in effect
immediately prior to such refinancing, replacement, expiration or termination.
Notwithstanding the above, the prior waivers and consents affecting such
Incorporated Affirmative Covenants granted pursuant to that Letter Agreement
constituting a portion of the Related Credit Agreement shall also apply to such
Incorporated Affirmative Covenants under this Credit Agreement. All capitalized
terms used in such Incorporated Affirmative Covenants shall have the meaning
ascribed thereto in the Related Credit Agreement, but as such meaning would be
determined relative to this Credit Agreement and the Credit Documents.
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SECTION 8
NEGATIVE COVENANTS
8.1 Incorporation. The negative covenants contained in the Related Credit
Agreement (the "Incorporated Negative Covenants") as in effect as of the date
thereof are incorporated herein by reference as such Incorporated Negative
Covenants relate to the Closing Date, this Agreement and the credit facilities
provided hereunder with the same effect as if stated at length. The Credit
Parties affirm and represent and warrant to the Agent and the Lenders that the
Incorporated Negative Covenants shall be as binding on the Credit Parties as if
fully set forth herein, provided that (i) such Incorporated Negative Covenants
as incorporated herein shall reflect that they are delivered to and run in favor
of the Agent and the Lenders hereunder, and references therein to the "Credit
Agreement" and "Credit Documents" shall be deemed for purposes hereof to include
this Credit Agreement and the Credit Documents relating hereto, (ii) any
amendments or modifications to such Incorporated Negative Covenants subsequent
to the date hereof must be consented to in writing by the Lenders hereunder, and
(iii) in the event that the Related Credit Agreement shall be refinanced or
replaced by another credit agreement or shall otherwise expire or terminate,
then the Incorporated Negative Covenants shall be as in effect immediately prior
to such refinancing, replacement, expiration or termination. Notwithstanding the
above, the prior waivers and consents affecting such Incorporated Negative
Covenants granted pursuant to that Letter Agreement constituting a portion of
the Related Credit Agreement shall also apply to such Incorporated Negative
Covenants under this Credit Agreement. All capitalized terms used in such
Incorporated Negative Covenants shall have the meaning ascribed thereto in the
Related Credit Agreement, but as such meaning would be determined relative to
this Credit Agreement and the Credit Documents.
SECTION 9
EVENTS OF DEFAULT
9.1 Incorporation. The events of default contained in the Related Credit
Agreement (the "Incorporated Events of Default") as in effect as of the date
thereof are incorporated herein by reference as such Incorporated Events of
Default relate to the Closing Date, this Agreement and the credit facilities
provided hereunder with the same effect as if stated at length. The Credit
Parties acknowledge and agree that the Incorporated Events of Default as
incorporated herein shall reflect that they are for the benefit of the Agent and
the Lenders hereunder, and references therein to the "Credit Agreement" and
"Credit Documents" shall be deemed for purposes hereof to include this Credit
Agreement and the Credit Documents relating hereto, (ii) any amendments or
modifications to such Incorporated Events of Default subsequent to the date
hereof must be consented to in writing by the Lenders hereunder, and (iii) in
the event that the Related Credit Agreement shall be refinanced or replaced by
another credit agreement or shall otherwise expire or terminate, then the
Incorporated Events of Default shall be as in effect immediately prior to such
refinancing, replacement, expiration or termination. All capitalized terms used
in such Incorporated Events of Default shall have the meaning ascribed thereto
in the Related Credit
26
Agreement, but as such meaning would be determined relative to this Credit
Agreement and the Credit Documents.
9.2 Additional Events of Default.
Except as set forth in the proviso of Section 5.2, an Event of Default
shall exist upon the occurrence of any of the following specified events (each
an "Event of Default"):
(a) Payment. Any Credit Party shall default in the payment within five
(5) days of when due of (i) any principal of any of the Loans or (ii) any
interest on the Loans or (iii) any fees or other amounts owing hereunder,
under any of the other Credit Documents or in connection herewith.
(b) Breach of Representations or Covenants. (i) 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 (ii) any Credit Party shall default in the due
performance or observance of any covenant or the terms and conditions set
forth in the Credit Documents, and such default shall continue unremedied
for the time period, if any, provided for in the Incorporated Events of
Default.
(c) Related Credit Agreement. An Event of Default (as defined therein)
shall occur under the Related Credit Agreement.
9.3 Acceleration; Remedies.
Upon the occurrence of an Event of Default, and at any time thereafter
(including with respect to an Event of Default under section 9.2(c) any time
after such Event of Default (as defined therein) may be waived under the Related
Credit Agreement) unless and until such Event of Default has been waived in
writing by the Required Lenders hereunder (or the Lenders as may be required
hereunder), the Agent shall, upon the request and direction of the Required
Lenders, (or if in the reasonable judgment of the Agent there is not sufficient
time to obtain the consent of the Required Lenders then on its own) by written
notice to the Borrower, take any of the following actions without prejudice to
the rights of the Agent or any Lender to enforce its claims against the Credit
Parties, except as otherwise specifically provided for herein:
(a) Termination of Commitments. Declare the Commitments terminated
whereupon the Commitments shall be immediately terminated.
(b) Acceleration of Loans. Declare the unpaid principal of and any
accrued interest in respect of all Loans and any and all other indebtedness
or obligations of any and every kind owing by a Credit Party to any of the
Lenders hereunder to be due whereupon the same shall be immediately due and
payable without presentment, demand, protest or other notice of any kind,
all of which are hereby waived by the Credit Parties.
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(c) Enforcement of Rights. Enforce any and all rights and interests
created and existing under the Credit Documents, including, without
limitation, all rights and remedies against the Guarantors and all rights
of set-off.
Notwithstanding the foregoing, if an Event of Default specified in Section 9.1
shall occur as a result of the incorporation of Section 9.1(f) of the Related
Credit Agreement, then the Commitments shall automatically terminate and all
Loans, all accrued interest in respect thereof, all accrued and unpaid fees and
other indebtedness or obligations owing to the Lenders hereunder shall
immediately become due and payable without the giving of any notice or other
action by the Agent or the Lenders, which notice or other action is expressly
waived by the Credit Parties.
Notwithstanding the fact that enforcement powers reside primarily with the
Agent, each Lender has, to the extent permitted by law, a separate right of
payment and shall be considered a separate "creditor" holding a separate "claim"
within the meaning of Section 101(5) of the Bankruptcy Code or any other
insolvency statute.
9.4 Allocation of Payments After Event of Default.
Notwithstanding any other provisions of this Credit Agreement, after the
occurrence and during the continuance of an Event of Default, all amounts
collected or received by the Agent or any Lender on account of amounts
outstanding under any of the Credit Documents shall be paid over or delivered as
follows:
FIRST, to the payment of all reasonable out-of-pocket costs and
expenses (including without limitation reasonable attorneys' fees) of the
Agent in connection with enforcing the rights of the Lenders under the
Credit Documents;
SECOND, to payment of any fees owed to the 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;
FOURTH, to the payment of all accrued fees and interest payable to the
Lenders hereunder;
FIFTH, to the payment of the outstanding principal amount of the
Loans;
SIXTH, to all other obligations which shall have become due and
payable under the Credit Documents and not repaid pursuant to clauses
"FIRST" through "FIFTH" above; and
SEVENTH, to the payment of the surplus, if any, to whoever may be
lawfully entitled to receive such surplus.
In carrying out the foregoing, (a) amounts received shall be applied in the
numerical order provided until exhausted prior to application to the next
succeeding category; and (b) each of the Lenders
28
shall receive an amount equal to its pro rata share (based on the proportion
that the then outstanding Loans, held by such Lender bears to the aggregate then
outstanding Loans) of amounts available to be applied pursuant to clauses
"THIRD", "FOURTH," "FIFTH," and "SIXTH" above.
SECTION 10
AGENCY PROVISIONS
10.1 Appointment.
Each Lender hereby designates and appoints NationsBank, N.A. as Agent of
such Lender to act as specified herein and the other Credit Documents, and each
such Lender hereby authorizes the Agent, as the agent for such Lender, to take
such action on its behalf under the provisions of this Credit Agreement and the
other Credit Documents and to exercise such powers and perform such duties as
are expressly delegated by the terms hereof and of the other Credit Documents,
together with such other powers as are reasonably incidental thereto.
Notwithstanding any provision to the contrary elsewhere herein and in the other
Credit Documents, the Agent shall not have any duties or responsibilities,
except those expressly set forth herein and therein, or any fiduciary
relationship with any Lender, and no implied covenants, functions,
responsibilities, duties, obligations or liabilities shall be read into this
Credit Agreement or any of the other Credit Documents, or shall otherwise exist
against the Agent. The provisions of this Section are solely for the benefit of
the Agent and the Lenders and none of the Credit Parties shall have any rights
as a third party beneficiary of the provisions hereof. In performing its
functions and duties under this Credit Agreement and the other Credit Documents,
the Agent shall act solely as an agent of the Lenders and does not assume and
shall not be deemed to have assumed any obligation or relationship of agency or
trust with or for any Credit Party.
10.2 Delegation of Duties.
The Agent may execute any of its duties hereunder or under the other Credit
Documents by or through agents or attorneys-in-fact and shall be entitled to
advice of counsel concerning all matters pertaining to such duties. The Agent
shall not be responsible for the negligence or misconduct of any agents or
attorneys-in-fact selected by it with reasonable care.
10.3 Exculpatory Provisions.
Neither the Agent nor any of its officers, directors, employees, agents,
attorneys-in-fact or affiliates shall be (a) liable for any action lawfully
taken or omitted to be taken by it or such Person under or in connection
herewith or in connection with any of the other Credit Documents (except for its
or such Person's own gross negligence or willful misconduct) or (b) responsible
in any manner to any of the Lenders for any recitals, statements,
representations or warranties made by any of the Credit Parties contained herein
or in any of the other Credit Documents or in any certificate, report, document,
financial statement or other written or oral statement referred to or provided
for in, or received by an Agent under or in connection herewith or in connection
with the other Credit Documents, or enforceability or sufficiency therefor of
any of the other Credit Documents, or for
29
any failure of the Borrower to perform its obligations hereunder or thereunder.
The Agent shall not be responsible to any Lender for the effectiveness,
genuineness, validity, enforceability, collectibility or sufficiency of this
Credit Agreement, or any of the other Credit Documents or for any
representations, warranties, recitals or statements made herein or therein or
made by the Borrower or any Credit Party in any written or oral statement or in
any financial or other statements, instruments, reports, certificates or any
other documents in connection herewith or therewith furnished or made by the
Agent to the Lenders or by or on behalf of the Credit Parties to the Agent or
any Lender or be required to ascertain or inquire as to the performance or
observance of any of the terms, conditions, provisions, covenants or agreements
contained herein or therein or as to the use of the proceeds of the Loans or of
the existence or possible existence of any Default or Event of Default or to
inspect the properties, books or records of the Credit Parties. The Agent is a
not trustee for the Lenders and owes no fiduciary duty to the Lenders. The Agent
shall administer the facility evidenced by the Credit Documents similar to other
credits in which the Agent holds 100% of the credit exposure.
10.4 Reliance on Communications.
The Agent shall be entitled to rely, and shall be fully protected in
relying, upon any note, writing, resolution, notice, consent, certificate,
affidavit, letter, cablegram, telegram, telecopy, telex or teletype message,
statement, order or other document or conversation believed by it to be genuine
and correct and to have been signed, sent or made by the proper Person or
Persons and upon advice and statements of legal counsel (including, without
limitation, counsel to any of the Credit Parties, independent accountants and
other experts selected by the Agent with reasonable care). The Agent may deem
and treat the Lenders as the owner of its interests hereunder for all purposes
unless a written notice of assignment, negotiation or transfer thereof shall
have been filed with the Agent in accordance with Section 11.3(b). The Agent
shall be fully justified in failing or refusing to take any action under this
Credit Agreement or under any of the other Credit Documents unless it shall
first receive such advice or concurrence of the Required Lenders as it deems
appropriate or it shall first be indemnified to its satisfaction by the Lenders
against any and all liability and expense which may be incurred by it by reason
of taking or continuing to take any such action. The Agent shall in all cases be
fully protected in acting, or in refraining from acting, hereunder or under any
of the other Credit Documents in accordance with a request of the Required
Lenders (or to the extent specifically provided in Section 11.6, all the
Lenders) and such request and any action taken or failure to act pursuant
thereto shall be binding upon all the Lenders (including their successors and
assigns).
10.5 Notice of Default.
An Agent shall not be deemed to have knowledge or notice of the occurrence
of any Default or Event of Default hereunder (other than Section 9.1(a)) unless
such Agent has received notice from a Lender or a Credit Party referring to the
Credit Document, describing such Default or Event of Default and stating that
such notice is a "notice of default." In the event that the Agent receives such
a notice, the Agent shall give prompt notice thereof to the Lenders. The Agent
shall take such action with respect to such Default or Event of Default as shall
be reasonably directed by the Required Lenders.
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10.6 Non-Reliance on Agent and Other Lenders.
Each Lender expressly acknowledges that neither the Agent, NationsBanc
Montgomery Securities, Inc. ("NMSI") nor any of their officers, directors,
employees, agents, attorneys-in-fact or affiliates has made any representations
or warranties to it and that no act by the Agent, NMSI or any affiliate thereof
hereinafter taken, including any review of the affairs of any Credit Party,
shall be deemed to constitute any representation or warranty by the Agent or
NMSI to any Lender. Each Lender represents to the Agent and NMSI that it has,
independently and without reliance upon the Agent or NMSI or any other Lender,
and based on such documents and information as it has deemed appropriate, made
its own appraisal of and investigation into the business, assets, operations,
property, financial and other conditions, prospects and creditworthiness of the
Credit Parties and made its own decision to make its Loans hereunder and enter
into this Credit Agreement. Each Lender also represents that it will,
independently and without reliance upon the Agent, NMSI or any other Lender, and
based on such documents and information as it shall deem appropriate at the
time, continue to make its own credit analysis, appraisals and decisions in
taking or not taking action under this Credit Agreement, and to make such
investigation as it deems necessary to inform itself as to the business, assets,
operations, property, financial and other conditions, prospects and
creditworthiness of the Credit Parties. The Agent shall promptly provide to the
Lenders (a) copies of all notices of Defaults or Events of Default or other
notices received in accordance with Section 11.1, (b) copies of all financial
statements, certificates and other information sent to it by the Borrower
pursuant to Article 7, (c) any written information it receives regarding the
unsecured debt rating of Highwoods Properties and (d) such other documents or
notices received by the Agent pursuant to this Agreement and requested in
writing by a Lender. Except for notices, reports and other documents expressly
required to be furnished to the Lenders by the Agent hereunder, the Agent and
NMSI shall not have any duty or responsibility to provide any Lender with any
credit or other information concerning the business, operations, assets,
property, financial or other conditions, prospects or creditworthiness of the
Credit Parties which may come into the possession of the Agent, NMSI or any of
their officers, directors, employees, agents, attorneys-in-fact or affiliates.
10.7 Indemnification.
The Lenders agree to indemnify the Agent in its capacity as such but not in
its capacity as a Lender (to the extent not reimbursed by the Borrower and
without limiting the obligation of the Borrower to do so), ratably according to
their respective Commitments (or if the Commitments have expired or been
terminated, in accordance with the respective principal amounts of outstanding
Loans of the Lenders), from and against any and all liabilities, obligations,
losses, damages, penalties, actions, judgments, suits, costs, expenses or
disbursements of any kind whatsoever which may at any time (including without
limitation at any time following payment in full of the Credit Party
Obligations) be imposed on, incurred by or asserted against an Agent in its
capacity as such in any way relating to or arising out of this Credit Agreement
or the other Credit Documents or any documents contemplated by or referred to
herein or therein or the transactions contemplated hereby or thereby or any
action taken or omitted by an Agent under or in connection with any of the
foregoing; provided that no Lender shall be liable for the payment of any
portion of such liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses or disbursements (i) resulting from the gross
negligence or willful misconduct of the Agent, (ii) arising
31
solely from an internal or regulatory matter relating only to the Agent (i.e. a
legal lending limit violation by the Agent) or (iii) resulting from and related
solely to a dispute between the Agent and one or more Lenders in which it is
reasonably determined that the Agent did not prevail. If any indemnity furnished
to the Agent for any purpose shall, in the reasonable judgment of the Agent, be
insufficient or become impaired, the Agent may call for additional indemnity and
cease, or not commence, to do the acts indemnified against until such additional
indemnity is furnished. The agreements in this Section shall survive the payment
of the Credit Party Obligations and all other amounts payable hereunder and
under the other Credit Documents.
10.8 Agent in Its Individual Capacity.
The Agent and its affiliates may make loans to, accept deposits from and
generally engage in any kind of business with the Borrower or any other Credit
Party as though the Agent were not the Agent hereunder. With respect to the
Loans made and all obligations owing to it, the Agent shall have the same rights
and powers under this Credit Agreement as any Lender and may exercise the same
as though they were not the Agent, and the terms "Lender" and "Lenders" shall
include the Agent in its individual capacity.
10.9 Successor Agent.
The Agent may, at any time, resign upon 20 days written notice to the
Lenders. Upon any such resignation, the Required Lenders shall have the right to
appoint a successor Agent; provided that if no successor Agent shall have been
appointed by the Required Lenders, and shall have accepted such appointment,
within 45 days after the notice of resignation, then the retiring Agent shall
select a successor Agent. In either case, whether selected by the Required
Lenders or the retiring Agent, the successor Agent must be either an existing
Lender hereunder or a commercial bank organized under the laws of the United
States of America or of any State thereof and have total assets of at least $25
billion and a long term unsecured debt rating of at least BBB+ with S&P or its
equivalent. Upon the acceptance of any appointment as the Agent hereunder by a
successor, such successor Agent shall thereupon succeed to and become vested
with all the rights, powers, privileges and duties of the retiring Agent, and
the retiring Agent shall be discharged from its duties and obligations as the
Agent, as appropriate, under this Credit Agreement and the other Credit
Documents and the provisions of this Section 10.9 shall inure to its benefit as
to any actions taken or omitted to be taken by it while it was the Agent under
this Credit Agreement.
SECTION 11
MISCELLANEOUS
11.1 Notices.
Except as otherwise expressly provided herein, all notices and other
communications shall have been duly given and shall be effective (a) when
delivered by hand, (b) when transmitted via telecopy (or other facsimile device)
to the number set out below, (c) the Business Day following the day on which the
same has been delivered prepaid to a reputable national overnight air courier
service, or (d) the third Business Day following the day on which the same is
sent by certified or
32
registered mail, postage prepaid, in each case to the respective parties at the
address or telecopy numbers set forth on Schedule 11.1, or at such other address
as such party may specify by written notice to the other parties hereto.
11.2 Right of Set-Off.
In addition to any rights now or hereafter granted under applicable law or
otherwise, and not by way of limitation of any such rights, upon the occurrence
of an Event of Default and the commencement of remedies described in Section
9.3, each Lender is authorized at any time and from time to time, without
presentment, demand, protest or other notice of any kind (all of which rights
being hereby expressly waived), to set-off and to appropriate and apply any and
all deposits (general or special) and any other indebtedness at any time held or
owing by such Lender (including, without limitation, branches, agencies or
Affiliates of such Lender wherever located) to or for the credit or the account
of any Credit Party against obligations and liabilities of such Credit Party to
the Lenders hereunder, under the Notes, the other Credit Documents or otherwise,
irrespective of whether the Agent or the Lenders shall have made any demand
hereunder and although such obligations, liabilities or claims, or any of them,
may be contingent or unmatured, and any such set-off shall be deemed to have
been made immediately upon the occurrence of an Event of Default even though
such charge is made or entered on the books of such Lender subsequent thereto.
The Credit Parties hereby agree that any Person purchasing a participation in
the Loans and Commitments hereunder pursuant to Section 11.3(c) or 3.8 may
exercise all rights of set-off with respect to its participation interest as
fully as if such Person were a Lender hereunder.
11.3 Benefit of Agreement.
(a) Generally. This Credit Agreement shall be binding upon and inure
to the benefit of and be enforceable by the respective successors and
assigns of the parties hereto; provided that none of the Credit Parties may
assign and transfer any of its interests without the prior written consent
of the Lenders; and provided further that the rights of each Lender to
transfer, assign or grant participation in its rights and/or obligations
hereunder shall be limited as set forth below in subsections (b) and (c) of
this Section 11.3. Notwithstanding the above (including anything set forth
in subsections (b) and (c) of this Section 11.3), nothing herein shall
restrict, prevent or prohibit any Lender from (A) pledging its Loans
hereunder to a Federal Reserve Bank in support of borrowings made by such
Lender from such Federal Reserve Bank, or (B) granting assignments or
participation in such Lender's Loans and/or Commitments hereunder to its
parent company and/or to any Affiliate of such Lender or to any existing
Lender or Affiliate thereof. No action permitted by this Section 11.3(a)
shall require a fee to be paid to the Agent.
(b) Assignments. In addition to the assignments permitted in Section
11.3(a), each Lender may, with the prior written consent of the Agent which
shall not be unreasonably withheld, assign all or a portion of its rights
and obligations hereunder pursuant to an assignment agreement substantially
in the form of Exhibit 11.3 to one or more Eligible Assignees; provided
that (i) any such assignment shall be in a minimum aggregate amount of
$10,000,000 of the Commitments and in integral multiples of $1,000,000
above such amount (or the remaining amount of Commitments held by such
33
Lender) and (ii) each such assignment shall be of a constant, not varying,
percentage of all of the assigning Lender's rights and obligations under
the Commitment being assigned. Any assignment hereunder shall be effective
upon satisfaction of the conditions set forth above and delivery to the
Agent of a duly executed assignment agreement together with a transfer fee
of $3,500 payable to the Agent for its own account. Upon the effectiveness
of any such assignment, the assignee shall become a "Lender" for all
purposes of this Credit Agreement and the other Credit Documents and, to
the extent of such assignment, the assigning Lender shall be relieved of
its obligations hereunder to the extent of the Loans and Commitment
components being assigned. Along such lines the Borrower agrees that upon
notice of any such assignment and surrender of the appropriate Note or
Notes, it will promptly provide to the assigning Lender and to the assignee
separate promissory notes in the amount of their respective interests
substantially in the form of the original Note or Notes (but with notation
thereon that it is given in substitution for and replacement of the
original Note or Notes or any replacement notes thereof).
By executing and delivering an assignment agreement in accordance with this
Section 11.3(b), the assigning Lender thereunder and the assignee
thereunder shall be deemed to confirm to and agree with each other and the
other parties hereto as follows: (i) such assigning Lender warrants that it
is the legal and beneficial owner of the interest being assigned thereby
free and clear of any adverse claim and the assignee warrants that it is an
Eligible Assignee; (ii) except as set forth in clause (i) above, such
assigning Lender makes no representation or warranty and assumes no
responsibility with respect to any statements, warranties or
representations made in or in connection with this Credit Agreement, any of
the other Credit Documents or any other instrument or document furnished
pursuant hereto or thereto, or the execution, legality, validity,
enforceability, genuineness, sufficiency or value of this Credit Agreement,
any of the other Credit Documents or any other instrument or document
furnished pursuant hereto or thereto or the financial condition of any
Credit Party or the performance or observance by any Credit Party of any of
its obligations under this Credit Agreement, any of the other Credit
Documents or any other instrument or document furnished pursuant hereto or
thereto; (iii) such assignee represents and warrants that it is legally
authorized to enter into such assignment agreement; (iv) such assignee
confirms that it has received a copy of this Credit Agreement, the other
Credit Documents and such other documents and information as it has deemed
appropriate to make its own credit analysis and decision to enter into such
assignment agreement; (v) such assignee will independently and without
reliance upon the Agent, such assigning Lender or any other Lender, and
based on such documents and information as it shall deem appropriate at the
time, continue to make its own credit decisions in taking or not taking
action under this Credit Agreement and the other Credit Documents; (vi)
such assignee appoints and authorizes the Agent to take such action on its
behalf and to exercise such powers under this Credit Agreement or any other
Credit Document as are delegated to the Agent by the terms hereof or
thereof, together with such powers as are reasonably incidental thereto;
and (vii) such assignee agrees that it will perform in accordance with
their terms all the obligations which by the terms of this Credit Agreement
and the other Credit Documents are required to be performed by it as a
Lender.
34
(c) Participations. Each Lender may sell, transfer, grant or assign
participations in all or any part of such Lender's interests and
obligations hereunder; provided that (i) such selling Lender shall remain a
"Lender" for all purposes under this Credit Agreement (such selling
Lender's obligations under the Credit Documents remaining unchanged) and
the participant shall not constitute a Lender hereunder, (ii) no such
participant shall have, or be granted, rights to approve any amendment or
waiver relating to this Credit Agreement or the other Credit Documents
except to the extent any such amendment or waiver would (A) reduce the
principal of or rate of interest on or fees in respect of any Loans in
which the participant is participating or increase any Commitments with
respect thereto, (B) postpone the date fixed for any payment of principal
(including the extension of the final maturity of any Loan or the date of
any mandatory prepayment), interest or fees in which the participant is
participating, or (C) release all or substantially all of the collateral or
guaranties (except as expressly provided in the Credit Documents)
supporting any of the Loans or Commitments in which the participant is
participating, (iii) sub-participations by the participant (except to an
Affiliate, parent company or Affiliate of a parent company of the
participant) shall be prohibited and (iv) any such participations shall be
in a minimum aggregate amount of $10,000,000 of the Commitments and in
integral multiples of $1,000,000 in excess thereof. In the case of any such
participation, the participant shall not have any rights under this Credit
Agreement or the other Credit Documents (the participant's rights against
the selling Lender in respect of such participation to be those set forth
in the participation agreement with such Lender creating such
participation) and all amounts payable by the Borrower hereunder shall be
determined as if such Lender had not sold such participation; provided,
however, that such participant shall be entitled to receive additional
amounts under Sections 3.9, 3.12, 3.13 and 3.14 to the same extent that the
Lender from which such participant acquired its participation would be
entitled to the benefit of such cost protection provisions.
11.4 No Waiver; Remedies Cumulative.
No failure or delay on the part of an Agent or any Lender in exercising any
right, power or privilege hereunder or under any other Credit Document and no
course of dealing between the Borrower or any Credit Party and the Agent or any
Lender shall operate as a waiver thereof; nor shall any single or partial
exercise of any right, power or privilege hereunder or under any other Credit
Document preclude any other or further exercise thereof or the exercise of any
other right, power or privilege hereunder or thereunder. The rights and remedies
provided herein are cumulative and not exclusive of any rights or remedies which
the Agent or any Lender would otherwise have. No notice to or demand on any
Credit Party in any case shall entitle any Credit Party to any other or further
notice or demand in similar or other circumstances or constitute a waiver of the
rights of the Agent or the Lenders to any other or further action in any
circumstances without notice or demand.
11.5 Payment of Expenses; Indemnification.
The Credit Parties agree to: (a) pay all reasonable out-of-pocket costs and
expenses of (i) the Agent and the Lenders in connection with (A) the
negotiation, preparation, execution and delivery and administration of this
Credit Agreement and the other Credit Documents and the documents and
instruments referred to therein (including, without limitation, the reasonable
fees
35
and expenses of Moore & Van Allen, PLLC, special counsel to the Agent); provided
that reimbursement to any Lender (other than the Agent) for fees and expenses
shall be limited to $7,500 per Lender and (B) any amendment, waiver or consent
relating hereto and thereto including, but not limited to, any such amendments,
waivers or consents resulting from or related to any work-out, renegotiation or
restructure relating to the performance by the Credit Parties under this Credit
Agreement and (ii) the Agent and the Lenders in connection with (A) enforcement
of the Credit Documents and the documents and instruments referred to therein,
including, without limitation, in connection with any such enforcement, the
reasonable fees (at standard hourly rates) and disbursements of counsel for the
Agent and each of the Lenders, and (B) any bankruptcy or insolvency proceeding
of a Credit Party; provided that the Credit Parties shall not be responsible for
the legal fees of the Agent and the Lenders in connection with any proceeding in
which a Credit Party is the prevailing party as determined by a court of
competent jurisdiction, and (b) indemnify the Agent, and each Lender, its
officers, directors, employees, representatives and agents from and hold each of
them harmless against any and all losses, liabilities, claims, damages or
expenses incurred by any of them as a result of, or arising out of, or in any
way related to, or by reason of, any investigation, litigation or other
proceeding (whether or not any Agent or Lender is a party thereto) related to
(i) the entering into and/or performance of any Credit Document or the use of
proceeds of any Loans (including other extensions of credit) hereunder or the
consummation of any other transactions contemplated in any Credit Document,
including, without limitation, the reasonable fees and disbursements of counsel
incurred in connection with any such investigation, litigation or other
proceeding (but excluding any such losses, liabilities, claims, damages or
expenses to the extent incurred by reason of gross negligence or willful
misconduct on the part of the Person to be indemnified), (ii) any Environmental
Claim and (iii) any claims for Non-Excluded Taxes.
11.6 Amendments, Waivers and Consents.
Neither this Credit Agreement nor any other Credit Document nor any of the
terms hereof or thereof may be amended, changed, waived, discharged or
terminated unless such amendment, change, waiver, discharge or termination is in
writing and signed by the Agent, the Required Lenders and the Credit Parties.
Notwithstanding the fact that the consent of all the Lenders is required in
certain circumstances as set forth above, (x) each Lender is entitled to vote as
such Lender sees fit on any reorganization plan that affects the Loans, 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.
11.7 Counterparts.
This Credit Agreement may be executed in any number of counterparts, each
of which where so executed and delivered shall be an original, but all of which
shall constitute one and the same instrument. It shall not be necessary in
making proof of this Credit Agreement to produce or account for more than one
such counterpart.
36
11.8 Headings.
The headings of the sections and subsections hereof are provided for
convenience only and shall not in any way affect the meaning or construction of
any provision of this Credit Agreement.
11.9 Defaulting Lender.
Each Lender understands and agrees that if such Lender is a Defaulting
Lender then notwithstanding the provisions of Section 11.6 it shall not be
entitled to vote on any matter requiring the consent of the Required Lenders or
to object to any matter requiring the consent of all the Lenders; provided,
however, that all other benefits and obligations under the Credit Documents
shall apply to such Defaulting Lender.
11.10 Survival of Indemnification and Representations and Warranties.
All indemnities set forth herein and all representations and warranties
made herein shall survive the execution and delivery of this Credit Agreement,
the making of the Loans and other obligations and the termination of the
commitments hereunder.
11.11 Governing Law.
THIS AGREEMENT AND THE OTHER CREDIT DOCUMENTS AND THE RIGHTS AND
OBLIGATIONS OF THE PARTIES HEREUNDER AND THEREUNDER SHALL BE GOVERNED BY AND
CONSTRUED AND INTERPRETED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NORTH
CAROLINA.
11.12 Arbitration.
Any controversy or claim between or among the parties hereto including, but
not limited to, those arising out of or relating to this Agreement or any
related agreements or instruments, including any claim based on or arising from
an alleged tort, shall be determined by binding arbitration in accordance with
the Federal Arbitration Act (or if not applicable, the applicable state law),
the Rules of Practice and Procedure for the Arbitration of Commercial Disputes
of Judicial Arbitration and Mediation Services, Inc. (J.A.M.S.), and the
"Special Rules" set forth below. In the event of any inconsistency, the Special
Rules shall control. Judgment upon any arbitration award may be entered in any
court having jurisdiction. Any party to this Agreement may bring an action,
including a summary or expedited proceeding, to compel arbitration of any
controversy or claim to which this Agreement applies in any court having
jurisdiction over such action.
(a) Special Rules. The arbitration shall be conducted in the city of
the Borrower's domicile at time of this Agreement's execution and
administered by J.A.M.S. who will appoint an arbitrator; if J.A.M.S. is
unable or legally precluded from administering the arbitration, then the
American Arbitration Association will serve. All arbitration hearings will
be commenced within ninety (90) days of the demand for arbitration;
further, the arbitrator shall only, upon a showing of cause, be permitted
to extend the commencement of such hearing for up to an additional sixty
(60) days.
37
(b) Reservations of Rights. Nothing in this Agreement shall be deemed
to (i) limit the applicability of any otherwise applicable statutes of
limitation or repose and any waivers contained in this Agreement; or (ii)
be a waiver by the Lenders of the protection afforded to it by 12 U.S.C.
Section 91 or any substantially equivalent state law; or (iii) limit the
right of the Lenders (A) to exercise self help remedies such as (but not
limited to) setoff, or (B) to foreclose against any real or personal
property collateral, or (C) to obtain from a court provisional or ancillary
remedies such as (but not limited to) injunctive relief or the appointment
of a receiver. The Lenders may exercise such self help rights, foreclose
upon such property, or obtain such provisional or ancillary remedies
before, during or after the pendency of any arbitration proceeding brought
pursuant to this Agreement. At the Lenders' option, foreclosure under the
Credit Documents may be accomplished by the exercise of a power of sale or
a judicial sale under the Credit Documents or by judicial foreclosure.
Neither the exercise of self help remedies nor the institution or
maintenance of an action for foreclosure or provisional or ancillary
remedies shall constitute a waiver of the right of any party, including the
claimant in any such action, to arbitrate the merits of the controversy or
claim occasioning resort to such remedies.
11.13 Time.
All references to time herein shall be references to Eastern Standard Time
or Eastern Daylight time, as the case may be, unless specified otherwise.
11.14 Severability.
If any provision of any of the Credit Documents is determined to be
illegal, invalid or unenforceable, such provision shall be fully severable and
the remaining provisions shall remain in full force and effect and shall be
construed without giving effect to the illegal, invalid or unenforceable
provisions.
11.15 Entirety.
This Credit Agreement together with the other Credit Documents represent
the entire agreement of the parties hereto and thereto, and supersede all prior
agreements and understandings, oral or written, if any, including any commitment
letters or correspondence relating to the Credit Documents or the transactions
contemplated herein and therein.
[remainder of page intentionally left blank]
38
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,
the Credit Parties doing so under seal.
BORROWER:
HIGHWOODS/FORSYTH LIMITED PARTNERSHIP,
a North Carolina limited partnership
ATTEST:
By: Highwoods Properties, Inc.,
By:___________________ a Maryland corporation, its sole general
partner
Title:_______________
By: __________________________________________
[CORPORATE SEAL] Name: ________________________________________
Title: _______________________________________
GUARANTORS: HIGHWOODS PROPERTIES, INC.,
a Maryland corporation
ATTEST:
By: __________________________________________
By:__________________ Name: ________________________________________
Title:________________ Title: _______________________________________
[CORPORATE SEAL]
HIGHWOODS SERVICES, INC.,
a North Carolina corporation
ATTEST:
By: __________________________________________
By:__________________ Name: ________________________________________
Title:________________ Title: _______________________________________
[CORPORATE SEAL]
SOUTHEAST REALTY OPTIONS CORP.,
a Delaware corporation
ATTEST:
By: __________________________________________
By:__________________ Name: ________________________________________
Title:________________ Title: _______________________________________
[CORPORATE SEAL]
HIGHWOODS/FLORIDA GP CORP.,
a Delaware corporation
ATTEST:
By: __________________________________________
By:__________________ Name: ________________________________________
Title:________________ Title: _______________________________________
[CORPORATE SEAL]
HIGHWOODS/FLORIDA HOLDINGS GP, L.P.,
a Delaware corporation
By: Highwoods/Florida GP Corp.,
a Delaware corporation, its sole
general partner
AATTEST:
By: __________________________________________
By:__________________ Name: ________________________________________
Title:________________ Title: _______________________________________
[CORPORATE SEAL]
HIGHWOODS/FLORIDA HOLDINGS L.P.,
a Delaware corporation
By: Highwoods/Florida Holdings GP, L.P.,
a Delaware limited
partnership, its sole general partner
By: Highwoods/Florida GP Corp.,
a Delaware corporation, its sole
general partner
ATTEST:
By: __________________________________________
By:__________________ Name: ________________________________________
Title:________________ Title: _______________________________________
[CORPORATE SEAL]
HIGHWOODS/TENNESSEE PROPERTIES,
a Tennessee corporation
ATTEST:
By: __________________________________________
By:__________________ Name: ________________________________________
Title:________________ Title: _______________________________________
[CORPORATE SEAL]
HIGHWOODS/TENNESSEE HOLDINGS GP, L.P.,
a Tennessee limited partnership
By: Highwoods/Tennessee Properties, Inc.,
a Tennessee corporation, its sole
general partner
ATTEST:
By: __________________________________________
By:__________________ Name: ________________________________________
Title:________________ Title: _______________________________________
[CORPORATE SEAL]
HIGHWOODS/TENNESSEE HOLDINGS L.P.,
a Tennessee limited partnership
By: Highwoods/Tennessee Holdings GP, L.P.,
a Tennessee limited
partnership, its sole general partner
By: Highwoods/Tennessee Properties, Inc.,
a Delaware corporation, its sole
general partner
ATTEST:
By: __________________________________________
By:__________________ Name: ________________________________________
Title:________________ Title: _______________________________________
[CORPORATE SEAL]
LENDERS:
NATIONSBANK, N.A.,
individually in its capacity as a
Lender and in its capacity as Agent
By: __________________________________________
Name: ________________________________________
Title: _______________________________________
Schedule 1.1(a)
COMMITMENT PERCENTAGE
Revolving
Revolving Commitment
Lender Committed Amount Percentage
- ------ ---------------- ----------
NationsBank, N.A., $ 150,000,000 100%
Schedule 11.1
Notices
Lender Address for All Notices
- ------ -----------------------
NationsBank, N.A. NationsBank, N.A.
One Hannover Square, Suite 301
Raleigh, NC 27611-7287
Attn: Patty Gardenhire
Ph: (919) 829-6683
Fax: (919) 829-6713
with a copy to:
Mark S. Cagley
Senior Vice President
NationsBank
Real Estate Banking Group
100 N. Tryon Street
11th Floor
NC1-007-11-07
Charlotte, NC 28255
Phone: (704) 386-7449
Fax: (704) 388-0617
Exhibit 2.1(b)
FORM OF NOTICE OF BORROWING
TO: NATIONSBANK, N.A., as Agent
NATIONSBANK CORPORATE CENTER
CHARLOTTE, NORTH CAROLINA 28255
RE: Credit Agreement dated as of December ___, 1997 among
Highwoods/Forsyth Limited Partnership (the "Borrower")
Highwoods Properties, Inc., the Subsidiaries of the Borrower
and Highwoods Properties, Inc., NationsBank, N.A., as Agent,
and the Lenders party thereto (as the same may be amended,
modified, extended or restated from time to time, the "Credit
Agreement")
DATE: _____________, 199__
________________________________________________________________
1. This Notice of Borrowing is made pursuant to the terms of the Credit
Agreement. All capitalized terms used herein unless otherwise defined
shall have the meanings set forth in the Credit Agreement.
2. Please be advised that the Borrower is requesting Revolving Loans in
the amount of $__________ to be funded on ____________, 199__ at the
interest rate option set forth in paragraph 3 below. Subsequent to the
funding of the requested Revolving Loans, the aggregate amount of
outstanding Revolving Loans will be $_________, which is less than or
equal to the Revolving Committed Amount.
3. The interest rate option applicable to the requested Revolving Loans
shall be:
a. ________ the Adjusted Base Rate
b. ________ the Adjusted Eurodollar Rate for an Interest Period
of one (1) month
4. The proceeds from the Revolving Loans shall be used for
________________________________________ which is in compliance with
Section 7 of the Credit Agreement.
5. The representations and warranties made by the Credit Parties in the
Credit Documents are true and correct in all material respects at and
as if made on the date hereof except to the extent they expressly
relate to an earlier date.
6. As of the date hereof, no Default or Event of Default has occurred and
is continuing or would be caused by this Notice of Borrowing.
7. No Material Adverse Effect has occurred since the Closing Date.
8. The Borrower is in compliance with all requirements of the Related
Credit Agreement. In furtherance of this certification, Borrower
represents that the ratio of (a) Total Liabilities (as defined in the
Related Credit Agreement) to (b) Market Capitalization (as defined in
the Related Credit Agreement) is less than or equal to 0.45 to 1.0.
HIGHWOODS/FORSYTH LIMITED PARTNERSHIP
By: Highwoods Properties, Inc., its sole general partner
By:____________________________
Name:__________________________
Title:_________________________
Exhibit 2.1(d)
FORM OF NOTICE OF CONTINUATION/CONVERSION
TO: NATIONSBANK, N.A., as Agent
NATIONSBANK CORPORATE CENTER
CHARLOTTE, NORTH CAROLINA 28255
RE: Credit Agreement dated as of December ____, 1997 among
Highwoods/Forsyth Limited Partnership (the "Borrower")
Highwoods Properties, Inc., the Subsidiaries of the Borrower
and Highwoods Properties, Inc., NationsBank, N.A., as Agent,
and the Lenders party thereto (as the same may be amended,
modified, extended or restated from time to time, the "Credit
Agreement")
DATE: _____________, 199__
____________________________________________________________
1. This Notice of Continuation/Conversion is made pursuant to the terms of
the Credit Agreement. All capitalized terms used herein unless
otherwise defined shall have the meanings set forth in the Credit
Agreement.
2. Please be advised that the Borrower is requesting that a portion of the
current outstanding Revolving Loans in the amount of $__________
currently accruing interest at _________ be extended or converted as of
_____________ at the interest rate option set forth in paragraph 3
below.
3. The interest rate option applicable to the extension or conversion of
all or part of the existing Revolving Loans shall be:
a. ________ the Adjusted Base Rate
b. ________ the Adjusted Eurodollar Rate for an Interest Period
of one (1) month
4. The representations and warranties made by the Credit Parties in the
Credit Documents are true and correct in all material respects at and
as if made on the date hereof except to the extent they expressly
relate to an earlier date.
5. As of the date hereof, no Default or Event of Default has occurred and
is continuing or would be caused by this Notice of
Continuation/Conversion.
6. No Material Adverse Effect has occurred since the Closing Date.
7. The Borrower is in compliance with all requirements of the Related
Credit Agreement. In furtherance of this certification, Borrower
represents that the ratio of (a) Total Liabilities (as defined in the
Related Credit Agreement) to (b) Market Capitalization (as defined in
the Related Credit Agreement) is less than or equal to .45 to 1.0.
HIGHWOODS/FORSYTH LIMITED PARTNERSHIP
By: Highwoods Properties, Inc., its sole general partner
By:____________________________
Name:__________________________
Title:_________________________
Exhibit 2.1(f)
FORM OF
REVOLVING NOTE
$____________ _______ ____, 1997
FOR VALUE RECEIVED, Highwoods/Forsyth Limited Partnership, a North Carolina
limited partnership, (the "Borrower"), hereby promises to pay to the order of
___________________ (the "Lender"), at the office of NationsBank, N.A. (the
"Agent") as set forth in that certain Credit Agreement dated as of December 15,
1997 between the Borrower, Highwoods Properties, Inc., the Subsidiaries of the
Borrower and Highwoods Properties, Inc., the Lenders named therein (including
the Lender), and NationsBank, N.A., as Agent (as modified and supplemented and
in effect from time to time, the "Credit Agreement"), the principal sum of
$______________ (or such lesser amount as shall equal the aggregate unpaid
principal amount of the Revolving Loans made by the Lender to the Borrower under
the Credit Agreement), in lawful money of the United States of America and in
immediately available funds, on the dates and in the principal amounts provided
in the Credit Agreement, and to pay interest on the unpaid principal amount of
each such Revolving Loan, at such office, in like money and funds, for the
period commencing on the date of such Revolving Loan until such Revolving Loan
shall be paid in full, at the rates per annum and on the dates provided in the
Credit Agreement.
This Note is one of the Revolving Notes referred to in the Credit Agreement
and evidences Revolving Loans made by the Lender thereunder. Capitalized terms
used in this Revolving Note and not otherwise defined shall have the respective
meanings assigned to them in the Credit Agreement and the terms and conditions
of the Credit Agreement are expressly incorporated herein and made a part
hereof.
The Credit Agreement provides for the acceleration of the maturity of the
Revolving Loans evidenced by this Revolving Note upon the occurrence of certain
events (and for payment of collection costs in connection therewith) and for
prepayments of Revolving Loans upon the terms and conditions specified therein.
In the event this Revolving Note is not paid when due at any stated or
accelerated maturity, the Borrower agrees to pay, in addition to the principal
and interest, all costs of collection, including reasonable attorney fees.
The date, amount, type, interest rate and duration of Interest Period (if
applicable) of each Revolving Loan made by the Lender to the Borrower, and each
payment made on account of the principal thereof, shall be recorded by the
Lender on its books; provided that the failure of the Lender to make any such
recordation or endorsement shall not affect the obligations of the Borrower to
make a payment when due of any amount owing hereunder or under this Revolving
Note in respect of the Revolving Loans to be evidenced by this Revolving Note,
and each such recordation or endorsement shall be prima facie evidence of such
information.
THIS REVOLVING NOTE SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH,
THE LAWS OF THE STATE OF NORTH CAROLINA.
IN WITNESS WHEREOF, the Borrower has caused this Revolving Note to be
executed as of the date first above written.
HIGHWOODS/FORSYTH LIMITED PARTNERSHIP
By: Highwoods Properties, Inc., its sole general partner
By:____________________________
Name:__________________________
Title:_________________________
Exhibit 7.1(c)
FORM OF OFFICER'S CERTIFICATE
For the fiscal quarter ended _________________, 19___.
I, ______________________, chief financial officer of Highwoods Properties,
Inc., the sole general partner of Highwoods/Forsyth Limited Partnership (the
"Borrower") hereby certify on behalf of the Borrower that, with respect to that
certain Credit Agreement dated as of December 15, 1997 (as it may be amended,
modified, extended or restated from time to time, the "Credit Agreement"; all of
the capitalized terms herein shall have the meanings set forth in the Credit
Agreement) among the Borrower, the other Credit Parties party thereto, the
Lenders party thereto and NationsBank, N.A., as Agent:
a. Attached hereto as Schedule 1 are calculations demonstrating
compliance by the Credit Parties with the financial covenants contained in
Section 7.2 of the Related Credit Agreement as of the end of the fiscal
period referred to above.
b. No Default or Event of Default has occurred under the Credit
Agreement(1).
c. The quarterly financial statements which accompany this certificate
fairly present in all material respects the financial condition of the
Credit Parties, on a consolidated basis, and have been prepared in
accordance with GAAP, subject to changes resulting from normal year-end
audit adjustments.
This ______ day of ___________, 19__.
HIGHWOODS PROPERTIES, INC.,
sole general partner of Highwoods/Forsyth
Limited Partnership
By:_________________________________
Name:_______________________________
Title: Chief Financial Officer
- -----------------
(1) If a Default or Event of Default shall have occurred an explanation of such
Default or Event of Default shall be provided on a separate page together
with an explanation of the action taken or proposed to be taken by the
Credit Parties with respect thereto.
Exhibit 7.16
FORM OF JOINDER AGREEMENT
THIS JOINDER AGREEMENT (this "Agreement"), dated as of _____________, 199_,
is entered into between _____________________, a ___________________ (the "New
Subsidiary") and NATIONSBANK, N.A., in its capacity as Agent (the "Agent") under
that certain Credit Agreement, dated as of December 15, 1997, among
Highwoods/Forsyth Limited Partnership (the "Borrower"), Highwoods Properties,
Inc., the Subsidiaries of the Borrower and Highwoods Properties, Inc., the
Lenders party thereto and the Agent (as the same may be amended, modified,
extended or restated from time to time, the "Credit Agreement"). All capitalized
terms used herein and not otherwise defined shall have the meanings set forth in
the Credit Agreement.
The New Subsidiary and the Agent, for the benefit of the Lenders, hereby
agree as follows:
1. The New Subsidiary hereby acknowledges, agrees and confirms that, by its
execution of this Agreement, the New Subsidiary will be deemed to be a Credit
Party under the Credit Agreement and a "Guarantor" for all purposes of the
Credit Agreement and shall have all of the obligations of a Guarantor thereunder
as if it had executed the Credit Agreement. The New Subsidiary hereby ratifies,
as of the date hereof, and agrees to be bound by, all of the terms, provisions
and conditions contained in the Credit Agreement, including without limitation
(a) all of the representations and warranties of the Credit Parties set forth in
Section 6 of the Credit Agreement, (b) all of the affirmative and negative
covenants set forth in Sections 7 and 8 of the Credit Agreement and (c) all of
the guaranty obligations set forth in Section 4 of the Credit Agreement. Without
limiting the generality of the foregoing terms of this paragraph 1, the New
Subsidiary, subject to the limitations set forth in Section 4.7 of the Credit
Agreement, hereby guarantees, jointly and severally with the other Guarantors,
to the Agent and the Lenders, as provided in Section 4 of the Credit Agreement,
the prompt payment and performance 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 and agrees that if any
of the Credit Party Obligations are not paid or performed in full when due
(whether at stated maturity, as a mandatory prepayment, by acceleration or
otherwise), the New Subsidiary will, jointly and severally together with the
other Guarantors, promptly pay and perform 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.
2. The address of the New Subsidiary for purposes of Section 11.1 of the
Credit Agreement is as follows:
____________________________
____________________________
____________________________
____________________________
3. The New Subsidiary hereby waives acceptance by the Agent and the Lenders
of the guaranty by the New Subsidiary under the Credit Agreement upon the
execution of this Agreement by the New Subsidiary.
4. This 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.
5. THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER
SHALL BE GOVERNED BY AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH THE LAWS
OF THE STATE OF NORTH CAROLINA.
IN WITNESS WHEREOF, the New Subsidiary has caused this Agreement to be duly
executed by its authorized officer, and the Agent, for the benefit of the
Lenders, has caused the same to be accepted by its authorized officer, as of the
day and year first above written.
[NEW SUBSIDIARY]
By:___________________________
Name:_________________________
Title:________________________
Acknowledged and accepted:
NATIONSBANK, N.A., as Agent
By:___________________________
Name:_________________________
Title:________________________
Exhibit 11.3
FORM OF
ASSIGNMENT AGREEMENT
Reference is made to that certain Credit Agreement dated as of December 15,
1997 (as the same may be amended, modified, extended or restated from time to
time, the "Credit Agreement") among Highwoods/Forsyth Limited Partnership (the
"Borrower"), Highwoods Properties, Inc., the Subsidiaries of the Borrower and
Highwoods Properties, Inc. the Lenders identified therein and NationsBank, N.A.,
as Agent. All capitalized terms used herein and not otherwise defined shall have
the meanings set forth in the Agreement.
1. The Assignor (as defined below) hereby sells and assigns, without
recourse, to the Assignee (as defined below), and the Assignee hereby purchases
and assumes, without recourse, from the Assignor, effective as of effective date
of the assignment as designated below (the "Effective Date"), the interests set
forth below (the "Assigned Interest") in the Assignor's rights and obligations
under the Credit Agreement, including, without limitation, (a) the interests set
forth below in the Revolving Loan Commitment Percentage of the Assignor on the
Effective Date and (b) the Loans owing to the Assignor in connection with the
Assigned Interest which are outstanding on the Effective Date. The purchase of
the Assigned Interest shall be at par and periodic payments made with respect to
the Assigned Interest which (i) accrued prior to the Effective Date shall be
remitted to the Assignor and (ii) accrue from and after the Effective Date shall
be remitted to the Assignee. From and after the Effective Date, the Assignee, if
it is not already a Lender under the Credit Agreement, shall become a "Lender"
for all purposes of the Credit Agreement and the other Credit Documents and, to
the extent of such assignment, the assigning Lender shall be relieved of its
obligations under the Credit Agreement.
2. The Assignor represents and warrants to the Assignee that it is the
holder of the Assigned Interest and the Loans related thereto and it has not
previously transferred or encumbered such Assigned Interest or Loans.
3. The Assignee represents and warrants to the Assignor that it is an
Eligible Assignee.
4. This Assignment shall be effective only upon (a) to the extent required,
the consent of the Agent under Section 11.3(b) of the Credit Agreement and (b)
delivery to the Agent of this Assignment Agreement together with the transfer
fees, if applicable, set forth in Section 11.3(b) of the Credit Agreement.
5. The Assignor and the Assignee confirm to and agree with each other and
the other parties to the Credit Agreement as to the terms set forth in paragraph
2 of Section 11.3(b) of the Credit Agreement.
6. This Assignment shall be governed by and construed in accordance with
the laws of the State of North Carolina.
7. Terms of Assignment
(a) Date of Assignment _________________
(b) Legal Name of Assignor _________________
(c) Legal Name of Assignee _________________
(d) Effective Date of Assignment _________________
(e) Revolving Loan Commitment
Percentage assigned _________________
(f) Total Revolving Loans
outstanding as of Effective Date $_________________
(g) Principal Amount of Revolving
Loans assigned on Effective Date
(the amount set forth in (f)
multiplied by the
percentage set forth in (e)) $_________________
(h) Revolving Committed
Amount $_________________
(i) Principal Amount of Revolving
Committed Amount Assigned on the
Effective Date (the amount set forth
in (h) multiplied by
the percentage set forth in (e)) $_________________
The terms set forth above
are hereby agreed to:
_______________________, as Assignor
By:____________________________________
Name:__________________________________
Title:_________________________________
____________________, as Assignee
By:____________________________________
Name:__________________________________
Title:_________________________________
CONSENTED TO (if applicable):
NATIONSBANK, N.A., as Agent
By:____________________________________
Name:__________________________________
Title:_________________________________