SECOND AMENDMENT
THIS SECOND AMENDMENT TO CREDIT AGREEMENT (this "Amendment") effective
as of December 31, 1998 (the "Effective Date") and executed as of February 26,
1999 (the "Execution Date") to the Credit Agreement referenced below is by and
among HIGHWOODS PROPERTIES, INC., a Maryland corporation ("Highwoods
Properties"), HIGHWOODS FINANCE, LLC, a Delaware limited liability company
("Highwoods Finance"), HIGHWOODS REALTY LIMITED PARTNERSHIP, a North Carolina
limited partnership ("Highwoods Realty"), and HIGHWOODS SERVICES, INC., a North
Carolina corporation ("Highwoods Services") (Highwoods Properties, Highwoods
Finance, Highwoods Realty and Highwoods Services are hereinafter referred to
individually as a "Borrower" and collectively as the "Borrowers"), the
Subsidiaries of the Borrowers identified on the signature pages hereto (such
Subsidiaries are hereinafter referred to individually as a "Guarantor" and
collectively as the "Guarantors"), the lenders identified on the signature pages
hereto (the "Lenders") and NATIONSBANK, N.A., as Administrative Agent for the
Lenders (in such capacity, the "Administrative Agent").
W I T N E S S E T H
WHEREAS, a $600 million credit facility has been established in favor
of the Borrowers pursuant to the terms of that Credit Agreement dated as of July
3, 1998 (as amended and modified, the "Credit Agreement") among the Borrower,
the Guarantors, the Lenders, NationsBank, N.A., as Administrative Agent for the
Lenders (in such capacity, the "Administrative Agent"), First Union National
Bank, as Syndication Agent for the Lenders (in such capacity, the "Syndication
Agent"), Xxxxx Fargo Bank, National Association, as Documentation Agent for the
Lenders (in such capacity, the "Documentation Agent"), and the institutions
identified therein as Managing Agents.
WHEREAS, the Borrower has requested certain modifications to the Credit
Agreement;
WHEREAS, such modifications require the consent of the Required
Lenders;
WHEREAS, the Required Lenders hereby consent to the requested
modifications on the terms and conditions set forth herein;
NOW, THEREFORE, IN CONSIDERATION of the premises and other good and
valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the parties agree as follows:
1. The Credit Agreement is amended in the following respects:
1.1 The following definitions in Section 1.1 of the Credit Agreement
are amended and modified, or added, to read as follows:
"Applicable Percentage" means, for any day, the rate per annum
set forth below opposite the applicable Unsecured Long Term Debt Rating
then in effect, it being understood that the Applicable Percentage for
(i) Eurodollar Loans shall be the percentage set forth under column
"Applicable Percentage for Eurodollar Loans", (ii) Base Rate Loans
shall be the percentage set forth under the column "Applicable
Percentage for Base Rate Loans" and (iii) Letter of Credit Fee shall be
the percentage set forth under the column "Applicable Percentage for
Letter of Credit Fee."
----------------- ---------------- -------------- --------------- ----------------- ------------------ ------------------
Applicable
Applicable Applicable Percentage for
Pricing Xxxxx'x Third Debt Percentage for Percentage Base Letter of Credit
Level S&P Rating Rating Rating Eurodollar Loans Rate Loans Fee
----------------- ---------------- -------------- --------------- ----------------- ------------------ ------------------
I X- xx xxxxxx X0 xx xxxxxx X- /X0 0.95% 0.30% 0.95%
equivalent
or higher
----------------- ---------------- -------------- --------------- ----------------- ------------------ ------------------
II BBB+ Baa1 BB+/Baa1 1.00% 0.30% 1.00%
equivalent
----------------- ---------------- -------------- --------------- ----------------- ------------------ ------------------
III BBB Baa2 BBB/Baa2 1.10% 0.30% 1.10%
equivalent
----------------- ---------------- -------------- --------------- ----------------- ------------------ ------------------
IV BBB- Baa3 BBB-/Baa3 1.20% 0.40% 1.20%
equivalent
----------------- ---------------- -------------- --------------- ----------------- ------------------ ------------------
V BB+ or Ba1 or BB+/Ba1 1.80% 0.55% 1.80%
lower lower equivalent
----------------- ---------------- -------------- --------------- ----------------- ------------------ ------------------
The Applicable Percentage shall be adjusted effective on the next
Business Day following any change in the Unsecured Long Term Debt
Rating. The Borrowers shall notify the Administrative Agent in writing
promptly after becoming aware of any change in the Unsecured Long Term
Debt Rating of Highwoods Properties.
"Budgeted Project Costs" means, with respect to Properties
Under Development, the budgeted cost of construction and final
completion of such Properties Under Development; provided that the
Budgeted Project Costs shall include projected operating deficits
through completion and the projected date of occupancy of eighty-five
percent (85%) of the gross leasable space; provided further that, with
respect to Properties Under Development by Minority Interest Entities,
the Budgeted Project Costs shall be the applicable Consolidated Party's
share of the budgeted costs of construction and final completion (based
on the greater of (x) the Minority Interest of such Consolidated Party
or (y) such Consolidated Party's obligation to provide funds to the
Minority Interest Entity, which could include, for example, completion
guaranties).
"Build To Suit Properties" means those Properties Under
Development which have been 100% leased to tenants and have projected
net operating income (based on projections approved by the
Administrative Agent in its discretion) during its first year after
final completion in an amount which results in a 9.75% annual rate of
return on all costs of construction of such Property Under Development,
including, without limitation, financing costs and operating deficits.
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"Derivative Exposure" means the maximum liability (including
costs, fees and expenses), based upon a liquidation or termination as
of the date of the applicable covenant compliance test, of any Person
under any interest rate swap, collar, cap or other interest rate
protection agreements, treasury locks, equity forward contracts,
foreign currency exchange agreements, commodity purchase or option
agreements or other interest or exchange rate or commodity price
hedging agreements.
"Guaranty Obligations" means, with respect to any Person,
without duplication, any obligations of such Person (other than
endorsements in the ordinary course of business of negotiable
instruments for deposit or collection) guaranteeing or intended to
guarantee any Indebtedness of any other Person in any manner, whether
direct or indirect, and including without limitation any obligation,
whether or not contingent, (i) to purchase any such Indebtedness or any
Property constituting security therefor, (ii) to advance or provide
funds or other support for the payment or purchase of any such
Indebtedness or to maintain working capital, solvency or other balance
sheet condition of such other Person (including without limitation keep
well agreements, maintenance agreements, comfort letters or similar
agreements or arrangements) for the benefit of any holder of
Indebtedness of such other Person, (iii) to lease or purchase Property,
securities or services primarily for the purpose of assuring the holder
of such Indebtedness, (iv) to guaranty the completion of any Properties
Under Development, whether or not specifically including costs
associated therewith or (v) to otherwise assure or hold harmless the
holder of such Indebtedness against loss in respect thereof. The amount
of any Guaranty Obligation hereunder shall (subject to any limitations
set forth therein) be deemed to be an amount equal to the outstanding
principal amount (or maximum principal amount, if larger) of the
Indebtedness in respect of which such Guaranty Obligation is made. It
is specifically understood and agreed that the Guaranty Obligations of
each Guarantor include any and all Obligations that such Guarantor may
have as a Borrower hereunder or under any of the other Credit
Documents.
"Indebtedness" of any Person, without duplication, means (a)
all obligations (whether direct or contingent and inclusive of all
costs and fees associated with any Derivative Exposure) of such Person
for borrowed money, (b) all obligations (whether direct or contingent
and inclusive of all costs and fees associated with any Derivative
Exposure) of such Person evidenced by bonds, debentures, notes or
similar instruments, or upon which interest payments are customarily
made, (c) all obligations (whether direct or contingent and inclusive
of all costs and fees associated with any Derivative Exposure) of such
Person under conditional sale or other title retention agreements
relating to Property purchased by such Person (other than customary
reservations or retentions of title under agreements with suppliers
entered into in the ordinary course of business), (d) all obligations
(whether direct or contingent and inclusive of all costs and fees
associated with any Derivative Exposure) of such Person issued or
assumed as the deferred purchase price of Property or services
purchased by such Person (other than trade debt incurred in the
ordinary course of business and due within six months of the incurrence
thereof) which would appear as liabilities on a balance sheet of such
Person, (e) all obligations (whether direct or contingent and inclusive
of all costs and fees associated with any Derivative Exposure) of such
Person under take-or-pay or similar arrangements or under commodities
agreements, (f) all Indebtedness of others secured by (or for which the
holder of such Indebtedness has an existing right, contingent or
otherwise, to be secured by) any Lien on, or payable out of the
proceeds of production from, Property owned or acquired by such Person,
whether or not the obligations secured thereby have been assumed, (g)
all Guaranty Obligations of such Person, (h) the principal portion of
all obligations (whether direct or contingent and inclusive of all
costs and fees associated with any Derivative Exposure) of such Person
under Capital Leases, (i) all obligations (whether direct or contingent
and inclusive of all costs and fees
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associated with any Derivative Exposure) of such Person in respect of
interest rate swap, collar, cap or other interest rate protection
agreements, treasury locks, equity forward contracts, foreign currency
exchange agreements, commodity purchase or option agreements or other
interest or exchange rate or commodity price hedging agreements
(including, but not limited to, the Hedging Agreements), (j) all
obligations (whether direct or contingent and inclusive of all costs
and fees associated with any Derivative Exposure) of such Person to
repurchase any securities which repurchase obligation is related to the
issuance thereof, (k) the maximum amount of all standby letters of
credit issued or bankers' acceptances facilities created for the
account of such Person and, without duplication, all drafts drawn
thereunder (to the extent unreimbursed), (l) all preferred Capital
Stock issued by such Person and required by the terms thereof to be
redeemed, or for which mandatory sinking fund payments are due, by a
fixed date, (m) all other obligations (whether direct or contingent and
inclusive of all costs and fees associated with any Derivative
Exposure) of such Person under any arrangement or financing structure
classified as debt (for tax purposes) by any nationally recognized
rating agency, (n) the principal portion of all obligations (whether
direct or contingent and inclusive of all costs and fees associated
with any Derivative Exposure) of such Person under Synthetic Leases and
(o) the Indebtedness of any partnership or unincorporated joint venture
in which such Person is a general partner or a joint venturer.
"Interest Expense" means, for any period, the sum of (a)
interest expense (including the interest component under Capital Leases
and Synthetic Leases) of the Consolidated Parties on a consolidated
basis for such period, as determined in accordance with GAAP, plus (b)
an amount equal to the aggregate of interest expense (including the
interest component under Capital Leases and Synthetic Leases), as
determined in accordance with GAAP, of each Minority Interest Entity
multiplied by the respective Minority Interest of each such entity.
"Managing Agents" means Centura Bank, CommerzBank AG, PNC
Bank, National Association and Wachovia Bank, N.A.
"Minority Interest" means the percentage of the Capital Stock
or other equity interest owned by a Consolidated Party in a Minority
Interest Entity.
"Minority Interest Entity" means any corporation, partnership,
association, joint venture or other entity in each case which is not a
Consolidated Party and in which a Consolidated Party owns, directly or
indirectly, Capital Stock or any other equity interest.
"Net Income" means, for any period, the sum of (i) net income
(excluding extraordinary gains and losses and related tax effects
thereof) after taxes for such period of the Consolidated Parties on a
consolidated basis, as determined in accordance with GAAP, plus (ii) an
amount equal to that portion attributable to Highwoods Realty of the
line item "minority interests" for such period, as shown on the
consolidated income statements of the Consolidated Parties, plus (iii)
without duplication, an amount equal to the aggregate of net income
(excluding extraordinary gains and losses and related tax effects
thereof) after taxes for such period, as determined in accordance with
GAAP, of each Minority Interest Entity multiplied by the respective
Minority Interest of each such entity.
"Notice of Borrowing" means a written notice of borrowing in
substantially the form of Exhibit 2.1(b)(i), as required by Section
2.1(b)(i) or Section 2.4(b)(i) signed by a Responsible Officer.
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"Permitted Investments" means Investments which are (i) cash
and Cash Equivalents; (ii) Investments existing on the Closing Date and
set forth on Schedule 1.1(a); (iii) Investments by any Credit Party in
any Wholly Owned Subsidiary that is a Credit Party; (iv) Investments in
any Wholly Owned Subsidiary which is to become a Credit Party pursuant
to the terms of Section 7.12 so long as such Wholly Owned Subsidiary
becomes a Credit Party within the 30 day period required by Section
7.12; (v) Investments by any Credit Party in any Preferred Stock
Subsidiary or any wholly owned Subsidiary of a Preferred Stock
Subsidiary; (vi) Investments by any Credit Party in any Property owned
by such Credit Party and in any personal property incidental to such
Property; (vii) Investments in vehicles, furniture, fixtures and other
personal property including supplies and other similar inventory
purchased by any Credit Party and used in such Consolidated Party's
ordinary course of business; (viii) Investments permitted by Section
8.5; (ix) Investments by Highwoods Realty, Highwoods Properties or any
Wholly Owned Subsidiary that is a Credit Party in any Non-Wholly Owned
Subsidiary that is a Credit Party, provided that the Adjusted
Investment Value of such Investments does not exceed, in the aggregate
at any time outstanding, an amount equal to 15% of Adjusted Total
Assets less an amount equal to the percentage of Adjusted Total Assets
represented by the Adjusted Investment Value of Investments made
pursuant to clause (x) below; and (x) Investments in any Person that is
not a Consolidated Party provided that the Adjusted Investment Value of
such Investments does not exceed 10% of Adjusted Total Assets in the
aggregate at any one time outstanding.
"Properties Under Development" means Properties the primary
purpose of which is to be leased in the ordinary course of business and
on which a Credit Party has commenced construction of a building or
other improvements; provided that any such Property will no longer be
considered a Property Under Development when seventy-five percent (75%)
of the gross leasable space contained therein are occupied by tenants
under leases.
"Scheduled Funded Debt Payments" means, as of the end of each
fiscal quarter of the Consolidated Parties, the sum of (a) all
scheduled payments of principal on Funded Indebtedness for the
Consolidated Parties on a consolidated basis for the applicable period
ending on such date (including the principal component of payments due
on Capital Leases during the applicable period ending on such date)
plus (b) an amount equal to the aggregate of all scheduled payments of
principal on Funded Indebtedness for each Minority Interest Entity for
the applicable period ending on such date (including the principal
component of payments due on Capital Leases during the applicable
period ending on such date) multiplied by the respective Minority
Interest of each such entity; it being understood that Scheduled Funded
Debt Payments shall not include any balloon payments due on the
maturity date of Funded Indebtedness.
"Total Assets" means the sum of (i) total assets of the
Consolidated Parties on a consolidated basis, as determined in
accordance with GAAP, plus (ii) an amount equal to the aggregate of
total assets, as determined in accordance with GAAP, of each Minority
Interest Entity multiplied by the respective Minority Interest of each
such entities.
"Total Liabilities" means the sum of (i) total liabilities of
the Consolidated Parties on a consolidated basis, as determined in
accordance with GAAP, plus (ii) an amount equal to the aggregate of
total liabilities, as determined in accordance with GAAP, of each
Minority Interest Entity multiplied by the respective Minority Interest
of each such entity plus (iii) without duplication, the Indebtedness of
the Consolidated Parties on a consolidated basis plus (iv) without
duplication, the aggregate of Indebtedness of each Minority Interest
Entity multiplied by the respective Minority Interest of each such
entity.
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"Unencumbered Assets at Cost" means with respect to (a) all
Properties of Highwoods Properties, Highwoods Realty and any Wholly
Owned Subsidiary (i) that are operating and generate revenues from
third parties, (ii) in which at least 75% of the available space
therein is being leased and generating rent payments and (iii) that are
not subject to any Liens and (b) all Properties of Highwoods
Properties, Highwoods Realty and any Wholly Owned Subsidiary (i) that
are in the process of being developed, (ii) in which at least 75% of
the space to be available at such Property upon completion of
construction has been pre-leased and (iii) that are not subject to any
Liens the sum of (I) for all such Properties of the type referenced in
clause (a) and (b) above owned by Highwoods Properties, Highwoods
Realty and any Wholly Owned Subsidiary on the Closing Date, the
undepreciated cost of such Properties plus (II) for such Properties of
the type referenced in clause (a) and (b) above purchased after the
Closing Date, the lesser of (x) the actual cost of such Properties and
(y) the Adjusted NOI for such Properties for the twelve months prior to
its acquisition divided by ten percent (10%) plus (III) all cash and
Cash Equivalents of the Highwoods Properties, Highwoods Realty and any
Wholly Owned Subsidiary.
1.2 The first sentence of Section 2.1(b)(i) is amended to read as
follows:
(i) Notice of Borrowing. One or more of the Borrowers shall
request a Revolving Loan borrowing by delivery of a Notice of
Borrowing, together with the officer's certificate required by Section
5.2(e), to the Administrative Agent not later than 11:00 A.M.
(Charlotte, North Carolina time) on the Business Day prior to the date
of the requested borrowing in the case of Base Rate Loans, and on the
third Business Day prior to the date of the requested borrowing in the
case of Eurodollar Loans.
1.3 Section 2.2(a)is amended to read as follows:
(a) Competitive Loans. So long as Highwoods Realty maintains
an unsecured long term debt rating of at least BBB- from S&P and Baa3
from Xxxxx'x, subject to the terms and conditions hereof and in
reliance upon the representations and warranties set forth herein, one
or more of the Borrowers may, from time to time from January 1, 2000
until the Maturity Date, request and each Lender may, in its sole
discretion, agree to make, Competitive Loans in Dollars to one or more
of the Borrowers; provided, however, that (i) the aggregate principal
amount of outstanding Competitive Loans shall not at any time exceed
the lesser of (a) THREE HUNDRED MILLION DOLLARS ($300,000,000) and (b)
fifty percent (50%) of the Revolving Committed Amount (the "Competitive
Loan Maximum Amount"), and (ii) the sum of the aggregate principal
amount of outstanding Revolving Loans plus the aggregate principal
amount of outstanding Competitive Loans plus the aggregate principal
amount of outstanding Swingline Loans plus LOC Obligations outstanding
shall not at any time exceed the Revolving Committed Amount. Each
Competitive Loan shall be not less than $10,000,000 in the aggregate
and integral multiples of $1,000,000 in excess thereof (or the
remaining portion of the Competitive Loan Maximum Amount, if less).
1.4 The first sentence of Section 2.2(b) is amended to read as follows:
(b) Competitive Bid Requests. One or more of the Borrowers may
solicit Competitive Bids by delivery of a Competitive Bid Request
substantially in the form of Exhibit 2.2(b), together with the
officer's certificate required by Section 5.2(e), to the Administrative
Agent by 12:00 Noon (Charlotte, North Carolina time) on a Business Day
four (4) Business Days prior to the date of a requested Competitive
Loan borrowing.
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1.5 The first sentence of Section 2.3(b) is amended to read as follows:
(b) Notice and Reports. The request for the issuance of a
Letter of Credit shall be submitted by a Borrower to the Issuing Lender
at least five (5) Business Days prior to the requested date of issuance
and shall be accompanied by the officer's certificate required by
Section 5.2(e).
1.6 The first sentence of Section 2.4(b)(i) is amended to read as
follows:
(i) Notices; Disbursement. Whenever one or more of the
Borrowers desires a Swingline Loan advance hereunder it shall deliver a
Notice of Borrowing, together with the officer's certificate required
by Section 5.2(e), to the Swingline Lender not later than 11:00 A.M.
(Charlotte, North Carolina time) on the Business Day of the requested
Swingline Loan advance.
1.7 The second sentence of Section 3.2 is amended to read as follows:
Each such extension or conversion shall be effected by the
Borrowers by delivery of a Notice of Extension/Conversion, together
with the officer's certificate required by Section 5.2(e), to the
office of the Administrative Agent specified in specified in Schedule
2.1(a), or at such other office as the Administrative Agent may
designate in writing, prior to 11:00 A.M. (Charlotte, North Carolina
time) on the Business Day of, in the case of the conversion of a
Eurodollar Loan into a Base Rate Loan, and on the third Business Day
prior to, in the case of the extension of a Eurodollar Loan as, or
conversion of a Base Rate Loan into, a Eurodollar Loan, the date of the
proposed extension or conversion, specifying the date of the proposed
extension or conversion and the Loans to be so extended or converted,
the types of Loans into which such Loans are to be converted.
1.8 Section 3.15(a) is amended by the addition of the following
sentence immediately after the fifth sentence thereof:
If the Administrative Agent fails to distribute such payment
to such Lenders on the day required by the foregoing sentence, the
Administrative Agent shall pay to such Lenders interest on the
undistributed amount from and including the day such amount was
required to be distributed to but excluding the date such amount is
distributed at a per annum rate equal to the Federal Funds Rate.
1.9 Subsections (e) and (f) of Section 5.2 of the Credit Agreement are
renumbered as subsections (f) and (g), and a new subsection (e) is added to
Section 5.2 of the Credit Agreement to read as follows:
(e) Officer's Certificates. Concurrent with the delivery of
the appropriate notice required pursuant to Section 5.2(a) above, the
Borrower shall have delivered a certificate of the chief financial
officer of the Principal Borrower substantially in the form of Exhibit
7.1(c), (i) demonstrating compliance with the financial covenants
contained in Section 7.11(a) and Section 7.11(b) by calculation thereof
after giving effect to the making of the requested Loan (and the
application of the proceeds thereof) or to the issuance of the
requested Letter of Credit, as the case may be, and (ii) stating that
no Default or Event of
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Default exists, or if any Default or Event of Default does exist,
specifying the nature and extent thereof and what action the Credit
Parties propose to take with respect thereto.
1.10 Clauses (iv) and (v) of Section 7.1(b) of the Credit Agreement are
renumbered as clausees (v) and (vi), and a new clause (iv) is added to Section
7.1(b) of the Credit Agreement to read as follows:
(iv) a projection of Asset Dispositions for the next fiscal
quarter for each Consolidated Party,
1.11 Section 7.1(c) of the Credit Agreement is amended to read as
follows:
(c) Officer's Certificate. At the time of delivery of the
financial statements provided for in Sections 7.1(a) and 7.1(b) above,
a certificate of the chief financial officer of the Principal Borrower
substantially in the form of Exhibit 7.1(c), (i) demonstrating
compliance, as of the end of each such fiscal period, with (A) the
financial covenants contained in Section 7.11, (B) the limitation on
Investments contained in Section 8.5 (and, correspondingly, the
limitations set forth in the definition of Permitted Investments), and
(C) the financial covenants contained in each of the indentures or
other agreements relating to any publicly issued debt securities of any
Consolidated Party, in each case by detailed calculation thereof (which
calculation shall be in form satisfactory to the Agent and which shall
include, among other things, an explanation of the methodology used in
such calculation and a breakdown of the components of such
calculation), (ii) stating that the Credit Parties were in compliance
with each of the covenants set forth in Sections 7 and 8 of the Credit
Agreement at all times during such fiscal period, and (iii) stating
that, as of the end of each such fiscal period, no Default or Event of
Default exists, or if any Default or Event of Default does exist,
specifying the nature and extent thereof and what action the Credit
Parties propose to take with respect thereto.
1.12 Subsections (d) through (j) of Section 7.1 of the Credit Agreement
are renumbered as subsections (e) through (k), and a new subsection (d) is added
to Section 7.1 to read as follows:
(d) Financial Projections. As soon as available, and in any
event within 45 days days after each fiscal quarter end (i) for each
fiscal quarter of the Consolidated Parties ending on or before December
31, 1999, a pro forma balance sheet and income statement of the
Consolidated Parties for each of the four succeeding fiscal quarters,
together with related pro forma consolidated and consolidating
statements of operations and retained earnings and of cash flows for
each such succeeding fiscal quarter and (ii) for each of the second and
fourth fiscal quarters of the Consolidated Parties ending subsequent to
December 31, 1999, (A) a pro forma balance sheet and income statement
of the Consolidated Parties for each of the eight succeeding fiscal
quarters, together with related pro forma consolidated and
consolidating statements of operations and retained earnings and of
cash flows for each such succeeding fiscal quarter and (B) a
certificate of the chief financial officer of the Principal Borrower
demonstrating compliance on a pro forma basis for each of the eight
succeeding fiscal quarters with (x) the financial covenants contained
in Section 7.11, (y) the limitation on Investments contained in Section
8.5 (and, correspondingly, the limitations set forth in the definition
of Permitted Investments), and (z) the financial covenants contained in
each of the indentures or other
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agreements relating to any publicly issued debt securities of any
Consolidated Party, in each case by detailed calculation thereof (which
calculations shall be in form satisfactory to the Agent and which shall
include, among other things, an explanation of the methodology used in
such calculations and a breakdown of the components of such
calculations).
1.13 Section 7.11 of the Credit Agreement is amended to read as
follows:
Section 7.11 Financial Covenants.
(a) Total Liabilities to Total Assets. At all times
during the periods set forth below, the ratio of (i) Total
Liabilities to (ii) Total Assets shall be less than or equal
to the ratio set forth opposite such period:
Effective Date through June 30, 2000 0.55 to 1.0
July 1, 2000 and thereafter 0.50 to 1.0
(b) Unencumbered Assets at Cost to Unsecured Debt. At
all times during the periods set forth below, the ratio of (i)
Unencumbered Assets at Cost to (ii) Unsecured Debt shall be
greater than or equal to the ratio set forth opposite such
period:
Effective Date through December 31, 1999 1.75 to 1.0
January 1, 2000 and thereafter 2.0 to 1.0
(c) Secured Debt to Total Assets. At all times, the
ratio of (i) Secured Debt to (ii) Total Assets shall be less
than or equal to 0.25 to 1.0.
(d) Interest Coverage Ratio. At all times, the
Interest Coverage Ratio shall be greater than 2.25 to 1.0.
(e) Fixed Charge Coverage Ratio. At all times the
Fixed Charge Coverage Ratio shall be greater than 1.75 to 1.0.
(f) Unsecured Debt Coverage Ratio. At all times, the
ratio of (i) for the twelve month period ending on the date of
determination, Adjusted NOI for the Properties that are not
subject to any Liens to (ii) for the twelve month period
ending on the date of determination, Interest Expense paid on
Unsecured Debt shall be greater than 2.25 to 1.0.
(g) Tangible Net Worth. At all times the Tangible Net
Worth shall be greater than or equal to the sum of
$1,779,000,000, increased on a cumulative basis as of the end
of each fiscal quarter of the Consolidated Parties, commencing
with the fiscal quarter ending June 30, 1998 by an amount
equal to 85% of the Net Cash Proceeds of any Equity Issuance
received by the Consolidated Parties subsequent to the Closing
Date.
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(h) Speculative Land to Total Assets. At all times,
the ratio of (i) the value at cost of all Speculative Land to
(ii) Total Assets shall be less than or equal to .10 to 1.0.
(i) Speculative Construction Ratio.
(i) At all times on or before December 31,
1999, the ratio of (A) the amount of potential square
footage in all Speculative Construction to (B) the
amount of square footage in all Properties of the
Consolidated Parties that have been fully completed
and are generating a positive cash flow on a stand
alone basis shall be less than or equal to 0.20 to
1.0.
(ii) At all times on or after January 1,
2000, the ratio of (i) the Budgeted Project Costs of
all Properties Under Development excluding Build To
Suit Properties to (ii) Total Assets shall be less
than or equal to 0.10 to 1.0.
(iii) At all times on or after January 1,
2000, the ratio of (i) the Budgeted Project Costs of
all Properties Under Development (including Build to
Suit Properties) to (ii) Total Assets shall be less
than or equal to 0.15 to 1.0.
(j) Investment in Properties other than For Lease
Office and Industrial Properties. The Credit Parties will not
permit any Consolidated Party to, directly or indirectly,
acquire, develop or otherwise make an Investment in any
properties other than for lease office and industrial
properties which in the aggregate shall exceed at any one time
during the periods set forth below an amount greater than the
amount set forth opposite such period:
Closing Date through December 31, 1999 15% of Total Assets
January 1, 2000 and thereafter 10% of Total Assets
(k) Restricted Payments. The Credit Parties will not
permit any Consolidated Party to, directly or indirectly,
declare, order, make or set apart any sum for or pay any
Restricted Payment, except the Credit Parties may make
distributions, in the aggregate, in an amount not to exceed
one hundred percent (100%) of Cash Available for Distribution.
1.14 Section 8.5 of the Credit Agreement is deleted in its entirety and
replaced with the following:
8.5 Intentionally Omitted
1.15 Section 8.7 of the Credit Agreement is deleted in its entirety and
replaced with the following:
10
8.7 Intentionally Omitted
1.16 All references in the Credit Agreement to Section 8.5 are amended
to refer to Section 7.11(j).
1.17 Exhibit 7.1(c) to the Credit Agreement is amended and restated in
its entirety as Exhibit 7.1(c) attached hereto.
2. Xxxxx & Xxxxx, LLC, a Tennessee limited liability company, a
Subsidiary, executed a Joinder Agreement more than 30 days after becoming a
Subsidiary in violation of Section 7.12 of the Credit Agreement. The Lenders do
hereby agree that the execution of such Joinder Agreement cured such Event of
Default to their satisfaction. Further, the Lenders hereby waive all Events of
Default occurring on or prior to the Execution Date as a result of any
Additional Credit Party's failure to execute a Joinder Agreement within the
period required by Section 7.12; provided, however, that this waiver (1) is a
one time waiver and shall be effective only in the specific circumstances
provided for above and only for the purposes for which given and (2) does not
waive any Event of Default occurring after the Execution Date as a result of any
Person's failure to execute a Joinder Agreement within the period required by
Section 7.12.
3. This Amendment shall be effective on the Effective Date (except for
the amendment to the definition of "Applicable Percentage", which shall be
effective on the Execution Date) upon satisfaction of the following conditions:
(a) execution of this Amendment by the Credit Parties and the Required
Lenders;
(b) execution by the Credit Parties and the Administrative Agent of a
side letter agreement, in form and substance satisfactory to the
Administrative Agent, relating to the settlement of any liability, cost
or expense resulting from or associated in any way with the Purchase
Agreement dated August 28, 1997 among Highwoods Properties, UBS Limited
and Union Bank of Switzerland, London Branch, and the Forward Stock
Purchase Agreement dated August 28, 1997 between Highwoods Properties
and Union Bank of Switzerland, London Branch.
(c) receipt by the Administrative Agent of a certificate of the chief
financial officer of the Principal Borrower substantially in the form
of Exhibit 7.1(c) to the Credit Agreement (i) demonstrating compliance
as of the Effective Date with (A) the financial covenants contained in
Section 7.11, (B) the limitation on Investments contained in Section
8.5 (and, correspondingly, the limitations set forth in the definition
of Permitted Investments), and (C) the financial covenants contained in
each of the indentures or other agreements relating to any publicly
issued debt securities of any Consolidated Party, in each case by
detailed calculation thereof (which calculation shall be in form
satisfactory to the Agent and which shall include, among other things,
an explanation of the methodology used in such calculation and a
breakdown of the components of such calculation) and (ii) stating that,
as of the Execution Date (after giving effect to this Amendment), no
Default or Event of Default exists, or if any Default or Event of
Default does exist, specifying the nature and extent thereof and what
action the Credit Parties propose to take with respect thereto.
11
(d) receipt by the Administrative Agent of legal opinions of counsel to
the Credit Parties relating to this Amendment; and
(e) receipt by the Administrative Agent of the following:
(i) Copies of resolutions of the Board of Directors
of each Credit Party approving and adopting the Credit
Documents to which it is a party, the transactions
contemplated therein and authorizing execution and delivery
thereof, certified by a secretary or assistant secretary of
such Credit Party to be true and correct and in force and
effect as of the Execution Date.
(ii) Copies of certificates of good standing,
existence or its equivalent with respect to each Credit Party
certified as of a recent date by the appropriate Governmental
Authorities of the state or other jurisdiction of
incorporation and each other jurisdiction in which the failure
to so qualify and be in good standing could reasonably be
expected to have a Material Adverse Effect.
(iii) An incumbency certificate of each Credit Party
certified by a secretary or assistant secretary to be true and
correct as of the Execution Date.
(iv) With respect to each Credit Party which
delivered its charter documents and bylaws (or their
equivalent) to the Administrative Agent on the Closing Date
pursuant to Section 5.1(b) of the Credit Agreement, an
officer's certificate for each such Credit Party dated as of
the Execution Date certifying that such charter documents and
bylaws (or their equivalent) have not been amended or modified
since the Closing Date and are true and correct copies of such
charter documents and bylaws as in effect on the Execution
Date.
(v) With respect to each Additional Credit Party, (A)
the charter documents (or their equivalent) for each such
Additional Credit Party, certified to be true and complete as
of a recent date by the appropriate Governmental Authority of
the state or other jurisdiction of its incorporation and
certified by a secretary or assistant secretary of such
Additional Credit Party to be true and correct as of the
Execution Date, and (B) a copy of the bylaws (or their
equivalent) of each such Additional Credit Party certified by
a secretary or assistant secretary of such Additional Credit
Party to be true and correct as of the Execution Date.
(d) receipt by each Lender of an amendment fee equal to 25 basis points
(0.25%) on such Lender's Revolving Commitment.
4. The Borrower hereby represents and warrants in connection herewith
that as of the date hereof (after giving effect hereto) that, as of the
Execution Date, (i) the representations and warranties set forth in Section 6 of
the Credit Agreement are true and correct in all material
12
respects (except those which expressly relate to an earlier date), and (ii) no
Default or Event of Default exists under the Credit Agreement, as amended
hereby.
5. Except as modified hereby, all of the terms and provisions of the
Credit Agreement (including Schedules and Exhibits) shall remain in full force
and effect.
6. The Borrower agrees to pay all reasonable costs and expenses of the
Administrative Agent in connection with the preparation, execution and delivery
of this Amendment, including without limitation the fees and expenses of Xxxxx &
Xxx Xxxxx, PLLC.
7. This Amendment may be executed in any number of counterparts, each
of which when so executed and delivered shall be deemed an original and it shall
not be necessary in making proof of this Amendment to produce or account for
more than one such counterpart.
8. This Amendment shall be deemed to be a contract made under, and for
all purposes shall be construed in accordance with, the laws of the State of
North Carolina.
9. To the extent that there is a conflict or inconsistency between any
provision of this Amendment, on the one hand, and any provision of any other
Credit Document, on the other hand, this Amendment shall control.
[Remainder of Page Intentionally Left Blank]
13
IN WITNESS WHEREOF, each of the parties hereto has caused a counterpart
of this Second Amendment to Credit Agreement to be duly executed and delivered
as of the date first above written.
BORROWERS: HIGHWOODS REALTY LIMITED PARTNERSHIP,
a North Carolina limited partnership
By: Highwoods Properties, Inc.,
general partner
By:
Name: Xxxxxx X. Xxxxxx
Title: President
HIGHWOODS PROPERTIES, INC.,
a Maryland corporation
By:
Name: Xxxxxx X. Xxxxxx
Title: President
HIGHWOODS SERVICES, INC.,
a North Carolina corporation
By:
Name: Xxxxxx X. Xxxxxx
Title: President
HIGHWOODS FINANCE, LLC,
a Delaware limited liability company
By: Highwoods Properties, Inc.,
its sole member-manager
By:
Name: Xxxxxx X. Xxxxxx
Title: President
GUARANTORS: SOUTHEAST REALTY OPTIONS CORP.,
a Delaware corporation
By:
Name: Xxxxxx X. Xxxxxx
Title: President
HIGHWOODS/FLORIDA GP CORP.,
a Delaware corporation
By:
Name: Xxxxxx X. Xxxxxx
Title: President
HIGHWOODS/TENNESSEE PROPERTIES, INC.,
a Tennessee corporation
By:
Name: Xxxxxx X. Xxxxxx
Title: President
ATRIUM ACQUISITION CORP.,
a Maryland corporation
By:
Name: Xxxxxx X. Xxxxxx
Title: President
0000 XXXXXXXX XXXXX, INC.,
a Maryland corporation
By:
Name: Xxxxxx X. Xxxxxx
Title: President
PIKESVILLE SPORTSMAN'S CLUB, INC.,
a Maryland corporation
By:
Name: Xxxxxx X. Xxxxxx
Title: President
[Signatures continue]
HIGHWOODS/FLORIDA HOLDINGS, L.P.,
a Delaware limited partnership
By: Highwoods/Florida GP Corp.,
general partner
By:
Name: Xxxxxx X. Xxxxxx
Title: President
HIGHWOODS/TENNESSEE HOLDINGS, L.P.,
a Tennessee limited partnership
By: Highwoods/Tennessee Properties, Inc.,
general partner
By:
Name: Xxxxxx X. Xxxxxx
Title: President
PINELLAS NORTHSIDE PARTNERS, LTD.,
a Florida limited partnership
By: Highwoods/Florida Holdings, L.P.,
its general partner
By: Highwoods/Florida GP Corp.,
its general partner
By:
Name: Xxxxxx X. Xxxxxx
Title: President
[Signatures continue]
INTERSTATE BUSINESS PARK, LTD.,
a Florida limited partnership
By: Highwoods/Florida Holdings, L.P.,
general partner
By: Highwoods/Florida GP Corp.,
general partner
By:
Name: Xxxxxx X. Xxxxxx
Title: President
PINELLAS BAY VISTA PARTNERS, LTD.,
a Florida limited partnership
By: Highwoods/Florida Holdings, L.P.,
general partner
By: Highwoods/Florida GP Corp.,
general partner
By:
Name: Xxxxxx X. Xxxxxx
Title: President
PINELLAS PINEBROOK PARTNERS, LTD.,
a Florida limited partnership
By: Highwoods/Florida Holdings, L.P.,
general partner
By: Highwoods/Florida GP Corp.,
general partner
By:
Name: Xxxxxx X. Xxxxxx
Title: President
[Signatures continue]
DOWNTOWN CLEARWATER TOWER, LTD.,
a Florida limited partnership
By: Highwoods/Florida Holdings, L.P.,
general partner
By: Highwoods/Florida GP Corp.,
general partner
By:
Name: Xxxxxx X. Xxxxxx
Title: President
BDBP, LTD.,
a Florida limited partnership
By: Highwoods/Florida Holdings, L.P.,
general partner
By: Highwoods/Florida GP Corp.,
general partner
By:
Name: Xxxxxx X. Xxxxxx
Title: President
CROSS BAYOU, LTD.,
a Florida limited partnership
By: Highwoods/Florida Holdings, L.P.,
general partner
By: Highwoods/Florida GP Corp.,
general partner
By:
Name: Xxxxxx X. Xxxxxx
Title: President
[Signatures continue]
SISBROS, LTD.,
a Florida limited partnership
By: Highwoods/Florida Holdings, L.P.,
general partner
By: Highwoods/Florida GP Corp.,
general partner
By:
Name: Xxxxxx X. Xxxxxx
Title: President
SHOCKOE PLAZA INVESTORS, L.C.,
a Virginia limited liability company
By: Highwoods Realty Limited Partnership,
manager
By: Highwoods Properties, Inc.,
general partner
By:
Name: Xxxxxx X. Xxxxxx
Title: President
RC ONE LLC,
a Maryland limited liability company
By: Highwoods Services, Inc.,
the sole member-manager
By:
Name: Xxxxxx X. Xxxxxx
Title: President
[Signatures continue]
SEVEN CRONDALL ASSOCIATES LLC,
a Maryland limited liability company
By: Highwoods Realty Limited Partnership,
the sole member-manager
By: Highwoods Properties, Inc.,
general partner
By:
Name: Xxxxxx X. Xxxxxx
Title: President
EIGHT CRONDALL ASSOCIATES LLC,
a Maryland limited liability company
By: Highwoods Realty Limited Partnership,
the sole member-manager
By: Highwoods Properties, Inc.,
general partner
By:
Name: Xxxxxx X. Xxxxxx
Title: President
NINE CRONDALL ASSOCIATES LLC,
a Maryland limited liability company
By: Highwoods Realty Limited Partnership,
the sole member-manager
By: Highwoods Properties, Inc.,
general partner
By:
Name: Xxxxxx X. Xxxxxx
Title: President
[Signatures continue]
0000 XXXXXXX XXXX LLC
a Maryland limited liability company
By: Highwoods Realty Limited Partnership,
the sole member-manager
By: Highwoods Properties, Inc.,
general partner
By:
Name: Xxxxxx X. Xxxxxx
Title: President
HPI TITLE AGENCY, LLC
a North Carolina limited liability company
By: Highwoods Realty Limited Partnership,
the sole member-manager
By: Highwoods Properties, Inc.,
general partner
By:
Name: Xxxxxx X. Xxxxxx
Title: President
581 HIGHWOODS, L.P.,
a Delaware limited partnership
By: Highwoods/Florida Holdings, L.P.,
its general partner
By: Highwoods/Florida GP Corp.,
its general partner
By:
Name: Xxxxxx X. Xxxxxx
Title: President
[Signatures continue]
HIGHWOODS DLF, LLC,
a Delaware limited liability company
By: Highwoods Realty Limited Partnership,
manager
By: Highwoods Properties, Inc.,
general partner
By:
Name: Xxxxxx X. Xxxxxx
Title: President
XXXXXXX PLAZA WEST, INC.,
a Missouri corporation
By:
Name: Xxxxxx X. Xxxxxx
Title: President
OZARK MOUNTAIN VILLAGE, INC.,
a Missouri corporation
By:
Name: Xxxxxx X. Xxxxxx
Title: President
PLAZA LAND COMPANY,
a Florida company
By:
Name: Xxxxxx X. Xxxxxx
Title: President
BOARD OF TRADE REDEVELOPMENT CORPORATION,
a Missouri corporation
By:
Name: Xxxxxx X. Xxxxxx
Title: President
[Signatures continue]
1st XXXXX CORP.,
a California corporation
By:
Name: Xxxxxx X. Xxxxxx
Title: President
SOMEDAY, INC.,
a Kansas corporation
By:
Name: Xxxxxx X. Xxxxxx
Title: President
KC CONDOR, INC.,
a Missouri corporation
By:
Name: Xxxxxx X. Xxxxxx
Title: President
X.X. XXXXXXX REALTY COMPANY,
a Missouri company
By:
Name: Xxxxxx X. Xxxxxx
Title: President
ALAMEDA TOWERS DEVELOPMENT COMPANY,
a Missouri corporation
By:
Name: Xxxxxx X. Xxxxxx
Title: President
CHALLENGER, INC.,
a Kansas corporation
By:
Name: Xxxxxx X. Xxxxxx
Title: President
[Signatures continue]
GUARDIAN MANAGEMENT, INC.,
a Kansas corporation
By:
Name: Xxxxxx X. Xxxxxx
Title: President
HIGHWOODS WELLNESS CENTER, LLC,
a North Carolina limited liability company
By: Highwoods Services, Inc.,
the sole member-manager
By:
Name: Xxxxxx X. Xxxxxx
Title: President
HIGHWOODS/INTERLACHEN HOLDINGS, L.P.,
a Delaware limited partnership
By: Highwoods/Florida Holdings, L.P.,
its sole general partner
By: Highwoods/Florida GP Corp.,
its sole general partner
By:
Name: Xxxxxx X. Xxxxxx
Title: President
[Signatures continue]
HIGHWOODS/TENNESSEE PROPERTIES, INC.,
a Tennessee corporation
By:
Name: Xxxxxx X. Xxxxxx
Title: President
XXXXX & XXXXX, LLC,
a Tennessee limited liability company
By:
Name: W. Xxxxx Xxxxxx
Title: Governor
By:
Name: Xxxx Xxxxxx
Title: Governor
By:
Name: Xxxxx X. Xxxxx
Title: Governor
[Signatures continue]
MARLEY CONTINENTAL HOMES OF KANSAS,
a Kansas general partnership
By: Highwoods Realty Limited Partnership,
general partner
By: Highwoods Properties, Inc.,
general partner
By:
Name: Xxxxxx X. Xxxxxx
Title: President
[Signatures continue]
LENDERS: NATIONSBANK, N.A.,
Individually in its capacity as a Lender
and in its capacity as Administrative Agent
By:
Name:
Title:
FIRST UNION NATIONAL BANK
By:
Name:
Title:
XXXXX FARGO BANK, NATIONAL
ASSOCIATION
By:
Name:
Title:
COMMERZBANK AG
By:
Name:
Title:
WACHOVIA BANK, N.A.
By:
Name:
Title:
CENTURA BANK
By:
Name:
Title:
PNC BANK, NATIONAL ASSOCIATION
By:
Name:
Title:
FLEET NATIONAL BANK
By:
Name:
Title:
AMSOUTH BANK
By:
Name:
Title:
DRESDNER BANK AG, NEW YORK BRANCH
By:
Name:
Title:
DG BANK DEUTSCHE GENOSSENSCHAFTSBANK,
CAYMAN ISLAND BRANCH
By:
Name:
Title:
By:
Name:
Title:
MELLON BANK, N.A.
By:
Name:
Title:
FIRSTRUST SAVINGS BANK
By:
Name:
Title:
CREDIT LYONNAIS, NEW YORK BRANCH
By:
Name:
Title:
BAYERISCHE HYPO-UND VEREINSBANK, AG
By:
Name:
Title:
ERSTE BANK DER OESTERREICHISCHEN SPARKASSEN AG
By:
Name:
Title:
SOUTHTRUST BANK, N.A.
By:
Name:
Title:
Exhibit 7.1(c)
to
Credit Agreement
FORM OF
OFFICER'S COMPLIANCE CERTIFICATE
For the fiscal quarter ended _________________, 19___/200___.
I, ______________________, chief financial officer of Highwoods
Properties, Inc., hereby certify that, with respect to that certain Credit
Agreement dated as of July 3, 1998 (as it may be amended, modified, extended or
restated from time to time, the "Credit Agreement"; all of the defined terms in
the Credit Agreement are incorporated herein by reference) among Highwoods
Realty Limited Partnership ("Highwoods Realty"), Highwoods Properties, Inc.
("Highwoods Properties"), Highwoods Finance LLC, a Delaware limited liability
company ("Highwoods Finance") and Highwoods Services, Inc. ("Highwoods
Services") (Highwoods Realty, Highwoods Properties, Highwoods Finance and
Highwoods Services are hereinafter referred to individually as a "Borrower" and
collectively as the "Borrowers") certain Subsidiaries of the Borrowers, the
Lenders party thereto, NationsBank, N.A., as Administrative Agent, First Union
National Bank, as Syndication Agent, Xxxxx Fargo Bank, National Association, as
Documentation Agent and the institutions identified therein as Managing Agents:
a. Attached hereto as Schedule 1 are detailed calculations
(which calculations shall be in form satisfactory to the Administrative
Agent and which shall include, among other things, an explanation of
the methodology used in such calculation and a breakdown of the
components of such calculation) demonstrating compliance, as of the end
of the fiscal period referred to above, by the Consolidated Parties
with (A) the financial covenants contained in Section 7.11 of the
Credit Agreement, (B) the limitation on Investments contained in
Section 8.5 (and, correspondingly, the limitations set forth in the
definition of Permitted Investments), and (C) the financial covenants
contained in each of the indentures or other agreements relating to any
publicly issued debt securities of any Consolidated Party.
b. The Credit Parties were in compliance with each of the
covenants set forth in Sections 7 and 8 of the Credit Agreement at all
times during such fiscal period referred to above.
c. No Default or Event of Default has occurred under the
Credit Agreement(1).
d. The quarterly financial statements which accompany this
certificate fairly present in all material respects the financial
condition of the Consolidated Parties and has been prepared in
accordance with GAAP, subject to changes resulting from normal year-end
audit adjustments.
This ______ day of ___________, ____.
HIGHWOODS PROPERTIES, INC.
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 Borrower with
respect thereto.
