Forward Stock Purchase

                                                          28-Aug-97, 03:51:24 PM

To:               Highwoods Properties, Inc.
                  3100 Smoketree Court
                  Suite 600
                  Raleigh, NC  27604

Attn:             Mr.  Carmen Liuzzo

From:             Union Bank of Switzerland, London Branch
                  c/o UBS Securities LLC, as agent
                  299 Park Avenue
                  New York, NY  10171

Date:             25 August 1997

Ladies and Gentlemen:

The purpose of this letter agreement (this "Confirmation") is to confirm the
terms and conditions of the Transaction entered into between us on the Trade
Date specified below (the "Transaction"). This Confirmation constitutes a
"Confirmation" as referred to in the ISDA Master Agreement specified below.

The definitions and provisions contained in the 1991 ISDA Definitions (as
published by the International Swaps and Derivatives Association, Inc.) are
incorporated into this Confirmation. In the event of any inconsistency between
those definitions and provisions and this Confirmation, this Confirmation will
govern. References herein to the "Transaction" shall be deemed to be references
to a "Swap Transaction" for the purposes of the 1991 ISDA Definitions.

This Confirmation evidences a complete binding agreement between you and us as
to the terms of the Transaction to which this Confirmation relates. In addition,
you and we agree to use all reasonable efforts promptly to negotiate, execute
and deliver an agreement in the form of the ISDA Master Agreement
(Multicurrency-Cross Border) (the "ISDA Form"), with such modifications as you
and we will in good faith agree. Upon the execution by you and us of such an
agreement, this Confirmation will supplement, form a part of, and be subject to
that agreement. All provisions contained or incorporated by reference in that
agreement upon its execution will govern this Confirmation except as expressly
modified below. Until we execute and deliver that agreement, this Confirmation,
together with all other documents referring to the ISDA Form (each a
"Confirmation") confirming transactions (each a "Transaction") entered into
between us (notwithstanding anything to the contrary in a Confirmation), shall
supplement, form a part of, and be subject to an agreement in the form of the
ISDA Form as if we had executed an agreement in such form m(but without any
Schedule) on the Trade Date of the firm such Transaction between us. In the
event of any inconsistency between the provisions of that agreement and this
Confirmation, this Confirmation will prevail for the purpose of this
Transaction.

The Agreement and each Confirmation thereunder will be governed by and construed
in accordance with the laws of the State of New York without reference to choice
of law doctrine.


<PAGE>

                             Forward Stock Purchase

I.   The Transaction

This Transaction is a commitment by Highwoods Properties, Inc. (the "Company")
to purchase, and Union Bank of Switzerland, London Branch ("UBS") acting through
UBS Securities LLC as its agent for each purchase or sale of Securities ("UBS
LLC") to sell, common shares of beneficial interest, par value $0.01 per share,
of the Company ("Common Shares") up to an aggregate of 1,800,000, in exchange
for cash or Common Shares of the Company on the terms more particularly
specified herein (the "Confirmation").

II.  Settlement

A.   Notice and Settlement Amount

1.   The Company may on any Exchange Trading Day up to and including the
     Maturity Date, upon the giving of five (5) Business Days telephonic notice
     to UBS, settle all or part of this Transaction. Such notice shall specify:

               (i) the number of Underlying Shares subject to such settlement
               (the "Settlement Shares"),

               (ii) the settlement method (Cash, Stock or Net Stock Settlement,
               as such methods are described below), and

               (iii) the date upon which such settlement shall begin ("Day S"),
               which must be an Exchange Trading Day; provided however, that if
               in UBS' reasonable judgment the settlement of the Settlement
               Shares would potentially violate or contravene any legal or
               regulatory prohibition or requirement applicable to UBS or cause
               UBS to contravene any established UBS corporate policy or
               compliance policy (other than any corporate policy limiting the
               amount of UBS's investment in another entity), then UBS shall at
               least three (3) Business Days prior to the proposed Day S, notify
               the Company telephonically (confirmed by writing) of any such
               impediment and its estimate of the period during which such
               impediment will preclude UBS' ability to settle all or part of
               this Transaction, in which case the Company may upon telephonic
               notice to UBS at least one (1) Exchange Trading Day prior to the
               proposed Day S withdraw its settlement notice.

     Such notice shall be effective only if the notice requirements specified
     above are fulfilled, provided, that if no settlement method is specified,
     then the settlement method shall be deemed to be Cash Settlement.

     In the case of any partial settlement ("Partial Settlement"), following
     such settlement the number of Underlying Shares to which this Transaction
     shall relate shall be adjusted by subtracting the number of Settlement
     Shares from the number of Underlying Shares to which the Transaction
     related (as the same may have been adjusted prior to such Partial
     Settlement) immediately prior to such partial settlement. The Settlement
     Shares shall not be subject to forward accretion and shall be treated
     separately from the remaining Underlying Shares, during any Unwind Period.

2.   On Day S, the Settlement Price for the Settlement Shares and the Settlement
     Amount shall be determined for Day S.

3.   The Settlement Amount shall be settled pursuant to the settlement method
     (B, C, or D of this Article II) selected by the Company in its sole
     discretion.

4.   If settlement with respect to the Settlement Shares (this section does not
     apply for Interim Net Stock Settlement) shall occur on or before the 180th
     day following the Effective Date, then the Settlement Price for purposes of
     such settlement shall be increased by any positive amount, calculated by
     UBS as follows:

                                      -2-
<PAGE>

                             Forward Stock Purchase

            Spread x Forward Price x (180 - calendar days since Trade Date)
                                     --------------------------------------
                                                       360

5.   It shall be a condition precedent to any right of the Company to elect
     Stock Settlement (II. C. below) or Net Stock Settlement (II. D. below),
     that the Company must (i) notify UBS of such election at least 5 Business
     Days prior to Day S and (ii) prior to Day S, cause to be filed with the
     Securities and Exchange Commission (the "Commission") and cause to become
     effective under the Securities Act of 1933, as amended (the "Securities
     Act") a resale registration statement covering all Common Shares to be
     delivered by the Company to UBS LLC for the account of UBS in effecting
     such Stock Settlement or Net Stock Settlement, such registration statement
     to include one or more preliminary prospectuses, prospectuses, and any
     amendments and supplements thereto such that any preliminary prospectus or
     prospectus, as amended or supplemented, shall not contain any untrue
     statement of a material fact or omit to state a material fact required to
     be stated therein or necessary to make the statements therein not
     misleading in light of the circumstances under which they are made The
     Company further agrees that it will cause any such Registration Statement
     to remain in effect until the earliest of the date on which (i) all Common
     Shares issued pursuant hereto and not required to be delivered to the
     Company hereunder have been sold by UBS LLC for the account of UBS and UBS
     agrees to notify the Company of such fact, within two (2) Business Days of
     its occurrence, (ii) UBS LLC for the account of UBS is able to sell the
     Common Shares subject thereto under Rule 144(k), or (iii) UBS has advised
     the Company that it no longer requires that such registration statement be
     effective.

B.   Cash Settlement

     The Company shall settle by delivering cash in an amount equal to the
     Settlement Amount in exchange for the Settlement Shares ("Cash Settlement")
     on the Exchange Trading Day immediately succeeding Day S. UBS LLC for the
     account of UBS shall deliver the Settlement Shares to the Company on the
     Exchange Trading Day immediately succeeding Day S upon receipt of such Cash
     Settlement.

C.   Stock Settlement

     If the Company elects to meet its payment obligations by delivering Common
     Shares in exchange for the Settlement Shares ("Stock Settlement"), the
     number of Common Shares to be delivered (the "Stock Settlement Shares")
     shall be equal to (a) the Settlement Amount divided by (b) the Stock
     Settlement Unwind Price. The mechanics for settlement are set forth in II.
     E.2. below and Article V.

D.   Net Stock Settlement

     If the Company determines that it will elect to meet its payment
     obligations under II.A. or its delivery obligations under III.A. on a net
     stock basis ("Net Stock Settlement"), the number of net stock settlement
     shares (the "Net Stock Settlement Shares") shall equal:

          i) the number of Settlement Shares, times

          ii) the Settlement Price minus the Stock Settlement Unwind Price,
          divided by

          iii) the Stock Settlement Unwind Price.

     If such calculation yields a negative number, this shall indicate the
     number of Common Shares to be delivered from UBS LLC for the account of UBS
     to the Company. The mechanics for settlement are set forth in II. E. below
     and Article V.

                                      -3-
<PAGE>

                             Forward Stock Purchase

E.   Stock and Net Stock Settlement Mechanics

     1.   Preliminary Stock Settlement. If the Company has chosen Stock
          Settlement, the Company shall deliver to UBS LLC for the account of
          UBS, by 11:00 a.m. on Day S, that number of Common Shares, registered,
          for resale under an effective registration statement (the "Preliminary
          Stock Settlement Shares"), equal to the product of (i)(a) the
          Settlement Amount divided by (b) the closing price of the Common
          Shares on the Exchange Trading Day immediately preceding Day S, times
          (ii) 110%. Upon receipt of the Preliminary Stock Settlement Shares,
          UBS will deposit the Settlement Shares in the Company's Margin
          Account.

     2.   Preliminary Net Stock Settlement. If the Company has chosen Net Stock
          Settlement and if the Settlement Price exceeds the closing price of
          the Common Shares on the Exchange Trading Day immediately preceding
          Day S, the Company shall deliver to UBS LLC for the account of UBS by
          11:00 a.m. on Day S, that number of Common Shares (the "Preliminary
          Net Stock Settlement Shares) equal to (i)(a) the number of Settlement
          Shares times (b) the difference between the Settlement Price and the
          closing price of the Common Shares on the Exchange Trading Day
          immediately preceding Day S divided by (ii) the closing price of the
          Common Shares on the Exchange Trading Day immediately preceding Day S
          times (iii) 125%. If the closing price of the Common Shares on the
          Exchange Trading Day immediately preceding Day S exceeds the
          Settlement Price, the Company shall not be required to deliver any
          shares to UBS LLC for the account of UBS under this subsection II.E.2.

     3.   By 11:00 a.m. on every fifth (5th) Exchange Trading Day during the
          Unwind Period and on the Business Day following the final Exchange
          Trading Day of the Unwind Period:

          (a) For Stock Settlement:

          Stock Settlement Shares shall be calculated as if such Exchange
          Trading Day were Day S, except that (a) there shall be no adjustment
          to the Settlement Amount and (b) for purposes of calculating the Stock
          Settlement Unwind Price, the Unwind Period shall be deemed to have
          ended on the Exchange Trading Day on which the calculation is made.

          (i) if Stock Settlement Shares are greater than the sum of (a)
          Preliminary Stork Settlement Shares plus (b) any shares previously
          delivered pursuant to this settlement under this subparagraph (i),
          then the Company shall deliver that number of registered, freely
          tradable Common Shares equal to the difference between Stock
          Settlement Shares and Preliminary Stock Settlement Shares to UBS LLC
          for the account of UBS, and

          (ii) on the final day of the Unwind Period, if the sum of (a)
          Preliminary Stock Settlement Shares plus (b) any shares previously
          delivered pursuant to this settlement under this subparagraph (i) are
          greater than Stock Settlement Shares, then UBS LLC, for the account of
          UBS, shall deliver Common Shares equal to the difference between the
          sum of (a) and (b) above and Stock Settlement Shares to the Company's
          Margin Account,

          (b) For Net Stock Settlement:

          Net Stock Settlement Shares shall be calculated as if such Exchange
          Trading Day were Day S except that (a) there shall be no adjustment to
          the Settlement Amount and (b) for purposes of calculating the Stock
          Settlement Unwind Price, the Unwind Period shall be deemed to have
          ended on the Exchange Trading Day on which the calculation is made.

          (i) if Net Stock Settlement Shares are greater than the sum of (a)
          Preliminary Net Stock Settlement Shares plus (b) any shares previously
          delivered pursuant to this settlement under this subparagraph (i),
          then the Company shall deliver Common Shares (which Common Shares may
          be delivered



                                      -4-
<PAGE>

                             Forward Stock Purchase

          from its Margin Account) registered for resale under an effective
          registration statement equal in number to the difference between Net
          Stock Settlement Shares and the sum of (a) and (b) to UBS LLC for the
          account of UBS, or

          (ii) on the final day of the Unwind Period, if the sum of a)
          Preliminary Net Stock Settlement Shares plus b) any shares previously
          delivered pursuant to this settlement under this subparagraph (i) are
          greater than Net Stock Settlement Shares, UBS LLC for the account of
          UBS shall deliver Common Shares equal in number to the difference
          between sum of (a) and (b) above and Net Stock Settlement Shares to
          the Company's Margin Account.

     4.   The Company shall cause all shares delivered by it to UBS LLC for the
          account of UBS to be fully and effectively registered under the
          Securities Act.

     5.   On the Exchange Trading Day following the final Exchange Trading Day
          of the Unwind Period, UBS LLC for the account of UBS shall release
          claims to Common Shares held in the Company's Margin Account,
          including any Underlying Shares delivered pursuant to Stock Settlement
          (II. E. 1. above), and deliver all such Common Shares to the Company
          with the dollar value of all fractional shares settled in cash.

     6.   In the event of Stock or Net Stock Settlement (this section does not
          apply for Interim Net Stock Settlement), the Company shall pay an
          unwind accretion fee, in cash or stock, calculated in accordance with
          the following formula:

      Settlement Amount x (days in Unwind Period) x [1 month USD LIBOR + Spread]
                           ---------------------     --------------------------
                                     2                           360

     7.   In the event of Stock or Net Stock Settlement (this section does not
          apply for Interim Net Stock Settlement), the Company shall pay a
          placement fee to UBS LLC for the account of UBS calculated as:

          Settlement Amount x 0.50%

III. Interim Net Stock Settlement

A.   On each Reset Date, if the Forward Price exceeds the closing price of the
     Common Shares on such Reset Date, on the Business Day following the Fifth
     Exchange Trading Day thereafter the Company shall deliver Common Shares
     registered for resale by URS to UBS LLC (if the Company is restricted by
     law or regulation or self-regulatory requirements or related policies and
     procedures, whether or not such requirements, policies or procedures are
     imposed by law directly or have been voluntarily adopted by the Company to
     insure compliance with applicable laws or in its reasonable judgment is
     otherwise unable or unwilling to deliver registered Common Shares, see
     III.B. below) for the account of UBS equal to the Interim Settlement
     Shares.

B.   In the event that the Company fails to deliver registered shares pursuant
     to Paragraph III.A. due to an inability described in such paragraph, the
     Company shall deliver cash collateral in an amount equal to the market
     value of the Interim Settlement Shares specified in III.A. to a collateral
     account at UBS. Such collateral account will earn interest at USD LIBOR for
     a designated maturity of 1 month, adjusted for any interest breakage costs
     (whether positive or negative). All other aspects of Interim Net Stock
     Settlement shall be unaffected. At the Company's option, upon delivering an
     effective resale registration statement to UBS LLC for the account of UBS,
     the Company may deliver freely salable registered shares to UBS equal in
     salable market value, based on closing market prices during a commercially
     reasonable valuation period, to the value of the collateral held in the
     collateral account at UBS. On the day after the last day of such
     commercially reasonable valuation period, UBS shall release all claims to
     collateral held in the collateral account and deliver such amounts to the
     Company.



                                      -5-
<PAGE>

                             Forward Stock Purchase

C.   If the Company fails to deliver an effective resale registration statement
     within 90 days of the Trade Date, until an effective resale registration
     statement is provided and an Interim Net Stock Settlement can be effected,
     the Company shall deliver cash collateral in an amount calculated as
     specified in III.A. to a collateral account at UBS. Such collateral account
     will earn interest at USD LIBOR for a designated maturity of 1 month,
     adjusted for any interest breakage costs. Monitoring of the Transaction on
     a cash collateral basis (using standards set forth above) shall be effected
     bi-weekly (every 2 weeks) until an Interim Net Settlement can be effected
     or the transaction is settled on a Cash Settlement basis. At the Company's
     option, upon delivering an effective resale registration statement to UBS
     LLC for the account of UBS, the Company may deliver freely salable
     registered shares to UBS equal in salable market value, based on closing
     market prices during a commercially reasonable valuation period, to the
     value of the collateral held in the collateral account at UBS. On the day
     after the last day of .such commercially reasonable valuation period, UBS
     shall release all claims to collateral held in the collateral account and
     deliver such amounts to the Company.

IV.  Definitions

For the purposes of this Confirmation, the following terms shall have the
meanings set opposite:

Ability to Settle in Stock:   As of the date hereof, the Company has not, and
                              after the date hereof, the Company will not, enter
                              into any obligation that would contractually
                              prohibit the Company from Stock Settlement of any
                              shares under this Agreement.

Adjustment to Forward Price:  In the event of:

                              (a) a subdivision, consolidation or
                              reclassification of the Common Shares, or a free
                              distribution or dividend of any Common Shares to
                              all existing holders of Common Shares by way of
                              bonus, capitalization or similar issue;

                              (b) a distribution or dividend to all existing
                              holders of Common Shares of (i) additional Common
                              Shares or (ii) other share capital or securities
                              granting right to payment of dividends and/or the
                              proceeds of liquidation of the Company equally or
                              proportionally with such payments to holders of
                              Common Shares or (iii) and other type of
                              securities, warrants or other assets, in any case
                              for payment (cash or otherwise) at less than the
                              prevailing market price; or

                              (c) any other event that has a diluting or
                              concentrative effect on the value of the
                              Underlying Shares, an adjustment shall thereupon
                              be effected to the Forward Price and/or the
                              Underlying Shares at the time of such event with
                              the intent that following such adjustment, the
                              value of this Transaction is economically
                              equivalent to the value immediately prior to the
                              occurrence of the event causing the adjustment.

Calculation Agent:            UBS, whose calculations and determinations shall
                              be made in a commercially reasonable manner and
                              shall be binding absent manifest error.

Compounding Period:           Means each period commencing on and including:

                              (i) in the case of the first Compounding Period,
                              the Effective Date and ending on but excluding the
                              first Reset Date, and

                              (ii) for each period thereafter, a Reset Date and
                              ending on (but excluding) the next following Reset
                              Date.

Daycount:                     Actual/360


                                      -6-
<PAGE>

                             Forward Stock Purchase

Dividend Amount:              Means, on each Reset Date, or Early Termination
                              Date, or Maturity Date, an amount in U.S. Dollars
                              equal to:

                              (i) the sum of all cash distributions paid on a
                              single Common Share during the relevant
                              Compounding Period; plus

                              (ii) an amount representing interest that could
                              have been earned on such distributions at a USD
                              LIBOR having a Designated Maturity of 1 month for
                              the period from the date that such distributions
                              would have been received by a holder of such
                              Common Shares until such Reset Date.

                              Separately, and not included in Dividend Amount,
                              all cash dividends, having gone ex-dividend but
                              not paid prior to the end of the final Compounding
                              Period for any settlement, on a number of shares
                              equal to the Underlying Shares, or on a reduced
                              number shares during an Unwind Period, will be
                              paid to the Company by UBS LLC for the account of
                              UBS on the Business Day after the relevant
                              dividend payment date declared by the Company's
                              Board of Directors.

Effective Date:               25 August 1997

Exchange Trading Day:         Each day on which the Relevant Exchange is open
                              for trading.

Forward Price:                On any day, the Forward Price shall be determined
                              for such day by:

                              a) (i) compounding the Initial Price for each
                              Compounding Period at the USD LIBOR rate plus
                              Spread for a Designated Maturity of 3 months or
                              the Designated Maturity which corresponds to the
                              Compounding Period if less than 3 months
                              (Actual/360 day count fraction) to such Reset Date
                              and

                              (ii) subtracting the Dividend Amount at that date,

                              and

                              b) provided however that if the Company delivers
                              shares pursuant to III., the Forward Price for
                              purposes of determining the Initial Price for the
                              next Reset Date, shall be adjusted to a price
                              equal to the closing price of the Common Shares on
                              the Exchange Trading Day immediately prior to the
                              current Reset Date, Early Termination Date or
                              Maturity Date adjusted up for any positive result
                              or down for any negative result of the following
                              formula:

                              (ii) the Interim Settlement Amount

                              minus,

                              (i) (a) Interim Settlement Shares times (b) the
                              average closing price of the Common Shares on the
                              five (5) Exchange Trading Days immediately
                              following the receipt of shares by UBS pursuant to
                              III. above.

                              such result divided by,

                              (iii) the number of Underlying Shares.

Initial Price:                Means,


                                      -7-
<PAGE>

                             Forward Stock Purchase

                              a) for the Compounding Period ending on the first
                              Reset Date, an amount in U.S. Dollars equal to
                              [closing price], and

                              b) for each subsequent Reset Date, the Forward
                              Price as calculated on or adjusted as of the prior
                              Reset Date.

Interim Settlement Amount:    On any day, the product of (a) the number of
                              Underlying, Shares, and (b) the amount by which
                              the Forward Price exceeds the closing price of the
                              Common Shares on the Exchange Trading Day
                              immediately prior to such day.

Interim Settlement Shares:    (i) 110% times (ii) Interim Settlement Amount
                              divided by (iii) the closing price of the Common
                              Shares on the Exchange Trading Day immediately
                              prior to such Reset Date.

Mandatory Unwind       Mandatory
Thresholds:            Unwind Thresholds                    Unwind Share Limit
                       -----------------                    ------------------
                          70.0% of current price           up to 25% of shares
                          65.0%                                    50%
                          62.5%                                    75%
                          60.0%                                    100%

Maturity Date:                One (1) year after the Effective Date, subject to
                              extension upon the written approval of UBS in its
                              sole discretion.

Relevant Exchange:            Means, with respect to any Exchange Trading Day,
                              the principal Stock Exchange on which the Common
                              Shares are traded on that day.

Reset Dates:                  25 November 1997, 25 February 1998, 25 May 1998,
                              25 August 1998.

Settlement Amount:            The product of the Settlement Price and the
                              Settlement Shares.

Settlement Disruption Event:  Means an event beyond the control of the parties
                              as a result of which The Depository Trust Company
                              ("DTC") or any successor depository cannot effect
                              a transfer of the Settlement Shares or the Common
                              Shares. If there is a Settlement Disruption Event
                              on a Valuation Date, then the transfer of the
                              Common Shares that would otherwise be due to be
                              made by UBS LLC for the account of UBS or the
                              transfer of the Common Shares that would otherwise
                              be due to be made by the Company, as applicable,
                              on that date shall take place on the first
                              succeeding Exchange Trading Dy on which settlement
                              can take place through DTC, provided that if such
                              a Settlement Disruption Event persists for five
                              consecutive Business Days, then the Party obliged
                              to deliver such Settlement Shares shall use its
                              best efforts to cause such Shares to be delivered
                              promptly thereafter to the other Party in any
                              commercially reasonable manner.

Settlement Price:             If Day S is a Reset Date, the Forward Price. If
                              Day S is not a Reset Date, the Forward Price
                              adjusted for LIBOR breakage adjustments (either
                              positive or negative) for the Settlement Shares
                              for the period from Day S to the next following
                              Reset Date. Any breakage adjustments shall be
                              calculated by the Calculation Agent in accordance
                              with normal industry standards.

Spread:                       0.75% per annum.

Stock Exchange:               Means the New York Stock Exchange, the American
                              Stock Exchange or



                                      -8-
<PAGE>

                             Forward Stock Purchase

                              NASDAQ.

Stock Settlement
Unwind Price:                 The daily average closing price of the Common
                              Shares for Exchange Trading Days during the Unwind
                              Period.

Trade Date:                   25 August 1997

Unwind Period:                In the event of Stock Settlement or Net Stock
                              Settlement, the 35 Exchange Trading Day period
                              (subject to change based on mutual agreement)
                              beginning on Day S; provided that UBS may extend
                              such period for such additional number of Exchange
                              Trading Days required to complete its hedging
                              activities in a commercially reasonable manner or
                              upon the occurrence of a Market Disruption Event.

Underlying Shares:            1,800,000 Common Shares of the Company (ticker
                              "HIW")

Valuation Date:               In the case of determining any Cash Settlement
                              value, Net Stock Settlement Shares or Stock
                              Settlement Shares, Day S, the day preceding Day S
                              and all Exchange Trading Days during the Unwind
                              Period; in the case of determining any Preliminary
                              Stock Settlement Shares or Preliminary Net Stock
                              Settlement Shares, the Exchange Trading Day
                              immediately preceding Day S.

Valuation Time:               4:00 pm EST, or in the event the Relevant Market
                              closes early, such closing time.


V.   Certain Covenants and Other Provisions



                                      -9-
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                             Forward Stock Purchase

Mandatory Unwind Event:       If at any time prior to the Maturity Date:

                              (i) the average closing price on the Relevant
                              Exchange of the Common Shares on an Exchange
                              Trading Days, other than a day on which a Market
                              Disruption Event has occurred, is equal to or less
                              than any of the Mandatory Unwind Thresholds, then
                              on the Mandatory Unwind Date the Parties agree to
                              settle, all or a portion of the Transaction, up to
                              the Unwind Share Limit for the corresponding
                              Mandatory Unwind Threshold settling such amounts
                              pursuant to Article II. above,

                              Once a Mandatory Unwind Event has occurred, if the
                              Common Shares trade below a lower Mandatory Unwind
                              Threshold at any time, the Parties agree to
                              settle, all or a portion of the Transaction, up to
                              the corresponding Unwind Share Limit.

                              Or,

                              (ii) if any of the following events occur:

                              (1) any Financial Covenant Default as more
                              particularly described in Exhibit A attached
                              hereto,

                              (2) any Event of Default under the outstanding
                              $280 million unsecured credit line, evidenced by
                              that certain Credit Agreement by and among
                              Highwoods/Forsyth Limited Partnership as borrower
                              the Company and certain subsidiaries as
                              guarantors, the lenders named therein,
                              NationsBank, N.A. as administrative agent and
                              First Union National Bank of North Carolina as
                              documentation agent, dated September 27, 1996,

                              (3) any Event of Default under any other unsecured
                              lending agreement involving the Company,

                              (4) Bankruptcy or Insolvency, and/or

                              (5) any failure of the Company to post cash
                              collateral pursuant to III. B. herein.

                              then, UBS LLC for the account of UBS may, on
                              giving 5 Business Days notice to the Company
                              require all or part of the Transaction to be
                              settled early on such date (such date and amount
                              being "Day S" and "Settlement Shares" for the
                              purposes of the "Settlement" provisions above).
                              The Company may elect the method of settlement for
                              such early settlement in accordance with the
                              settlement provisions set forth herein.

                              however,

                              in the event (1) no resale Registration Statement
                              has been provided and declared effective prior to
                              Day S or (2) any resale Registration Statement so
                              provided and declared effective becomes, on Day S
                              or during an unwind period, the subject of a stop
                              order suspending its effectiveness or is the
                              subject of any proceeding for that purpose or any
                              such proceeding is threatened by the Commission,
                              then the Company at its sole option may choose to
                              (A) cash collateralize 125% of its obligation to
                              UBS in a manner similar to that described in
                              Section III.3., (B) effect Cash Settlement as to
                              all of the Settlement Shares in accordance with

                                      -10-
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                             Forward Stock Purchase

                              Section II.B. hereof on the Exchange Trading Day
                              immediately succeeding the occurrence of one of
                              the events specified in (1) or (2) above or (C)
                              effect settlement with Common Shares that are not
                              subject to a resale Registration Statement to
                              allow UBS to unwind the Transaction and liquidate
                              any position it may hold in such unregistered
                              Settlement Shares by means of negotiated private
                              resales, to the extent and in the manner permitted
                              by applicable federal and state securities laws.
                              In recognition that such negotiated private
                              resales, if any, are likely to be completed at
                              prices reflective of a discount to the prevailing
                              open market prices for any freely tradable Common
                              Shares, the Company agrees to deliver such number
                              of supplemental Common Shares as UBS may
                              reasonably request to which UBS shall assign a
                              dollar price in order to approximate an aggregate
                              amount equal to the aggregate discount accepted by
                              UBS in connection with the resale of the
                              Settlement Shares or the Company shall pay an
                              amount to UBS equal to the aggregate discount
                              accepted by UBS in connection with the resale of
                              the Settlement Shares.

                              Upon receipt of full payment from the Company to
                              UBS LLC for the account of UBS, UBS LLC for the
                              account of UBS will promptly return all shares in
                              the Company's Margin Account to the Company.


Market Disruption Event:      The occurrence or existing or existence on any
                              Exchange Trading Day during the one-half hour
                              period that ends at the Valuation Time of any
                              suspension of or limitation imposed on trading on
                              (i) any of the Relevant Exchanges or (ii) any of
                              the Related Exchanges in options or futures
                              contracts on the Common Shares of the Company if,
                              in the reasonable determination of the Calculation
                              Agent, such suspension or limitation is material.
                              In the event that a Market Disruption Event occurs
                              or is continuing on a Valuation Date, then any
                              determination of the closing pricing of the Common
                              Shares shall be postponed to the first succeeding
                              Exchange Trading Day on which there is no Market
                              Disruption Event, provided that if there is a
                              Market Disruption Event on each of the five
                              Exchange Trading Days immediately following the
                              original Valuation Date that but for the Market
                              Disruption Event would have been a day on which
                              the closing price of the Common Shares would have
                              been determined, such fifth Exchange Trading Day
                              shall be deemed to be such Valuation Date
                              notwithstanding the Market Disruption Event and
                              the Calculation Agent shall, in consultation with
                              the Company, determine the closing price for that
                              Valuation Date based upon the last closing price
                              prior to such Market Disruption Event, and if
                              applicable, shall effect the settlement of the
                              Underlying Shares by using such last closing price
                              for the determination of the Settlement Amount
                              under Paragraph II.A.3. above.

                              The Calculation Agent shall within one (1 )
                              Business Day notify the other party of the
                              existence or occurrence of a Market Disruption
                              Event on any day that but for the occurrence or
                              existence of a Market Disruption Event would have
                              been a Valuation Date.

Regulatory Compliance:        Each party agrees that if the delivery of shares
                              upon settlement is subject to any restriction
                              imposed by a regulatory authority, it shall not be
                              an event of default, and the parties will
                              negotiate in good faith a procedure to effect
                              settlement of such shares in a manner which
                              complies with any relevant rules of such
                              regulatory authority and which is satisfactory in
                              form and substance to their respective counsel.

                                      -11-
<PAGE>

                             Forward Stock Purchase

Securities Law Compliance:    Each party agrees that it will comply, in
                              connection with this Transaction and all related
                              or contemporaneous sales and purchases of the
                              Company's Common Shares, with the applicable
                              provisions of the Securities Act, the Securities
                              Exchange Act of 1934 (the "Exchange Act") and the
                              rules and regulations thereunder.

Settlement Stock Delivery:    Pursuant to the Stock Settlement and Net Stock
                              Settlement provisions under Section II. above, UBS
                              LLC for the account of UBS shal1 deliver all
                              Settlement Shares to the Company's Margin Account.
                              Such Common Shares will be owned by the Company,
                              and will serve as collateral until released by UBS
                              LLC for the account of UBS in accordance with the
                              settlement mechanics noted under II.E. above.

                              The Company covenants and agrees with UBS that
                              Common Shares delivered by the Company pursuant to
                              settlement events in accordance herewith will be
                              duly authorized, validly issued, fully paid and
                              nonassessable. The issuance of such Common Shares
                              will not require the consent, approval,
                              authorization, registration, or qualification of
                              any government authority, except such as shall
                              have been obtained on or before the delivery date
                              to UBS LLC for the account of UBS in connection
                              with any registration statement filed with respect
                              to any shares.

Stock Settlement Transfer:    All settlements shall occur through DTC or any
                              other mutually acceptable depository.

Solvency:                     Immediately following the execution of this
                              agreement, the Company will be solvent and able to
                              pay its debts as they mature, will have capital
                              sufficient to carry on business and all businesses
                              in which it engages, and will have assets which
                              will have a present fair market valuation greater
                              than the amount of all of its liabilities.

Trading Authorization:        The following individuals and /or any individual
                              authorized in writing by the Treasurer of the
                              Company are authorized by the Company to provide
                              trading instructions to UBS LLC for the account of
                              UBS with regard to this transaction.

                                            Ronald P.  Gibson
                                            Carman J.  Liuzzo
                                            Mack D.  Pridgen III


                                      -12-

<PAGE>

                             Forward Stock Purchase

VI.  Delivery Instructions:

  Party A:                    Chase, NYC
                              UBS Securities LLC
                              ABA 021000021
                              A/C No. ###-##-####
                              Attn: GED




  Party B:



                              Please confirm that the foregoing correctly sets
                              forth the terms of our agreement by executing the
                              copy of this Confirmation enclosed for that
                              purpose and returning it to Ms. Gale Herzing, 29th
                              Floor.

Yours faithfully,

Union Bank of Switzerland, London Branch

By: ________________________             By: _______________________________
Name:                                    Name:
Title:                                   Title:
Date:                                    Date:





Highwoods Properties Inc.



By: ____________________________         By: _____________________________
Name: Carman J. Liuzzo                   Name: Mack D. Pridgen III
Title: Vice President and Chief          Title: Vice President and
       Financial Officer                        General Counsel
Date: August 28, 1997                    Date: August 28, 1997


                                      -13-
<PAGE>

                             Forward Stock Purchase

                                    Exhibit A
                               Financial Covenants

<TABLE>
<CAPTION>
Financial Covenants *                                                             Test Period            Threshold
---------------------                                                             -----------            ---------
<S>                                                                               <C>                    <C>
Adjusted NOI to Total Liabilities                                                 Rolling 4Q             >= 16 5%

Minimum Tangible Net Worth                                                        NA                     (1)

Total Liabilities to Total Market Capitalization                                  NA                     <= 45%

Total Liabilities to Total Property Assets at Cost                                NA                     <= 50%

EBITDA to Interest Expense (plus Capex)                                           Rolling 4Q             >= 2 20x

Unencumbered Assets to Unsecured Debt                                             Rolling 4Q             >= 2.25x

Secured Debt to Total Property Assets at Cost                                     Rolling 4Q             <= 30NO

Unencumbered Adjusted NOI to Unsecured Interest Expense                           Rolling 4Q             >= 2 25x

Unencumbered Adjusted NOI to Unsecured Debt                                       Rolling 4Q             >= 18%

Speculative Land to Improved Properties                                           Rolling 4Q             <= 3 .0%
</TABLE>

Any above capitalized terms shall be defined pursuant to the Company's $280
million Credit Agreement by and among Highwoods/Forsyth Limited Partnership as
borrower, the Company and certain subsidiaries as guarantors, the lenders named
therein, NationsBank, N.A. as administrative agent and First Union National Bank
of North Carolina as documentation agent, dated September 27, 1996.

(1) Greater than or equal to the sum of (i) $700 million plus (ii) 85% of the
Net Cash Proceeds of any Equity Issuance subsequent to the Closing Date of the
Credit Agreement by and among Highwoods/Forsyth Limited Partnership as borrower
the Company and certain subsidiaries as guarantors, the lenders named therein,
NationsBank, N A as administrative agent and First Union National Bank of North
Carolina as documentation agent, dated September 27, 1996.





* ($ millions where appropriate)


                                      -14-