**Exhibit 10.3**

 

**THIRD AMENDMENT TO CREDIT AGREEMENT**

 

****THIS THIRD AMENDMENT TO CREDITAGREEMENT dated as of March 27, 2003 (the “Third Amendment”), is by and among HIGHWOODS REALTY LIMITED PARTNERSHIP, a North Carolina limited partnership (“Highwoods Realty”), HIGHWOODS PROPERTIES, INC., a Marylandcorporation (“Highwoods Properties”), HIGHWOODS FINANCE, LLC, a Delaware limited liability company (“Highwoods Finance”), HIGHWOODS SERVICES, INC., a North Carolina corporation (“HighwoodsServices”), and HIGHWOODS/TENNESSEE HOLDINGS, L.P., a Tennessee limited partnership (“Highwoods Tennessee”) (Highwoods Realty, Highwoods Properties, Highwoods Finance, Highwoods Services, and Highwoods Tennessee arehereinafter referred to individually as a “Borrower” and collectively as the “Borrowers”), the subsidiaries of the Borrowers identified on the signature pages attached hereto (such Subsidiaries are hereinafterreferred to individually as a “Guarantor” and collectively as the “Guarantors”), the Lenders (as defined in the Credit Agreement referenced below), BANK OF AMERICA, N.A., as Administrative Agent for the Lenders (insuch capacity, the “Administrative Agent”), BANC OF AMERICA SECURITIES LLC, as Sole Lead Arranger (in such capacity, the “Sole Lead Arranger”) and Sole Book Manager (in such capacity, the “Sole BookManager”), WELLS FARGO BANK, NATIONAL ASSOCIATION, as Syndication Agent (in such capacity, the “Syndication Agent”), WACHOVIA BANK, N.A., as Documentation Agent (in such capacity, the “DocumentationAgent”), and is an amendment to that certain Credit Agreement dated as of December 13, 2000 by and among the Borrowers, Guarantors, Lenders, Administrative Agent, Sole Lead Arranger, Sole Book Manager, Syndication Agent and DocumentationAgent, as amended by that certain First Amendment to Credit Agreement dated as of June 29, 2001, and as amended by that certain Second Amendment to Credit Agreement dated as of December         , 2002(as the same may have been further amended, restated, supplemented or otherwise modified, the “Credit Agreement”). 

 

**W I T N E S S E T H**

 

**WHEREAS**, each of the Borrowers and the Guarantors have requested and the Lenders and Administrative Agent have agreed to amend theCredit Agreement on the terms and conditions set forth herein; 

 

**NOW, THEREFORE**, for good and valuable consideration, the receipt of which is hereby acknowledged by the parties hereto, the parties hereto agree as follows: 

 

1. Amendments to Credit Agreement. 

 

(a) Section 7.11(e) of the Credit Agreement is hereby deleted in its entirety and replacedwith the following: 

 

“(e)Fixed Charge Coverage Ratio. The Fixed Charge Coverage Ratio shall at all times be greater than 1.60 to 1.00.” 

 

(b) Section 7.11(k)(i) of the Credit Agreement is hereby deleted in its entirety and replaced with the following:

 

“(i) Restricted Payments,as determined on any date following the date of this Agreement and for the previous twelve (12) calendar month period (including, as applicable, periods occurring prior to the date of this Agreement) shall not exceed an amount equal to the sum of(A) Cash Available for Distribution, plus (B) 25% of Net Assets Sales Proceeds derived from sales of Speculative Land, plus, (C) 70% of Net Assets Sales Proceeds derived from sales of other assets of the Consolidated Parties not considered to beSpeculative Land, plus (D) excess proceeds from the refinance of assets, in each case, over the same twelve (12) calendar month period.” 

 

2. Conditions Precedent. The effectiveness of this Third Amendment is subject to receipt by the Administrative Agent of each of thefollowing, each in form and substance satisfactory to the Administrative Agent: 

 

(a) A counterpart of this Third Amendment duly executed by the Borrowers, Guarantors, Lenders, Administrative Agent, Sole Lead Arranger, Sole Book Manager, Syndication Agent and Documentation

 

 

Agent; and

 

(b) Such other documents,instruments and agreements as the Administrative Agent may reasonably request. 

 

3. Representations. Each of the Borrowers and each of the Guarantors collectively represent and warrant to the Administrative Agent and the Lenders that: 

 

(a) Authorization. Each of theBorrowers and each of the Guarantors, respectively, has the right and power and has obtained all authorizations necessary to execute and deliver this Third Amendment and to perform its respective obligations hereunder and under the Credit Agreement,as amended by this Third Amendment, in accordance with their respective terms. This Third Amendment has been duly executed and delivered by a duly authorized officers of each of the Borrowers and each Guarantor, respectively, and each of this ThirdAmendment and the Credit Agreement, as amended by this Third Amendment, is a legal, valid and binding obligation of each of the Borrowers and each Guarantor (each as applicable), enforceable against each of the Borrowers and each Guarantor (each asapplicable) in accordance with its respective terms, except as the same may be limited by bankruptcy, insolvency, and other similar laws affecting the rights of creditors generally and by equitable principles generally. 

 

(b) Compliance with Laws, etc. Theexecution and delivery by each of the Borrowers and each of the Guarantors of this Third Amendment and the performance by each of the Borrowers and/or the Guarantors of this Third Amendment and the Credit Agreement, as amended by this ThirdAmendment, in accordance with their respective terms, does not and will not, by the passage of time, the giving of notice or otherwise: (i) require any approval (other than those already obtained) by any Governmental Authority or violate any law(including any Environmental Law) which is applicable to a Borrower, any Guarantors, any Consolidated Party, the Credit Documents or the transactions contemplated herein or therein; (ii) conflict with, result in a breach of or constitute a defaultunder the organizational documents of any Borrower, any of the Guarantors or any other Consolidated Party, or any indenture, agreement/or other instrument to which any Borrower, any of the Guarantors or any other Consolidated Party is a party or bywhich it or any of its respective properties may be bound; or (iii) result in or require the creation or imposition of any Lien upon or with respect to any property now owned or hereafter acquired by any Borrower, any Guarantor or any otherConsolidated Party other than in favor of the Administrative Agent for the benefit of the Lenders; and 

 

(c) No Default. No Default or Event of Default has occurred and is continuing as of the date hereof nor will existimmediately after giving effect to this Third Amendment.****

 

4. Reaffirmation of Representations. Each of the Borrowers and each of the Guarantors hereby repeat and reaffirm all representations and warranties made by such party to the Administrative Agent and the Lenders in the CreditAgreement and the other Credit Documents to which it is a party on and as of the date hereof (other than any representation or warranty expressly relating to an earlier date) with the same force and effect as if such representations and warrantieswere set forth in this Third Amendment in full. 

 

5. Reaffirmation of Guaranty. Each of the Guarantors hereby reaffirms its continuing obligations to the Administrative Agent and the Lenders under the Credit Agreement and agrees that the transactions contemplated by thisThird Amendment shall not in any way affect the validity and enforceability of their respective guaranty obligations thereunder or reduce, impair or discharge the obligations of such Guarantors thereunder. 

 

****6. Severability. If any provision of any of thisThird Amendment or of the Credit Agreement, as amended hereby, is determined to be illegal, invalid or unenforceable, such provision shall be fully severable and the remaining provisions shall remain in full force and effect and shall be construedwithout giving effect to the illegal, invalid or unenforceable provisions. 

 

7. Certain References. Each reference to the Credit Agreement in any of the Credit Documents shall be deemed to be a reference to the Credit Agreement as amended by this Third Amendment and thisThird Amendment shall be deemed a Credit Document for purposes of the application of provisions of the Credit 

 

2 

 

Agreement generally applicablethereto (including, without limitation, any arbitration provisions or waiver provisions). 

 

8. Expenses. The Borrowers shall reimburse the Administrative Agent upon demand for all reasonable costs and expenses (including reasonable attorneys’ fees) incurred by the AdministrativeAgent in connection with the preparation, negotiation and execution of this Third Amendment and the other agreements and documents executed and delivered in connection herewith. 

 

9. Benefits. This Third Amendment shall be binding upon and shall inure to the benefit of the partieshereto and their respective successors and assigns. 

 

10. Default. The failure of any of the Borrowers or any of the Guarantors to perform any of their respective obligations under this Third Amendment or the material falsity of any representation or warranty made herein shall,at the option of the Administrative Agent and/or Lenders (as determined in accordance with the Credit Agreement) after expiration of any applicable cure period, constitute an Event of Default under the Credit Documents. 

 

11. No Novation. The parties hereto intend this ThirdAmendment to evidence the amendments to the terms of the existing indebtedness of the Borrowers and Guarantors to the Lenders as specifically set forth herein and do not intend for such amendments to constitute a novation in any mannerwhatsoever. 

 

12. GOVERNING LAW. THIS THIRDAMENDMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NORTH CAROLINA APPLICABLE TO CONTRACTS EXECUTED, AND TO BE FULLY PERFORMED, IN SUCH STATE. 

 

13. No Implied Agreements. Except as expressly herein amended, the terms and conditions of the CreditAgreement and the other Credit Documents remain in full force and effect. The amendments contained herein shall be deemed to have prospective application only, unless otherwise specifically stated herein. 

 

14. Counterparts. This Third Amendment may be executedin any number of counterparts, each of which when so executed and delivered shall be an original, but all of which shall constitute one and the same instrument. It shall not be necessary in making proof of this Third Amendment to produce or accountfor more than one such counterpart for each of the parties hereto. Delivery by facsimile by any of the parties hereto of an executed counterpart of this Third Amendment shall be as effective as an original executed counterpart hereof and shall bedeemed a representation that an original executed counterpart hereof will be delivered. Each counterpart hereof shall be deemed to be an original and shall be binding upon all parties, their successors and assigns. 

 

15. Binding Effect. This Third Amendment shall becomeeffective as of the date hereof at such time when all of the conditions set forth in Section 2 hereof have been satisfied or waived by the Lenders and it shall have been executed by the Borrowers, the Guarantors and the Administrative Agent, and theAdministrative Agent shall have received copies hereof (telefaxed or otherwise) which, when taken together, bear the signatures of each Lender, and thereafter this Credit Agreement shall be binding upon and inure to the benefit of the Borrowers, theGuarantors, the Administrative Agent and each Lender and their respective successors and assigns. 

 

16. Definitions. All capitalized terms not otherwise defined herein are used herein with the respective definitions given them inthe Credit Agreement. The interpretive. provisions set forth in Sections 1.2 and 1.3 of the Credit Agreement shall apply to this Third Amendment as though set forth herein. 

 

[Signature Pages to Follow] 

 

3 

 

IN WITNESSWHEREOF, each of the parties hereto has caused a counterpart of this Third Amendment to be duly executed and delivered as of the date written above. 

 

**BORROWERS:**
   
**HIGHWOODS REALTY LIMITED PARTNERSHIP**
      
By: HIGHWOODS PROPERTIES, INC.
      
**HIGHWOODS PROPERTIES, INC.**
      
**HIGHWOODS SERVICES, INC**
      
**HIGHWOODS FINANCE, LLC**
      
By: HIGHWOODS PROPERTIES, INC.
      
**HIGHWOODS/TENNESSEE HOLDINGS, L.P.**
      
By: HIGHWOODS/TENNESSEE PROPERTIES, INC.
      
By:
 
/s/ Ronald P. Gibson
        
Name: Ronald P. Gibson
        
Title: President and Chief Executive Officer

**GUARANTORS:**
   
**HIGHWOODS/FLORIDA GP CORP.**
      
**HIGHWOODS/TENNESSEE PROPERTIES, INC.**
      
**HIGHWOODS/FLORIDA HOLDINGS, L.P.**
      
By: HIGHWOODS FLORIDA GP CORP.
      
**PINELLAS NORTHSIDE PARTNERS, LTD.**
      
By: HIGHWOODS/FLORIDA HOLDINGS, L.P.
      
 By: HIGHWOODS/FLORIDA GP CORP.
      
**PINELLAS BAY VISTA PARTNERS, LTD.**
      
By: HIGHWOODS/FLORIDA HOLDINGS, L.P.
      
 By: HIGHWOODS/FLORIDA GP CORP.

 

**(Signatures continued on next page)**

 

 

**DOWNTOWN CLEARWATER TOWER, LTD.**

By: HIGHWOODS /FLORIDA HOLDINGS, L.P.

By: HIGHWOODS /FLORIDA GP CORP.

**SISBROS, LTD**

By: HIGHWOODS /FLORIDA HOLDINGS, L.P.

By: HIGHWOODS /FLORIDA GP CORP.

**SHOCKOE PLAZA INVESTORS, L.C.**

By: HIGHWOODS REALTY LIMITED PARTNERSHIP

By: HIGHWOODS PROPERTIES, INC.

**RC ONE LLC**

By: HIGHWOODS SERVICES, INC.

**HPI TITLE AGENCY, LLC**

By: HIGHWOODS REALTY LIMITED PARTNERSHIP

By: HIGHWOODS PROPERTIES, INC.

**ALAMEDA TOWERS DEVELOPMENT COMPANY**

**CHALLENGER, INC.**

**GUARDIAN MANAGEMENT, INC.**

**HIGHWOODS/CYPRESS COMMONS LLC**

By: AP SOUTHEAST PORTFOLIO PARTNERS, L.P.

By: AP-GP SOUTHEST PORTFOLIO PARTNERS, L.P .

By: HIGHWOODS REALTY GP CORP.

**HIGHWOODS/INTERLACHEN HOLDINGS, L.P.**

By: HIGHWOODS /FLORIDA HOLDINGS, L.P.

By: HIGHWOODS /FLORIDA GP CORP.

**HIGHWOODS CONSTRUCTION SERVICES, LLC**

By: HIGHWOOD SERVICES, INC.

 

**(Signatures continued on next page)**

 

 

**HIGHWOODS DLF, LLC**

        By: HIGHWOODS REALTY LIMITED PARTNERSHIP

               By: HIGHWOODS PROPERTIES,INC.

**HIGHWOODS DLF II, LLC**

        By: HIGHWOODS REALTY LIMITED PARTNERSHIP

               By: HIGHWOODS PROPERTIES,INC.

**PAPEC RICHMOND II, LLC**

        By: HIGHWOODS REALTY LIMITED PARTNERSHIP

               By: HIGHWOODS PROPERTIES,INC.

**PAPEC WESTON I, LLC**

        By: HIGHWOODS REALTY LIMITED PARTNERSHIP

               By: HIGHWOODS PROPERTIES,INC.

**PAPEC WESTON II, LLC**

        By: HIGHWOODS REALTY LIMITED PARTNERSHIP

               By: HIGHWOODS PROPERTIES,INC.

**PAPEC WESTON III, LLC**

        By: HIGHWOODS REALTY LIMITED PARTNERSHIP

               By: HIGHWOODS PROPERTIES,INC.

**SPI SHADOW CREEK II, LLC**

        By: HIGHWOODS REALTY LIMITED PARTNERSHIP

               By: HIGHWOODS PROPERTIES,INC.

**HARBORVIEW PLAZA, LLC**

        By: HIGHWOODS/FLORIDA HOLDINGS, L.P.

               By: HIGHWOODS/FLORIDA GPCORP.

**SPI BROOKFIELD I, LLC**

        By: HIGHWOODS REALTY LIMITED PARTNERSHIP

               By: HIGHWOODS PROPERTIES,INC.

**SPI BROOKFIELD II, LLC**

        By: HIGHWOODS REALTY LIMITED PARTNERSHIP

               By: HIGHWOODS PROPERTIES,INC.

**SPI BUSINESS HOLDINGS, LLC**

        By: HIGHWOODS REALTY LIMITED PARTNERSHIP

               By: HIGHWOODS PROPERTIES,INC.

**SPI CENTURY PLAZA III, LLC**

        By: HIGHWOODS REALTY LIMITED PARTNERSHIP

               By: HIGHWOODS PROPERTIES,INC.

**SPI JEFFERSON VILLAGE, LLC**

        By: HIGHWOODS REALTY LIMITED PARTNERSHIP

               By: HIGHWOODS PROPERTIES,INC.

 

**SPI SEVEN SPRINGS I, LLC**

        By: HIGHWOODS REALTY LIMITED PARTNERSHIP

               By: HIGHWOODS PROPERTIES,INC.

**SPI TRADEPORT OFFICE III, LLC**

        By: HIGHWOODS REALTY LIMITED PARTNERSHIP

               By: HIGHWOODS PROPERTIES,INC.

**SPI RALEIGH CORPORATE CENTER, LLC**

        By: HIGHWOODS REALTY LIMITED PARTNERSHIP

               By: HIGHWOODS PROPERTIES,INC.

**HIGHWOODS COLONNADE, LLC**

        By: HIGHWOODS REALTY LIMITED PARTNERSHIP

               By: HIGHWOODS PROPERTIES,INC.

**SPI TRADEPORT PLACE V, LLC**

        By: HIGHWOODS REALTY LIMITED PARTNERSHIP

                By: HIGHWOODS PROPERTIES,INC.

**HIWTP, LLC**

        By: HIGHWOODS SERVICES, INC.

**HIGHWOODS INDUSTRIAL VIRGINIA, LLC**

        By: HIGHWOODS SERVICES, INC.

**HIGHWOODS INDUSTRIAL NORTH CAROLINA, LLC**

        By: HIGHWOODS SERVICES, INC.

**GROVE PARK SQUARE, LLC**

        By: HIGHWOODS SERVICES, INC.

**HIGHWOODS WELLNESS CENTER, LLC**

        By: HIGHWOODS SERVICES, INC.

**HIGHWOODS 3322, LLC**

        By  HIGHWOODS/FLORIDA HOLDINGS, L.P.

               By: HIGHWOODS/FLORIDA GPCORP.

**NICHOLS PLAZA WEST, INC.**

**OZARK MOUNTAIN VILLAGE, INC.**

**SHADOW CREEK I, LLC**

        By: HIGHWOODS REALTY LIMITED PARTNERSHIP

               By: HIGHWOODS PROPERTIES,INC.

**4551 COX ROAD LLC**

        By: HIGHWOODS REALTY LIMITED PARTNERSHIP

               By: HIGHWOODS PROPERTIES,INC.

 

**(Signatures continued on next page)**

 

**4****600 COX ROAD LLC**

    By: HIGHWOODS/FLORIDA HOLDINGS, L.P.

           By: HIGHWOODS/FLORIDA GP CORP.

**581 HIGHWOODS, L.P.**

    By: HIGHWOODS/FLORIDA HOLDINGS, L.P.

           By: HIGHWOODS/FLORIDA GP CORP.

 

By:
 
/s/ Ronald P. Gibson
  
Name: Ronald P. Gibson

Title: President and Chief Executive Officer

 

**LENDERS:**
   
**BANK OF AMERICA, N.A.,**

individually in its capacity as a Lender

and in its capacity as Administrative Agent
      
By:
 
/s/ Gretchen P. Burad
      
Name:
 
Gretchen P. Burad
      
Title:
 
Managing Director

 
    
**WELLS FARGO BANK, NATIONAL ASSOCIATION**

****individually in its capacity as a Lender

and in its capacity as Syndication Agent
      
By:
 
/s/ John S. Misiura
      
Name:
 
John S. Misiura
      
Title:
 
Vice President

 
    
**WACHOVIA BANK, N.A.**

individually in its capacity as a Lender

and in its capacity as Documentation Agent
      
By:
       
Name:
       
Title:
 
 
    
**COMMERZBANK AG,**

**NEW YORK AND GRAND CAYMAN BRANCHES**

individually in its capacity as a Lender

and as Managing Agent
      
By:
       
Name:
       
Title:
 
 
      
By:
       
Name:
       
Title:
 
 
    
**PNC BANK, NATIONAL ASSOCIATION**

****individually in its capacity as a Lender

and as a Co-Agent****
      
By:
 
/s/ Timothy P. Gleeson
      
Name:
 
Timothy P. Gleeson
      
Title:
 
Assistant Vice President

 

**(Signatures continued on next page)**

 
    
**AMSOUTH BANK**

individually in its capacity as a Lender

and as a Co-Agent
      
By:
 
/s/ Robert Blair
      
Name:
 
Robert Blair
      
Title:
 
Vice President Commercial Real Estate

 
    
**SOUTHTRUST BANK**

individually in its capacity as a Lender

and as a Co-Agent
      
By:
 
/s/ Ann Peck
      
Name:
 
Ann Peck
      
Title:
 
Assistant Vice President

 
    
**RBC CENTURA BANK**

individually in its capacity as a Lender

and as a Co-Agent
      
By:
 
/s/ Robert E. Hammersley, Jr.
      
Name:
 
Robert E. Hammersley, Jr.
      
Title:
 
Bank Officer

 
    
**BRANCH BANKING AND TRUST COMPANY**

individually in its capacity as a Lender

and as a Co-Agent
      
By:
 
/s/ Holger Ebert
      
Name:
 
Holger B. Ebert
      
Title:
 
SVP

 
    
**ERSTE BANK, NEW YORK BRANCH**

individually in its capacity as a Lender
      
By:
 
/s/ Gregory T. Aptman
      
Name:
 
Gregory T. Aptman
      
Title:
 
Vice President

 
      
By:
 
/s/ Bryan Lynch
      
Name:
 
Bryan J. Lynch
      
Title:
 
First Vice President