UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
----------------------------------
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d)
of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported):November 17, 1997
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PARKWAY PROPERTIES, INC.
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(Exact name of Registrant as specified in its charter)
Maryland 1-11533 74-2123597
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(State or other (Commission File Number) (IRS Employer
jurisdiction of Identification
incorporation) Number)
One Jackson Place Suite 1000
188 East Capitol Street
P. O. Box 24647
Jackson, Mississippi 39225-4647
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (601) 948-4091
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(Former name or former address, if changed since last report)
FORM 8-K
PARKWAY PROPERTIES, INC.
Item 2. Acquisition or Disposition of Assets.
On November 17, 1997, Parkway Properties LP, a limited
partnership in which Parkway Properties, Inc. is a 99% limited
partner and a wholly-owned subsidiary of Parkway Properties,
Inc. is a 1% general partner, purchased the Raytheon Office
Building in Houston, Texas for $15,980,000 from an unrelated
party. The purchase was funded with advances under bank lines
of credit with Deposit Guaranty National Bank at an interest
rate of 7.53% and the assumption of an existing $7,958,000 first
mortgage. The Raytheon Office Building is an eight-story
building constructed in 1983 containing approximately 148,000
net rentable square feet. The building offers 736 parking
spaces with 494 spaces located within a six-story parking garage
next to the building. The Raytheon Building is located on 3.9
acres at 1250 West Sam Houston Parkway South in West Houston.
The building is 100% leased with Raytheon Engineers and
Constructors, Inc. occupying 147,000 square feet under a lease
that expires in December 2005.
Item 7. Financial Statements and Exhibits.
(a) Financial Statements
The following audited financial statement of the
Raytheon Building for the year ended December 31, 1996 is
attached hereto. Also included is the unaudited financial
statement for the nine months ended September 30, 1997.
Page
----
Report of Independent Auditors 4
Statement of Rental Revenue and
Direct Operating Expenses 5
Notes to Statement of Rental Revenue
and Direct Operating Expenses 6
(b) Pro Forma Consolidated Financial Statements
The following unaudited Pro Forma Consolidated Financial
Statements are attached hereto.
Page
----
Pro Forma Consolidated Financial Statements (Unaudited) 8
Pro Forma Consolidated Balance Sheet (Unaudited) -
As of September 30, 1997 10
Pro Forma Consolidated Statement of Income (Unaudited) -
For the Year Ended December 31, 1996 11
Pro Forma Consolidated Statement of Income (Unaudited) -
For the Nine Months Ended September 30, 1997 12
Notes to Pro Forma Consolidated Financial
Statements (Unaudited) 13
(c) Exhibits.
(10) Purchase and Sale Agreement between RayVest Limited
Partnership, a Texas limited partnership ("Seller") and Parkway
Properties, L.P., a Delaware limited partnership ("Purchaser")
dated September 17, 1997. Parkway agrees to furnish
supplementally to the Securities and Exchange Commission on
request a copy of any omitted schedule or exhibit to this
agreement.
Report of Independent Auditors
The Board of Directors
Parkway Properties, Inc.
We have audited the accompanying statement of rental revenue and
direct operating expenses of Raytheon Building for the year ended
December 31, 1996. This statement is the responsibility of
management. Our responsibility is to express an opinion on this
statement based on our audit.
We conducted our audit in accordance with generally accepted
auditing standards. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the
statement of rental revenue and direct operating expenses is free
of material misstatement. An audit includes examining, on a test
basis, evidence supporting the amounts and disclosures in the
statement. An audit also includes assessing the accounting
principles used and significant estimates made by management, as
well as evaluating the overall statement presentation. We believe
that our audit provides a reasonable basis for our opinion.
The accompanying statement was prepared for the purpose of
complying with the rules and regulations of the Securities and
Exchange Commission for inclusion in Form 8-K of Parkway
Properties, Inc., as described in Note 2, and is not intended to
be a complete presentation of Raytheon Building revenue and
expenses.
In our opinion, the statement of rental revenue and direct
operating expenses referred to above presents fairly, in all
material respects, the rental revenue and direct operating
expenses described in Note 2 of Raytheon Building for the year
ended December 31, 1996, in conformity with generally accepted
accounting principles.
We have compiled the accompanying statement of rental revenue and
direct operating expenses of Raytheon Building for the nine months
ended September 30, 1997 in accordance with the Statement on
Standards for Accounting and Review Services issued by the
American Institute of Certified Public Accountants. A compilation
is limited to presenting in the form of a financial statement
information that is the representation of management. We have not
audited or reviewed the statement of rental revenue and direct
operating expenses of Raytheon Building for the nine months ended
September 30, 1997 and, accordingly, do not express an opinion or
any other form of assurance on the statement.
Jackson, Mississippi /s/ Ernst & Young LLP
November 11, 1997
Raytheon Building
Statement of Rental Revenue
and Direct Operating Expenses
Year Ended Nine Months Ended
December 31, 1996 September 30, 1997
------------------ ------------------
(unaudited)
Rental revenue:
Minimum rents ............... $2,224,767 $1,668,575
Reimbursed charges and
other income............... 538,197 403,650
---------- ----------
2,762,964 2,072,225
---------- ----------
Direct operating expenses
(Note 2):
Utilities................... 305,857 225,917
Real estate taxes........... 191,506 143,630
Maintenance services
and supplies.............. 169,060 80,608
Janitorial services
and supplies.............. 147,675 109,245
Management fees (Note 3).... 71,771 65,086
Salaries.................... 122,643 92,929
Insurance................... 25,181 15,203
Security service............ 179,959 157,593
Administrative and
miscellaneous expenses.... 62,506 28,673
---------- ----------
1,276,158 918,884
---------- ----------
Excess of rental revenue over
direct operating expenses... $1,486,806 $1,153,341
========== ==========
See accompanying notes.
Raytheon Building
Notes to Statement of Rental Revenue
and Direct Operating Expenses
December 31, 1996
1. Organization and Significant Accounting Policies
Description of Property
A limited partnership in which Parkway Properties, Inc. is a
99% limited partner and a wholly-owned subsidiary is a 1% general
partner expects to complete the acquisition of Raytheon Building
(the "Building") in Houston, Texas effective November 17, 1997
from an unrelated party. The eight story building located in
Houston, Texas and contains approximately 148,000 (unaudited)
rentable square feet.
Rental Income
Minimum rents from leases are accounted for ratably over the
term of each lease. Tenant reimbursements are recognized as
income as the applicable services are rendered or expenses
incurred.
The future minimum rents on noncancelable operating leases at
December 31, 1996 are as follows:
Year Amount
--------------------------------
1997 $ 2,313,000
1998 2,313,000
1999 2,313,000
2000 2,304,000
2001 2,300,000
Thereafter 9,201,000
-----------
$20,744,000
===========
The above amounts do not include tenant reimbursements for
utilities, taxes, insurance and common area maintenance.
One tenant, whose lease expires December 31, 2005, accounted
for approximately 99% of the Building's rental revenue for the
year ended December 31, 1996 and the nine months ended September
30, 1997 (unaudited).
2. Basis of Accounting
The accompanying statement of rental revenue and direct
operating expenses is presented on the accrual basis. The
statement has been prepared in accordance with the applicable
rules and regulations of the Securities and Exchange Commission
for real estate properties acquired. Accordingly, the statement
excludes certain expenses not comparable to the proposed future
operations of the building such as depreciation and mortgage
interest expense. Management is not aware of any material factors
relating to the Building that would cause the reported financial
information not be necessarily indicative of future operating
results.
3. Management Fee
Management fees of approximately 3% of revenues received from
the operations of the Building were paid to an unrelated
management company.
PARKWAY PROPERTIES, INC.
Pro Forma Consolidated Financial Statements
(Unaudited)
The following unaudited pro forma consolidated balance sheet
as of September 30, 1997 and pro forma consolidated statements of
income of Parkway Properties, Inc. ("Parkway") for the year ended
December 31, 1996 and nine months ended September 30, 1997 give
effect to the recent purchases of Parkway for the periods stated.
The pro forma consolidated financial statements have been prepared
by management of Parkway based upon the historical financial
statements of Parkway and the adjustments and assumptions in the
accompanying notes to the pro forma consolidated financial
statements.
The pro forma consolidated balance sheet sets forth the
effect of Parkway's purchases of Hightower Centre and Raytheon
Building as well as the placement of non-recourse mortgage debt on
BB&T, as if they had been consummated on September 30, 1997.
The pro forma consolidated statements of income sets forth
the effects of Parkway's purchases of the following buildings as
if they had been consummated on January 1, 1996.
BUILDING DATE OF PURCHASE
Raytheon Building 11/17/97
Hightower Centre 10/01/97
Morgan Keegan Tower 09/30/97
First Tennessee Plaza 09/18/97
Fairway Plaza 08/12/97
NationsBank Tower 07/31/97
Lakewood II 07/10/97
Sugar Grove 05/01/97
Vestavia Centre 04/04/97
Meridian 03/31/97
Charlotte Park Executive Center 03/18/97
Courtyard at Arapaho 03/06/97
Ashford II 01/28/97
Forum II & III 01/07/97
Tensor 10/31/96
BB&T Financial Center 09/30/96
Falls Pointe 08/09/96
Roswell North 08/09/96
Cherokee 07/09/96
Courthouse 07/09/96
400 Northbelt 04/15/96
Woodbranch 04/15/96
One Park 10 Plaza 03/07/96
PARKWAY PROPERTIES, INC.
Pro Forma Consolidated Financial Statements (continued)
(Unaudited)
In addition to the purchases listed above, the pro forma
consolidated statements of income set forth the effect of the May
31, 1996 sale of 157 mortgage loans, the placement of non-recourse
mortgage debt on certain properties acquired during 1995 and 1996
or assumed in the purchases, the December 24, 1996 sale of the
Virginia Beach mortgage loan, the sale of 2,012,500 shares of
common stock on January 22, 1997 and the sale of 3,000,000 shares
of common stock on September 24, 1997 as if all the transactions
had occurred January 1, 1996.
These pro forma consolidated financial statements may not be
indicative of the results that actually would have occurred if the
purchases, sales and/or financings had been in effect on the dates
indicated or which may be obtained in the future. The pro forma
consolidated financial statements should be read in conjunction
with the consolidated financial statements and notes of Parkway
included in its annual report on Form 1O-KSB for the year ended
December 31, 1996.
PARKWAY PROPERTIES, INC. AND SUBSIDIARIES
PRO FORMA CONSOLIDATED BALANCE SHEET
September 30, 1997
(Unaudited)
Parkway Pro Forma Parkway
Historical Adjustments Pro Forma
---------- ----------- ---------
(In thousands)
Assets
Real estate related investments:
Office buildings.............$310,130 $ 22,680(1-2)$332,810
Land held for development.... 1,721 - 1,721
Accumulated depreciation..... (12,073) - (12,073)
-------- -------- --------
299,778 22,680 322,458
Real estate held for sale:
Land....................... 4,687 - 4,687
Operating properties....... 1,497 - 1,497
Other non-core
real estate assets......... 58 - 58
Mortgage loans............... 307 - 307
Real estate partnership...... 322 - 322
-------- -------- --------
306,649 22,680 329,329
Interest, rents receivable
and other assets............. 7,365 - 7,365
Cash and cash equivalents...... 486 278 764
-------- -------- --------
$314,500 $ 22,958 $337,458
======== ======== ========
Liabilities
Notes payable to banks..........$ 8,200 $ - $ 8,200
Mortgage notes payable
without recourse.............. 67,960 22,958(2,3) 90,918
Accounts payable and other
liabilities................... 10,692 - 10,692
-------- -------- --------
86,852 22,958 109,810
-------- -------- --------
Stockholders' Equity
Common stock, $.001 par value,
70,000,000 shares authorized,
9,307,988 shares issued in
1997.......................... 9 - 9
Additional paid-in capital...... 199,018 - 199,018
Retained earnings............... 28,621 - 28,621
-------- -------- --------
227,648 - 227,648
-------- -------- --------
$314,500 $ 22,958 $337,458
======== ======== ========
See accompanying notes
PARKWAY PROPERTIES, INC. AND SUBSIDIARIES
PRO FORMA CONSOLIDATED STATEMENT OF INCOME
FOR THE YEAR ENDED DECEMBER 31, 1996
(Unaudited)
Parkway Pro Forma Parkway
Historical Adjustments(4) Pro Forma
---------- -------------- ---------
(In thousands, except per share data)
Revenues
Income from office properties...$18,840 $40,060(a) $58,900
Income from other real estate
properties.................... 1,773 - 1,773
Interest on mortgage loans...... 1,740 (1,384)(d) 356
Management company income....... 784 - 784
Interest on investments......... 500 - 500
Dividend income................. 118 - 118
Deferred gains and other income. 324 - 324
Gains on real estate held
for sale and mortgage loans... 9,909 - 9,909
Gain on securities.............. 549 - 549
------- ------- -------
34,537 38,676 73,213
------- ------- -------
Expenses
Office properties
Operating expense............. 8,466 18,840 (a) 27,306
Interest expense.............. 3,526 3,900 (c) 7,426
Depreciation and amortization. 2,444 5,400 (a) 7,844
Minority interest............. (28) - (28)
Other real estate properties
Operating expense............. 1,379 - 1,379
Interest expense
Notes payable to banks........ 281 - 281
Notes payable on wrap
mortgages................... 340 (340)(e) -
Management company expense...... 673 - 673
General and administrative...... 2,982 - 2,982
------- ------- -------
20,063 27,800 47,863
------- ------- -------
Income before income taxes...... 14,474 10,876 25,350
Income tax expense.............. 103 - 103
------- ------- -------
Net income......................$14,371 $10,876 $25,247
======= ======= =======
Net income per share............$ 3.92 $ 2.91(5)
======= =======
Weighted average shares
outstanding................... 3,662 8,674
======= =======
See accompanying notes
PARKWAY PROPERTIES, INC. AND SUBSIDIARIES
PRO FORMA CONSOLIDATED STATEMENT OF INCOME
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1997
(Unaudited)
Parkway Pro Forma Parkway
Historical Adjustments(4) Pro Forma
---------- -------------- ---------
(In thousands, except per share data)
Revenues
Income from office properties...$29,939 $16,541 (b) $46,480
Income from other real estate
properties.................... 564 - 564
Interest on mortgage loans...... 47 - 47
Management company income....... 398 - 398
Interest on investments......... 363 - 363
Dividend income................. 323 - 323
Deferred gains and other income. 100 - 100
------- ------- -------
31,734 16,541 48,275
------- ------- -------
Expenses
Office properties
Operating expense............. 12,678 7,614 (b) 20,292
Interest expense:
Contractual................. 3,856 1,600 (c) 5,456
Amortization of loan cost... 68 - 68
Depreciation and amortization. 3,795 2,231 (b) 6,026
Minority interest............. 59 - 59
Other real estate properties
Operating expense............. 361 - 361
Interest expense on bank notes:
Contractual................... 657 - 657
Amortization of loan costs.... 126 - 126
Interest expense on wrap
mortages.................... - - -
Management company expense...... 260 - 260
General and administrative...... 2,540 - 2,540
------- ------- -------
24,400 11,445 35,845
------- ------- -------
Income before gains............. 7,334 5,096 12,430
------- ------- -------
Gain on sales
Gain on real estate held for
Sale and mortgage loans....... 1,091 - 1,091
------- ------- -------
Net income......................$ 8,425 $ 5,096 $13,521
======= ======= =======
Net income per share............$ 1.36 $ 1.48
======= =======
Weighted average shares
outstanding................... 6,182 9,116
======= =======
See accompanying notes
PARKWAY PROPERTIES, INC.
Notes to Pro Forma Consolidated Financial Statements
(Unaudited)
1. On October 1, 1997, the Company purchased Hightower Centre in
Atlanta, Georgia for $6,700,000 from an unrelated party.
Hightower Centre consists of two multi-story buildings
containing 78,199 rentable square feet with 332 parking
spaces.
2. On November 12, 1997, the Company received funds totaling
$15,000,000 from the placement of non-recourse mortgage debt
on the BB&T office building in Winston-Salem, North Carolina.
The loan fully amortizes over a 15-year period at an interest
rate of 7.3%.
3. On November 17, 1997, the Company purchased the Raytheon
Building in Houston, Texas for $15,980,000, which included
the assumption of an existing $7,958,000 first mortgage,
from an unrelated party. Raytheon is an eight-story
building constructed in 1983 containing approximately
148,000 net rentable square feet with 736 parking spaces
with 494 spaces located within a six-story parking garage.
4. The pro forma adjustments to the Consolidated Statement of
Income for the year ended December 31, 1996 and nine months
ended September 30, 1997 set forth the effects of Parkway's
purchase of the following as if they had been consummated on
January 1, 1996.
BUILDING DATE OF PURCHASE
Raytheon Building 11/17/97
Hightower Centre 10/01/97
Morgan Keegan Tower 09/30/97
First Tennessee Plaza 09/18/97
Fairway Plaza 08/12/97
NationsBank Tower 07/31/97
Lakewood II 07/10/97
Sugar Grove 05/01/97
Vestavia Centre 04/04/97
Meridian 03/31/97
Charlotte Park Executive Center 03/18/97
Courtyard at Arapaho 03/06/97
Ashford II 01/28/97
Forum II & III 01/07/97
Tensor 10/31/96
BB&T Financial Center 09/30/96
Falls Pointe 08/09/96
Roswell North 08/09/96
Cherokee 07/09/96
Courthouse 07/09/96
400 Northbelt 04/15/96
Woodbranch 04/15/96
One Park 10 Plaza 03/07/96
In addition to the purchases listed above, the adjustments
on the pro forma consolidated statements of income set
forth the effect of the May 31, 1996 sale of 157 mortgage
loans, the December 24, 1996 sale of the Virginia Beach
mortgage loan and the placement of non-recourse mortgage
debt on certain properties acquired during 1995 and 1996 or
assumed in the purchases as if the transactions occurred
January 1, 1996. These pro forma adjustments are detailed
below by property for the year ended December 31, 1996 and
nine months ended September 30, 1997.
The effect on income and expenses from real estate
properties due to the above purchases are as follows:
(a) For the year ended December 31, 1996:
Revenue Expenses
----------- ---------------------------
Income From Real Estate Owned
Real Estate Operating Depreciation
Properties Expense Expense
----------- ------------- ------------
One Park 10 $ 299,000 $ 160,000 $ 25,000
400 North Belt
& Woodbranch 1,036,000 551,000 92,000
Cherokee &
Courthouse
Road Bldgs. 917,000 480,000 124,000
Falls Pointe &
Roswell North 1,161,000 439,000 191,000
BB&T Financial
Center 3,072,000 1,055,000 413,000
Tensor 810,000 530,000 64,000
Forum II & III 2,749,000 1,331,000 370,000
Charlotte Park 2,616,000 1,180,000 333,000
Ashford II 649,000 441,000 50,000
Courtyard at
Arapaho 2,196,000 948,000 340,000
Meridian 843,000 503,000 236,000
Vestavia 878,000 394,000 105,000
Sugar Grove 1,082,000 643,000 174,000
Lakewood II 1,915,000 839,000 259,000
NationsBank Tower 4,094,000 1,782,000 464,000
Fairway Plaza 1,408,000 682,000 151,000
First Tennessee
Plaza 5,958,000 3,083,000 675,000
Morgan Keegan
Tower 4,633,000 2,093,000 823,000
Hightower Centre 981,000 430,000 151,000
Raytheon Building 2,763,000 1,276,000 360,000
----------- ----------- ----------
$40,060,000 $18,840,000 $5,400,000
=========== =========== ==========
Depreciation is provided by the straight-line method over the
estimated useful lives of the buildings (40 years).
(b) For the nine months ended September 30, 1997:
Revenue Expenses
----------- ---------------------------
Income From Real Estate Owned
Real Estate Operating Depreciation
Properties Expense Expense
----------- ------------ ------------
Charlotte Park $ 505,000 $ 208,000 $ 69,000
Ashford II 54,000 37,000 4,000
Courtyard at
Arapaho 366,000 164,000 58,000
Meridian 354,000 123,000 59,000
Vestavia 240,000 91,000 26,000
Sugar Grove 309,000 165,000 43,000
Lakewood II 977,000 447,000 129,000
NationsBank Tower 2,392,000 1,003,000 271,000
Fairway Plaza 859,000 379,000 94,000
First Tennessee
Plaza 4,253,000 2,080,000 477,000
Morgan Keegan
Tower 3,327,000 1,665,000 618,000
Hightower Centre 833,000 333,000 113,000
Raytheon Building 2,072,000 919,000 270,000
----------- ----------- -----------
$16,541,000 $ 7,614,000 $ 2,231,000
=========== =========== ===========
Depreciation is provided by the straight-line method over the
estimated useful lives of the buildings (40 years).
(c) Pro forma interest expense on real estate owned reflects
the non-recourse debt placed on certain buildings
acquired during 1995 and 1996 and debt assumed upon
purchase at the actual amounts and rates by property as
if placed January 1, 1996 and is detailed below.
Nine
Property/Placement Year Ended Months Ended
Date/Rate Debt 12/31/96 9/30/97
------------------ ----------- ---------- ------------
IBM Building
2/96 7.78% $ 4,800,000 $ 41,000 $ -
Waterstone
6/96 8.00% 5,620,000 185,000 -
One Park 10
7/96 8.35% 4,700,000 196,000 -
400 North Belt &
Woodbranch
7/96 8.25% 10,000,000 412,000 -
Falls Pointe &
Roswell North
12/96 8.375% 9,850,000 766,000 -
Lakewood II*
7/97 8.08% 6,910,000 558,000 294,000
BB&T
11/97 7.3% 15,000,000 1,095,000 821,000
Raytheon Building*
11/97 8.125% 7,958,000 647,000 485,000
---------- -----------
$3,900,000 $1,600,000
========== ===========
*Assumed in purchase.
(d) The January 1, 1996 pro forma effect of the sale of 157
mortgage loans on May 31, 1996 and the December 24, 1996
sale of the Virginia Beach mortgage loan is as follows:
Year Ended
12/31/96
------------
Interest Income:
Mortgage loans $(1,384,000)
(e) The pro forma effect of the sale of the Virginia Beach
mortgage loan on interest expense on notes payable on
wrap mortgages for the year ended December 31, 1996 is
a decrease of $340,000.
5. The pro forma earnings per share for the year ended December
31, 1996 and the nine months ended September 30, 1997 reflect
the sale of 2,012,500 shares of common stock under its
existing shelf registration on January 22, 1997 and the sale
of 3,000,000 shares of common stock on September 24, 1997.
6. No additional income tax expenses were provided because of
the Company's net operating loss carryover and status as a
REIT.
7. All per share information for the year ended December 31,
1996 has been restated to reflect a 3 for 2 common stock
split effected as a dividend of one share for every two
shares outstanding on April 30, 1996 as well as the June 14,
1996 private placement of 1,140,000 shares as if both
transactions had occurred January 1, 1996.
FORM 8-K
PARKWAY PROPERTIES, INC.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of
1934, the Registrant has duly caused this report to be signed on
its behalf by the undersigned hereunto duly authorized.
DATE: December 2, 1997 PARKWAY PROPERTIES, INC.
BY: /s/Sarah P. Clark
Sarah P. Clark
Senior Vice President,
Chief Financial Officer,
Treasurer and Secretary
PURCHASE AND SALE AGREEMENT
between
RAYVEST LIMITED PARTNERSHIP
and
PARKWAY PROPERTIES, L.P.
SEPTEMBER 17, 1997
PURCHASE AND SALE AGREEMENT
This Purchase and Sale Agreement ("Agreement") is made and
entered into on or as of the Effective Date (as defined in
Section 13.20), by and between RayVest Limited Partnership, a
Texas limited partnership ("Seller") and Parkway Properties,
L.P., a Delaware limited partnership ("Purchaser").
WHEREAS, Seller is the owner of a parcel of land located at
1250 West Sam Houston Parkway South, Houston, Harris County,
Texas, as more specifically described on Exhibit 1.2(a) attached
hereto (the "Land"); and
WHEREAS, there are certain real property improvements in,
on or under the Land consisting principally, but not
exclusively, of an office building known as "The Raytheon
Building" (collectively, the "Improvements"); and
WHEREAS, Seller desires to sell, transfer, assign and
convey to Purchaser, and Purchaser desires to purchase and
acquire from Seller all of Seller's right, title and interest in
and to the Land, Improvements, and the Personal Property (as
defined below) pursuant to the terms and conditions set forth
herein.
NOW, THEREFORE, in consideration of the premises, and the
mutual covenants, agreements, representations and warranties
contained in this Agreement, and intending to be legally
obligated, Purchaser and Seller agree as follows:
ARTICLE 1
PURCHASE AND SALE
1.1 Purchase and Sale. Subject to the provisions of, and
on the basis of the covenants, agreements, representations and
warranties contained in this Agreement, Seller agrees to sell,
transfer, assign and convey all of its right, title and interest
in and to the Real Property and the Personal Property, as each
are defined below (collectively referred to as the "Project") to
Purchaser, and Purchaser agrees to purchase and acquire the
Project from Seller (this "Transaction").
1.2 Real Property Identified. As used herein, the "Real
Property" shall mean:
(a) Description of Land. The real estate described
in Exhibit 1.2(a) attached hereto (the "Land").
(b) Description of Improvements. The Improvements,
including The Raytheon Building, Houston, Harris County,
Texas containing approximately 147,000 rentable square
feet, together with all building materials, fixtures,
heating, ventilation and air conditioning systems,
canopies, sidewalks, walkways, planters and landscape
materials, and all other real property improvements owned
by Seller and located in, on or under the Land or related
to, used or available for use in the ownership, conduct,
operation or maintenance of the Real Property.
(c) Rights and Appurtenances. All and singular, the
rights and appurtenances pertaining to the Real Property,
including, but not limited to, any right, title and
interest of Seller in and to adjacent streets, roads,
alleys, easements and rights-of-way.
1.3 Personal Property Identified. As used herein, the
"Personal Property" shall mean:
(a) Description of Tangible Personal Property. The
tangible Personal Property consists of all tangible
personal property located on or attached to the Real
Property and owned by Seller and used or available for use
by Seller in the ownership, operation and/or management of
the Real Property and in the repair, operation and
maintenance of the Project, including, without limitation,
all of Seller's right, title and interest in all equipment,
tools, machinery, furniture, furnishings, office and other
supplies, inventories, spare parts and other tangible
personal property located on or attached to the Real
Property. The tangible Personal Property specifically
excludes all tangible personal property located in any
management office at the Real Property which is owned by a
third party. The tangible Personal Property is generally
described on Exhibit 1.3 attached hereto.
(b) Description of Intangible Personal Property. The
intangible Personal Property consists of all intangible
personal property owned by Seller and used by Seller in
connection with the operation and/or management of the Real
Property and in the repair, operation and maintenance of
the Project and includes, without limitation, (i) all
assignable guarantees and warranties (including those
pertaining to construction of the Project, if any); (ii)
all assignable licenses and other permits relating to the
Project or the operation thereof; (iii) all assignable
contracts, agreements and contract rights; (iv) rights, if
any, to use the name "The Raytheon Building" on a non-
exclusive basis with respect to the Project only; and (v)
all leases, tenancies and rental agreements or arrangements
with tenants (collectively "Leases" or any one individually
"Lease") and security, damage and other deposits and
payments which have been collected by Seller with respect
to the Leases and not retained by Seller in accordance with
the terms of the Leases (collectively "Deposits").
ARTICLE 2
PURCHASE PRICE
2.1 Escrow Deposit. (a) Purchaser shall within two (2)
business days following the Effective Date deliver to Texas
State Title Company, attention: R. G. Cochran ("Title Company")
the sum of ONE HUNDRED THOUSAND AND NO/100 DOLLARS
($100,000.00) ("Escrow Deposit") in lawful funds of the United
States of America. If Purchaser elects in writing not to
proceed with this transaction prior to the conclusion of the
Inspection Period or elects to terminate this Agreement pursuant
to the express provisions hereof, then Title Company shall
refund to Purchaser the Escrow Deposit and all interest accrued
thereon. If Purchaser shall fail to terminate this transaction
prior to the conclusion of the Inspection Period, the Escrow
Deposit and all interest thereon, shall become non-refundable to
Purchaser except in the case: (i) Seller's default; (ii) the
non-satisfaction of the conditions set forth in Section 10.1; or
(iii) except as otherwise set forth herein, but shall be
credited toward the Purchase Price upon Closing. Title Company
is hereby instructed to invest the Escrow Deposit in an FDIC
insured interest bearing account in the name of Purchaser.
Purchaser's taxpayer identification number is 72-1344324.
Purchaser and Seller hereby acknowledge and agree that all
accrued interest on the deposit shall be credited to Purchaser,
provided, however, in the event that this transaction does not
Close due to an event of default by Purchaser and through no
event of default of Seller unless Seller's performance is
excused due to a prior default of Purchaser, the Escrow Deposit
and all accrued interest thereon shall be delivered to Seller as
herein set forth.
(b) The sole responsibility of Title Company shall be to
hold and disburse the Escrow Deposit in accordance with the
terms of this Agreement and, if a dispute shall arise with
respect to the disposition of the Escrow Deposit, the Title
Company may continue to hold such funds until receipt of written
instructions acknowledged and agreed to by Purchaser and Seller
or may deposit such funds with a court of competent jurisdiction
of Harris County, Texas and interplead the Purchaser and Seller
in connection therewith.
2.2 Purchase Price. Seller agrees to sell, and Purchaser
agrees to purchase, the Project for a total purchase price equal
to FIFTEEN MILLION FIVE HUNDRED THOUSAND AND NO/100 DOLLARS
($15,500,000.00) ("Purchase Price"), plus or minus prorations
and other adjustments provided by this Agreement, upon and in
accordance with the terms and conditions of this Agreement.
Subject to the provisions hereof and at Purchaser's sole option,
payment of a portion of the Purchase Price may be evidenced by
assumption of the "Existing Indebtedness" (as defined below),
such payment shall equal the amount of the outstanding principal
balance of the existing note. The balance of the Purchase Price,
plus or minus prorations, shall be paid in immediately available
funds at Closing.
Subject to Purchaser's review of all loan documents
relating to the Existing Indebtedness and of any required
assumption documents, Purchaser may at its election assume
Seller's obligations under the Loan Documents (as defined below)
at Closing. Purchaser agrees to use reasonable efforts to
cooperate with Lender in the assumption of the Existing
Indebtedness and to secure the release of Seller of its
liability under the Loan Documents. Seller acknowledges that
Purchaser retains the right to request certain modifications
and/or alterations to the Loan Documents (and to any assumption
documents required by Lender) prior to its assumption thereof.
In the event Lender is unwilling to allow Purchaser to assume
the Existing Indebtedness on terms acceptable to Purchaser, then
Purchaser may, in its sole and absolute discretion, terminate
this Agreement, and receive a return of the Escrow Deposit
together with all interest accrued thereon. In the event Lender
is unwilling to release Seller from the Existing Indebtedness
and all other liability under the Loan Documents, then Seller
may, in its sole and absolute discretion, terminate this
Agreement, in which case, the Escrow Deposit together with all
interest thereon will be refunded to Purchaser and Seller shall
reimburse Purchaser for its reasonable out-of-pocket expenses
incurred in investigation of the Project in an amount not to
exceed Thirty Thousand Dollars ($30,000.00) and, thereafter,
neither Seller nor Purchaser will have any further obligations
hereunder.
2.3 Independent Consideration. Seller and Purchaser
acknowledge and agree that One Hundred and No/100 Dollars
($100.00) of the Escrow Deposit shall be paid to Seller if this
Agreement is terminated for any reason (the "Independent
Contract Consideration"). Moreover, Seller and Purchaser
acknowledge and agree that the Independent Contract
Consideration has been bargained for and agreed to as additional
consideration for Seller's execution and delivery of this
Agreement. At Closing (defined below) the Independent Contract
Consideration shall be applied to the Purchase Price. In the
event this Agreement is terminated for any reason, Seller shall
be entitled to the Independent Contract Consideration.
ARTICLE 3
ESCROW; CLOSING
3.1 Escrow Agent. Title Company is authorized and
instructed to act as escrow agent pursuant to the terms of this
Agreement. By execution of the acknowledgment attached hereto,
Title Company acknowledges receipt of the Escrow Deposit.
Purchaser and Seller shall execute any additional escrow
instructions reasonably required by Title Company to complete
the transactions provided for herein provided that such
instructions are not inconsistent with the terms of this
Agreement.
3.2 Closing. Closing shall be on such date and location
as mutually agreed to by Purchaser and Seller (hereafter
referred to as "Closing Date" or "Closing") provided, however,
in no event shall the Closing Date be more than fifteen (15)
calendar days after the end of the Inspection Period.
3.3 Closing Costs.
(a) Seller's Payments. Seller shall pay the cost and
expenses, if any, of (i) the title search and title
insurance commitment for the owner's title insurance
policy; (ii) the premium for the owner's extended coverage
title policy and the cost of applicable endorsements
waiving the survey and mechanics'/materialmen's lien
exceptions; (iii) the fees for recording the deed conveying
the Real Property; (iv) the survey, (v) any transfer tax,
documentary stamp tax or similar tax which becomes payable
by reason of the transfer of the Project; and (vi) one-half
of any escrow fees charged by Title Company, if any.
(b) Purchaser's Payments. Purchaser shall pay the
cost and expenses, if any, of (i) the cost of any
endorsements as Purchaser may obtain to the title insurance
policy (other than deletion of the survey or
mechanics'/materialmen's lien exception); and (ii) one-half
of any escrow fees charged by Title Company, if any.
(c) Other Costs. Each party will pay all its own
expenses incurred in connection with this Agreement and the
transactions contemplated hereby, including, without
limitation (i) all costs and expenses stated herein to be
borne by a party, and (ii) all of their respective
consulting, accounting, investigation, legal and appraisal
fees.
3.4 Prorations. The following prorations shall be made
effective as of the Closing Date and, to the extent possible,
shall be made tentatively at Closing:
(a) Proration Date. All prorations shall be made as
of 12:01 a.m., according to the time zone in which the
Project is located, on the Closing Date, as if Purchaser
were vested with title to the Project during the entire
Closing Date.
(b) Rents. All rents under the Leases for the month
in which Closing occurs which are actually received by
Seller shall be prorated as of the Closing Date. All
advance payments of rents, other than for the month in
which Closing occurs, and all Deposits shall be paid by
Seller to Purchaser at Closing. Delinquent rents and
additional rents owed for the month during which Closing
occurs (for the pro rata period of Seller's ownership of
such Project) or prior to the month during which the
Closing takes place shall remain the property of Seller,
and Purchaser shall use reasonable efforts (not to include
commencing any eviction action or other litigation to
collect such delinquency) to collect such delinquent rents
and additional rents for the benefit of Seller and shall
cooperate with Seller in the collection of any such
delinquent rents and additional rents. Seller shall retain
the right to pursue all remedies (excluding eviction of
tenants) against tenants from whom Purchaser is unable to
collect such delinquent rents and additional rents despite
reasonable efforts. All rent received by Purchaser after
the Closing Date shall be applied first to current rentals
and then to delinquent rentals, if any, in the inverse
order of maturity.
(c) Additional Rents. Seller and Purchaser
acknowledge and agree that certain additional rents are
collected on an estimated basis and are attributable to
percentage rents, expense escalation reimbursements,
operating expense pass throughs and/or common area
maintenance reimbursements. The parties further agree to
credit any difference in the amounts collected as compared
to the actual expenses associated therewith to the
applicable party effective as of the Closing Date.
(d) Taxes. Ad valorem and personal property taxes
and assessments against the Project for the year of Closing
shall be prorated between Seller and Purchaser as of the
Closing Date. If actual taxes are unknown, they shall be
prorated based upon the best available information from the
local taxing authority. To the extent that the actual
taxes for the current year differ from the amounts so
apportioned at Closing, Seller and Purchaser shall make all
necessary adjustments by appropriate payments between
themselves following Closing.
(e) Utilities. Charges for utilities serving the
Project shall be determined as of the day preceding the
Closing Date, and Seller shall pay the amount of the
utility charges to such date to the utility companies
involved or to Purchaser in the event Purchaser is
responsible for the payment of such utility charges. All
utility deposits of Seller shall belong to Seller.
(f) Contract Charges. Charges with respect to
Contracts (as defined below) transferred and assigned to
Purchaser shall be prorated as of the Closing Date.
Payments for obligations under leases of tangible Personal
Property transferred and assigned to Purchaser will be
prorated as of the Closing Date. To the extent not
reflected in the closing statements evidencing the
Transaction contemplated by this Agreement, Purchaser and
Seller agree to adjust between themselves outside of
Closing any amounts which are the responsibility of the
other party pursuant to this subsection.
(g) Operating Expenses. Except as otherwise provided
herein, any and all expenses and payables relating to the
operation, management or ownership of the Project arising
or accruing prior to the Closing Date in the ordinary
course of business are the responsibility of the Seller and
will be paid by Seller promptly upon receipt of billing
therefor.
(h) Leasing Costs. Seller shall be responsible for
paying all costs, including, without limitation, tenant
improvements and leasing commissions, associated with any
new lease or any lease renewal, expansion or other
modification executed by Seller prior to the expiration of
the Inspection Period. If Purchaser acquires the Project,
Purchaser shall be responsible for paying the costs
associated with all leases or any lease renewal, expansion
or other modification executed after the end of the
Inspection Period which have been approved by Purchaser and
Seller shall receive a credit at Closing for any such costs
previously paid by Seller. If, for any reason, Purchaser
does not purchase the Project, Purchaser shall not be
responsible or liable to any entity with respect to any
such costs or leasing commissions.
(i) Escrow Accounts. Any escrow accounts required to
be maintained by Seller pursuant to the Loan Documents
shall be prorated as of the Closing Date.
(j) Lease Reimbursements. Notwithstanding the
provisions of this Section 3.4 and Section 9.3, the tenants
of the Project are obligated for certain base rental
adjustments based on the operating expenses of the Project.
Seller and Purchaser acknowledge and agree that certain
base rental adjustments may be collected on an estimated
basis. The parties further agree to credit any difference
in the amounts collected as compared to the actual lease
reimbursements associated therewith to the applicable party
effective as of the Closing Date.
The agreements with respect to prorations in this Section
3.4 shall survive Closing. Final settlement of all prorated
items shall occur on or before 90 days after the Closing Date,
or on the next business day if the 90th day is a Saturday,
Sunday or legal holiday, except property taxes and delinquent
and pass through rentals which shall be determined upon
collection or the date upon which any such amounts shall become
ascertainable. Contractual and tort liabilities accruing, or
relating to events that occurred, prior to the Closing Date
shall remain the responsibility of Seller.
ARTICLE 4
TITLE MATTERS
4.1 Title Report/Commitment for Title Insurance. Seller
hereby instructs Title Company to prepare and deliver to
Purchaser, Seller and the surveyor described below, at Seller's
expense, within five business (5) days after the Effective Date
a commitment to issue an owner's policy of title insurance to be
issued by a title company reasonably acceptable to Purchaser
(the "Title Commitment") covering the Real Property, showing all
matters affecting title to the Real Property and binding Title
Company to issue to Purchaser at Closing an owner's policy of
title insurance on an ALTA (1970 form) Extended Form of policy
in the full amount of the Purchase Price pursuant to Section 4.4
hereof. Seller and Purchaser further instruct Title Company to
deliver to such parties copies of all instruments referenced in
Schedule B, Section II of the Title Commitment.
4.2 Survey. Within five (5) days after the Effective
Date, Seller shall, at its expense, order a survey or an update
to a survey and shall use reasonable efforts to cause such
survey to be delivered to Purchaser and Title Company within ten
(10) business days after the Effective Date. Such survey shall
be a currently dated ALTA/ASCM land title survey of the Land and
of the Improvements situated thereon (the "Survey"), prepared by
a surveyor licensed by the State of Texas and certified to
Purchaser and Title Company by such surveyors in conformity to
the Certificate attached hereto as Exhibit 4.2(a). In addition
to the requirements set forth in attached Exhibit 4.2(a), the
Survey shall reflect the total area of the Real Property, the
location of all improvements, recorded easements and
encroachments, if any, located thereon and all building and set
back lines and other matters of record with respect thereto.
Said Survey shall also certify that the Land is not in an area
identified by FEMA as having special flood or mudslide hazards
which require flood insurance under the Flood Insurance Act of
1968. Seller shall provide at Closing a certificate to
Purchaser and Title Company if requested, that there have been
no improvements made to the Real Property since the date of the
Survey which would materially alter the depictions on the
Survey.
4.3 Title Defects. Within seven (7) days after receipt of
the later of the Title Commitment and the Survey, Purchaser
shall notify Seller of any title matters to which Purchaser
objects (the "Title Defects") ("Purchaser's Notice"). Any
matter disclosed in a Title Commitment or Survey and not
objected to by Purchaser or subsequently waived by Purchaser
shall be deemed a permitted exception ("Permitted Exception").
Seller shall notify Purchaser of Seller's decision not to cure
any Title Defect within three (3) days after receipt of
Purchaser's Notice; provided, however, Seller shall remove
monetary liens relating to borrowed funds or other liens
securing indebtedness of an ascertainable amount and mechanic or
materialmen's liens, if any, except for the Existing
Indebtedness if assumed by Purchaser. Seller's failure to
respond shall be deemed a decision by Seller not to cure any
Title Defect except for the Existing Indebtedness if assumed by
Purchaser. Within three (3) days of Seller's election not to
cure certain Title Defects, Purchaser may elect to waive such
Title Defects or terminate this Agreement in which event
Purchaser shall receive a return of the Escrow Deposit and all
interest accrued thereon. Purchaser's failure to respond shall
be deemed a decision by Purchaser to waive the Title Defects to
which Seller decides not to cure. If the Title Defects that
Seller elected to cure are not cured by Seller or waived by
Purchaser on or before the Closing Date then Purchaser may (i)
elect to waive the uncured Title Defects, or (ii) terminate this
Agreement in which event Purchaser shall receive a return of the
Escrow Deposit and all interest accrued thereon.
4.4 Title Insurance. At Closing, Seller and Purchaser
shall instruct Title Company to issue a final update to the
Title Commitment in which the "GAP" exception has been deleted,
binding Title Company to issue to Purchaser an owner policy of
title insurance (the "Title Policy") covering the Real Property
in the full amount of the Purchase Price. The Title Policy
shall be an ALTA Form 1970-B owner's policy of extended coverage
title insurance containing such endorsements as may be
reasonably requested by Purchaser and agreed to by Title Company
subject only to: (a) current non-delinquent real estate taxes
and assessments; (b) matters set forth in the Title Commitment
and approved or waived by Purchaser; (c) any other matters
approved in writing by Purchaser; (d) title exceptions caused by
acts or omissions of Purchaser; and (e) matters excepted or
excluded from coverage by the printed terms of the title
insurance policy standard form (except for survey (if requested
by Purchaser) and mechanics and materialmen's lien exceptions
which shall be deleted). Purchaser shall use reasonable efforts
to reach agreement with Title Company regarding any applicable
endorsements during the Inspection Period.
ARTICLE 5
INFORMATION SCHEDULES
5.1 Information Schedules. Seller will deliver or cause
to be delivered to Purchaser within ten (10) days after the
Effective Date, copies of all schedules and documents referred
to in this Agreement ("Information Schedules"), including the
following schedules and other information described below:
(a) Rent Roll. A complete list and description,
including all Deposits ("Rent Roll"), and true and complete
copies, of all Leases.
(b) Delinquency Report. A complete list and
description of any and all delinquencies or defaults under
any of the Leases ("Delinquency Report").
(c) Contracts. An itemized schedule ("Contracts
Schedule") of all written and oral service, maintenance,
management, leasing, brokerage, and other agreements,
equipment or appliance leases, non-governmental franchises,
contracts and arrangements relating or pertaining to the
Project (collectively "Contracts"). Unless Purchaser makes
written request to cancel any Contract contained in the
Contracts Schedule prior to the end of the Inspection
Period, the Contracts contained in the Contracts Schedule
shall be transferred and assigned by Seller to Purchaser at
Closing, to the extent assignable. The Contracts Schedule
shall note any Contracts which are not assignable or
cancelable at Closing.
(d) Personal Property. A true and complete schedule
and description ("Personal Property Schedule") of all
material tangible Personal Property.
(e) Permits. A list ("Permits Schedule") of all
current franchises, business or other licenses, bonds,
permits, certificates of occupancy, authorizations and
other evidences of consent, approval, authorization or
permission relating to or affecting the Project
(collectively "Permits") of or from any person, including
any governmental authority, held by Seller including any
pending applications, but only to the extent that Purchaser
may obtain or derive a benefit from such Permits after
Closing. In lieu of providing a detailed Permits Schedule,
Seller may provide to Purchaser copies of all Permits in
its possession or control.
(f) Property Taxes. Copies of the two most recent
tax statements with respect to the Project, including,
without limitation, real and personal property taxes and
any special assessments.
(g) Warranties. A list and description ("Warranty
Schedule") of all material third party bonds, warranties
and guaranties, including any warranties relating to
equipment, structures, roof, landscaping, parking lot or
parking lot surfaces, if any, which are in effect with
respect to or which benefit any portion of the Project.
(h) Repair History. A true and complete list of all
major (i.e., costing more than $5,000) repairs of a capital
nature which Seller has undertaken with respect to the
Project during its ownership thereof.
(i) Operating Statements. Materially true and
complete copies of all operating statements for the Project
for the period September 1996 through the month ending
August 31, 1997.
(j) Prior Studies. True and complete copies of any
prior third party studies and reports, in the possession of
Seller or Seller's agents, affiliates or management
companies relating in any manner to the environmental,
structural, mechanical, or engineering status of any
portion of the Project.
(k) Plans. Copies of all construction plans,
diagrams and schematics of the Real Property and
Improvements in Seller's possession or control made
available to Purchaser at the Project.
ARTICLE 6
INSPECTION
6.1 Inspection Period. During the period beginning upon
the Effective Date and ending at 5:00 p.m., local time, on the
thirtieth (30th) day after the Effective Date (such period of
time hereinafter referred to as the "Inspection Period"),
Purchaser and/or its attorneys, consultants or employees
("Authorized Representatives") shall have the right to: (i) make
a physical inspection of the Project subject to the rights of
tenants, (ii) examine the financial and operating books and
records relating to the Project maintained by or for the benefit
of Seller, (iii) interview tenants of the Project, and (iv)
conduct such non-destructive physical engineering, feasibility
and other studies and tests on or of the Project as Purchaser
considers to be appropriate. Purchaser and/or Purchaser's
Authorized Representatives may also copy any documents referred
to or described in the Information Schedules but not required to
be provided to Purchaser as part of any such schedule.
Notwithstanding the foregoing, Purchaser shall not be permitted
to interfere unreasonably with Seller's operations at the
Project or interfere with any tenant's operations at the
Project, and the scheduling of any inspections, interviews,
and/or testing shall take into account the timing and
availability of access to tenant's premises, subject to and in
accordance with tenants' rights under the Leases or as tenants
may otherwise agree. Purchaser shall at all times conduct such
due diligence in compliance with applicable laws and the terms
of any leases of the Project, and in a manner so as to not cause
undue damage, loss, cost or expense to Seller, the Project or
the tenants of the Project, and Purchaser shall promptly restore
the Project to its condition immediately preceding such
inspections and examinations and shall keep the Project free and
clear of any mechanic's liens or materialmen's liens in
connection with such inspections and investigations. Seller
shall have the right, at its option, to cause a representative
of Seller to be present at all such inspections, reviews and
examinations. Purchaser shall keep all information or data
received or discovered in connection with such due diligence
strictly confidential. Purchaser shall indemnify, protect,
defend and hold Seller harmless from and against any obligation,
liability, claim (including any claim for damage to property or
injury to or death of any persons), lien or encumbrance, loss,
damage, cost or expense, including attorney's fees
(collectively, the "Loss"), in any way caused by the inspections
or examinations of the Project by Purchaser or its agents or
contractors. The foregoing indemnification shall survive the
Closing or the termination of this Agreement for any reason.
6.2 Right of Termination. Notwithstanding anything in
this Agreement to the contrary, Purchaser shall have the right,
for any reason in Purchaser's sole and absolute discretion, to
terminate this Agreement by written notice to Seller on or
before the expiration of the Inspection Period and Title Company
shall immediately refund to Purchaser the Escrow Deposit and any
interest thereon. In the event the transaction does not close
for any reason other than a default by Seller, Purchaser shall
deliver to Seller all materials, studies or documents received
from third parties or Seller relating to the Project.
ARTICLE 7
REPRESENTATIONS AND WARRANTIES OF PURCHASER
Purchaser's Representations and Warranties. Purchaser
makes the following representations and warranties, as of the
date of execution of this Agreement, which shall survive Closing
and conveyance of the Project to Purchaser:
7.1 Authority. Purchaser is a limited partnership, duly
formed, existing and in good standing under the laws of the
State of Delaware; Purchaser has full legal right, power and
authority to execute and fully perform its obligations under
this Agreement, without the need for any further action under
its governing instruments; and the persons executing this
Agreement and the other documents required hereunder are the
duly designated officers of the sole general partner of
Purchaser and are authorized to do so.
7.2 Inspection. Purchaser has made, or will make prior to
expiration of the Inspection Period, an independent
investigation, to the extent Purchaser deems necessary or
appropriate, concerning the physical condition, value,
development, use, marketability, feasibility and suitability of
the Project, including, without limitation, land use, zoning and
other governmental restrictions.
7.3 No Other Seller Representations. Except as expressly
set forth herein, Purchaser acknowledges that no representations
or warranties, express or implied, have been made by Seller or
Seller's representatives.
7.4 "AS IS, WHERE IS". PURCHASER HEREBY EXPRESSLY
ACKNOWLEDGES THAT IT HAS INSPECTED AND EXAMINED OR WILL INSPECT
AND EXAMINE THE PROJECT TO THE EXTENT DEEMED NECESSARY BY
PURCHASER IN ORDER TO ENABLE PURCHASER TO EVALUATE THE PURCHASE
OF THE PROJECT. PURCHASER REPRESENTS THAT IT IS A KNOWLEDGEABLE
PURCHASER OF REAL ESTATE AND OFFICE PROPERTIES AND THAT, EXCEPT
AS SET FORTH IN ARTICLE 8, IT IS RELYING SOLELY ON ITS OWN
EXPERTISE AND THAT OF PURCHASER'S CONSULTANTS, AND THAT
PURCHASER HAS CONDUCTED OR WILL CONDUCT SUCH INSPECTIONS AND
INVESTIGATIONS OF THE PROJECT, INCLUDING, BUT NOT LIMITED TO,
THE PHYSICAL AND ENVIRONMENTAL CONDITIONS THEREOF. PURCHASER
FURTHER ACKNOWLEDGES AND AGREES THAT PURCHASER IS ACQUIRING THE
PROJECT ON AN "AS IS, WHERE IS" BASIS WITHOUT REPRESENTATIONS OR
WARRANTIES OTHER THAN THOSE SET FORTH HEREIN AND IN THE
DOCUMENTS OF TRANSFER RELATING TO THIS TRANSACTION.
Initialed by:
________________ ________________
Seller Purchaser
ARTICLE 8
REPRESENTATIONS AND WARRANTIES OF SELLER
Seller's Representations and Warranties. Seller makes the
following representations and warranties as of the date of
execution of this Agreement, which shall survive conveyance of
the Project to Purchaser:
8.1 Authority. Seller is a limited partnership, duly
formed, organized, existing and in good standing under the laws
of the State of Texas. Seller has full legal right, power and
authority to execute and fully perform its obligations under
this Agreement, without the need for any further action under
its governing instruments; and the persons executing this
Agreement and the other documents required hereunder are the
duly designated officers or partners of Seller and are
authorized to do so.
8.2 Indefeasible Title. At the Effective Date and as of
Closing, Seller will own the Personal Property free and clear of
all liens, claims, encumbrances, and rights of others, except
the leased or financed equipment disclosed pursuant to Exhibit
1.3, and will convey same to Purchaser. Seller is not a party
to any contract agreement, or commitment to sell, convey,
assign, transfer or otherwise dispose of any portion or portions
of the Project.
8.3 Liabilities. Except as created by this Agreement or
disclosed in the Information Schedules or the documents
referenced therein, there are no contractual obligations or to
Seller's knowledge, any other liabilities of any type which
might, with notice, passage of time or both, have a material
adverse effect on the Project.
8.4 Contracts. Except as disclosed in the Information
Schedules, there are no other management, leasing, brokerage,
maintenance, service or other contracts relating to the Project.
If Purchaser requests during the Inspection Period, any such
existing contracts will be terminated at Closing.
8.5 No Undisclosed Matters. To Seller's knowledge, there
are no unsatisfied written requests for material repairs,
restorations or improvements from any insurance carrier or
governmental authority. Seller has not received any written
notice from any insurer of any defects or inadequacies in any
part of the Project which would adversely affect its
insurability, or written notice of any claims of any
governmental agency to the effect that the construction,
operation or use of any of the Project is in violation of any
applicable law, ordinance, rule, regulation or order.
8.6 No Defaults. Seller is not in default in respect of
any of its material obligations or liabilities pertaining to the
Project (including, but not limited to, such obligations and
liabilities under the Contracts or Leases). To Seller's
knowledge, no present dispute or fact exists which might with
notice, passage of time or both, give rise to a dispute under
any Contracts or Leases.
8.7 Litigation. There is no litigation pending or to
Seller's knowledge, threatened against Seller or the Project
which relates to, or if decided adversely, could have a material
adverse effect upon, the Project (including condemnation or
similar proceeding).
8.8 Environmental Matters. For the purpose of this
Agreement, the term "Hazardous Materials" shall mean (i) each
and every substance included within the term "hazardous
substance" or "hazardous waste" as defined in any one or more of
the Comprehensive Environmental Response, Compensation, and
Liability Act of 1980, 42 U.S.C.A. Section 9601 et seq. (as
heretofore amended), the Hazardous Materials Transportation Act
of 1975, 49 U.S.C.A. Section 1801 et seq. (as heretofore
amended), the Resource Conservation and Recovery Act of 1976, 42
U.S.C.A. Section 6901 et seq. (as heretofore amended) and any
other federal, state or local environmental laws or regulations
now or hereafter enacted; (ii) all substances to which the rules
and regulations promulgated by any Federal or state agency
pursuant to any one or more of said statutes applies; and (iii)
any and all petroleum products and petroleum derivatives.
Seller represents unto Purchaser that the following matters are
true as of the date of execution of this Agreement by Seller,
and shall survive Closing and not merge into any documents
delivered at Closing:
(i) Seller has no notice or knowledge of any (i)
currently existing violations of federal, state,
county or municipal environmental laws in respect to
the Project, or (ii) past, pending or threatened
administrative or judicial litigation or other legal
proceedings including, without limitation, any
enforcement proceeding under any federal, state,
county or municipal statute, ordinance, rule or
regulation concerning Hazardous Materials, relating to
the Project, or of any settlement thereof; and
(ii) to Seller's knowledge, there are no
underground storage tanks ("USTs") located on or below
the Land
8.9 Certification of Rent Roll. No person has any title,
interest or right to possession of any portion of the Project as
a lessee, tenant or concessionaire of Seller except as shown on
the Rent Roll. Except as disclosed in writing to Purchaser, the
Rent Roll lists all Leases, amendments and modifications
thereof. Seller is not, and to Seller's knowledge no tenant is,
in default in the performance of or under any such Lease in any
material respect except as disclosed in the Delinquency Report.
The Rent Roll states all Deposits, prepaid rents and other
deposits or prepayments for each Lease and Seller or Seller's
agent are currently in possession of all such deposits. No
tenant is entitled to any rebate, concession, special allowance
or other benefits, except as stated in the Leases. To Seller's
knowledge, no tenant has any counterclaim, defense or offset to
any action for collection of rents or other amounts accruing
after the Closing Date under any Lease. The rents and other
sums due or to become due under each Lease have not been and
will not be assigned, encumbered or subjected to any liens by
Seller, except to Lender and to lenders whose liens shall be
released at Closing. Except as disclosed in the Rent Roll,
there has been no waiver of Seller's rights under or
modification of any Lease or other documents executed by tenants
in connection with the Leases which could have a material
adverse affect thereon. To Seller's knowledge, except for the
right of the tenants in possession under the Leases, there are
no parties in possession of, or claiming any possession to any
portion of the Project as lessees, tenants at sufferance,
trespassers or otherwise. To Seller's knowledge, there has been
no material, adverse change with respect to the information set
forth in the Rent Roll or Delinquency Report. Except as
disclosed in Exhibit 8.9, all leasing commissions payable in
connection with the Leases have been paid in full. Exhibit 8.9
lists any and all leasing commissions and brokerage agreements
which may be due and payable in connection with the Leases upon
a subsequent renewal, expansion, modification or waiver of any
rights by a tenant under the terms of the Leases. Seller has
paid in full all leasing or similar commissions or payment
obligations, if any, relating to any Lease. Purchaser is not
assuming any obligations for tenant improvements or purported
leasing commissions. Seller shall indemnify and hold Purchaser
harmless for any Loss with respect to any claims by tenants or
third party brokers for tenant improvements or leasing
commissions not expressly assumed by Purchaser.
8.10 Existing Indebtedness. The "Loan Documents" described
on Exhibit 8.10 constitute all of the loan documents relating in
any manner to Seller's "Existing Indebtedness" to New York Life
Insurance and Annuity Corporation ("Lender") which relates to
the Project. The outstanding principal balance of the Existing
Indebtedness as of the Effective Date is $8,028,078.44. The
Loan Documents correctly and accurately state the terms and
condition of the Existing Indebtedness. Except as disclosed in
writing to Purchaser prior to the expiration of the Inspection
Period, the Loan Documents contain the entire agreement between
Seller, any guarantors and any lenders; are in full force and
effect in accordance with their written terms; and, are valid
obligations of the Seller, any guarantors and Lender. Seller is
not, and to Seller's knowledge any guarantors and Lender are
not in default in the performance of or under any of the Loan
Documents in any material respect except as disclosed on Exhibit
8.10. Lender is not entitled to any payments, offsets or
remuneration of any kind except as set forth in the Loan
Documents. As of the Effective Date, and as of the Closing Date,
Seller has complied with all requirements of the Loan Documents
and is not in default thereunder.
8.11 Operating Statements. To Seller's knowledge, the
Operating Statements are true, accurate and complete in all
material respects and present fairly the results of operations
for the periods indicated on a consistent basis.
8.12 Use of Project. To Seller's knowledge, (i) no
governmental, public or private authority intends or desires to
appropriate the use of or limit the use of any of the Project
pursuant to any condemnation, eminent domain or similar
proceeding; (ii) no fact or condition exists which will result
in the termination of the Project's current access to and from
existing streets and utilities.
8.13 Documentation. To Seller's knowledge, all documents
which shall be delivered to Purchaser by or on behalf of Seller
under this Agreement shall be accurate and complete in all
material respects, including, without limitation, the
Information Schedules.
8.14 FIRPTA. Seller is not a "foreign person" (as defined
in the Internal Revenue Code and Income Tax Regulations). The
provisions of the Foreign Investment in Real Property Tax Act of
1980, as amended, are not applicable to the Transaction.
ARTICLE 9
COVENANTS
Covenants of Seller. Seller covenants and agrees with
Purchaser as follows:
9.1 Access. Subject to the terms and conditions of
Section 6.1, during normal business hours prior to Closing,
Seller agrees to give to Purchaser and its agents and
representatives reasonable access to the Project and the books
and records directly relating to the ownership, management,
maintenance and operation of the Project, and all documents
directly pertaining to the Project that are in the possession of
Seller, or any of Seller's agents or representatives. Prior to
Closing, Seller will furnish Purchaser with such additional
financial and operating data and other information reasonably
available to Seller as may be reasonably necessary for Purchaser
to thoroughly evaluate the Project.
9.2 Additional Audits. Purchaser shall have, in addition
to any inspection or audit rights contained elsewhere in this
Agreement, the right to conduct a full audit of the books and
records of Seller relating to the operations and financial
results of the Property, in such form and at such time,
including up to 270 days after Closing, as Purchaser may
reasonably determine is necessary to comply with applicable
securities laws requirements, including, without limitation,
Regulation 210.3-14 promulgated under the Securities Exchange
Act of 1934, as amended. All costs incurred as a result of a
Purchaser's undertaking such audit shall be borne exclusively by
Purchaser, including the cost of Seller's personnel,
photocopying, and the like; however, Seller shall make
available such books, records and materials as may be reasonably
requested by Purchaser or its accountants in order to conduct
such audit. All such audit activities shall be conducted at
Seller's place of business in a commercially reasonable fashion
during normal business hours and upon five (5) days prior notice
from Purchaser to Seller. Purchaser will provide Seller a copy
of such audit at no additional cost to Seller.
9.3 No Material Changes. Prior to Closing, Seller shall:
(i) not cancel or permit cancellation of any hazard or liability
insurance carried with respect to the Project; (ii) remedy all
material violations of laws, ordinances, orders or requirements
relating to the Project which are not caused by Purchaser and of
which Seller has received actual notice and provide Purchaser
with evidence of curing of same (provided that Seller shall not
be required to expend more than $10,000, in the aggregate, with
respect to such matters); and (iii) operate the Project on a
basis consistent with historical operations including, without
limitation, undertaking all reasonably required ordinary
maintenance and repair of the Project. Prior to Closing, Seller
also will not, without the prior written consent of Purchaser,
(i) sell, transfer or dispose or become obligated to sell,
transfer or dispose of any of the Project, except for the use
and consumption of inventory, office and other supplies and
spare parts, and the replacement of worn out, obsolete and
defective tools, equipment and appliances, in the ordinary
course of the business, (ii) after the expiration of the
Inspection Period except as specifically permitted by this
Agreement, enter into any transaction, or make any commitment
with respect to the Project other than in the ordinary course of
the business, (iii) amend, renew, extend, modify or terminate
any Contract, Permit or Lease except as contemplated by this
Agreement or except in the ordinary course of business. Subject
to Section 9.9 below regarding Seller's continued leasing
obligations, prior to Closing, Seller shall operate and maintain
the Project in substantially the same manner and condition as
Seller has operated and maintained the Project immediately prior
to the Effective Date. Seller will perform current or routine
maintenance and repairs in the ordinary course of business of or
to the Project as may be required or reasonably appropriate to
operate and maintain the Project other than tenant improvements
relating to new leases. Provided, however, that Seller shall
not be obligated to make a capital expenditure in excess of
$15,000 and in the event Seller elects not to make an
expenditure greater than said amount, then Purchaser may
terminate this Agreement and receive a return of the Escrow
Deposit and all interest thereon. After expiration of the
Inspection Period, Seller shall be required to gain Purchaser's
written approval of any new or modified contract or agreement
which will affect the operation of the Project.
9.4 Consents. Seller and Purchaser shall each promptly
file or submit and diligently prosecute any and all applications
or notices with federal, state and/or local authorities and all
other requests with any private persons or entities for
consents, approvals, authorizations and permissions which are
reasonably considered necessary or appropriate by the other
party for the consummation of the Transaction or to prevent the
termination of any Lease, Contract or Permit, or any loss or
disadvantage to the Project.
9.5 Payments. Seller will cause to be paid when due or
shall be responsible for all taxes, license fees, trade accounts
and costs and expenses of operation and maintenance of the
Project incurred through the Closing Date, except amounts
subject to proration under Section 3.4.
9.6 Cooperation. Seller will reasonably assist and
cooperate with any environmental evaluation, study or audit of
the Project prepared by, for or at the request of Purchaser.
9.7 Notification of Subsequent Events. Prior to Closing,
Seller shall notify Purchaser of any written notice received by
Seller of any material adverse change in or to the Project
including, without limitation, any notice relating to any
insurance contract or policy now held or owned by Seller to
cancel or materially increase any premiums relating thereto.
9.8 Existing Loan Matters. Seller shall use its
reasonable efforts to obtain the written consent to the
transactions contemplated herein from all parties whose consent
to the assumption by Purchaser of such Loan Documents is
required thereunder, together with a release of Seller from any
liability under the Loan Documents, and an "estoppel
certificate" executed by Lender in the form attached hereto as
Exhibit 9.9 certifying that Loan Documents are in full force and
effect and that no default exists thereunder. To the extent
required by the Lender, Purchaser shall pay to the Lender any
required loan transfer, assumption, or prepayment fee(s) imposed
in connection with Purchaser's assumption or prepayment of the
Existing Indebtedness from Seller, including, reasonable
attorney's fees of Lender in an amount not to exceed $3,500.00;
however, notwithstanding the foregoing, Seller shall pay any
other transfer, assumption or other ancillary fees and costs of
Lender (including reasonable attorneys' fees and any
endorsements to Lender's existing mortgagee's policy of title
insurance, but not attorneys' fees of Purchaser's counsel)
imposed by any of such parties with respect to such consent and
assumption. Purchaser shall reasonably cooperate with Seller in
connection with such consent and assumption (and shall promptly
deliver such information, including financial information,
respecting Purchaser or its principals as any of such parties
may request). Seller's sole obligations in connection with the
consent matters herein contemplated (unless Purchaser agrees
otherwise) shall be to utilize reasonable efforts to obtain such
consents, and to reasonably cooperate with Purchaser to the
extent necessary. If such consents are not obtained on or
before the Closing Date, the obligation of Purchaser to purchase
the Project shall terminate. Seller's sole obligation hereunder
with respect to obtaining an "estoppel certificate" from the
Lender shall be to utilize reasonable efforts to obtain such
"estoppel certificate" (such reasonable efforts not including
any obligation to institute legal proceedings or to expend any
additional monies therefor, other than for minor administrative
charges).
9.9 Estoppel Certificates. Before the expiration of the
Inspection Period, Seller shall have delivered currently dated
(no earlier than thirty (30) days prior to the scheduled Closing
Date) estoppel certificates in material conformance with the
form attached hereto as Exhibit 9.9.1 from each major Tenant
referenced on the Rent Roll or a Seller's estoppel certificate
in the form attached hereto as Exhibit 9.9.2 for each non-major
tenant not providing an estoppel certificate directly. "Major
Tenant" shall include Raytheon Engineers and Constructors, Inc.
Seller and Purchaser shall use reasonable efforts to obtain a
Subordination Non-Disturbance and Attornment Agreement ("SD&A")
in the form requested by any lender of Purchaser and from each
Tenant requested by any such lender. Seller and Purchaser shall
use reasonable efforts to negotiate the final form of any SD&A
with the applicable tenant and lender during the Inspection
Period.
9.10 Leasing. Seller (and/or Seller's agents), in
consultation with Purchaser, shall continue in good faith to
advance all leasing activities for the Project including,
without limitation, new leases, renewals, extensions, expansions
or other modifications. Provided, however, Seller shall not
enter into any new lease or any renewal, expansion or other
modification of any existing Lease without Purchaser's prior
written consent which shall not be unreasonably withheld,
conditioned or delayed.
9.11 Leasing Commissions. Except as set forth in Section
13.1 and Exhibit 8.9, there are no outstanding commissions,
leasing, brokerage or otherwise, payable to any leasing agents,
brokers, or similar type parties, regarding the sale of the
Project or the execution, renewal, amendment, or modification of
any Lease in the Project.
9.12 Knowledge Standard. As used in this Agreement, "the
Seller's knowledge "or any similar phrase, shall mean the
current actual knowledge of Ken Hatfield; provided, however,
that nothing in this Agreement shall be deemed to create or
impose any personal liability of any kind on Ken Hatfield. Ken
Hatfield is the Vice President of Property Management with
respect to the Project and as such has personal knowledge of the
Project and its operations.
ARTICLE 10
CLOSING MATTERS
10.1 Conditions to Purchaser's Obligations. The
obligations of Purchaser to consummate the transactions
contemplated by this Agreement are subject to the satisfaction
of each of the following conditions as of the Closing Date,
except to the extent any such condition is waived in whole or in
part by Purchaser in writing at or prior to Closing:
(a) Satisfaction. The representations and warranties
of Seller contained in this Agreement shall have been true
on the date of this Agreement and on Closing. Seller shall
have performed all obligations and complied with all
covenants required by this Agreement.
(b) No Injunction. On the Closing Date, there shall
be no third party injunction, writ, preliminary restraining
order or any order of any nature issued by a court of
competent jurisdiction directing that the transactions
contemplated herein not be consummated as herein provided
which relates to the acts or omissions of Seller.
(c) Certificates. Purchaser shall have received the
estoppel certificates and the SD&A's as referenced in
Section 9.9 above, from or for each tenant referenced on
the Rent Roll.
(d) Existing Indebtedness. Purchaser shall have
approved and executed all documents necessary to assume the
Existing Indebtedness on terms and in such form as approved
by Purchaser, in its sole discretion.
(e) No Adverse Change. No material and adverse
change shall have occurred without Purchaser's written
consent, in the state or condition of the Project or in the
title matters described in the Title Commitment and the
Survey.
(f) Net Operating Income. Purchaser shall have
verified to its reasonable satisfaction Seller's
representation that the Project's annualized net operating
income for 1997 is $1,7000,000. In computing the Project's
net income for purposes of this paragraph, the parties
shall include the Project's operating expense rental
adjustments and the actual or reasonably projected
operating expenses on an annualized basis.
(g) Assumption. Lender will have agreed prior to the
expiration of the Inspection Period to permit the
assumption of the Loan on terms acceptable to Purchaser.
(h) Lender's Estoppel. Purchaser shall have received
a Lender's Estoppel in form and substance satisfactory to
Purchaser.
10.2 Conditions to Seller's Obligations. The obligations
of Seller to consummate the transactions contemplated by this
Agreement are subject to the satisfaction of each of the
following conditions as of the Closing Date, except to the
extent any such condition is waived in whole or in part by
Seller in writing at or prior to Closing:
(a) Satisfaction. The representations and warranties
of Purchaser contained in this Agreement shall have been
true on the date of this Agreement and on Closing.
Purchaser shall have performed all obligations and complied
with all covenants required by this Agreement.
(b) No Injunction. On the Closing Date, there shall
be no third party injunction, writ, preliminary restraining
order or any order of any nature issued by a court of
competent jurisdiction directing that the transactions
contemplated herein not be consummated as herein provided
which relates to acts or omissions of Purchaser.
10.3 Closing Documents. At Closing, Seller shall deliver
to Purchaser the following documents, all properly executed by
Seller and delivered to Purchaser and/or executed by Purchaser
and delivered to Seller shall be in a form reasonably acceptable
to Purchaser and Seller and include, but are not limited to:
(a) Special Warranty Deed. A Special Warranty Deed
in form attached hereto as Exhibit 10.3(a).
(b) Assignment and Bill of Sale. An Assignment and
Assumption Agreement and Bill of Sale in form attached
hereto as Exhibit 10.3(b). Such Assignment and Bill of
Sale shall be joined in by Purchaser for the purpose of
assuming all obligations under any assigned item arising
from and after the Closing Date.
(c) Existing Indebtedness. Appropriate documentation
to evidence the assumption by Purchaser of the Loan
Documents and the release of Seller from further liability
thereunder as contemplated by this Agreement.
(d) Documents. Executed original copies, or copies
certified as correct by Seller, if originals are not
available, of (i) all Leases in force on the Closing Date
covering portions of the Project and all other documents
referred to in the Rent Roll, (ii) all Contracts and
Permits of which Seller is aware transferred and assigned
to Purchaser, (iii) all "as built" plans, specifications,
surveys or other documents relating or pertaining to the
Project in the possession of Seller (collectively "Plans"),
including, but not limited to, all records relating to
repair, renovation and maintenance of the Project; (iv) all
notices to tenants relating to this Transaction and the
receipt of security deposits as necessary or appropriate
under applicable law; and (v) all other documents referred
to in the schedules.
(e) Rent Roll. A current and updated Rent Roll.
(f) FIRPTA. Affidavit from Seller that Seller is not
a foreign person as defined in the Foreign Investment in
Real Property Tax Act of 1980, as amended, in the form
attached hereto as Exhibit 10.3(f).
(g) Keys. All keys and master keys in Seller's
possession or control to all locks located on the Project
properly tagged for identification as well as cards keys
and cards for the security systems, if any.
(h) Telephone and Mail. Such documents as may be
reasonably requested by Purchaser and required by (i) the
local telephone company to assign to Purchaser all of
Seller's rights and interest in each telephone number or
phone line used by Seller exclusively for the operation of
the Project, and (ii) the U.S. Postal Service to assign to
Purchaser all of Seller's rights and interest in each post
office box and drawer exclusively for the operation of the
Project.
(i) Evidence of Authority. Both parties will deliver
to each other and the Title Company such evidence or
documents as may reasonably be required evidencing the
authority of any person who is executing any of the
documents required hereunder.
(j) Miscellaneous. Such other documents as may be
required under other provisions of this Agreement or as may
reasonably be required by Purchaser to consummate the
Transaction, so long as such document does not increase
either party's liability or obligations hereunder,
including, but not limited to, (i) a Closing Statement,
(ii) tenant's notice letter, (iii) an affidavit executed by
Seller with regard to South Carolina withholding tax
requirements and (iv) a Quitclaim Deed with the legal
description contained in Exhibit 1.2(a) and/or the Survey,
if the legal description of the Land contained in the
Survey differs from the legal description contained in
Exhibit 1.2(a).
ARTICLE 11
DEFAULTS AND REMEDIES
11.1 Damages Against Purchaser. IF PURCHASER DEFAULTS
UNDER ANY PROVISION OF THIS AGREEMENT AND CLOSING DOES NOT
OCCUR, THEN SELLER SHALL BE RELEASED FROM ALL OBLIGATIONS IN LAW
OR EQUITY TO CONVEY THE PROPERTY TO PURCHASER. PURCHASER AND
SELLER AGREE THAT AS SELLER'S SOLE REMEDY FOR A DEFAULT
HEREUNDER, BY WRITTEN NOTICE TO PURCHASER AND TITLE COMPANY,
SELLER SHALL BE ENTITLED TO TERMINATE THIS AGREEMENT AND BE
ENTITLED TO RECEIVE THE ESCROW DEPOSIT PLUS ACCRUED INTEREST
THEREON AS LIQUIDATED DAMAGES. PURCHASER AND SELLER ACKNOWLEDGE
AND AGREE THAT ACTUAL DAMAGES WILL BE EXTREMELY DIFFICULT AND
IMPRACTICAL TO ASCERTAIN. THEREFORE, THE SUM REPRESENTED BY THE
ESCROW DEPOSIT PLUS ANY ACCRUED INTEREST THEREON SHALL BE DEEMED
TO CONSTITUTE A REASONABLE ESTIMATE AND AGREED STIPULATION OF
SELLER'S DAMAGES AND SHALL CONSTITUTE SELLER'S SOLE AND
EXCLUSIVE REMEDY IN THE EVENT THIS TRANSACTION FAILS TO CLOSE AS
A RESULT OF PURCHASER'S DEFAULT. NOTWITHSTANDING THE FOREGOING,
PURCHASER'S LIABILITY UNDER SECTION 6.1 HEREOF AND SHALL REMAIN
IN FULL FORCE AND EFFECT.
Initialed by:
________________ ________________
Seller Purchaser
11.2 DAMAGES AGAINST SELLER. IN THE EVENT THAT SELLER
FAILS TO PERFORM ALL OF SELLER'S OBLIGATIONS UNDER THIS
AGREEMENT AND PURCHASER PERFORMS ALL OF ITS OBLIGATIONS OR
TENDERS PERFORMANCE, INCLUDING THE OBLIGATION TO CONSUMMATE THE
TRANSACTION, THEN PURCHASER MAY MAKE WRITTEN DEMAND TO SELLER
FOR PERFORMANCE OF THIS AGREEMENT. IF SELLER FAILS TO COMPLY
WITH PURCHASER'S WRITTEN DEMAND WITHIN 30 DAYS AFTER RECEIPT OF
SUCH WRITTEN DEMAND FOR PERFORMANCE, PURCHASER SHALL HAVE THE
EXCLUSIVE RIGHT TO (I) WAIVE SUCH DEFAULT, (II) SEEK SPECIFIC
PERFORMANCE OF SELLER'S OBLIGATIONS UNDER THIS AGREEMENT, OR
(III) TERMINATE THIS AGREEMENT AND PROMPTLY RECEIVE A FULL
REFUND OF THE ESCROW DEPOSIT AND ALL INTEREST THEREON AND
PAYMENT BY SELLER OF AN AMOUNT NOT TO EXCEED $25,000 IN ORDER TO
REIMBURSE PURCHASER'S REASONABLE OUT OF POCKET EXPENSES
ASSOCIATED WITH THIS TRANSACTION, BUT WITHOUT FURTHER LIABILITY
ON PURCHASER'S PART. SELLER AGREES THAT THE PROJECT IS UNIQUE
AND THAT DAMAGES FOR FAILURE BY SELLER TO CONSUMMATE THE
TRANSACTION WILL BE IMPRACTICABLE AND EXTREMELY DIFFICULT TO
DETERMINE. THEREFORE, IN THE EVENT THAT SELLER FAILS OR REFUSES
TO CONSUMMATE THE TRANSACTION AND PURCHASER SEEKS SPECIFIC
PERFORMANCE, SELLER SPECIFICALLY AGREES THAT THE REMEDY OF
SPECIFIC PERFORMANCE IS AN APPROPRIATE REMEDY FOR PURCHASER,
AND SELLER WAIVES AND AGREES NOT TO ASSERT ANY CLAIM OR DEFENSE
THAT SPECIFIC PERFORMANCE IS NOT AN APPROPRIATE REMEDY FOR
PURCHASER.
Initialed by:
________________ ________________
Seller Purchaser
ARTICLE 12
RISK OF LOSS
12.1 Risk of Loss. Prior to Closing, Seller shall have
full risk of loss or damage with respect to the Project. Upon
Closing, full risk of loss or damage with respect to the Project
shall pass to Purchaser. For purposes of this Article, "loss or
damage" shall mean the following: (i) any loss, damage,
destruction or injury by fire, storm, accident, flood or other
casualty or hazard to the Project; and (ii) any condemnation,
eminent domain or other similar proceeding.
12.2 Minor Damage. In the event of loss or damage to the
Project or any portion thereof (the "premises in question")
which is not "major" as hereinafter defined), this Agreement
shall remain in full and effect provided Seller performs any
necessary repairs or, at Seller's option, reduces the cash
portion of the Purchase Price in an amount equal to the cost of
such repairs, Seller thereby retaining all of the Seller's
right, title and interest to any claims and proceeds Seller may
have with respect to any casualty insurance policies or
condemnation awards relating to the premises in question. In
the event Seller elects to perform repairs upon the Project,
Seller shall use reasonable efforts to complete such repairs
promptly and if necessary, the date of Closing shall be extended
a reasonable time in order to allow for the completion of such
repairs; provided, however, Closing may not be extended for a
period of more than thirty (30) days without the prior consent
of Purchaser. The shortfall, if any, arising by reason of an
insured loss is included as an operating expense that is passed
through to the tenants, and thus Seller will be entitled to this
reimbursement if and when collected.
12.3 Major Damage. In the event of a "major" loss or
damage, Purchaser may either (i) terminate this Agreement and
immediately receive a refund of the Escrow Deposit and all
interest thereon, or (ii) it may proceed with this transaction
and receive Seller's insurance proceeds, if any, for such
damage, plus payment from Seller of the amount of the applicable
insurance deductible relating thereto not to exceed the actual
repair cost. In such event, Seller shall execute all documents
reasonably requested by Purchaser to assign Seller's rights and
interest to such insurance proceeds.
12.4 Definition of Major Loss or Damage. For purposes of
Sections 12.2 and 12.3, "major" loss or damage refers to the
following: (i) loss or damage to the Project or any portion
thereof such that the cost of repairing or restoring the
premises in question to a condition substantially identical to
that of the premises in question prior to the event of damage or
loss would be, in the certified opinion of a mutually acceptable
architect, equal to or greater than Fifty Thousand Dollars
($50,000), and (ii) any loss or damage due to a condemnation
which permanently or materially impairs the current use of the
Project.
ARTICLE 13
GENERAL PROVISIONS
13.1 Brokerage Commission. Seller shall pay no brokerage
commissions. Purchaser shall pay the commission owed to Stephen
George, Inc. pursuant to a separate commission agreement.
Seller and Purchaser represent to each other that they have
acted directly and independently with the other as principals
and that neither Seller nor Purchaser have retained or
authorized the services of any broker or finder with respect to
this Transaction, except as noted herein. Seller agrees to
indemnify and hold Purchaser harmless from and against all
claims, liabilities, and obligations for any commission,
finder's fee, or other compensation in connection with this
Agreement claimed by or through Seller. Purchaser agrees to
indemnify and hold Seller harmless from and against all claims,
liabilities, and obligations for any commission, finder's fee,
or other compensation in connection with this Agreement claimed
by or through Purchaser.
13.2 Confidentiality. Unless Seller otherwise agrees in
writing, Purchaser agrees that all confidential proprietary
information regarding the Project of whatsoever nature made
available to it by Seller or Seller's agents or representatives
or developed by Purchaser ("Confidential Information"), is
confidential and shall not be disclosed to any other person
except those assisting Purchaser with this transaction, or
Purchaser's lender, if any, except as required by law. The
provisions of the foregoing sentence shall not apply to any
information which is otherwise available to the public or which
has been obtained from sources that are not subject to a similar
confidentiality restriction or to disclosures as required by
law. Further, Purchaser agrees not to use any Confidential
Information for any purpose other than to determine whether to
proceed with the transaction contemplated by this Agreement.
Upon Closing, all such Confidential Information shall be the
sole and exclusive property of Purchaser and not subject in any
manner to this confidentiality restriction. Provided, however,
in the event the transaction contemplated by this Agreement does
not close for any reason other than a breach by Seller, the
provisions of this Section 13.2 shall survive the termination of
this Agreement.
13.3 Entire Agreement. This Agreement, together with all
exhibits or schedules either attached or delivered pursuant
hereto and other agreements expressly referred to herein,
constitutes the entire agreement between the parties with
respect to the purchase and sale of the Project. All prior to
or contemporaneous agreements, understandings, representations,
warranties and statements, oral or written, are superseded.
13.4 Further Assurances. The parties agree to take such
further action and execute such documents and instruments as may
be reasonably required in order to more effectively carry out
the terms of this Agreement and the intentions of the parties.
13.5 Modification, Waiver. Except as expressly
contemplated herein, no modification, waiver, supplement or
discharge of this Agreement shall be valid unless the same is in
writing and signed by the party against whom the enforcement
thereof is or may be sought. No waiver of a breach of any of
the terms, covenants or conditions of this Agreement by either
party shall be construed or held to be a waiver of any
succeeding or preceding breach of the same or any other term,
covenant or condition herein contained. No waiver of any
default by either party hereunder shall be implied from any
omissions by either party to take any action on account of such
default if such default persists or is repeated, and no express
waiver shall affect a default other than as specified in such
waiver.
13.6 Severability. If any term, provision, covenant or
condition of this Agreement is held to be invalid, void or
otherwise unenforceable to any extent by any court of competent
jurisdiction, the remainder of this Agreement shall not be
affected thereby, and each term, provision, covenant or
condition of this Agreement shall be valid and enforceable to
the fullest extent permitted by law.
13.7 Successors. Subject to the restriction on assignment
provided herein, all terms of this Agreement shall be binding
upon, inure to the benefit of, and be enforceable by the parties
hereto and their respective heirs, legal representatives,
successors and assigns.
13.8 Assignment. Purchaser may assign its rights under
this Agreement to a wholly owned subsidiary of Purchaser, or to
a limited partnership controlled by either Purchaser or its
wholly owned subsidiary without Seller's consent; provided,
however, no such assignment shall relieve Purchaser of its
obligations hereunder and the assignee must sign an assumption
agreement in form reasonably acceptable to Seller. Except as
contemplated by the preceding sentence, Seller and Purchaser
shall not assign their respective rights, obligations or
interest under this Agreement without the prior written consent
of the other.
13.9 Survival of Representations and Warranties. All
obligations hereunder to be performed after Closing, and all
warranties and representations contained herein, shall survive
Closing and the delivery of the Limited Warranty Deed to
Purchaser for a period of six (6) months after the Closing, at
which time such warranties, representations and covenants shall
terminate in all respects unless written notice of any such
breach has been delivered to the breaching party prior to such
date. Purchaser shall look solely to the escrow account
described in Section 13.10 to satisfy any damages occasioned by
Seller's breach of any representation or warranty contained
herein.
13.10 Escrow Account. Seller shall escrow One Hundred
Seventy-Five Thousand and no/100 Dollars ($175,000.00) from its
proceeds from this Transaction with the Title Company pursuant
to a separate written escrow agreement for six (6) months after
Closing to be held in escrow by the Title Company to satisfy any
claim(s) by Purchaser against Seller for a breach of its
representations or warranties herein or in any Closing Documents
or any adjustments necessary pursuant to the last paragraph of
Section 3.4.
13.11 Attorneys' Fees. If either party commences legal
proceedings for any relief against the other party arising out
of this Agreement, the losing party shall pay the prevailing
party's reasonable attorneys' fees.
13.12 Time. Time is of the essence with respect to this
Agreement.
13.13 No Other Inducement. The making, execution and
delivery of this Agreement by the parties hereto has been
induced by no representations, statements, warranties or
agreements other than those expressed herein.
13.14 Computation of Time Periods. All periods of the
time referred to in this Agreement shall include all Saturdays,
Sundays and state or national holidays, unless the period of
time specifies business days, provided that if the date or last
date to perform any act or give any notice or approval shall
fall on a Saturday, Sunday or state or national holiday, such
act or notice may be timely performed or given on the next
succeeding day which is not a Saturday, Sunday or state or
national holiday.
13.15 Notices. Any notice, request, instruction or other
document to be given or furnished under this Agreement by either
party to the other party or to the Title Company shall be in
writing and shall be delivered personally or shall be sent by
facsimile transmission (with a copy sent by regular U. S. mail)
or registered or certified mail, postage prepaid, or by prepaid
overnight delivery service, at the address or telecopy number in
this Section 13.15 or to such other address, telecopy number of
person as either party may designate by written notice to the
other party. A notice, request, instruction or other documents
shall be deemed to be given (a) when delivered personally, (b)
sent by facsimile transmission (with a copy sent by regular U.
S. mail), or (c) if sent by certified mail or overnight delivery
service, at the time the delivery is indicated on the duly
completed United States Postal Service return receipt or the
time of package pick up as indicated on the records of or
certificates provided by the overnight delivery service.
Seller: RayVest Limited Partnership
Attention: Ken Hatfield
Office Address: 1811 North Freeway
Suite 300
Houston, Texas 77060
Telephone Number: (281) 820-0747
Telecopy Number: (281) 820-1673
with a copy to: Cochran, Rooke & Craft, L.L.P.
Attention: John R. Cochran, Jr.
Office Address: 2200 Post Oak Boulevard, Suite 700
Houston, Texas 77056
Telephone Number: (713) 621-6600
Telecopy Number: (713) 621-8562
Purchaser: Parkway Properties, L.P.
Attention: Mitch Mattingly
Office Address: 12012 Wickchester, Suite 420
Houston, Texas 77079
Suite 1000, One Jackson Place
188 East Capitol Street
Jackson, Mississippi 39201
Mailing Address: Post Office Box 24647
Jackson, Mississippi 39225
Telephone Number: (281) 597-9475; (601) 948-4091
Telecopy Number (281) 597-9575; (601) 949-4077
with a copy to: Forman, Perry, Watkins, Krutz & Tardy, PLLC
Attention: Robert C. Hutchison
Office Address: Suite 1200, One Jackson Place
188 East Capitol Street
Jackson, Mississippi 39201
Telephone Number: (601) 969-7840
Telecopy Number: (601) 960-8600
13.16 Headings. The captions and paragraph headings used
in this Agreement are inserted for convenience of reference only
and are not intended to define, limit or affect the
interpretation or construction of any term or provision hereof.
13.17 Exhibits. All schedules or exhibits referred to
herein or attached hereto are incorporated herein by this
reference.
13.18 Counterparts. This Agreement may be executed in
multiple copies, each of which shall be deemed an original, but
all of which shall constitute one Agreement binding on all
parties.
13.19 Governing Law. This Agreement shall be governed,
construed and enforced in accordance with the laws of the State
of Texas.
13.20 Effective Date. The date of delivery to Title
Company of a fully executed counterpart of this Agreement, as
evidenced by Title Company's notation in the space set forth
below, shall be deemed the effective date of this Agreement (the
"Effective Date").
13.21 Limitation on Liability. Notwithstanding anything
contained herein to the contrary, Seller and Purchaser
acknowledge and agree that no limited partner of either of them,
nor any trustee, director, holder of any beneficial interests,
shareholder, officer or employee of either of them or any
affiliate of either of them (except an affiliate to which this
Agreement has been assigned) shall have any personal liability,
directly or indirectly, under this Agreement, or under any
certificate, representation, warranty or other instrument
delivered in connection herewith, and Seller and Purchaser shall
have recourse hereunder only against the other's assets. Each
document to be executed by either Seller or Purchaser at Closing
shall contain a similar exculpation.
IN WITNESS WHEREOF, Seller and Purchaser have executed this
Agreement as of the Effective Date.
SELLER:
RAYVEST LIMITED PARTNERSHIP, a
Texas limited partnership
By: RayVest GP, Inc., a Texas
corporation, its general
partner
Executed by Seller this
____ day of September, 1997 By:_______________________
Name:_____________________
Title:____________________
PURCHASER:
PARKWAY PROPERTIES, L.P., a
Delaware limited partnership
Executed by Purchaser
____ day of September, 1997 By: Parkway Properties General
Partners, Inc., its sole
general partner
By:______________________
Name:____________________
Title:___________________
By:______________________
Name:____________________
Title:___________________
ACKNOWLEDGMENT BY TITLE COMPANY
Title Company hereby agrees to perform its obligations
under this Agreement and acknowledge receipt of (a) the Escrow
Deposit from Purchaser in the amount of ONE HUNDRED THOUSAND AND
NO/100 DOLLARS ($100,000.00) on the _____ day of ______________,
1997 and (b) a fully executed counterpart of this Agreement on
the _____ day of _____________, 1997.
Texas State Title Company, as
Agent for _____________ Title
Insurance Company
By: ______________________________
Name: ____________________________
Title:____________________________
EXHIBIT 1.2(a)
LEGAL DESCRIPTION
EXHIBIT 1.3
PERSONAL PROPERTY
EXHIBIT 4.2(a)
SURVEY CERTIFICATION
The plat of survey must be accompanied by a certificate
meeting the following requirements:
1. The certification should be by a registered land
surveyor.
2. The certification should include the signature with
the seal and registration number of the certifying party.
3. The certification should contain a jurat executed by a
notary public.
4. If the surveyor finds that any easement furnished to
him which purports to affect the property does not, in fact,
affect the property, he should specifically certify that such
easement, identified by book and page of recording, does not
affect the property.
5. The form of certificate should be substantially as
follows: "I, a registered land surveyor
do hereby certify to and
Title Company, that the accompanying plat of survey represents a
true and correct survey made by me and has: (i) been prepared in
accordance with the most current minimum standard detail
requirements for a Land Title Survey adopted by the American
Land Title Association and the American Congress on Surveying
and Mapping; (ii) includes optional items 2-11 of Table A
thereof; and (iii) has been prepared pursuant to the Accuracy
Standards (as adopted by ALTA and ACSM) in effect on the date of
this Certification of an Urban Survey of the following described
property (the "Project") on the day of
, 199 :
[Insert legal description]
I further certify that:
(i) the accompanying plat of survey correctly shows the
location of all buildings, structures, and other improvements
situated on the Project,
(ii) except as shown, there are no visible easements or
rights-of-way across the Property or other easements or rights-
of-way affecting the Property of which the undersigned has been
advised,
(iii) there are no party walls included in any buildings,
structures, or other improvements on the Property,
(iv) except as shown, there are no encroachments on
adjoining premises, streets, or alleys by any of the buildings,
structures, or other improvements on the Property, and
(v) except as shown, there are no encroachments on the
property by any buildings, structures, or other improvements
located on adjoining premises.
EXHIBIT 8.9
OUTSTANDING COMMISSIONS
AND BROKERAGE AGREEMENTS
EXHIBIT 8.10
EXISTING INDEBTEDNESS
EXHIBIT 9.9
FORM OF LENDER'S ESTOPPEL
Parkway Properties L.P.
1000 One Jackson Place
188 East Capitol Street
Jackson, MS 39201
RE: Assignment to Parkway Properties L.P. ("Buyer") by RayVest
Limited Partnership ("Seller"), of its obligations under
New York Life Insurance and Annuity Company ("Lender") loan
#_____, in the original principal amount of $______________
(the "Loan")
Gentlemen:
Lender hereby certifies to Parkway Properties L.P., and its
successors or assigns that:
(a) All sums payable under the Loan have been paid through
______, 19___;
(b) The outstanding principal balance of the Loan as of
_______ , 1997 is _________ .
(c) Attached hereto as Exhibit A are true and complete
copies of the following documents (the "Loan
Documents"):
1. Promissory Note, dated April 28, 1995.
2. Deed of Trust and Security Agreement dated April
28, 1995.
3. Assignment of Rents and Leases, dated April 28,
1995.
4. Escrow Agreement dated April 28, 1995.
(d) The Loan Documents set forth the entire
agreement between the Lender and Seller, are
in full force and effect in accordance with
their terms and, to Lender's knowledge, have
not, in any way, been amended, modified, or
assigned;
(e) To Lender's knowledge, there exists no
default by either party to the Loan
Documents, or other grounds for declaring an
event of default thereunder;
(f) Lender has not assigned or otherwise transferred any
of its interest under the Loan Documents.
(g) Other than as set forth in Exhibit B, there are no
escrow, improvement accounts maintained, by Lender, or
required to be maintained by Lender or funded by
Seller in connection with the Loan Documents. Seller
has met all of its obligations to fund any such
accounts.
Lender understands that Purchaser is relying on the above
representations in connection with the purchase of the above
referenced property and assuming the Loan and does hereby
warrant and affirm to and for the benefit of Purchaser, its
successors and assigns, that each of the foregoing
representations is true, correct and complete as of the date
hereof.
New York Life Insurance and
Annuity
Corporation
By:
Name:
Title:
Date: _______
EXHIBIT 9.9.1
FORM OF TENANT ESTOPPEL CERTIFICATE
Parkway Properties, L.P.
1000 One Jackson Place
188 East Capitol Street
Jackson, MS 39201
RE: _______________________
Gentlemen:
The undersigned as Tenant hereby certifies to Parkway
Properties, L.P., and its successors or assigns ("Purchaser"),
and any beneficiary under a deed of trust covering the above
captioned property ("Mortgagee") that:
(a) It is a Tenant of a portion of the captioned
property under a certain lease (the "Lease")
as follows:
Landlord:
Tenant:
Lease Dated:
Amendment(s) Dated (if any):
Current Annual Base Rent:
Current CAM or Operating Expense Charges:
Square Footage:
Original term (or current option period,
if applicable) expires:
Security Deposit and/or
Lease Deposit: $
Outstanding Tenant Improvement Allowance (if any):
$_______________
Outstanding Leasing Commission (if any):
$______________
(b) All rentals payable under the Lease have been paid
through ______, 19___; and except for _________, no
rent has been paid more than one month in advance of
its due date.
(c) That attached hereto as Exhibit A is a true
and complete copy of the Lease and all
amendments thereto.
(d) Tenant has unconditionally accepted and
occupied the leased premises, is paying rent
under the Lease without claim or right of
set-off, or claim of any default by the
Landlord, and is now conducting business on
the premises;
(e) The Lease sets forth the entire agreement
between the Landlord and Tenant, is in full
force and effect in accordance with its
terms and has not, in any way, been amended,
modified, assigned or sublet;
(f) There exists no default by either party to
the Lease, or other grounds for ceasing or
reducing the payment of rental, or for
cancellation or termination of the Lease;
(g) All requirements of the Lease have been
complied with and no charges, set-offs or
other credits exist against the rentals;
(h) The Lease contains, and Tenant has, no outstanding
options or rights of first refusal to purchase the
Premises nor any part of the real property of which
the Premises are a part.
(i) Tenant has not assigned, mortgaged, sublet, encumbered
or otherwise transferred any of its interest under the
Lease and has received no notice of any assignment,
mortgage or encumbrance of the Lease by Landlord.
From and after the date that Purchaser acquires title to the
Project:
(j) Tenant shall not agree to any alteration,
modification, amendment or termination of
its Lease, nor subordinate or permit
subordination of the Lease to any lien in
favor of anyone other than Purchaser or
Mortgagee, without first obtaining
Purchaser's or such Mortgagee's prior
written approval provided Tenant has been
provided the name and address of such
Mortgagee;
(k) Tenant shall give any Mortgagee 30 days
notice of any default by the Landlord under
the Lease and a reasonable opportunity for
Mortgagee to cure any default upon
Borrower's failure to do so;
(l) Tenant will not pay rent in advance for more
than the current month without Mortgagee's
prior written consent. No concession or
allowance has been granted by Landlord which
permits Tenant to occupy the leased premises
without payment of Rent or any other
financial obligation contained in the Lease,
nor will Tenant accept such concession or
allowance or negotiate for the same without
the prior written consent of Purchaser or
Mortgagee;
(m) Purchaser may subsequently execute and
deliver to Mortgagee an Assignment of Leases
and Rents conveying the rentals under the
Lease as additional security for a loan
secured by the _________________ Building,
and Tenant hereby expressly consents to such
Assignment and has no notice of a prior
Assignment of the Lease or the rents
thereunder;
(n) Tenant will not look to any mortgagee, or
its successors or assigns, for the return of
or credit for security deposit or prepaid
rent, if any, unless said sums have been
actually transferred to such mortgagee or
its successors or assigns.
Tenant understands that Purchaser is relying on the above
representations in connection with the purchase of the above
referenced building and does hereby warrant and affirm to and
for the benefit of Purchaser, its successors and assigns, that
each of the foregoing representations is true, correct and
complete as of the date hereof.
By:
Name:
Title:
Date: _______
EXHIBIT 9.9.2
FORM OF SELLER ESTOPPEL CERTIFICATE
Parkway Properties, L.P.
1000 One Jackson Place
188 East Capitol Street
Jackson, MS 39201
RE: _____________
Gentlemen:
The undersigned as Landlord hereby certifies to Parkway
Properties, L.P. and its successors and assigns ("Purchaser")
that:
(a) It is a Landlord of a portion of the above
referenced property under a certain lease
(the "Lease") as follows:
Landlord:
Tenant:
Lease Dated:
Amendment(s) Dated (if any):
Current Annual Base Rent:
Current CAM or Operating Expense Charges:
Square Footage:
Original term (or current option period,
if applicable) expires:
Security Deposit and/or
Lease Deposit: $
Outstanding Tenant Improvement Allowance (if any):
$_______________
Outstanding Leasing Commission (if any):
$______________
(b) All rentals payable under the Lease have been paid
through ________, 19___.
(c) That attached hereto as Exhibit A is a true
and complete copy of the Lease and all
amendments thereto.
(d) Tenant has unconditionally accepted and
occupied the leased premises, commenced
payment of rent under the Lease without
claim or right of set-off, or claim of any
default by the Landlord, and is now
conducting business on the premises;
(e) The Lease sets forth the entire agreement
between the Landlord and Tenant, is in full
force and effect in accordance with its
terms and has not, in any way, been amended,
modified, assigned or sublet;
(f) There exists no default by either party to
the Lease, or other grounds for ceasing or
reducing the payment of rental, or for
cancellation or termination of the Lease;
(g) All requirements of the Lease have been
complied with and no charges, set-offs or
other credits exist against the rentals;
Landlord understands that Purchaser is relying on the above
representations in consenting to purchase the above referenced
building and does hereby warrant and affirm to and for the
benefit of Purchaser, its successors and assigns, that each of
the foregoing representations is true, correct and complete as
of the date hereof. Purchaser acknowledges that this Seller's
Estoppel Certificate shall terminate upon delivery of a Tenant's
Estoppel Certificate in a form reasonably acceptable to
Purchaser and containing information consistent with the
information set forth herein.
By:
Name:
Title:
Date:
EXHIBIT 10.3(a)
FORM OF SPECIAL WARRANTY DEED
SPECIAL WARRANTY DEED
THE STATE OF TEXAS
KNOW ALL MEN BY THESE PRESENTS:
COUNTY OF HARRIS
THAT, RAYVEST LIMITED PARTNERSHIP, a __________ limited
partnership (hereinafter called "Grantor"), for and in
consideration of TEN AND NO/100 DOLLARS ($10.00), and other good
and valuable consideration to Grantor in hand paid by PARKWAY
PROPERTIES, L.P., a limited partnership (hereinafter called
"Grantee"), the receipt and sufficiency of which are hereby
acknowledged, has GRANTED, SOLD and CONVEYED, and by these
presents does GRANT, SELL and CONVEY unto the said Grantee, all
that certain lot, tract or parcel of land, together with all
improvements thereon, lying and being situated in the County of
Harris and State of Texas described on Exhibit A attached
hereto, together with all rights and appurtenances thereunto
belonging or appertaining, and all rights, titles and interests
of Grantor in and to any and all roads, easements, streets and
ways within, adjacent or contiguous thereto (hereinafter
collectively referred to as the "Property").
This conveyance is subject to the valid and subsisting
easements, restrictions, covenants, conditions and outstanding
mineral and royalty interests affecting the Property and
described on Exhibit B attached hereto.
TO HAVE AND TO HOLD the Property, together with all and
singular the rights and appurtenances thereto in anywise
belonging unto the said Grantee, its heirs, executors, legal
representatives, successors and assigns forever; and Grantor
does hereby bind itself, its heirs, executors, legal
representatives, successors and assigns, to WARRANT and FOREVER
DEFEND, all and singular the Property unto the said Grantee, its
heirs, executors, legal representatives, successors and assigns,
against every person whomsoever lawfully claiming or to claim
the same or any part thereof by, through or under Grantor, but
not otherwise.
Grantee's address is
Parkway Properties, L.P.
1000 One Jackson Place
188 East Capitol Street
Jackson, Mississippi 39201
Current taxes on the Improvements have been prorated and
payment thereof is assumed by Grantee.
EXECUTED this ____ day of _________________________, 1997.
GRANTOR:
RayVest Limited Partnership, a
____________ limited partnership
By:______________, its general
partner
By:_______________________
Name:_____________________
Title:____________________
STATE OF __________
COUNTY OF _________
(INSERT NOTARY ACKNOWLEDGMENT)
_______________________________
NOTARY PUBLIC
My commission expires:
____________________
(Affix official seal, if applicable)
PREPARED BY AND
AFTER RECORDING RETURN TO:
____________________________________
____________________________________
____________________________________
____________________________________
EXHIBIT 10.3(b)
FORM OF
BILL OF SALE AND ASSIGNMENT
ASSIGNMENT AND ASSUMPTION AGREEMENT
AND BILL OF SALE
This ASSIGNMENT AND ASSUMPTION AGREEMENT AND BILL OF SALE
("Assignment"), is made by and between _______________, a
______________ ("Assignor") and Parkway Properties, L.P., a
Delaware limited partnership ("Assignee").
W I T N E S S E T H:
WHEREAS, by Purchase and Sale Agreement ("Purchase
Agreement") dated as of _______, 1997, by and between Assignor
and Assignee, Assignor agreed to sell to Assignee certain real
property, and the improvements located thereon ("Project") as
more particularly described in the Purchase Agreement; and
WHEREAS, the Purchase Agreement provides, inter alia, that
Assignor shall assign to Assignee certain contractual and other
intangible rights, that Assignee shall assume all of the
obligations of Assignor with respect to the property so assigned
from and after the date of such assignment, and that Assignor
and Assignee shall enter into this Assignment.
NOW, THEREFORE, in consideration of the premises and the
mutual covenants herein contained, the parties hereto hereby
agree as follows:
1. Assignment. Assignor hereby assigns, sets over and
transfers to Assignee all tangible and intangible personal
property owned by Assignor, located on the real property
described on Exhibit A hereto, and used in the ownership,
operation and maintenance of such real property including,
without limitation, the following (collectively called the
"Personal Property"):
(i) All rights (if any) to use the name "The
Raytheon Building" to the extent such rights are
assignable without expense to Assignor and only as
such rights relate directly to the Project (but
Assignor does not represent that it has exclusive
rights to use such trade name and Assignor has not
registered the same in any manner);
(ii) The items of personal property described on
Exhibit B hereto;
(iii) The interest of Assignor under the
contracts and agreements described on Exhibit C hereto
(collectively, the "Contract");
(iv) The interest of the landlord under the
tenant leases encumbering the real property described
on Exhibit D hereto (collectively, the "Leases");
(v) To the extent assignable without expense to
Assignor, the interest of Assignor in and to tenant
lease files and correspondence relating to the Leases,
plans and specifications with respect to the Project,
promotional materials with respect to the leasing of
space within the Project, warranties and guaranties
relating to any of the other property to be conveyed
pursuant to the Purchase Agreement, licenses and
permits relating to the Project, and all other
property to be conveyed pursuant to the Purchase
Agreement.
2. Assignee's Assumption and Indemnification. Assignee
hereby assumes the obligation to pay any and all liabilities and
obligations arising or accruing under any of the Contracts and
Leases on or after the effective date hereof. Assignee agrees
to indemnify, defend and hold harmless Assignor from any loss,
cost, claim, liability, expense or demand of whatever nature
under any of the Contracts and Leases above arising or accruing
on or after the effective date hereof.
3. Assignor's Indemnification. Assignor agrees to
indemnify, defend and hold harmless Assignee from any loss,
cost, claim, liability, expense or demand of whatever nature
under any of the property described in Paragraph 1 above arising
or accruing prior to the effective date hereof.
4. Special Warranty of Title. Assignor does hereby bind
itself, its legal representatives, successors and assigns, to
SPECIALLY WARRANT, and FOREVER DEFEND title to the property
conveyed hereby unto Assignee, its legal representatives,
successors and assigns, against every person whomsoever lawfully
claiming or to claim same or any part thereof, by, through or
under Assignor, but not otherwise.
5. Limitation on Liability. Notwithstanding anything
contained herein to the contrary, Assignor acknowledges and
agrees that no limited partner of Assignee, nor any trustee,
director, holder of any beneficial interests, shareholder,
officer or employee of Assignee or any affiliate of Assignee
shall have any personal liability, directly or indirectly, under
this Assignment, and Assignor shall have recourse hereunder only
against Assignee's assets.
6. Miscellaneous. This Assignment and the obligations of
the parties hereunder shall survive the closing of the
transaction referred to in the Purchase Agreement, shall be
binding upon and inure to the benefit of the parties hereto,
their respective legal representatives, successors and assigns,
shall be governed by and construed in accordance with the laws
of the State of Georgia applicable to agreements made and to be
wholly performed within said State, and may not be modified or
amended in any manner other than by a written agreement signed
by the party to be charged therewith.
EXECUTED TO BE EFFECTIVE as of the ______ day of
________________, 1997.
ASSIGNOR:
______________, a _______________
By:______________________________
Name:____________________________
Title:___________________________
By:______________________________
Name:____________________________
Title:___________________________
ASSIGNEE:
PURCHASER:
PARKWAY PROPERTIES, L.P.
By: Parkway Properties General
Partners, Inc., its sole general
partner
By:_______________________________
Name:_____________________________
Title:____________________________
By:_______________________________
Name:_____________________________
Title:____________________________
EXHIBIT 10.3(f)
FORM OF FIRPTA AFFIDAVIT
STATE OF _______________
KNOW ALL MEN BY THESE PRESENTS:
COUNTY OF ______________
Section 1445 of the Internal Revenue Code provides that a
transferee of a U.S. real property interest must withhold tax if
the transferor is a foreign person. To inform Parkway
Properties, L.P., a Delaware limited partnership ("Transferee"),
that withholding of tax is not required upon the disposition of
a U.S. real property interest by ________________, a
_______________ ("Transferor"), the undersigned hereby certifies
as follows:
1. Transferor is not a foreign corporation, foreign
partnership, foreign trust or foreign estate (as those
terms are defined in the Internal Revenue Code and Income
Tax Regulations);
2. Transferor's U.S. employer identification number is:
#______________________;
3. Transferor's office address is
_________________________________________;
Transferor understands that this certification may be
disclosed to the Internal Revenue Service by the Transferee and
that any false statement contained herein could be punished by
fine, imprisonment, or both.
Under penalties of perjury, the undersigned, in the
capacity set forth below, hereby declares that he has examined
this certification and to the best of his knowledge and belief
it is true, correct and complete, and the undersigned further
declares that he has authority to sign this document in such
capacity.
EXECUTED to be effective as of the ____ day of ___________,
1997.
TRANSFEROR:
__________________________________
STATE OF ___________________
COUNTY OF __________________
(INSERT NOTARY ACKNOWLEDGMENT)
__________________________________
NOTARY PUBLIC
My Commission Expires:______________________
[AFFIX NOTARIAL SEAL]
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