------------------
U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
-----------------
FORM 8-K/A
AMENDMENT TO FORM 8-K
Filed Pursuant to
THE SECURITIES EXCHANGE ACT OF 1934
PARKWAY PROPERTIES, INC.
-----------------------------------
(Exact name of registrant as specified in its charter)
AMENDMENT NO. 1
The undersigned registrant hereby amends the following
items, financial statements, exhibits or other portions of its Form 8-K
filed August 13, 1997 as set forth in the pages attached hereto:
Item 5. Other Events
Item 7. Financial Statements and Exhibits
Pursuant to the requirements of the Securities Exchange Act
of 1934, the registrant has duly caused this amendment to be
signed on its behalf by the undersigned, thereunto duly
authorized.
Date: August 25, 1997 PARKWAY PROPERTIES, INC.
By: /s/ Sarah P. Clark
-----------------------
Sarah P. Clark
Vice President, Chief
Financial Officer,
Treasurer and Secretary
FORM 8-K
PARKWAY PROPERTIES, INC.
Item 5. Other Events.
On July 10, 1997, a limited partnership in which Parkway
Properties, Inc. is a 99% limited partner and a wholly-owned
subsidiary is a 1% general partner purchased the 118,750 net rentable
square foot Lakewood II office building in Atlanta, Georgia for
$11,500,000 from an unrelated party. This five-story office
building was constructed in 1988. The Company assumed a
$6,910,000 first mortgage on the property with an 8.08% interest
rate as part of the purchase. The remaining balance was funded
with bank borrowings on a line of credit with Deposit Guaranty
National Bank at a rate equal to the 90-day Libor rate plus 1.75%,
currently 7.562%.
On August 12, 1997, a limited partnership in which Parkway
Properties, Inc. is a 99% limited partner and a wholly-owned
subsidiary is a 1% general partner purchased Fairway Plaza in Las
Colinas, Texas for $6,705,000 from an unrelated party. Fairway
Plaza consists of two multi-story office buildings containing
82,268 net rentable square feet with 321 surface parking spaces
situated on 6.31 acres. The purchase was funded with bank
borrowings on a line of credit with Deposit Guaranty National at
a rate equal to the 90-day Libor rate plus 1.75%, currently
7.562%.
Item 7. Financial Statements and Exhibits.
(a) Financial Statements
(1) The following audited financial statement of
NationsBank Tower for the year ended December 31, 1996 is
attached hereto. Also included is the unaudited financial
statement for the six months ended June 30, 1997.
Page
----
Report of Independent Auditors 5
Statement of Rental Revenue and
Direct Operating Expenses 6
Notes to Statement of Rental Revenue
and Direct Operating Expenses 7
(2) The following audited financial statement of
Lakewood II for the year ended December 31, 1996 is attached
hereto. Also included is the unaudited financial statement for
the six months ended June 30, 1997.
Page
----
Report of Independent Auditors 9
Statement of Rental Revenue and
Direct Operating Expenses 10
Notes to Statement of Rental Revenue
and Direct Operating Expenses 11
(3) The following audited financial statement of
Fairway Plaza for the year ended December 31, 1996 is attached
hereto. Also included is the unaudited financial statement for
the six months ended June 30, 1997.
Page
----
Report of Independent Auditors 13
Statement of Rental Revenue and
Direct Operating Expenses 14
Notes to Statement of Rental Revenue
and Direct Operating Expenses 15
(b) Pro Forma Consolidated Financial Statements
The following unaudited Pro Forma Consolidated Financial
Statements are attached hereto.
PARKWAY PROPERTIES, INC.
Page
----
Pro Forma Consolidated Financial Statements (Unaudited) 16
Pro Forma Consolidated Balance Sheet (Unaudited) -
As of June 30, 1997 18
Pro Forma Consolidated Statement of Income (Unaudited) -
For the Year Ended December 31, 1996 19
Pro Forma Consolidated Statement of Income (Unaudited) -
For the Six Months Ended June 30, 1997 20
Notes to Pro Forma Consolidated Financial
Statements (Unaudited) 21
(c) Exhibits.
(10)(a) Purchase and Sale Agreement between 2233,
L.P. and Parkway Properties, L. P. dated May 19, 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.
(10)(b) Contract of Sale between Southland Investment
Properties Partners and Parkway Properties, Inc. dated July 27,
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 NationsBank Tower 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/A of Parkway
Properties, Inc., as described in Note 2, and is not intended to
be a complete presentation of NationsBank Tower's 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 NationsBank Tower 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 NationsBank Tower for the six months
ended June 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 NationsBank Tower for the six months
ended June 30, 1997 and, accordingly, do not express an opinion
or any other form of assurance on the statement.
Jackson, Mississippi /s/ Ernst & Young LLP
August 15, 1997
NationsBank Tower
Statement of Rental Revenue
and Direct Operating Expenses
Year Ended Six Months Ended
December 31, 1996 June 30, 1997
----------------- -----------------
(unaudited)
Rental revenue:
Minimum rents ............... $3,269,559 $1,671,917
Parking fee income........... 404,123 186,540
Reimbursed charges and
other income............... 419,954 191,582
---------- ----------
4,093,636 2,050,039
---------- ----------
Direct operating expenses
(Note 2):
Utilities................... 537,531 258,611
Real estate taxes........... 404,389 202,252
Maintenance services and
and supplies.............. 254,399 132,272
Janitorial services
and supplies.............. 178,316 80,127
Management fees (Note 3).... 82,173 38,921
Salaries.................... 175,920 76,933
Security service............ 75,621 37,192
Administrative and
miscellaneous expenses..... 73,652 33,324
---------- ----------
1,782,001 859,632
---------- ----------
Excess of rental revenue over
direct operating expenses... $2,311,635 $1,190,407
========== ==========
See accompanying notes.
NationsBank Tower
Notes to Statement of Rental Revenue
and Direct Operating Expenses
1. Organization and Significant Accounting Policies
Description of Property
On July 31, 1997, a limited partnership in which Parkway
Properties, Inc. is a 99% limited partner and a wholly-owned
subsidiary is a 1% general partner purchased NationsBank Tower
(the "Building") in Columbia, South Carolina from an unrelated
party. The twenty-story building contains approximately 300,000
(unaudited) square feet of rentable area.
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 and noncancelable operating leases at
December 31, 1996 are as follows:
Year Amount
--------------------------------
1997 $ 3,344,000
1998 3,315,000
1999 3,254,000
2000 2,788,000
2001 2,473,000
Thereafter 8,869,000
-----------
$24,043,000
===========
The above amounts do not include tenant reimbursements for
utilities, taxes, insurance and common area maintenance.
Three tenants, whose leases expire September 30,2002, December
31, 2004 and June 30, 2006, respectively, accounted for
approximately 69% of the Building's 1996 rental revenue.
NationsBank Tower
Notes to Statement of Rental Revenue
and Direct Operating Expenses (continued)
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 to be necessarily indicative of future operating
results.
3. Management Fees
Management fees of approximately 2% of revenues received from the
operations of the Building were paid to an unrelated management
company.
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 Lakewood II 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/A of Parkway
Properties, Inc. as described in Note 2, and is not intended to
be a complete presentation of Lakewood II's 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 Lakewood II 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 Lakewood II for the six months ended
June 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 Lakewood II for the six months ended June 30, 1997
and, accordingly, do not express an opinion or any other form of
assurance on the statement.
Jackson, Mississippi /s/ Ernst & Young LLP
August 8, 1997
Lakewood II
Statement of Rental Revenue
and Direct Operating Expenses
Year Ended Six Months Ended
December 31, 1996 June 30, 1997
----------------- ------------------
(unaudited)
Rental revenue:
Minimum rents ............... $1,745,974 $ 872,497
Reimbursed charges and
other income............... 168,922 104,418
---------- ----------
1,914,896 976,915
---------- ----------
Direct operating expenses
(Note 2):
Utilities................... 195,711 96,445
Real estate taxes........... 168,119 84,060
Maintenance services
and supplies............... 110,237 64,175
Janitorial services
and supplies............... 87,480 48,374
Management fees (Note 3).... 89,971 47,858
Salaries.................... 78,328 41,071
Security service............ 49,211 27,867
Administrative and
miscellaneous expenses.... 60,410 37,030
---------- ----------
839,467 446,880
---------- ----------
Excess of rental revenue over
direct operating expenses.... $1,075,429 $ 530,035
========== ==========
See accompanying notes.
Lakewood II
Notes to Statement of Rental Revenue
and Direct Operating Expenses
1. Organization and Significant Accounting Policies
Description of Property
On July 10, 1997, a limited partnership in which Parkway
Properties, Inc. is a 99% limited partner and a wholly-owned
subsidiary is a 1% general partner purchased Lakewood II (the
"Building") in Atlanta, Georgia from an unrelated party. The
five-story building contains approximately 120,000 (unaudited)
square feet of rentable area.
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 non-cancelable operating leases at
December 31, 1996 are as follows:
Year Amount
--------------------------------
1997 $ 1,745,000
1998 1,643,000
1999 1,491,000
2000 1,080,000
2001 1,024,000
Thereafter 921,000
-----------
$ 7,904,000
===========
The above amounts do not include tenant reimbursements for
utilities, taxes, insurance and common area maintenance.
Four tenants, whose leases expire July 31, 1998, December 31,
1999, November 30, 2001 and January 31, 2004, accounted for
approximately 95% of the Building's 1996 rental revenue.
Lakewood II
Notes to Statement of Rental Revenue
and Direct Operating Expenses (continued)
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 to be necessarily indicative of future operating
results.
3. Management Fees
Management fees of approximately 5% of revenues from the
operations of the Building were paid to an unrelated management
company.
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 Fairway Plaza 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/A of Parkway
Properties, Inc., as described in Note 2, and is not intended to
be a complete presentation of Fairway Plaza's 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 Fairway Plaza 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 Fairway Plaza for the six months
ended June 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 Fairway Plaza for the six months
ended June 30, 1997 and, accordingly, do not express an opinion
or any other form of assurance on the statement.
Jackson, Mississippi /s/ Ernst & Young LLP
August 19, 1997
Fairway Plaza
Statement of Rental Revenue
and Direct Operating Expenses
Year Ended Six Months Ended
December 31, 1996 June 30, 1997
----------------- -----------------
(unaudited)
Rental revenue:
Minimum rents ............... $1,062,018 $ 531,009
Reimbursed charges
and other income........... 345,959 155,609
---------- ----------
1,407,977 686,618
---------- ----------
Direct operating expenses
(Note 2):
Utilities................... 207,323 91,683
Real estate taxes........... 76,168 39,988
Maintenance services
and supplies.............. 171,826 65,574
Janitorial services
and supplies.............. 70,663 36,210
Management fees (Note 3).... 39,928 19,243
Salaries.................... 81,649 37,438
Administrative and
miscellaneous expenses.... 34,917 12,933
---------- ----------
682,474 303,069
---------- ----------
Excess of rental revenue over
direct operating expenses.... $ 725,503 $ 383,549
========== ==========
See accompanying notes.
Fairway Plaza
Notes to Statement of Rental Revenue
and Direct Operating Expenses
1. Organization and Significant Accounting Policies
Description of Property
On August 12, 1997, a limited partnership in which Parkway
Properties, Inc. is a 99% limited partner and a wholly-owned
subsidiary is a 1% general partner purchased Fairway Plaza (the
"Building") in Los Colinas, Texas from an unrelated party. The
two multi-store building plaza contains approximately 82,000
(unaudited) square feet of rentable area.
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 non-cancelable operating leases at
December 31, 1996 are as follows:
Year Amount
--------------------------------
1997 $ 1,098,000
1998 1,207,000
1999 905,000
-----------
$ 3,210,000
===========
The above amounts do not include tenant reimbursements for
utilities, taxes, insurance and common area maintenance.
One tenant, whose lease expires September 30, 1997, accounted for
all of the Building's 1996 rental revenue. Effective October 1,
1997, that tenant will be replaced with two new tenants, whose
leases expire September 30, 1999, who will occupy all of the
rentable square feet of the Building.
Fairway Plaza
Notes to Statement of Rental Revenue
and Direct Operating Expenses (continued)
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 to be necessarily indicative of future operating
results.
3. Management Fees
Management fees of approximately 2.75% of rental revenues and
operating costs reimbursements 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 June 30, 1997 and pro forma consolidated statements of income
of Parkway Properties, Inc. ("Parkway") for the year ended
December 31, 1996 and six months ended June 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 Lakewood II, NationsBank Tower and Fairway
Plaza as if they had been consummated on June 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
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 and the sale of 2,012,500 shares of
common stock subsequent to December 31, 1996 as if the
transactions occurred January 1, 1996.
These pro forma consolidated financial statements may not be
indicative of the results that actually would have occurred if
the purchase, sale 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
June 30, 1997
(Unaudited)
Parkway Pro Forma Parkway
Historical Adjustments Pro Forma
---------- ----------- ---------
(In thousands)
Assets
Real estate related investments:
Office buildings.............$204,510 $ 38,805(1-3)$243,315
Land held for development.... 1,721 - 1,721
Accumulated depreciation..... (10,749) - (10,749)
-------- -------- --------
195,482 38,805 234,287
Real estate held for sale:
Land....................... 5,187 - 5,187
Operating properties....... 1,492 - 1,492
Other non-core
real estate assets......... 253 - 253
Mortgage loans............... 326 - 326
Real estate partnership...... 311 - 311
-------- -------- --------
203,051 - 241,856
Interest, rents receivable
and other assets............. 6,343 - 6,343
Cash and cash equivalents...... 480 (480) -
-------- -------- --------
$209,874 $ 38,325 $248,199
======== ======== ========
Liabilities
Notes payable to banks.........$ 8,200 $ 31,415 $39,615
Mortgage notes payable
without recourse.............. 61,681 6,910(1) 68,591
Accounts payable and other
liabilities................... 7,644 - 7,644
-------- -------- --------
77,525 38,325 115,850
-------- -------- --------
Stockholders' Equity
Common stock, $.001 par value,
70,000,000 shares authorized,
6,289,230 shares issued in
1997.......................... 6 - 6
Additional paid-in capital...... 103,719 - 103,719
Retained earnings............... 28,624 - 28,624
-------- -------- --------
132,349 - 132,349
-------- -------- --------
$209,874 $ 38,325 $248,199
======== ======== ========
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 $25,725 (a) $44,565
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 24,341 58,878
------- ------- -------
Expenses
Office properties
Operating expense............. 8,466 11,958 (a) 20,424
Interest expense.............. 3,526 2,158 (c) 5,684
Depreciation and amortization. 2,444 3,391 (a) 5,835
Minority interest............. (28) - (28)
Other real estate properties
Operating expense............. 1,379 - 1,379
Interest expense
Notes payable to banks........ 281 2,376 (e) 2,657
Notes payable on wrap
mortgages................... 340 (340)(f) -
Management company expense...... 673 - 673
General and administrative...... 2,982 - 2,982
------- ------- -------
20,063 19,543 39,606
------- ------- -------
Income before income taxes...... 14,474 4,798 19,272
Income tax expense.............. 103 - 103
------- ------- -------
Net income......................$14,371 $ 4,798 $19,169
======= ======= =======
Net income per share............ $ 3.92 $ 3.38(5)
======= =======
Weighted average shares
outstanding................... 3,662 5,674
======= =======
See accompanying notes.
PARKWAY PROPERTIES, INC. AND SUBSIDIARIES
PRO FORMA CONSOLIDATED STATEMENT OF INCOME
FOR THE SIX MONTHS ENDED JUNE 30, 1997
(Unaudited)
Parkway Pro Forma Parkway
Historical Adjustments(4) Pro Forma
---------- -------------- ---------
(In thousands, except per share data)
Revenues
Income from office properties...$18,065 $ 5,542 (b) $23,607
Income from other real estate
properties.................... 440 - 440
Interest on mortgage loans...... 32 - 32
Management company income....... 251 - 251
Interest on investments......... 330 - 330
Dividend income................. 128 - 128
Deferred gains and other income. 64 - 64
------- ------- -------
19,310 5,542 24,852
------- ------- -------
Expenses
Office properties
Operating expense............. 7,459 2,398 (b) 9,857
Interest expense:
Contractual................. 2,499 279 (c) 2,778
Amortization of loan cost... 43 - 43
Depreciation and amortization. 2,255 695 (b) 2,950
Minority interest............. 59 - 59
Other real estate properties
Operating expense............. 293 - 293
Interest expense on bank notes:
Contractual................... 130 1,188 (e) 1,318
Amortization of loan costs.... 77 - 77
Management company expense...... 172 - 172
General and administrative...... 1,677 - 1,677
------- ------- -------
14,664 4,560 19,224
------- ------- -------
Income before gains............. 4,646 982 5,628
------- ------- -------
Gain on sales
Gain on real estate held for
sale and mortgage loans....... 1,574 - 1,574
------- ------- -------
Net income......................$ 6,220 $ 982 $ 7,202
======= ======= =======
Net income per share............$ 1.04 $ 1.20
======= =======
Weighted average shares
outstanding................... 6,004 6,004
======= =======
See accompanying notes.
PARKWAY PROPERTIES, INC.
Notes to Pro Forma Consolidated Financial Statements
(Unaudited)
1. On July 10, 1997, the Company purchased the 118,750 square
foot Lakewood II office building in Atlanta, Georgia for
$11,500,000 from an unrelated party. This five-story office
building was constructed in 1988. The Company assumed a
$6,910,000 first mortgage on the property with an 8.08%
interest rate as part of the purchase. The remaining
balance was funded with advances under bank lines of credit.
2. On July 31, 1997, the Company purchased the 296,797 square
foot NationsBank Tower in Columbia, South Carolina for
$20,600,000 from an unrelated party. NationsBank Tower is a
twenty-story office building with an attached 565 space,
eight-level parking deck. The building was constructed in
1973 and is located on Gervais Street in the Central
Business District (CBD). The purchase was funded with
advances under bank lines of credit.
3. On August 12, 1997, the Company purchased Fairway Plaza in
Los Colinas, Texas for $6,705,000 from an unrelated party.
Fairway Plaza consists of two multi-story office buildings
containing 82,268 net rentable square feet with 321 surface
parking spaces situated on 6.31 acres. The purchase was
funded with advances under bank lines of credit
4. The pro forma adjustments to the Consolidated Statement of
Income for the year ended December 31, 1996 and six months
ended June 30, 1997 set 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
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 six months
ended June 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
----------- ----------- ----------
$25,725,000 $11,958,000 $3,391,000
=========== =========== ==========
Depreciation is provided by the straight-line method over
the estimated useful lives of the buildings (40 years).
(b) For the six months ended June 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 2,050,000 860,000 232,000
Fairway Plaza 687,000 303,000 75,000
----------- ----------- -----------
$ 5,542,000 $ 2,398,000 $ 695,000
=========== =========== ===========
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.
Property/Placement Year Ended
Date/Rate Debt 12/31/96
------------------ ----------- ----------
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
----------
$2,158,000
==========
*The only pro forma adjustment to interest expense on
real estate owned for the six months ended June 30,
1997 is due to the debt assumed in the purchase of
Lakewood II in the amount of $279,000.
(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 building purchases as well
as the stock offering of 2,012,500 shares on interest
expense on notes payable to banks for the year ended
December 31, 1996 and six months ended June 30, 1997 is
an increase of $2,376,000 and $1,188,000, respectively.
(f) 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 reflect the sale of 2,012,500 shares of common
stock under its existing shelf registration subsequent to
December 31, 1996.
6. No additional income tax expenses were provided because of
the Company's net operating loss carryover and status as a Real
Estate Investment Trust.
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: August 25, 1997 PARKWAY PROPERTIES, INC.
BY: /s/Sarah P. Clark
Sarah P. Clark
Vice President,
Chief Financial Officer,
Treasurer and Secretary
PURCHASE AND SALE AGREEMENT
between
2233, L.P.
and
PARKWAY PROPERTIES LP
MAY 19, 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 ), by and between 2233, L.P., a Georgia limited
partnership, ("Seller") and Parkway Properties LP, a Delaware
limited partnership ("Purchaser").
WHEREAS, Seller is the owner of a parcel of land located at
2233 Lake Park Drive, Smyrna, Georgia, as more specifically
described on Exhibit (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 "Lakewood II" (collectively, the
"Improvements"); and
WHEREAS, Seller owns certain items of tangible and
intangible personal property listed on Exhibit 1.3 attached
hereto; 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 (a) attached hereto.
(b) Description of Improvements. The Improvements,
including the Lakewood II, 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 material 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
includes all tangible personal property located in any
management office at the Real Property owned or leased by
Seller. The material tangible Personal Property is
generally described on Exhibit attached hereto, but the
material tangible Personal Property specifically does not
include any of those items of personal property listed on
Exhibit 1.3 attached hereto which are identified as excluded
personal property thereon.
(b) Description of Intangible Personal Property. The
intangible Personal Property consists of all material 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 "Lakewood
II" on a non-exclusive basis; and (v) all leases, tenancies and
rental agreements or arrangements (collectively "Leases" or
individually, "Lease") with tenants, 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. Purchaser shall within two (2) business
days following the Effective Date deliver to Specialized Title
Services, Inc., 7000 Peachtree Dunwoody Road, N.E., Suite 300,
Building #2, Atlanta, Georgia 30328-1636 (Attn.: George C.
Calloway) ("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 ; 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 74-2123527.
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
hereinafter set forth.
2.2 Purchase Price. Seller agrees to sell, and Purchaser agrees
to purchase, the Project for a total purchase price equal to
ELEVEN MILLION FIVE HUNDRED THOUSAND AND NO/100 DOLLARS
($11,500,000.00) ("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. At
Closing, (defined below) and subject to the conditions set forth
herein, Purchaser shall assume a loan in the approximate amount
of SIX MILLION NINE HUNDRED THOUSAND AND NO/100 DOLLARS
($6,900,000.00). The remainder of the Purchase Price, plus or
minus prorations, shall be paid in immediately available funds at
Closing.
2.3 Purchaser's Assumption of Certain Loans. The Project
presently secures a loan in the approximate amount of SIX
MILLION NINE HUNDRED THOUSAND AND NO/100 DOLLARS ($6,900,000.00)
(the "Loan") from Principal Mutual Life Insurance Company, an
Iowa corporation ("Lender") to Seller. The Loan is evidenced by
those certain documents described on Exhibit 2.3 attached hereto
(the "Loan Documents"). Subject to Purchaser's review of the
Loan Documents and of any required assumption documents,
Purchaser shall assume Seller's obligations under the Loan
Documents at Closing. Purchaser agrees to use reasonable efforts
to cooperate with Lender in the assumption of the Loan. 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 so long as such modifications do not increase
Seller's liability. In the event Lender is unwilling to allow
Purchaser to assume the loans 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.
2.4 Indemnity Agreement. Purchaser and Seller agree to enter
into an indemnity agreement at Closing, whereby Seller (and its
general partner) will agree to indemnify Purchaser for breaches
of the Loan Documents which occurred prior to Closing and
Purchaser will agree to indemnify Seller for breaches of the Loan
Documents which occur after Closing. The form of such agreement
is attached as Exhibit 2.4 hereto.
2.5 Balance of Purchase Price. The Purchase Price, less the
amount of all unpaid principal, charges and interest due with
respect to the Loan on the Closing Date, plus or minus
prorations, shall be paid in immediately available funds to
Seller on the Closing Date.
2.6 Independent Consideration. Seller and Purchaser acknowledge
and agree that One Hundred and No/100 Dollars ($100.00) of the
Escrow Deposit and, if Purchaser is in default as described more
fully in Paragraph 2.1 above, the Escrow Deposit itself, 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 in Atlanta, Georgia on such date
as Purchaser may designate or as Seller and Purchaser may
otherwise mutually determine (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 fees for recording the deed
conveying the Real Property; (ii) any transfer tax,
documentary stamp tax or similar tax which becomes payable
by reason of the transfer of the Project; (iii) one-half of
any escrow fees charged by Title Company, if any; and (iv)
any and all fees (assumption or otherwise) or expenses
charged by Lender, including Lender's attorneys' fees.
Seller shall not pay the cost of the title search and
commitment for the owner's policy of title insurance, the
premium for the owner's policy of title insurance nor the
survey.
(b) Purchaser's Payments. Purchaser shall pay the cost and
expenses, if any, of (i) the survey; (ii) the title search
and title insurance commitment for the owner's policy of
title insurance; (iii) the premium for the owner's extended
coverage title insurance policy and for the cost of any
endorsements as Purchaser may obtain (other than deletion of
the survey or mechanics'/materialmen's lien exception); and
(iv) 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 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.
The agreements with respect to prorations in this Section
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. Purchaser
hereby instructs Title Company to prepare and deliver to
Purchaser, Seller, Lender and the surveyor described below,
within five business (5) days after the Effective Date a
mortgagee's and owner's commitment for a policy of title
insurance (the "Title Commitment") covering the Real Property,
showing all matters affecting title to the Real Property and
binding Title Company to issue to Lender and Purchaser at Closing
a mortgagee's policy of title insurance and 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. Contemporaneously with the execution of this
Agreement, Seller shall provide Purchaser a photocopy of its
existing survey of the Project so that Purchaser can contact the
surveyor to update said survey. Purchaser 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, Lender
and Title Company within five (5) 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 Georgia 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(b), 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 ten (10) business 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 five (5) 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 (other than liens related to the Loan) and
mechanic or materialmen's liens, if any. Seller's failure to
respond shall be deemed a decision by Seller not to cure any
Title Defect. Within ten (10) 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 which are in the possession or control of Seller
("Information Schedules"), including the following schedules and
other information described below:
(a) Rent Roll. A complete list and description ("Rent
Roll"), and true and complete copies, of all Leases.
(b) Contracts. An itemized schedule ("Contracts Schedule")
of all written and oral service, maintenance, management 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.
(c) Personal Property. A true and complete schedule and
description ("Personal Property Schedule") of all material
tangible Personal Property to be transferred to Purchaser.
(d) 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.
(e) 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.
(f) 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.
(g) 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.
(h) Operating Statements. Materially true and complete
copies of all operating statements for the Project for the
last two calendar years and for each calendar month of 1997
through the month ending April 31.
(i) 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.
(j) 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.
(k) Loan Documents. True and complete copies of all Loan
Documents, together with all information pertaining to the
Loan, including, without limitation, schedules setting forth
any escrow accounts or improvements required by Lender.
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 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 corporation, duly formed,
organized, existing and in good standing under the laws of the
State of Maryland; 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 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 , 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 Georgia. 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 of Seller and are authorized to do so.
8.2 Marketable 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, maintenance,
service or other contracts relating to the Project. If Purchaser
requests at the expiration of 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 otherwise disclosed. The Rent Roll states all
Deposits, prepaid rents and other deposits or prepayments for
each Lease. 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: (i) to lenders whose liens shall be
released at Closing; or (ii) to Lender. 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. Except as disclosed in the Rent Roll,
all presently due leasing commissions payable in connection with
the Leases have been paid in full. The Rent Roll 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. Except as specifically referenced in
the Rent Roll and the lease summary attached as Exhibit or the
Contracts Schedule, 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. Notwithstanding the above, it shall be Purchaser's
responsibility to review all Leases to confirm the rents and to
verify the other obligations of Seller.
8.10 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.
8.11 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.
8.12 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.
8.13 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.
8.14 Loan Documents. The Loan Documents described on Exhibit 2.3
constitute all of the loan documents which relate to, or in any
way affect Seller's interest in the Project. The outstanding
principal balance of the Loan as of the Effective Date is
$6,925,105. The Loan Documents correctly and accurately state
the terms and condition of the Loans. 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 actual 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 otherwise disclosed
in writing to Purchaser. 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.
8.15 Escrow Accounts. Any escrow accounts required to be
maintained by Seller pursuant to the Loan Documents are fully
funded and shall remain fully funded through the Closing Date.
Any amounts required by the Loan Documents to be expended in
connection with lease commissions or improvements shall be so
expended prior to the Closing Date. Any escrow accounts required
to be created and maintained by Purchaser after the Closing Date
shall be the responsibility of Purchaser.
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; 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 to be determined by Seller,
provided that such place of business is within the continental
United States, in a commercially reasonable fashion during normal
business hours and upon five (5) days prior notice from Purchaser
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 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, if the Agreement is still in force, Seller
shall be required to gain Purchaser's written approval, which
shall not be unreasonably withheld, 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 .
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 Estoppel Certificates. Before the expiration of the
Inspection Period, Seller shall have delivered currently dated
(no earlier than thirty-five (35) days prior to the scheduled
Closing Date) estoppel certificates in material conformance with
the form attached hereto as Exhibit (1) (or on another form if
requested by Lender) from each major Tenant referenced on the
Rent Roll or a Seller's estoppel certificate in the form attached
hereto as Exhibit (2) for each non-major tenant not providing an
estoppel certificate directly. "Major Tenants" shall include The
Facility Group, Colgate-Palmolive, Square D, and Magnus Software.
In the event Seller shall not have delivered such estoppel
certificates from each Major Tenant before the expiration of the
Inspection Period, Seller and Purchaser agree that the Inspection
Period shall automatically be extended for fifteen (15) days
("Extended Inspection Period") for Seller to deliver such Major
Tenant estoppel certificates to Purchaser. If Seller shall not
have delivered such estoppel certificates from each Major Tenant
at the expiration of the Extended Inspection Period, Purchaser
shall have the right to terminate this Agreement and receive its
Escrow Deposit together with all interest accrued thereon.
Seller and Purchaser shall use reasonable efforts to obtain a
Subordination Non-Disturbance and Attornment Agreement ("SD&A")
in the form requested by Lender and from each Tenant requested by
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.
9.9 Lender's Estoppel. Seller shall use reasonable efforts to
assist Purchaser in obtaining a certificate from Lender in the
form attached as Exhibit 9.9 hereto concerning such matters as
Purchaser may reasonably request, including, without limitation,
all amounts owing under the Loan, defaults by Seller, the Loan
Documents and any escrow or other accounts (the "Lender's
Estoppel"). If the Lender's Estoppel is not received prior to
the expiration of the Inspection Period, Seller and Purchaser
agree that the Inspection Period shall automatically be extended
for fifteen (15) days ("Lender's Estoppel Extended Inspection
Period") for Seller to deliver the Lender's Estoppel to
Purchaser. If Seller shall not have delivered such Lender's
Estoppel at the expiration of the Lender's Estoppel Extended
Inspection Period, Purchaser shall have the right to terminate
this Agreement and receive its Escrow Deposit together with all
interest accrued thereon.
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 Knowledge Standard. As used in this Agreement, "the
Seller's knowledge "or any similar phrase, shall mean the actual
knowledge of Howard S. Rothman after reasonable investigation and
inquiry; provided, however, that nothing in this Agreement shall
be deemed to create or impose any personal liability of any kind
on Howard S. Rothman.
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 in all material
respects. Seller shall have performed in all material
respects all obligations and complied in all material
respects with all covenants required by this Agreement.
(b) Title Defects. All Title Defects, except Permitted
Exceptions, shall have been cured by Seller or waived in
writing by Purchaser.
(c) 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.
(d) Certificates. Purchaser shall have received the
estoppel certificates and the SD&A's as referenced in
Section above, from or for each tenant referenced on the
Rent Roll and the Lender's Estoppel referenced in Section .
(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) 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.
(g) 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) Limited Warranty Deed. A Limited Warranty Deed in form
attached hereto as Exhibit (a).
(b) Bill of Sale. A Bill of Sale and Assignment in form
attached hereto as Exhibit (b).
(c) Assignment. An Assignment of Leases, Contracts and
Intangibles in form attached hereto as Exhibit (c). Such
Assignment of Leases, Contracts and Intangibles shall be
joined in by Purchaser for the purpose of assuming all
obligations under any assigned item arising from and after
the Closing Date.
(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 (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, except for Seller's local telephone number
which shall remain the property of Seller, 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) Assumption of Loan. Such documents as may be necessary
in order for Seller to assign and Purchaser to assume
Seller's obligations under the Loan Documents including the
Lender's Estoppel.
(k) 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 and
(ii) 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.
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. 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 and , "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 any and all
brokerage commissions due to Zarrilli and Karpf pursuant to a
separate written agreement. If the purchase and sale hereunder
does not close for any reason, including default by either Seller
or Purchaser, then no commission shall be due by any party
hereto. Except as set forth in the preceding sentence, 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. 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 Termination of Existing Management Agreement. Prior to or
at Closing, Seller shall terminate that certain Management
Agreement by and between Seller and Rothman Corporation dated
October 26, 1992 ("Management Agreement"). Seller shall be
solely liable and responsible for the payment of any and all
termination fees and commissions due Rothman per the Management
Agreement. Seller shall provide Purchaser at Closing, an
estoppel letter from Rothman acknowledging termination of the
Management Agreement and payment of all fees and commissions due
thereunder.
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, if approved by Lender;
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,
representations, and covenants contained herein, shall survive
Closing and the delivery of the Limited Warranty Deed to
Purchaser for a period of one (1) year 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.
13.10 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.
13.11 Time. Time is of the essence with respect to this
Agreement.
13.12 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.
13.13 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.
13.14 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 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: 2233, L.P.
Attention: Howard S. Rothman
Office Address: Suite 220
Lakewood II
2333 Lakewood Park Drive
Smyrna, Georgia 30080
Telephone Number: (770) 435-8800
Telecopy Number: (770) 435-8890
with a copy to: Stanley K. Slutzky, Esquire
Slutzky, Wolfe and Bailey, LLP
Office Address: 2255 Cumberland Parkway, N.W.
Building 1300
Atlanta, Georgia 30339
Telephone Number: (770) 438-8000
Telecopy Number: (770)438-9657
Purchaser: Parkway Properties LP
Attention: James M. Ingram
Office Address: Suite 1000, One Jackson Place
188 East Capitol Street
Jackson, Mississippi 39201
Mailing Address: Post Office Box 24647
Jackson, Mississippi 39225
Telephone Number: (601) 948-4091
Telecopy Number (601) 949-4077
with a copy to: Forman, Perry, Watkins, Krutz & Tardy, PLLC
Attention: Phillip S. Sykes
Office Address: Suite 1200, One Jackson Place
188 East Capitol Street
Jackson, Mississippi 39201
Telephone Number: (601) 960-8600
Telecopy Number: (601) 960-8609
13.15 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.
13.16 Exhibits. All schedules or exhibits referred to herein
or attached hereto are incorporated herein by this reference.
13.17 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.
13.18 Governing Law. This Agreement shall be governed,
construed and enforced in accordance with the laws of the State
of Georgia.
13.19 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").
13.20 Limitation on Liability. Notwithstanding anything
contained herein to the contrary, Seller acknowledges and agrees
that no limited partner of Purchaser, nor any trustee, director,
holder of any beneficial interests, shareholder, officer or
employee of Purchaser or any affiliate of Purchaser (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
shall have recourse hereunder only against Purchaser's assets.
Each document to be executed by Purchaser at Closing shall
contain a similar exculpation.
13.21 1031 Opportunity. Purchaser agrees to cooperate with
Seller on an Internal Revenue Code Section 1031 tax free
exchange. The cost, expenses, and liability of Purchaser shall
note be increased by such participation.
IN WITNESS WHEREOF, Seller and Purchaser have executed this
Agreement as of the Effective Date.
SELLER:
Executed by Seller this 2233, L.P., A GEORGIA LIMITED
19th day of May, 1997 PARTNERSHIP
BY: Coophigh, Inc.,
a Georgia corporation
By: Howard S. Rothman
Its: President
PURCHASER:
Executed by Purchaser this PARKWAY PROPERTIES LP, a Delaware
19th day of May, 1997 limited partnership
By: Parkway Properties General
Partners, Inc., a Delaware
corporation, its sole general
partner
By: James M. Ingram
Name: James M. Ingram
Title: Vice President
By: Leland R. Speed
Name: Leland R. Speed
Title: Chairman
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 19th day of May, 1997 and (b) a
fully executed counterpart of this Agreement on the 19th day of
May, 1997.
Specialized Title Services, Inc.,
as Agent for First American Title
Insurance Company
By: George C. Calloway
Name: George C. Calloway
Title: Vice President
EXHIBIT 1.2(a)
Legal Description
EXHIBIT 1.3
INCLUDED AND EXCLUDED PERSONAL PROPERTY
EXHIBIT 2.3
LOAN DOCUMENTS
EXHIBIT 2.4
FORM OF INDEMNITY AGREEMENT
INDEMNITY AGREEMENT
THIS INDEMNITY AGREEMENT, is entered into by Parkway
Properties LP, a Delaware limited partnership ("Parkway"), and
2233, L.P., a Georgia limited partnership ("2233"), and Coophigh,
Inc., a Georgia corporation ("Coophigh") (2233 and Coophigh are
hereinafter, collectively, the "Seller").
WHEREAS, Seller and Parkway have entered into a Purchase and
Sale Agreement dated ________________ (the "Purchase and Sale
Agreement") whereby Parkway will purchase the Lakewood II office
building and certain other assets in connection therewith as set
forth in the Purchase and Sale Agreement;
WHEREAS, at Closing, Parkway will assume certain of Seller's
obligations under certain loan documents including, that
______________________________________ ("Lender") (the
____________ are collectively referred to herein as the "Loan
Documents");
WHEREAS, the Loan Documents provide that Seller shall not
have any personal liability to Lender thereunder, except as
specifically set forth on Pages __ and __ of the Note and Section
___ of the Deed of Trust ("Recourse Provisions");
WHEREAS, Seller and Parkway have agreed to indemnify one
another with respect to personal liability in connection with the
Recourse Provisions as set forth herein.
NOW THEREFORE IN CONSIDERATION OF THE FOREGOING, and other
good and valuable consideration, the receipt and sufficiency of
which is hereby acknowledged, Seller and Parkway hereby agree as
follows:
1. Seller Indemnity. Seller agrees to indemnify, defend,
protect and hold harmless Parkway from any and all loss, cost or
expense, including reasonable attorney's fees, arising out of or
in connection with any act, event, occurrence or omission by
Seller which causes or imposes any personal liability on Parkway
pursuant to the Recourse Provisions to the extent such act,
event, occurrence or omission occurs prior to the Closing Dates.
2. Parkway Indemnity. Parkway agrees to indemnify,
defend, protect and hold harmless Seller from any and all loss,
cost or expense, including reasonable attorney's fees, arising
out of or in connection with any act, event, occurrence or
omission by Parkway which causes or imposes any personal
liability on Seller pursuant to the Recourse Provisions to the
extent such act, event or omission occurs on or after the Closing
Date.
IN WITNESS WHEREOF, this Indemnity Agreement has been
executed by the parties hereto as of the _____ day of
___________________, 1997.
PARKWAY PROPERTIES LP, a Delaware
limited partnership
By:
Parkway Properties General
Partners, Inc. a Delaware
corporation, its sole
general partner
By:
Name:
Title:
By:
Name:
Title:
2233, L.P., A GEORGIA LIMITED
PARTNERSHIP
BY: Coophigh, Inc., a Georgia
corporation
By: Howard S. Rothman
Its: President
COOPHIGH, INC., a Georgia
corporation
By:
Name:
Title:
EXHIBIT (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
LEASE SUMMARY
EXHIBIT 9.8(i)
FORM OF TENANT ESTOPPEL CERTIFICATE
Parkway Properties LP
300 One Jackson Place
188 East Capitol Street
Jackson, MS 39201
RE: _______________________
Gentlemen:
The undersigned as Tenant hereby certifies to Parkway
Properties LP 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 (2)
FORM OF SELLER ESTOPPEL CERTIFICATE
Parkway Properties LP
300 One Jackson Place
188 East Capitol Street
Jackson, MS 39201
RE: _____________
Gentlemen:
The undersigned as Landlord hereby certifies to Parkway
Properties LP 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 9.9
FORM OF LENDER'S ESTOPPEL
Parkway Properties LP
1000 One Jackson Place
188 East Capitol Street
Jackson, MS 39201
RE: Assignment to Parkway Properties LP ("Buyer") by
________________ ("Seller"), of its obligations under
_____________ ("Lender") loan #__________, in the
original principal amount of ______________ (the
"Loan")
Gentlemen:
Lender hereby certifies to Buyer, 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.
2.
3.
4.
5.
(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.
LENDER:
______________________________
By:
Name:
Title:
Date:
EXHIBIT (a)
FORM OF LIMITED WARRANTY DEED
RETURN TO: _________________
_____________________________
_____________________________
_____________________________
STATE OF GEORGIA
COUNTY OF ____________
LIMITED WARRANTY DEED
THIS INDENTURE, made as of the ____st day of _____, in the
year One Thousand Nine Hundred Ninety-Seven between
___________________, of the County of ________, and the State of
____________, as party of the first part, hereinafter called
Grantor, and Parkway Properties LP, a Delaware limited
partnership, whose address is 1000 One Jackson Place, Jackson,
Mississippi 39201, as party of the second part, hereinafter
called Grantee (the words "Grantor" and "Grantee" to include
their respective heirs, successors and assigns where the context
requires or permits).
WITNESSETH: That Grantor for and in consideration of the
sum of TEN AND NO/100 DOLLARS ($10.00) AND OTHER GOOD AND
VALUABLE CONSIDERATION, in hand paid at and before sealing and
delivery of this presents, the receipts whereof is hereby
acknowledged, has granted, bargained, aliened, conveyed and
confirmed, and by these presents does grant, bargain, sell,
alien, convey and confirm 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 ______ and
State of Georgia 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 made subject to all zoning ordinances,
easements and restrictions of record affecting said described
Property described on Exhibit B attached hereto.
TO HAVE AND TO HOLD the said described Property, with all
and singular the rights, members and appurtenances thereof, to
the same being, belonging, or in anywise appertaining, to the
only proper use, benefit, and behoof of the said Grantee forever
in FEE SIMPLE.
AND THE SAID GRANTOR will warrant and forever defend the
right and title to the said described Property unto the said
Grantee against the claims of all persons claiming by, under or
through Grantor.
IN WITNESS WHEREOF, the Grantor has signed and sealed this
limited warranty deed, the day and year above written.
GRANTOR:
___________________________
By:________________________
Name:______________________
Title:_____________________
Signed, sealed and delivered
in the presence of:
_____________________________ ________________________(SEAL)
Unofficial Witness
_____________________________ ________________________(SEAL)
Notary Public
MY COMMISSION EXPIRES:
(AFFIX NOTARY SEAL)
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 _____________, a _____________
("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
"Lakewood II" to the extent such rights are assignable
without expense to Assignor (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 tangible and intangible
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:
___________________________________
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 ________________ a
_______________ ("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 _________________
I, ___________________, a Notary Public of the County and
State aforesaid, certify that _____________________ personally
came before me this day and acknowledged that he/she is
____________________ of ___________________________, a
_____________________ and that by authority duly given and as the
act of the ______________ the foregoing instrument was signed in
its name by its ______________________, sealed with its corporate
seal, and attested by himself/herself as its
____________________.
WITNESS MY HAND AND OFFICIAL SEAL, this the _____ day of
________________, 1997.
____________________________
NOTARY PUBLIC
My Commission Expires:______________________
[AFFIX NOTARIAL SEAL]
CONTRACT OF SALE
BETWEEN
SOUTHLAND INVESTMENT PROPERTIES PARTNERS,
AS SELLER,
AND
PARKWAY PROPERTIES, INC.
AS BUYER
Table of Contents
ARTICLE 1
PROPERTY AND PURCHASE PRICE
Section 1.1 Agreement to Sell and Purchase 95
Section 1.2 Purchase Price 95
Section 1.3 Earnest Money Deposit 96
ARTICLE 2
SELLER'S COVENANTS
Section 2.1 Title Insurance 96
Section 2.2 Other Information 97
Section 2.3 Survey 99
Section 2.4 Continuing Operations 99
ARTICLE 3
CONDITIONS PRECEDENT TO BUYER'S OBLIGATIONS
Section 3.1 Title Review 100
Section 3.2 Inspection Period 100
ARTICLE 4
CLOSING
Section 4.1 Closing 102
Section 4.2 Prorations 104
ARTICLE 5
TERMINATION, DEFAULTS, AND REMEDIES
Section 5.1 Termination Due to Title Defects 105
Section 5.2 Termination Due to Inspection 106
Section 5.3 Buyer's Remedies 106
Section 5.4 Seller's Remedies 107
ARTICLE 6
CASUALTY; CONDEMNATION
Section 6.1 Risk of Loss Notice 108
Section 6.2 Minor Casualty 108
Section 6.3 Major Casualty; Condemnation 109
Section 6.4 Rights of Lienholders 110
Section 6.5 Estimate 110
ARTICLE 7
SELLER'S REPRESENTATIONS AND WARRANTIES
Section 7.1 Seller's Representations and
Warranties 110
Section 7.2 Buyer's Representations 114
Section 7.3 Covenants of Seller 114
ARTICLE 8
MISCELLANEOUS
Section 8.1 Notices 116
Section 8.2 Performance 117
Section 8.3 Binding Effect 117
Section 8.4 Entire Agreement/Disclaimer 118
Section 8.5 WAIVER OF ENVIRONMENTAL LIABILITY 120
Section 8.6 Assignment 120
Section 8.7 Commissions 120
Section 8.8 Survival. 121
Section 8.9 Headings 121
Section 8.10 Earnest Money Deposit and Release 121
Section 8.11 Holidays, Etc 122
Section 8.12 Attorneys' Fees 122
Section 8.13 Governing Law 122
Section 8.14 No Recordation 122
Section 8.15 Severability 122
Section 8.16 Rule of Construction 122
Section 8.17 Offer to Buy 122
Section 8.18 Effective Date 123
Section 8.19 Independent Contract Consideration 123
Section 8.20 Counterparts 123
Section 8.21 Limitation on Recourse 123
Section 8.22 Approvals. 124
EXHIBIT A
LEGAL DESCRIPTION OF THE PROPERTY
EXHIBIT B
INTENTIONALLY OMITTED
EXHIBIT C
ASSIGNMENT OF LEASES, TRADE NAMES, AND SECURITY
DEPOSITS
EXHIBIT D
TENANT NOTICE LETTERS
EXHIBIT E
SPECIAL WARRANTY DEED
EXHIBIT F
SPECIAL WARRANTY BILL OF SALE
EXHIBIT G
IRC SECTION 1445 CERTIFICATE
EXHIBIT H
FORM OF TENANT ESTOPPEL CERTIFICATE
CONTRACT OF SALE
This Contract of Sale (this Contract) is between SOUTHLAND
INVESTMENT PROPERTIES PARTNERS, a Delaware general partnership
(Seller) and Parkway Properties, Inc., a Maryland corporation
(Buyer).
BACKGROUND
Buyer wants to purchase, and Seller wants to sell, all of
Seller's interest in:
o the real property (the Real Property) located in Dallas
County, Texas, being more particularly described on Exhibit A
attached to this Contract;
o all improvements, structures, and fixtures located on the
Real Property (collectively, the Improvements), and all rights
and appurtenances pertaining to the Real Property, including any
interest of Seller in adjacent streets, alleys, easements, and
rights-of-way;
o all leases, rental agreements and certain service contracts
entered into by Seller and encumbering the Real Property (the
Contracts); and
o the personal property located on the Real Property and used
in connection with the operation of the business (the Personal
Property) (the Real Property, the Improvements, the Contracts,
and the Personal Property are collectively called the Property).
ARTICLE 1
PROPERTY AND PURCHASE PRICE
Section 1.1 Agreement to Sell and Purchase.
Seller agrees to sell to Buyer, and Buyer agrees to purchase from
Seller, the Property, subject to the Permitted Exceptions
(defined in Section 3.1), upon the terms of this Contract.
Section 1.2 Purchase Price.
The Purchase Price of the Property is Six-Million, Seven-Hundred
Fifty Thousand and no/100 Dollars ($6,750,000), payable in
immediately available federal funds at Closing (defined in
Section 4.1).
Section 1.3 Earnest Money Deposit.
(a) Within two (2) business days after receipt of notice of
Seller's execution of this Contract, Buyer shall
deposit with the Title Company (defined in Section 2.1)
a deposit (the Earnest Money Deposit) in cash in the
amount of $100,000.
(b) The Earnest Money Deposit will be applied to the
Purchase Price at Closing, or, if this Contract does
not close, it will be applied as provided elsewhere in
this Contract.
(c) The Title Company shall, promptly upon receipt, place
the Earnest Money Deposit in an interest bearing
account in investments designated by Buyer reasonably
acceptable to Seller. All interest accruing on the
Earnest Money Deposit is deemed to be part of the
Earnest Money Deposit and is payable to the party
entitled to receive the Earnest Money Deposit as
provided in this Contract.
ARTICLE 2
SELLER'S COVENANTS
Section 2.1 Title Insurance.
(a) Seller, at Seller's expense, shall furnish to Buyer, as
soon as practicable after Closing, a Texas Standard
Form of Owner Policy of Title Insurance (the Owner
Policy) issued by Chicago Title Insurance Company
(Underwriter), through its agent, American Title
Company, a Texas corporation (the Title Company), 500
North Akard Street, 3525 Lincoln Plaza, Dallas, TX
75201, Attn: Tim Hardin, Telephone: (214) 969-5300,
Fax: (214)969-5348, dated as of the Closing Date (as
defined in Section 4.1), in the amount of the Purchase
Price, and containing no exceptions or conditions
except as provided elsewhere in this Contract and the
following:
(i) the restrictive covenants exception must
be deleted or must state "None of Record
except..." and then must list only specific
restrictive covenants approved or waived by
Buyer;
(ii) the survey exception, at Buyer's
election, may be amended to except only to
"shortages in area" (the expense of the
modification of the policy shall be paid by
Buyer);
(iii) stand-by fees, taxes and
assessments for the year 1997 and subsequent
years, and subsequent assessments for prior
years due to change in land usage or
ownership;
(iv) zoning ordinances;
(v) terms and conditions of Ordinance No.
71-100, entitled Airport Zoning Ordinance of
the Dallas-Fort Worth Regional Airport, dated
December 16, 1971, filed September 2, 1982,
recorded in Volume 82173, Page 0178, of the
Deed Records of Dallas County, Texas;
(vi) all other Permitted Exceptions.
(b) Seller, at Seller's expense, shall furnish to Buyer
within fifteen (15) days after the Effective Date (as
defined in Section 8.19) a title insurance commitment
covering the Property issued by Title Company (the
Commitment), together with legible and complete copies
of all documents referenced as title exceptions in the
Commitment.
(c) Except as expressly set forth in this Contract, Seller
may not voluntarily create any encumbrances on the
Property other than those listed in the Title
Commitment and shown on the Survey (defined in Section
2.3) prior to the Closing Date without the prior
written consent of Buyer.
Section 2.2 Other Information.
Seller shall deliver to Buyer within ten (10) days after the
Effective Date of this Contract, the following:
(a) a rent roll ("Rent Roll"), dated no earlier that ten
(10) days prior to the date Seller delivers same,
stating:
(1) the rentable square footage of each lease space
within the Property;
(2) the name of the tenant, if any, occupying each
lease space;
(3) the rent payable each month under any current
lease for each lease space;
(4) the amount of security deposit (or any other
deposit), if any, for each lease space; and
(5) whether and how much rent for each lease space has
been prepaid or is delinquent;
The leases on the Rent Roll will also include Seller
approved subleases.
(b) copies of all utility bills paid by Seller for the
Property for the twelve (12) months immediately preced
ing the date of this Contract;
(c) copies of the ad valorem tax bill for 1996;
(d) copies of any plans and specifications in Seller's
possession for the Improvements or portions thereof;
(e) copies of all existing service contracts entered into
by Seller (the Service Contracts) affecting the Prope
rty;
(f) a copy of each lease and any amendments or addenda
thereto executed by current tenants in the Property
(the Lease);
(g) operating statements covering the Property for 1996 and
1997;
(h) copies of all leasing commission agreements with
respect to current tenants of the Property; and
(i) an inventory of Personal Property to be transferred to
Buyer at Closing.
Section 2.3 Survey.
Seller shall furnish to Buyer, at Seller's sole cost and expense,
within fifteen (15) days after the date of this Contract an as-
built survey (the Survey) of the Property, certified to Seller,
Buyer, Underwriter, Title Company, and Buyer's lender, if any,
showing the following:
(a) a metes and bounds description of the Property;
(b) the area, boundaries and dimensions of the Property;
(c) any encroachments or protrusions;
(d) the number of parking spaces within the Property and
the number and location of any handicapped spaces;
(e) the location of all easements and building restrictions
affecting the Property, and the location of the
Improvements; and
(f) a certification by the surveyor as to any portion of
the Property which lies within the 100-year flood
plain.
Section 2.4. Continuing Operations.
From the Effective Date until the Closing Date or any earlier
termination of this Contract, Seller shall cause the Property to
be managed in substantially the same manner as the Property is
managed on the Effective Date. After the execution of this
Agreement, until the date of Closing or any earlier termination
of this Contract, however, Seller may not execute or permit the
execution of any new leases covering any portion of the Property
or the execution of any modifications of any existing leases,
without the prior written consent of Buyer, which consent may not
be unreasonably withheld, conditioned or delayed; provided that
Buyer has no right to consent to Seller's execution of any
renewal, extension, or expansion of any existing lease arising
out of the exercise by any tenant of any right under any existing
lease to renew, extend, or expand that lease.
ARTICLE 3
CONDITIONS PRECEDENT TO BUYER'S OBLIGATIONS
Section 3.1 Title Review.
(a) Buyer has five (5) business days (the Title Review
Period) after its receipt of the last of the
Commitment, the copies of each title exception, and the
Survey (even though they may not be delivered to Buyer
in strict compliance with Sections 2.1 and 2.3) to
object to any exception or condition contained in the
Commitment or shown on the Survey by giving written
notice thereof to Seller, such notice specifically
identifying the issues to which Buyer objects. If
Buyer does not give notice of any objections to Seller
within the Title Review Period, Buyer is deemed to
have approved the title as shown in the Commitment as
well as matters shown on the Survey.
(b) If the form of the Title Commitment or the Survey does
not comply with the terms of either Section 2.1 or
Section 2.3, neither the beginning nor the length of
the Title Review Period will be extended.
(c) Seller has five (5) days after receipt of Buyer's
notice to cure, attempt to cure or elect not to cure
any or all of Buyer's objections; Seller, however, has
no obligation to cure any of Buyer's objections.
(d) If Buyer gives notice of any objections within the five
(5) business day period and Seller fails, is unable, or
refuses to cure any of Buyer's objections within
Seller's five (5) day curative period, Buyer may, on or
before the fifth (5th) day after the last day of
Seller's five (5) day curative period, exercise its
remedies under Section 5.1 of this Contract.
(e) Those exceptions shown in Section 2.1 and all other
exceptions shown on the Title Commitment or the Survey
that are either accepted or waived by Buyer are called
the Permitted Exceptions.
Section 3.2 Inspection Period.
(a) Commencing on the Effective Date and continuing through
the date which is thirty (30) days from the Effective
Date (the Inspection Period), Buyer may, but is not
obligated to, inspect the Property and all of Seller's
books and records concerning the Property, review and
analyze all materials, surveys, maps, reports, and
other matters and information provided pursuant to this
Contract, together with any other materials, surveys,
maps, reports, and other matters (other than internally
generated studies, projections or memoranda of Seller)
it may choose which relate to the Property, in its sole
and absolute discretion.
(b) Buyer shall deliver to Seller complete copies of any
written reports concerning the Property prepared by any
third party for Buyer, including any soils test or
environmental audit report. Buyer shall keep, and
shall cause all of its agents, employees, and
consultants to keep, all information or data obtained
from any inspection, test, or report confidential,
except for disclosures required by law or in connection
with litigation concerning the Property.
(c) Buyer may, for any reason whatsoever, or for no reason
at all, in Buyer's sole discretion, terminate this
Contract by notifying Seller in writing (the Inspection
Termination Notice) of Buyer's election to terminate
under this Section 3.2 no later than 5:00 p.m., Dallas,
Texas, time, on the last day of the Inspection Period.
(d) If Buyer does not timely tender the Inspection
Termination Notice to Seller, Buyer is deemed to have
waived its right to terminate this Contract under the
provisions of this Section 3.2.
(e) Seller grants to Buyer, its agents, contractors and
employees a license to enter upon the Property, to
conduct its studies and tests, but prior to entering
any tenant's leased premises, Buyer shall be required
to notify Seller thereof and Buyer shall not enter such
premises unless accompanied by Seller's representative
or a representative of the tenant. No studies, tests
and inspections deemed necessary or desirable by Buyer
shall be destructive of nor shall they do any material
damage to the Property. Buyer's performance of all
studies and inspections are at its sole risk and
expense and Buyer shall promptly restore the Property
substantially to its condition immediately prior to
such damage, free from any mechanic's or materialman's
liens or claims or other encumbrances. Additionally,
except to the extent of Seller's own negligence, Buyer
shall indemnify, defend and hold Seller, its partners,
agents, managers and employees and their partners,
agents, managers and employees harmless from any and
all losses, claims, costs, damages, judgments, and
liabilities for injury to or the death of any person or
persons or the damage to any property arising out of,
resulting from or connected with any entry onto or the
performance of the studies, tests or inspections on the
Property by Buyer, its agents, servants employees or
contractors, including, without limitation attorney's
fees and court costs and expenses, whether at the trial
or appellate level.
ARTICLE 4
CLOSING
Section 4.1 Closing.
(a) The Closing of this Contract will take place at the
Seller's attorney's offices at 9:00 A.M., Dallas,
Texas, time, on or before fifteen (15) days after the
end of the Inspection Period (the Date of Closing).
(b) At Closing, Buyer shall deliver to Seller:
(1) in cash, by wire transfer, or in other immediately
available federal funds, the Purchase Price and
other funds required of Buyer at the Closing less
the Earnest Money Deposit;
(2) at least one (1) counterpart of an Assignment of
Leases, Trade Names, and Security Deposits (the
Assignment of Leases), duly executed by Buyer, in
substantially the form attached hereto as Exhibit
C; and
(3) at least one (1) counterpart of a notice to
tenants (the Tenant Notice Letters), duly executed
by Buyer, in substantially the form attached
hereto as Exhibit D, addressed to each tenant of
the Property.
(c) At Closing, Seller shall deliver to Buyer:
(1) a Special Warranty Deed (the Deed), duly executed
and acknowledged by Seller, containing no
exceptions or conditions except the Permitted
Exceptions, substantially in the form attached
hereto as Exhibit E;
(2) a Special Warranty Bill of Sale, duly executed by
Seller, substantially in the form attached hereto
as Exhibit F;
(3) at least one (1) counterpart of the Assignment of
Leases, duly executed by Seller;
(4) an IRC Section 1445 Certification, duly executed
by Seller, substantially in the form attached
hereto as Exhibit G;
(5) at least one (1) counterpart of each of the Tenant
Notice Letters, duly executed by Seller;
(6) a rent roll and a list of Service Contracts (each
dated not earlier than two business days before
closing);
(7) possession of the Property, subject to the
Permitted Exceptions and the rights of tenants in
possession;
(8) a credit against the Purchase Price equal to the
security deposits, if any, held by Seller; and
(9) originals of the following if they are in Seller's
possession:
(i) all leases, licenses, occupancy
agreements, lease commission agreements,
permits, and other rental agreements executed
by Seller and affecting the Property;
(ii) originals of the Service Contracts
executed by Seller; and
(iii) all keys to the Property.
(d) Seller and Buyer shall execute and deliver to the
appropriate parties such additional documents and
instruments as in the opinion of Buyer's counsel and
Seller's counsel are necessary to the consummation of
this transaction.
Section 4.2 Prorations.
(a) Ad valorem taxes, assessments, and assessments of The
Las Colinas Association (TLCA) against the Property
will be prorated at Closing to the Date of Closing
based on the tax bills for the year of the Closing.
Seller shall pay to Buyer at Closing, or Seller can
credit such amount against the Purchase Price, the
portion of the taxes on the Property from the beginning
of the current year through the Date of Closing. If
Closing occurs before the current year's tax bills and
the TLCA assessments are available, the proration will
be based on the latest tax rate, or TLCA assessment
rate, as appropriate, applied to the latest assessed
valuation; provided, after the taxes for the current
year are finally assessed, upon written demand, Buyer
shall refund to Seller any amount overpaid by Seller or
Seller shall pay to Buyer the amount of any deficiency
in the proration, but only to the extent not payable by
the tenants of the Property. Buyer shall pay all taxes
and assessments before they become delinquent and shall
indemnify and hold Seller harmless from all loss, cost
and expense for Buyer's failure to do so.
(b) Rental income, other income and expenses (including
maintenance and service contracts not terminated at
Closing and utility charges) of the Property shall be
prorated as of the Date of Closing based upon the
actual days in the respective month of Closing with
Seller bearing all expenses and receiving all income
(including income received after Closing by Buyer from
tenants of the Property relating to expenses payable by
the tenants under their leases for matters accruing
prior to Closing and for which Seller is or was
responsible) for periods to the Date of Closing and
Buyer bearing all expenses and receiving all income for
the periods from and after the Date of Closing. To the
extent that the actual amounts of such charges or
income are unavailable at the Date of Closing, the
closing statements shall be based upon estimated
amounts, and a readjustment of these items shall be
made within ninety (90) days after the Closing. All
lease commissions for existing leases shall be paid in
full by Seller including the commission relating to the
Campbell lease, (the Campbell Lease Commission) and all
leasing commissions for new leases shall be prorated
over the term of the respective lease. All unpaid
tenant improvements or other upfitting costs for
existing leases shall be paid in full by Seller. No
proration shall be made in relation to delinquent rents
existing as of the Date of Closing, but Buyer shall
make a good faith attempt to collect the same for
Seller's benefit after the Closing and such
collections, if any, shall be remitted to Seller
promptly upon receipt by Buyer (but only after applying
all collections from any delinquent tenant first to
rentals then due for any period after the Closing);
provided, however, nothing herein shall be construed to
require Buyer to institute any suit or collection
procedure to collect such delinquent rents.
(c) All closing costs other than as specified above, or as
may be specifically allocated elsewhere in this
Contract, will be allocated to the respective parties
in the customary manner for the sale and purchase of
improved real property in Dallas County, Texas, as of
the Date of Closing; provided, each party shall pay its
own attorneys' fees except in the event of litigation.
ARTICLE 5
TERMINATION, DEFAULTS, AND REMEDIES
Section 5.1 Termination Due to Title Defects.
If Buyer timely gives notice of other objections and Seller does
not or refuses or is unable to cure such title objections within
the time period provided in Section 3.1 of this Contract, Buyer
may, as its sole and exclusive remedy, waiving all other
remedies, either:
(i) terminate this Contract by notice in writing to Seller
within two (2) days after the end of the time for
Seller to cure Buyer's objections, and $100,000 of the
Earnest Money Deposit, together with all interest
earned, will be returned to Buyer and the remainder of
the Earnest Money Deposit shall be paid to Seller, and
the parties will have no further rights, liabilities,
or obligations under this Contract except for those
which specifically survive the termination; or
(ii) waive any uncured objection and accept Seller's title
as shown in the Title Commitment and Survey.
If Seller does not timely receive written notice of Buyer's
election to terminate this Contract, Buyer is deemed to have
accepted Seller's title as shown in the Title Commitment and
Survey.
Section 5.2 Termination Due to Inspection.
If Seller receives the Inspection Termination Notice on or before
5:00 P.M. on the last day of the Inspection Period:
(a) this Contract terminates as of that time and date;
(b) $100,000 of the Earnest Money Deposit, together with
all interest earned, will be returned to Buyer, and the
remainder of the Earnest Money Deposit shall be paid to
Seller; and
(c) the parties will have no further rights, liabilities,
and obligations under this Contract except with respect
to those matters which specifically survive the
termination.
Buyer shall (such matters to survive the termination):
(1) promptly repair all damage to the Property caused or
attributable to the studies and tests; and
(2) indemnify, defend and hold Seller, its partners,
agents, managers, employees, and their partners,
agents, managers, and employees, harmless from any
losses, claims, costs, damages, judgments and
liabilities arising out of, resulting from or connected
with any entry onto or the performance of the studies,
tests or inspections on the Property by Buyer or its
agents, servants, employees, or contractors, including,
without limitation, attorneys' fees and court costs and
expenses, whether at the trial or appellate level.
Section 5.3 Buyer's Remedies.
If:
(a) Seller is unable to convey title to Buyer as provided
in Sections 2.1 and 4.1 of this Contract and Buyer, at
Closing, does not waive any defect in title and accept
Seller's title as Seller is able to convey it;
(b) condemnation proceedings are initiated against all or
any portion of the Property;
(c) a Major Casualty (defined in Section 6.3) occurs;
(d) a lienholder requires Seller to apply insurance
proceeds or condemnation awards other than as required
in Article 6;
(e) Seller fails or refuses to close this Contract for any
reason except pursuant to any applicable provision of
this Contract; or
(f) Seller is otherwise in default under this Contract;
Buyer may, as its sole and exclusive remedy, with respect to
items in (a), (b), (c) and (d), waiving all other remedies, ter
minate this Contract by giving written notice thereof to Seller,
and the Earnest Money Deposit shall be returned to Buyer and upon
Seller's delivery to Buyer of the items listed in Section 3.2(b)
Seller shall pay to Buyer an amount of up to $15,000 to reimburse
Buyer for its actual out-of-pocket legal, engineering and
environmental research costs paid to third parties associated
with this transaction, and the parties shall have no further
rights, liabilities, or obligations under this Contract, except
with respect to those matters which survive a termination; with
respect to matters in items (e) and (f), Buyer may, as its sole
and exclusive remedy, either terminate this Contract in
accordance with the foregoing, or enforce specific performance
against the Seller.
Section 5.4 Seller's Remedies.
If:
(a) Buyer fails or refuses to close this Contract for any
reason, except the termination of this Contract
pursuant to any applicable provision of this Contract;
or
(b) Buyer is otherwise in default under this Contract;
Seller may, as its sole and exclusive remedy, waiving all other
remedies, terminate this Contract and receive the Earnest Money
Deposit as liquidated damages and the parties shall have no
further rights, liabilities, or obligations under this Contract,
except with respect to those matters which survive a termination.
The parties agree that Seller's damages would be difficult to
ascertain and the amount of the Earnest Money Deposit would be a
fair approximation of Seller's damages.
ARTICLE 6
CASUALTY; CONDEMNATION
Section 6.1 Risk of Loss Notice.
The risk of loss or damage to the Property by fire or other
casualty prior to the date of Closing is borne by Seller. Seller
shall give Buyer written notice of any destruction of any part of
the Property or the commencement of any condemnation proceedings
between the Effective Date and the Closing Date.
Section 6.2 Minor Casualty.
Whether or not the notice required by Section 6.1 is given, if
less than $50,000 of value of the Improvements are destroyed by
fire or other casualty (such destruction being herein called a
Minor Casualty):
(a) At Closing Seller shall assign to Buyer all proceeds of
insurance payable to Seller;
(b) Buyer will receive a credit against the Purchase Price
equal to the amount of any deductible under any such
insurance policy;
(c) Buyer shall accept the Property and the Improvements in
their damaged state; and
(d) Seller has no obligation to repair or restore any
damaged or destroyed portions of the Property or the
Improvements.
If the Minor Casualty occurs within thirty (30) days prior to the
date of Closing, the Closing Date will be automatically extended
for the period of time from the date of casualty until the
earlier of thirty (30) days after the date that the estimate of
the value of the damage to the Property is received by Seller
under Section 6.5 of this Contract, or the date that those
proceeds can be assigned to Buyer.
Section 6.3 Major Casualty; Condemnation.
If condemnation proceedings are commenced against all or any
portion of the Property, or if $50,000 or more of the value of
the Improvements are destroyed by fire or other casualty (such
destruction being herein called a Major Casualty), Buyer may
exercise its appropriate remedies under Section 5.3. If Buyer
does not exercise its remedies under Section 5.3 within (10) days
after receipt by Buyer of notice from Seller of the occurrence of
a Major Casualty or the initiation of condemnation proceedings at
Closing:
(a) Seller shall assign all proceeds of insurance or
condemnation awards to Buyer (but not in excess of the
Purchase Price less the amount of the deductible on an
insured loss);
(b) if a Major Casualty occurs:
(1) Buyer will receive a credit against the Purchase
Price equal to the amount of any deductible under
any such insurance policy;
(2) Buyer shall accept the Property and the
Improvements in their damaged state; and
(3) Seller has no obligation to repair or restore any
damaged or destroyed portions of the Property or
the Improvements; and
(c) if condemnation proceedings are begun:
(1) Buyer will accept the Property subject to the
condemnation proceedings and any of the claims of
or against any condemning authority;
(2) Seller has no liability with respect to any
portion of the Property that is condemned, or with
respect to any costs or expenses incurred by Buyer
as a result of any such condemnation proceedings;
and
(3) Seller has no obligation to defend or otherwise
appear in any condemnation proceedings.
If a Major Casualty occurs within thirty (30) days prior to the
Closing Date, the Closing Date will be automatically extended for
the period of time from the date of casualty until the earlier of
thirty (30) days after the date that the estimate of the value of
the damage to the Property is received by Seller under Section
6.5 of this Contract, or the date that the insurance proceeds may
be assigned to Buyer.
Section 6.4 Rights of Lienholders.
Notwithstanding anything contained in this Article 6, if any
holder of any lien on all or any portion of the Property requires
Seller to apply insurance proceeds or condemnation awards other
than in accordance this Article 6, Seller shall give notice to
Buyer of such circumstance, Seller shall apply such proceeds or
awards as required by such lienholder, and Buyer may exercise its
remedies under Section 5.3 or it shall proceed in accordance with
this Contract and Close the transaction.
Section 6.5 Estimate.
The value of the damage to the Improvements, for the purposes of
this Article 6, equals the estimate of the value of the damage to
the Improvements that is given to Seller by the adjuster under
Seller's casualty insurance policy; provided nothing in this
Article 6 limits or impairs Seller's rights under its insurance
policy to dispute that estimate. Also, Seller has no obligation
to dispute that estimate, unless Seller so desires, in Seller's
sole discretion.
ARTICLE 7
SELLER'S REPRESENTATIONS AND WARRANTIES
Section 7.1 Seller's Representations and Warranties.
Seller hereby represents and warrants to Buyer, which represen
tations and warranties shall also be deemed to be made on the
Date of Closing:
(a) No condemnation proceedings have been instituted
and Seller has received no written notice of any threatened
proceedings against the Property.
(b) There is no action, suit or proceeding pending or,
to Seller's actual knowledge, Seller has received no written
threat or has no actual knowledge of same against or
affecting the Property or relating to or arising out of the
ownership or use of the Property by Seller in any court or
before or by any federal, state, county or municipal depart
ment, commission, board, bureau, agency or other governmen
tal instrumentality.
(c) At Closing, there will be no unpaid bills or
claims in connection with any work by Seller on the Proper
ty, including, but not limited to, the unpaid balance of the
exterior waterproofing and refinishing project being
completed by Sevier Enterprises, which had an outstanding
unpaid balance of $27,942.57 as of June 6, 1997..
(d) Seller has the power and authority to enter into
this Contract and to consummate the transactions herein
contemplated; and neither the entering into of this Contract
nor the consummation of the transactions contemplated hereby
will constitute a violation or breach by Seller of any
contract or other instrument to which Seller is a party, or
to which it is subject, or by which any of its assets or
properties may be affected, or of any judgment, order, writ,
injunction or decree issued against or imposed upon it, or
will result in a violation of any applicable law, order,
rule or regulation of any governmental authority affecting
Seller.
(e) Neither Seller nor any partner thereof is a
"foreign person" under the Foreign Investment in Real Pro
perty Tax Act of 1980.
(f) No portion of the Property is subject to any
special assessments constituting a lien on the Property, and
Seller has not received any notice of any other, or
contemplated, special assessments affecting the Property.
(g) Seller has received no written notice from any
governmental entity or administrative agency having juris
diction over the Property stating that the Property is not
in compliance with any federal, state, county or municipal
laws, ordinances, orders or regulations applicable to the
Property.
(h) To Seller's actual knowledge, without independent
inquiry of any kind, no part of the Property has been used
for the disposal of "hazardous substances," "hazardous
materials," "toxic substances" or "solid waste" in violation
of and as those terms are currently defined as of the date
of this Contract in the Comprehensive Environmental Res
ponse, Compensation and Liability Act of 1980, as amended by
Superfund Amendments and Reauthorization Act of 1986, the
Resource Conservation and Recovery Act of 1976, the Hazar
dous Materials Transportation Act and applicable state
environmental laws, and in the regulations issued pursuant
thereto.
(i) Except as disclosed in the information provided
pursuant to Section 2.2, there are no other management ,
leasing, maintenance, service or other contracts relating to
the Property. If Buyer requests during the Inspection
Period, at Closing, Seller shall terminate any and all such
agreements so requested by Buyer in accordance with the
terms and conditions thereof but in no event prior to the
Closing Date.
(j) To Seller=s actual knowledge, Seller is not in
default in respect of any of its material obligations or
liabilities pertaining to the Property (including, but not
limited to, such obligations and liabilities under the
Service Contracts or Leases). To Seller=s actual knowledge,
no present dispute or fact exists which might with notice,
passage of time or both, give rise to a dispute under any
Service Contracts or Leases. As used herein, Seller=s
actual knowledge means the current actual (not constructive)
knowledge of Nick Ryan and Keith Fisher.
(k) To Seller=s actual knowledge, no person has any
title, interest or right to possession of any portion of the
Property as a lessee, tenant or concessionaire of Seller
except as shown on the Rent Roll. Except as disclosed in
writing to Buyer, the Rent Roll lists all Leases, amendments
and modifications thereof. Seller is not, and to Seller=s
actual knowledge no tenant is, in default in the performance
of or under any such Lease in any material respect except as
otherwise disclosed. The Rent Roll states all Deposits,
prepaid rents and other deposits or prepayments for each
Lease. No tenant is entitled to any rebate, concession,
special allowance or other benefits, except as stated in the
Leases. To Seller=s actual 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
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 actual 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 Property as lessees, tenants at sufferance,
trespassers or otherwise. To Seller=s actual knowledge,
there has been no material, adverse change with respect to
the information set forth in the Rent Roll. Except as
disclosed in the Rent Roll and the Campbell Lease
Commission, all presently due leasing commissions payable in
connection with the Leases have been paid in full. The Rent
Roll 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 Lease. Seller has paid in full all leases or
similar commissions or payment obligations, if any, relating
to any Lease except for the Campbell Lease Commission.
Except as specifically referenced in the Rent Roll, Buyer is
not assuming any obligations for tenant improvements or
purported leasing commissions. Seller shall indemnify and
hold Buyer harmless for any Loss with respect to any claims
by tenants or third party brokers for tenant improvements,
allowances or leasing commissions not expressly assumed by
Buyer.
(l) To Seller=s actual knowledge, the operating
statements delivered to Buyer pursuant to Section 2.2 are
true, accurate and complete in all material respects and
present fairly the results of operations for the periods
indicated on a consistent basis.
(m) To Seller=s actual knowledge, all documents which
shall be delivered to Buyer by or on behalf of Seller
pursuant to Section 2.2 of this Agreement shall be accurate
and complete in all material respects.
These representations and warranties shall survive the Closing
for a period of nine (9) months. If Buyer discovers that any of
these representations and warranties are inaccurate in any mater
ial respect prior to the Closing, Buyer's sole and exclusive
remedy, waiving all other remedies, shall be either to (I) termi
nate this Contract by giving notice to Seller prior to the Clos
ing Date or (ii) waive such representation and warranty in its
entirety and proceed to the Closing. If Buyer terminates this
Contract under this Section 7.1, the Earnest Money Deposit shall
be returned to Buyer and the parties shall have no further
rights, liabilities or obligations under this Contract.
Section 7.2 Buyer's Representations. Buyer hereby
represents and warrants to Seller, which representations and
warranties shall also be deemed to be made on the Date of
Closing:
(a) Buyer has the power and authority to enter into
this Contract and to consummate the transactions herein
contemplated; and neither the entering into of this Contract
nor the consummation of the transactions contemplated hereby
will constitute a violation or breach by Buyer of any
contract or other instrument to which Buyer is a party, or
to which it is subject, or by which any of its assets or
properties may be affected, or of any judgment, order, writ,
injunction or decree issued against or imposed upon it, or
will result in a violation of any applicable law, order,
rule or regulation of any governmental authority affecting
Buyer.
(b) Buyer has not discovered any facts or information
that indicate that any of the representations and warranties
provided by Seller in this Agreement are untrue and as of
Closing, Buyer will have previously disclosed to Seller any
such facts or information it discovered, if any.
Section 7.3 Covenants of Seller. Seller covenants and
agrees with Buyer as follows:
(a) Buyer 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 Buyer may reasonably determine is
necessary to comply with applicable securities laws
requirements, without limitation, Regulation ' 210.3-14
promulgated under the Securities Exchange Act of 1934, as
amended. All costs incurred as a result of a Buyer=s
undertaking such audit shall be borne exclusively by Buyer;
however, Seller shall make available such books, records and
materials as may be reasonably requested by Buyer or its
accountants in order to conduct such audit. All such audit
activities shall be conduced at Seller=s place of business
in a commercially reasonable fashion during normal business
hours and upon fifteen (15) days prior notice from Buyer to
Seller.
(b) Prior to Closing, Seller shall: (I) not cancel or
permit cancellation of any hazard or liability insurance
carried with respect to the Property, (ii) remedy all
material violations of laws, ordinances, orders or
requirements relating to the Property which are not caused
by Buyer and of which Seller have received actual notice and
provide Buyer with evidence of curing of same (provided that
Seller shall not be required to cure any such violations
that would require Seller to expend more than $5,000, in the
aggregate, with respect to such matters); and (iii) operate
the Property on a basis consistent with historical
operations, including, without limitation, undertaking all
reasonably required ordinary maintenance and repair of the
Property. Prior to Closing, Seller also will not, without
the prior written consent of Buyer, (I) sell, transfer or
dispose or become obligated to sell, transfer or dispose of
any of the Property, 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 Property other than in the ordinary course of the
business, or (iii) amend, renew, extend, modify or terminate
any Service Contracts, permit or Lease except as
contemplated by this Agreement or except in the ordinary
course of business. Seller will perform current or routine
maintenance and repairs in the ordinary course of business
of or to the Property as may be required or reasonably
appropriate to operate and maintain the Property including
tenant improvements under existing leases, but excluding
tenant improvements relating to new leases. Seller shall
complete the repair of water leaks and stucco replacement to
Building A of the Property in accordance with the work
specified by Sevier Enterprises. After expiration of the
Inspection Period, Seller shall be required to gain Buyer=s
written approval of any new or modified contract or
agreement which will affect the operation of the Property
after Closing.
(c) 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
Property incurred through the Closing Date, except amounts
subject to proration under Section 4.2.
(d) Prior to Closing, Seller shall notify Buyer of any
written notice received by Seller of (I) any material
adverse change in or to the Property 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 or (ii) any tort
claim filed against Seller relating to the Property that is
not covered by insurance.
(e) Before the Closing Date, 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
H from each Tenant (but not sublessees) referenced on the Rent
Roll including the two Tenants whose Lease terms commence in
October, 1997. Seller shall use reasonable efforts to obtain
an estoppel certificate from all of the tenants of the Property.
ARTICLE 8
MISCELLANEOUS
Section 8.1 Notices.
All notices, requests, approvals, and other communications
required or permitted to be delivered under this Contract must be
in writing and are effective:
(a) in the case of delivery by U.S. mail or by private
courier, upon receipt, or upon refusal to accept
delivery (such refusal being evidenced by the U.S.
Postal Services return receipt or similar advice from
the courier company);
(b) In the case of delivery by telecopy, upon receipt at
the party's office.
in each instance addressed to Seller or Buyer, as the case may
be, at the following addresses, or to any other address either
party may designate by notice to the other party:
Seller: Southland Investment Properties Partners
c/o Faison-Stone, Inc.
5215 North O'Connor Blvd.
Williams Square, Central Tower
Suite 1100
Irving, Texas 75039
Attention: Tim Couch
Telephone: (972) 432-3625
Telecopy: (972) 432-3650
With a copy to:Munsch, Hardt, Kopf, Harr & Dinan, P.C.
4000 Fountain Place
1445 Ross Avenue
Dallas, Texas
Attention: B. Carl Klinke
Telephone: (214) 855-7533
Telecopy: (214) 855-7584
Buyer: Parkway Properties, Inc.
300 One Jackson Place
188 East Capitol Street
Jackson, MS 39201-2195
Telephone: (601)948-4091
Telecopy: (601)949-4077
With a copy to:Forman Perry Watkins Krutz & Tardy, PLLC
1200 One Jackson Place
188 East Capitol Street
Jackson, Mississippi 39225-2608
Attention: Steven M. Hendrix
Telephone: (601) 960-8603
Telecopy: (601) 960-8609
Section 8.2 Performance.
Time is of the essence in the performance of the terms of this
Contract.
Section 8.3 Binding Effect.
This Contract is binding upon and inures to the benefit of the
successors and assigns of the parties.
Section 8.4 Entire Agreement/Disclaimer.
THIS CONTRACT EMBODIES THE COMPLETE AGREEMENT BETWEEN THE PARTIES
AND CANNOT BE VARIED EXCEPT BY WRITTEN AGREEMENT OF THE PARTIES.
EXCEPT AS MAY BE SPECIFICALLY STATED IN THE DEED OR THIS
CONTRACT, SELLER DISCLAIMS ANY WARRANTY, GUARANTY, OR
REPRESENTATION, ORAL OR WRITTEN, PAST, PRESENT, OR FUTURE,
CONCERNING:
(a) THE NATURE AND CONDITION OF THE PROPERTY AND THE
IMPROVEMENTS, INCLUDING, WITHOUT LIMITATION, THE WATER,
SOIL AND GEOLOGY, AND THE SUITABILITY THEREOF, FOR ANY
ACTIVITIES AND USES THAT BUYER MAY CONDUCT THEREON;
(b) THE NATURE AND EXTENT OF ANY RIGHT-OF-WAY, ENCUMBRANCE,
RESERVATION OR CONDITION;
(c) THE COMPLIANCE OF THE PROPERTY AND THE IMPROVEMENTS OR
THE COMPLIANCE OF ANY OPERATIONS ON THE PROPERTY WITH
ANY LAWS, RULES, ORDINANCES, OR REGULATIONS OF ANY
GOVERNMENT OR OTHER BODY;
(d) ANY ENVIRONMENTAL CONDITIONS THAT MAY EXIST ON THE
PROPERTY OR MAY BE INCORPORATED IN THE IMPROVEMENTS,
INCLUDING, WITHOUT LIMITATION, THE EXISTENCE OR NON-
EXISTENCE OR INCORPORATION OR NON-INCORPORATION OF
(1) ASBESTOS,
(2) POLYCHLORINATED BYPHENALS ("PCBS"), OR
(3) "HAZARDOUS SUBSTANCES," "HAZARDOUS
MATERIALS," "TOXIC SUBSTANCES," OR "SOLID
WASTE"AS SUCH TERMS ARE DEFINED IN
(i) THE COMPREHENSIVE ENVIRONMENTAL
RESPONSE COMPENSATION AND LIABILITY ACT
OF 1980, AS AMENDED BY SUPERFUND AMEND
MENTS AND REAUTHORIZATION ACT OF 1986,
(ii) THE RESOURCE CONSERVATION AND
RECOVERY ACT OF 1976,
(iii) THE HAZARDOUS MATERIALS
TRANSPORTATION ACT,
(iv) STATE ENVIRONMENTAL LAWS, AND
(v) THE REGULATIONS PROMULGATED
PURSUANT TO THOSE LAWS, ALL AS AMENDED
(ALL OF THE FOREGOING BEING REFERRED TO
AS THE "HAZARDOUS WASTE LAWS"); AND
(e) THE FINANCIAL EARNING CAPACITY OR HISTORY OR EXPENSE
HISTORY OF THE OPERATION OF THE PROPERTY.
THE CONVEYANCE OF THE PROPERTY IS MADE ON AN "AS-IS" BASIS, AND
BUYER EXPRESSLY ACKNOWLEDGES THAT, IN CONSIDERATION OF THE
AGREEMENTS OF SELLER HEREIN, EXCEPT AS OTHERWISE SPECIFIED HEREIN
OR IN THE DEED, SELLER MAKES NO WARRANTY OR REPRESENTATION,
EXPRESS OR IMPLIED, OR ARISING BY OPERATION OF LAW, INCLUDING,
BUT IN NO WAY LIMITED TO, ANY WARRANTY OF CONDITION, TENANT
ABILITY, MERCHANTABILITY, OR FITNESS FOR A PARTICULAR PURPOSE OF
THE PROPERTY.
BUYER ACKNOWLEDGES, WARRANTS, AND REPRESENTS TO SELLER THAT NO
REPRESENTATIONS HAVE BEEN MADE BY SELLER, ITS AGENTS, BROKERS, OR
EMPLOYEES IN ORDER TO INDUCE BUYER TO ENTER INTO THIS TRANSACTION
OTHER THAN AS EXPRESSLY STATED IN THIS CONTRACT. WITHOUT
LIMITING THE GENERALITY OF THE FOREGOING, BUYER ACKNOWLEDGES,
WARRANTS, AND REPRESENTS TO SELLER THAT NEITHER SELLER NOR
SELLER'S AGENTS, BROKERS, OR EMPLOYEES HAVE MADE ANY REPRESENTA
TION OR STATEMENT TO BUYER CONCERNING THE PROPERTY'S INVESTMENT
POTENTIAL OR RESALE AT ANY FUTURE DATE, AT A PROFIT OR OTHERWISE,
NOR HAS SELLER OR SELLER'S AGENTS, BROKERS, OR EMPLOYEES RENDERED
ANY ADVICE OR EXPRESSED ANY OPINION TO BUYER REGARDING ANY INCOME
TAX CONSEQUENCES OF OWNERSHIP OF THE PROPERTY.
OTHER THAN AS EXPRESSLY STATED IN THIS CONTRACT, BUYER
ACKNOWLEDGES THAT ANY REPORTS SUPPLIED OR MADE AVAILABLE BY
SELLER, WHETHER WRITTEN OR ORAL, OR IN THE FORM OF MAPS, SURVEYS,
PLATS, SOIL REPORTS, ENGINEERING STUDIES, ENVIRONMENTAL STUDIES,
OR OTHER INSPECTION REPORTS PERTAINING TO THE PROPERTY
("REPORTS") ARE BEING DELIVERED TO BUYER ON AN "AS-IS/WHERE-IS"
BASIS SOLELY AS A COURTESY AND THAT SELLER HAS NEITHER VERIFIED
THE ACCURACY OF ANY STATEMENTS OR OTHER INFORMATION THEREIN
CONTAINED, NOR ANY METHOD USED TO COMPILE THE REPORTS OR THE
QUALIFICATIONS OF THE PERSON(S) PREPARING THE REPORTS AND SELLER
MAKES NO REPRESENTATIONS, EXPRESS OR IMPLIED, OR ARISING BY OPERA
TION OF LAW AS TO THE ACCURACY, COMPLETENESS, OR ANY OTHER ASPECT
OF THE REPORTS.
BUYER EXPRESSLY WAIVES ANY AND ALL WARRANTIES AND REPRESENTATIONS
OF SELLER NOT SET FORTH IN THIS CONTRACT OR THE DEED.
SECTION 8.5 WAIVER OF ENVIRONMENTAL LIABILITY.
BUYER WAIVES AND RELINQUISHES SELLER, SELLER'S AGENTS, PARTNERS,
EMPLOYEES, OFFICERS, DIRECTORS, TRUSTEES, REPRESENTATIVES, AND
SUCCESSORS (COLLECTIVELY, THE RELEASED PARTIES) FROM, ANY RIGHTS,
CLAIMS, DEMANDS, ACTIONS AND REMEDIES THAT IT MAY NOW OR MAY
HEREAFTER HAVE AGAINST, THE RELEASED PARTIES FOR, OR ON ACCOUNT
OF, ANY LIABILITY, DAMAGE, OR CLAIM BY OR AGAINST THE RELEASED
PARTIES DUE TO THE EXISTENCE, DISCHARGE, THREAT OF DISCHARGE,
PLACEMENT, OR RELEASE OF ANY ASBESTOS, PCBS, HAZARDOUS MATERIALS,
HAZARDOUS SUBSTANCES, TOXIC SUBSTANCES, OR SOLID WASTE ON, FROM,
OR ONTO THE PROPERTY OR INCORPORATED IN THE IMPROVEMENTS.
Section 8.6 Assignment.
Buyer may assign its rights under this Agreement to a wholly
owned subsidiary of Buyer, or to a limited partnership controlled
by either Buyer or its wholly owned subsidiary without Seller=s
consent; provided, however, no such assignment shall relieve
Buyer 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
Buyer shall not assign their respective rights, obligations or
interest under this Agreement without the prior written consent
of the other.
Section 8.7 Commissions.
(a) Each party hereby warrants to the other party that:
(1) it has not dealt with any real estate broker or
salesman in the negotiation of this Contract
except Faison Stone, Inc.(Broker); and
(2) no real estate commission is due upon the
execution of this Contract.
(b) If this Contract closes, Seller shall pay to Broker at
the Closing a commission (the Commission) equal to two
percent (2%) of the Purchase Price. Broker may further
divide its commission with co-brokers. No commission
is payable if this Contract does not close for any
reason.
(c) Each party shall indemnify and hold harmless the other
party against any other real estate commissions due by
virtue of the execution or Closing of this Contract,
the obligation or asserted claim for which arises from
actions taken or claimed to be taken by the
indemnifying party.
(d) Buyer is notified by Broker that it should have an
abstract of title to the Property examined by an
attorney of its selection or obtain or be provided with
a policy of title insurance. Buyer acknowledges
receipt of Broker's notice.
Section 8.8 Survival.
Any of the provisions of this Contract pertaining to a period of
time following Closing survive Closing and the delivery of the
documents provided for in Section 4.1 hereof and are not merged
in those documents. All indemnities in this Contract and the
provisions of Sections 3.2, 4.2, 5.2, 8.4, 8.5, 8.7, 8.8, 8.10,
8.12 and 8.21 of this Contract survive the Closing or any termina
tion of this Contract.
Section 8.9 Headings.
Paragraph headings or captions are used in this Contract for
convenience only and do not limit or otherwise affect the meaning
of any provision of this Contract.
Section 8.10 Earnest Money Deposit and Release.
If either Seller or Buyer becomes entitled to the Earnest Money
Deposit upon termination of this Contract, Title Company is
authorized and directed to pay immediately the Earnest Money
Deposit to the party entitled to receive it. In the event Title
Company requires same, Buyer and Seller shall deliver a letter of
instruction to Title Company directing the disbursement of the
Earnest Money Deposit to the party entitled it, if Title Company
requests a letter of instruction. If this Contract terminates,
Buyer shall execute, acknowledge and deliver to Seller upon
demand an instrument in recordable form evidencing the
termination of the Contract and waiving and releasing all rights
of Buyer to the Property.
Section 8.11 Holidays, Etc.
Whenever any time limit or date provided herein falls on a
Saturday, Sunday or legal holiday under the laws of the State of
Texas, then that date is extended to the next day that is not a
Saturday, Sunday or legal holiday. The term business day as used
in this Contract means any day that is not a Saturday, Sunday or
legal holiday under the laws of the State of Texas.
Section 8.12 Attorneys' Fees.
In the event of litigation concerning the interpretation or
enforcement of this Contract, the prevailing party is entitled to
recover from the losing party its attorneys' fees, court costs
and expenses, whether at the trial or appellate level.
Section 8.13 Governing Law.
The laws of the State of Texas govern this Contract.
Section 8.14 No Recordation.
Neither Seller nor Buyer may record this Contract or a memorandum
of this Contract in the Real Property Records of Dallas County,
Texas.
Section 8.15 Severability.
If any of the provisions contained in this Contract is
unenforceable in any respect, the remainder of this Contract
will, nevertheless, remain enforceable.
Section 8.16 Rule of Construction.
Each party and its counsel have reviewed and revised this Con
tract. The normal rule of construction to the effect that any
ambiguities are to be resolved against the drafting party may not
be employed in the interpretation of this Contract or any
amendments, schedules, or exhibits hereto.
Section 8.17 Offer to Buy.
Upon execution by Buyer, this Contract is an offer to buy the
Property that terminates at 5:00 P.M.,, Texas, time, on the fifth
(5th) business day after the date of Buyer's execution of this
Contract unless prior to such time, Seller delivers to Title
Company two (2) copies of this Contract executed by Seller. The
Title Company shall then notify Buyer of its receipt of the two
(2) copies of the Contract and when Buyer tenders the Earnest
Money Deposit to the Title Company in accordance with Section
1.3, the Title Company shall execute this Contract and return one
fully executed copy of this Contract to Buyer and one fully
executed copy of this Contract to Seller.
Section 8.18 Effective Date.
The Effective Date of this Contract is the date of execution of
this Contract by Title Company.
Section 8.19 Independent Contract Consideration.
Buyer tenders to Seller and Seller acknowledges receipt of the
sum of ONE HUNDRED DOLLARS ($100.00) as independent and non-
refundable contract consideration for any options granted in this
Contract. This independent consideration is in addition to any
other deposits made under this Contract.
Section 8.20 Counterparts.
This Contract may be executed in one or more counterparts. Each
counterpart is an original and proof of this Contract may be made
without more than one counterpart.
Section 8.21 Limitation on Recourse.
Notwithstanding anything to the contrary contained herein or in
any document related hereto, Buyer's recourse against Seller with
respect to any obligation, responsibility, undertaking, duty or
liability of any kind or nature under or in connection with this
Contract or any other related agreement or transaction, whether
liquidated, unliquidated, claimed or adjudged, shall be and is
hereby limited to the assets of the Seller as an entity, and no
general partner or limited partner comprising the Seller or any
other person or entity whatsoever shall have any liability
whatsoever, direct, indirect, contingent or otherwise, in
connection therewith.
Notwithstanding anything contained herein to the contrary, Seller
hereby acknowledges and agrees that no limited partner of Buyer,
nor any trustee, director, holder of any beneficial interests,
shareholder, officer or employee of any affiliate thereof (except
any general partner of Buyer or any 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 shall have recourse
hereunder only against Buyer=s assets or the assets of its
general partner(s). Each document to be executed as Closing
shall contain a similar exculpation provision.
Section 8.22 Approvals.
Notwithstanding anything to the contrary, this Contract is
binding on Seller only upon written approval of this Contract by
the Executive Committee of Seller.
EXECUTED by Buyer on this the ____ day of
_______________________, 1997.
BUYER
Parkway Properties, Inc.
a Maryland corporation
By:
Name:
Title:
By:
Name:
Title:
EXECUTED by Seller on this _____ day of ___________, 1997.
SELLER
SOUTHLAND INVESTMENT PROPERTIES
PARTNERS, a Delaware general
partnership
BY: LAS COLINAS INVESTMENT
PROPERTIES LIMITED
PARTNERSHIP, a
Delaware limited partnership,
Managing General Partner
By: Faison-Stone, Inc., a
Texas corporation,
Manager
By:
Name:
Title:
The undersigned acknowledges receipt of a fully executed
copy of this Contract. The undersigned further acknowledges
receipt of the Earnest Money Deposit. The undersigned agrees to
hold and pay the Earnest Money Deposit in accordance with the
provisions of this Contract.
EXECUTED THIS ____ day of _____________, 1997.
TITLE COMPANY
AMERICAN TITLE COMPANY, a
_____________ corporation
By:
Name:
Title:
EXHIBIT A
LEGAL DESCRIPTION OF THE PROPERTY
EXHIBIT B
INTENTIONALLY OMITTED.
EXHIBIT C
ASSIGNMENT OF LEASES, TRADE NAMES, AND SECURITY DEPOSITS
This Assignment of Leases, Trade Names, and Security
Deposits (this Assignment) is made as of _______________, 1997,
by SOUTHLAND INVESTMENT PROPERTIES PARTNERS, a Delaware general
partnership (Grantor), and __________________________, a
_____________________ (Grantee).
ASSIGNMENT
For and in consideration of the sum of Ten and No/100
Dollars ($10.00) cash and other good and valuable considerations
to Grantor paid by Grantee (hereinafter named), the receipt and
sufficiency of which are hereby acknowledged, Grantor and Grantee
agree as follows:
1. Assignment.
Grantor GRANTS, SELLS, and CONVEYS to Grantee, subject to the
Permitted Exceptions (defined below), all of Grantor's interests
in the following described properties, rights, estates and
interests that are located on, affixed to, or used in connection
with the real property (the Real Property) described on Exhibit A
attached to this Assignment (the Property):
o all leases for space on the Real Property or in the
improvements on the Real Property (the Leases), and the leasehold
estates created thereby, together with all and singular the
rights, benefits, and privileges of the lessor thereunder;
o all rents, issues, and profits arising from the Leases,
o all service contracts, vending agreements, other leases,
lease commission agreements, licenses, occupancy agreements, or
permits with respect to the Real Property listed on Schedule 1
attached hereto (the Contracts) and the rents, issues, profits
from the Contracts, if any;
o all security deposits and other deposits and security
deposit accounts maintained with respect to the Leases or the
Real Property listed on Schedule 2 attached hereto; and
o all trade names and trademarks owned or used by Grantor in
connection with the operation of the Real Property, together with
all appurtenances and rights related to such trade name or
trademark, including, but not limited to, the goodwill associated
therewith, telephone listings, telephone advertising, and
telephone and utility deposits affecting the Real Property.
TO HAVE AND TO HOLD the Property to Grantee, its successors and
assigns forever. Grantor binds itself, its successors and
assigns, to WARRANT AND FOREVER DEFEND, all and singular the
Property, subject to the Permitted Encumbrances and the
warranties, covenants, and conditions in this Assignment, to
Grantee, its successors and assigns, against every person
whomsoever lawfully claiming or to claim the Property or any part
thereof, by, through and under Grantor, but not otherwise.
2. Assumption.
Grantee assumes and agrees to perform all of the terms, covenants
and conditions of the Leases and the Contracts, on the part of
the lessor or on the part of the Grantor, as the case may be,
therein required to be performed arising on or after the date of
this Assignment.
3. Permitted Exceptions.
This Assignment is executed by Grantor, and accepted by Grantee,
subject to all liens, security interests, restrictions,
conditions, limitations, easements, reservations, and
encumbrances of record in Dallas County, Texas, affecting the
Property, to the extent valid and enforceable and which are
listed on Exhibit B attached to this Assignment (the Permitted
Exceptions).
4. Indemnities.
Grantor shall indemnify and hold Grantee harmless from any and
all liabilities, claims, demands, damages, and causes of actions
that may now or hereafter be made or asserted against Grantee
arising out of or related to the Contracts or the Leases for acts
or omissions of Grantor occurring prior to the date of this
Assignment.
Grantee shall indemnify and hold Grantor harmless from any and
all liabilities, claims, demands, damages, and causes of actions
that may now or hereafter be made or asserted against Grantor
arising out of or related to the Contracts or the Leases for acts
or omissions occurring on or after the date of this Assignment.
5. Limitation on Recourse.
Notwithstanding anything to the contrary contained in this
Assignment or in any document related to this Assignment,
Grantee's recourse against Grantor with respect to any warranty,
covenant, responsibility, undertaking, duty, liability, or
obligation of any kind or nature under or in connection with this
Assignment or any other related agreement or transaction whether
liquidated, unliquidated, claimed, or adjudged is limited to the
assets of Grantor as an entity, and no general or limited partner
comprising Grantor or any other person or entity whatsoever has
any liability whatsoever, direct, indirect, contingent or
otherwise, in connection therewith.
Notwithstanding anything contained herein to the contrary,
Grantor hereby acknowledges and agrees that no limited partner of
Grantee, nor any trustee, director, holder of any beneficial
interests, shareholder, officer or employee of any affiliate
thereof (except any general partner of Grantee or any such
affiliate) shall have any personal liability, directly or
indirectly, under this Assignment or under any certificate,
representation, warranty or other instrument delivered in
connection herewith, and Grantor shall have recourse hereunder
only against Grantee=s assets or the assets of its general
partner(s).
DATED EFFECTIVE as of the first date above-written.
GRANTOR:
SOUTHLAND INVESTMENT PROPERTIES
PARTNERS, a Delaware general
partnership
BY: Las Colinas Investment
Properties Limited
Partnership, a Delaware
limited partnership, Managing
General Partner
By: Faison-Stone, Inc., a
Texas corporation,
Manager
By:
Name:
Title:
GRANTEE:
Parkway Properties, Inc.
a
By:
Name:
Title:
Exhibit A
Description of Real Property
Exhibit B
Permitted Exceptions
SCHEDULE 1
List of Contracts
SCHEDULE 2
List of Deposits
EXHIBIT D
TENANT NOTICE LETTERS
[Name and Address of Tenant]
Re: Change of Ownership
___________________
Irving, Texas (the Property)
Ladies and Gentlemen:
This letter is to notify you, as a tenant at the Property, that
the present owner, Southland Investment Properties Partners, a
Delaware general partnership (Seller), has this date conveyed and
transferred ownership of the Property to
_________________________, a _____________________ (Buyer).
In connection with this conveyance, all of Seller's interest as
landlord under your lease has been transferred and assigned to
Buyer. Beginning ____________ 1, 1997, please make all rental
payments payable to Buyer and deliver them to:
_____________________
_____________________
_____________________
All questions or other matters regarding your lease at the
Property should be coordinated through ____________________, at
the above address, whose telephone number is _______________.
In connection with the conveyance, your security deposit in the
amount of $_______.00 has been transferred to Buyer, who has
assumed responsibility for this security deposit, and all future
matters regarding this security deposit are to be coordinated
with Buyer. Security deposit returns will be conditioned upon
and subject to existing agreements.
Very truly yours,
SOUTHLAND INVESTMENT PROPERTIES
PARTNERS, a Delaware general part-
nership
By: Las Colinas Investment
Properties Limited
Partnership, a Delaware
limited partnership, Managing
General Partner
By: Faison-Stone, Inc., a
Texas corporation,
Manager
By:
Name:
Title:
EXHIBIT E
SPECIAL WARRANTY DEED
This Special Warranty Deed (this Deed) is made as of
_______________, 1997, by SOUTHLAND INVESTMENT PROPERTIES
PARTNERS, a Delaware general partnership (Grantor) to
__________________________, a _________________________
(Grantee).
For and in consideration of the sum of Ten and No/100 Dollars and
other valuable consideration to Grantor paid by the Grantee, the
receipt of which is hereby acknowledged, Grantor and Grantee
agree as follows:
1. Conveyance and Warranty of Title.
Grantor GRANTS, SELLS, and CONVEYS to Grantee, subject to the
Permitted Exceptions (defined below), all of the real property
(the Property) more particularly described in Exhibit A attached
to this Deed.
TO HAVE AND TO HOLD the Property, subject to the Permitted
Exceptions, together with all and singular the rights and appurte
nances thereto in anywise belonging, to Grantee, its successors
and assigns, forever; and Grantor binds itself, its successors
and assigns, to WARRANT AND FOREVER DEFEND all and singular the
Property to Grantee, its 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.
2. Permitted Exceptions.
This Deed is made, and is accepted by Grantee, subject to the
restrictions, easements, covenants, encumbrances, and liens
described on Exhibit B attached hereto and incorporated herein by
reference for all purposes (the Permitted Exceptions).
3. Taxes and Assessments.
Grantee, by accepting delivery of this Deed, has assumed and
agreed to pay the taxes and assessments for the current year.
Grantee's acceptance of delivery of this Deed is evidenced by its
recordation.
4. Limitation on Recourse.
Notwithstanding anything to the contrary contained in this Deed
or in any document related to this Deed, Grantee's recourse
against Grantor with respect to any warranty, covenant,
responsibility, undertaking, duty, liability, or obligation of
any kind or nature under or in connection with this Deed or any
other related agreement or transaction whether liquidated,
unliquidated, claimed, or adjudged is limited to the assets of
Grantor as an entity, and no general or limited partner
comprising Grantor or any other person or entity whatsoever has
any liability whatsoever, direct, indirect, contingent, or
otherwise, in connection therewith.
EXECUTED as of the date first above written.
GRANTOR:
SOUTHLAND INVESTMENT PROPERTIES
PARTNERS, a Delaware general
partnership
By: Las Colinas Investment
Properties Limited
Partnership, a Delaware
limited partnership, Managing
General Partner
By: Faison-Stone, Inc., a
Texas corporation,
Manager
By:
Name:
Title:
STATE OF TEXAS
COUNTY OF DALLAS
This instrument was acknowledged before me on
______________, 1997, by ,
of Faison-Stone, Inc., a Texas corporation, Manager for Las
Colinas Investment Properties Limited Partnership, a Delaware
limited partnership, Managing General Partner of Southland
Investment Properties Partners, a Delaware general partnership,
on behalf of said partnerships and corporation.
NOTARY PUBLIC, STATE OF TEXAS
[Stamped Notary Seal]
GRANTEE'S ADDRESS:
Exhibit A
Description of Real Property
Exhibit B
Permitted Exceptions
EXHIBIT F
SPECIAL WARRANTY BILL OF SALE
This Special Warranty Bill of Sale is made as of _______________,
1997, by SOUTHLAND INVESTMENT PROPERTIES PARTNERS, a Delaware
general partnership (Grantor) to __________________________, a
_____________________ (Grantee).
For and in consideration of the sum of Ten and No/100 Dollars and
other valuable consideration to Grantor paid by the Grantee, the
receipt of which is hereby acknowledged, Grantor and Grantee
agree as follows:
1. Conveyance and Warranty of Title.
Grantor GRANTS, SELLS, and CONVEYS to Grantee, subject to the
Permitted Exceptions (defined below), all of Seller's interest in
all equipment, furniture, fittings, fixtures, and articles of
personal property owned by Seller and located on the real
property described in Exhibit A attached to this Bill of Sale and
more particularly described in Exhibit B attached to this Bill of
Sale (such equipment, furniture, fittings, fixtures, and articles
of personal property are referred to collectively as the Personal
Property); provided, however, THIS CONVEYANCE IS MADE ON AN "AS-
IS", "WHERE-IS' BASIS AND GRANTOR MAKES AND IT HEREBY DISCLAIMS
ANY AND ALL WARRANTIES AND REPRESENTATIONS, EXPRESS OR IMPLIED,
OR ARISING BY OPERATION OF LAW, INCLUDING, WITHOUT LIMITATION,
ANY WARRANTY OF CONDITION, USABILITY, MERCHANTABILITY OR FITNESS
FOR A PARTICULAR PURPOSE.
TO HAVE AND TO HOLD the Personal Property, subject to the
Permitted Exceptions, to Grantee, its successors and assigns
forever; and Grantor binds itself, its successors and assigns, to
WARRANT AND FOREVER DEFEND all and singular the Personal Property
to Grantee, its successors and assigns, against every person
whomsoever lawfully claiming or to claim the Personal Property or
any part thereof, by, through, or under Grantor, but not
otherwise.
2. Permitted Exceptions.
This Bill of Sale is executed by Grantor, and accepted by
Grantee, subject to all liens, security interests, restrictions,
conditions, limitations, easements, reservations, and
encumbrances of record in Dallas County, Texas, affecting the
Personal Property, to the extent valid and enforceable and which
are listed on Exhibit C attached to this Bill of Sale (the
Permitted Exceptions).
3. Limitation on Recourse.
Notwithstanding anything to the contrary contained in this Bill
of Sale or in any document related to this Bill of Sale,
Grantee's recourse against Grantor with respect to any warranty,
covenant, responsibility, undertaking, duty, liability, or
obligation of any kind or nature under or in connection with this
Bill of Sale or any other related agreement or transaction
whether liquidated, unliquidated, claimed, or adjudged is limited
to the assets of Grantor, as an entity, and no general or limited
partner comprising Grantor or any other person or entity
whatsoever has any liability whatsoever, direct, indirect,
contingent, or otherwise, in connection therewith.
Notwithstanding anything contained herein to the contrary,
Grantor hereby acknowledges and agrees that no limited partner of
Grantee, nor any trustee, director, holder of any beneficial
interests, shareholder, officer or employee of any affiliate
thereof (except any general partner of Grantee or any such
affiliate) shall have any personal liability, directly or
indirectly, under this Bill of Sale or under any certificate,
representation, warranty or other instrument delivered in
connection herewith, and Grantor shall have recourse hereunder
only against Grantee=s assets or the assets of its general
partner(s).
EXECUTED as of the date first above written.
GRANTOR:
SOUTHLAND INVESTMENT PROPERTIES
PARTNERS, a Delaware general
partnership
BY: Las Colinas Investment
Properties Limited
Partnership, a Delaware
limited partnership, Managing
General Partner
By: Faison-Stone, Inc., a
Texas corporation,
Manager
By:
Name:
Title:
Exhibit A
Description of Real Property
Exhibit B
Description of Personal Property
Exhibit C
Permitted Exceptions
EXHIBIT G
IRC SECTION 1445 CERTIFICATE
SUBJECT
PROPERTY: The real property described on Exhibit A
attached hereto and made a part hereof.
SELLER: SOUTHLAND INVESTMENT PROPERTIES PARTNERS, a
Delaware general partnership
BUYER: _________________________, a
_____________________
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 Buyer that the
withholding of tax is not required upon the disposition of a U.S.
real property interest by Seller, the undersigned hereby
certifies the following on behalf of Seller:
1. Seller 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. Seller's U.S. employer identification number is
____________________; and
3. Seller's office address is 5215 N. O'Connor Blvd.,
Suite 1100, Williams Square - Central Tower, Irving, Texas
75039.
Seller understands that this certification may be disclosed
to the Internal Revenue Service by Buyer and that any false
statement contained herein could be punished by fine,
imprisonment, or both.
Under penalties of perjury, I declare that I have examined
this certification and to the best of my knowledge and belief, it
is true, correct, and complete, and I further declare that I have
authority to sign this document on behalf of Seller.
EXECUTED as of the _____ day of _________________, 1997.
SOUTHLAND INVESTMENT PROPERTIES
PARTNERS, a Delaware general
partnership
By: Las Colinas Investment
Properties Limited
Partnership, a Delaware
limited partnership, Managing
General Partner
By: Faison-Stone, Inc., a
Texas corporation,
Manager
By:
Name:
Title:
Exhibit A
Description of Real Property
EXHIBIT H
FORM OF TENANT ESTOPPEL CERTIFICATE
Parkway Properties, Inc.
300 One Jackson Place
188 East Capitol Street
Jackson, MS 39201
Re:
Gentlemen:
The undersigned as Tenant hereby certifies to Parkway
Properties, Inc., and its successors or assigns ("Buyer"), 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 Expenses Charges:
Square Footage:
Original term (or current option period, if applicable)
expires:
Security Deposit and/or Lease Deposit: $
Outstanding Tenant Improvement Allowance (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) Except as set forth below, 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) To Tenant's actual knowledge, 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) To Tenant's actual knowledge, all requirements of the
Lease have been complied with an 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) Except for ______________________________, 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 Buyer acquires title to the
Property:
(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 Buyer or Mortgagee, without
first obtaining Buyer's prior written approval;
(k) 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.
(l) Buyer 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 Property, and Tenant hereby expressly
consents to such Assignment and has no notice of a
prior Assignment of the Leases or the rents thereunder
other than to Landlord=s current lender;
(m) 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 Buyer 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 Buyer, its successors and assigns, that each of
the foregoing representations is true, correct and complete as of
the date hereof.
By:
Name:
Title:
Date:
