UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
----------------------------------
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d)
of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): Dec. 24, 1996
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PARKWAY PROPERTIES, INC.
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(Exact name of Registrant as specified in its charter)
Maryland 1-11533 74-2123597
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(State or other (Commission File Number) (IRS Employer
jurisdiction of Identification
incorporation) Number)
300 One Jackson Place, 188 E. Capitol St., Jackson, MS 39201
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (601) 948-4091
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(Former name or former address, if changed since last report)
FORM 8-K
PARKWAY PROPERTIES, INC.
Item 2. Acquisition or Disposition of Assets.
On December 24, 1996, Parkway Properties, Inc.
("Parkway") sold its Virginia Beach mortgage loan for
$9,700,000 in cash to an unrelated party. This mortgage loan
represented a second mortgage on the Pembroke Office Park in
Virginia Beach, Virginia. A portion of the proceeds from the sale
were used to repay seven underlying first mortgages on the office
buildings totaling $4,415,000. Parkway will recognize a gain of
approximately $3,560,000 on the transaction in the fourth quarter
of 1996.
Item 7. Financial Statements and Exhibits.
(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) 4
Pro Forma Consolidated Balance Sheet (Unaudited) -
As of September 30, 1996 5
Pro Forma Consolidated Statement of Income (Unaudited) -
For the Twelve Months Ended December 31, 1995 7
Pro Forma Consolidated Statement of Income (Unaudited) -
For the Nine Months Ended September 30, 1996 8
Notes to Pro Forma Consolidated Financial
Statements (Unaudited) 9
(c) Exhibits.
(10) Note Purchase Agreement among Allied
Capital Commercial Corporation and Parkway Properties,
Inc. dated December 24, 1996. Parkway agrees to
furnish supplementally to the Securities and Exchange
Commission on request a copy of any omitted schedule or
exhibit to this agreement.
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: January 7, 1997
PARKWAY PROPERTIES, INC.
BY: /s/Sarah P. Clark
Sarah P. Clark
Vice President, Chief Financial
Officer, Treasurer and Secretary
PARKWAY PROPERTIES, INC.
Pro Forma Consolidated Financial Statements
(Unaudited)
The following unaudited pro forma consolidated balance sheet as
of September 30, 1996 and pro forma consolidated statements of
income of Parkway Properties, Inc. ("Parkway") for the twelve
months ended December 31, 1995 and nine months ended September 30, 1996
give effect to the December 24, 1996 sale of the Virginia Beach mortgage
loan and the September 30, 1996 purchase of the BB&T Financial Center.
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 sale of the Virginia Beach mortgage loan as if the
transaction occurred on September 30, 1996. No pro forma
adjustments were needed for the purchase of the BB&T Finanical
Center due to the September 30th purchase date.
The pro forma consolidated statements of income set forth the
effects of Parkway's September 30, 1996 purchase of the BB&T
Financial Center, August 9, 1996 purchase of the Falls Pointe and
Roswell North Buildings, the July 9, 1996 purchase of the
Cherokee Business Center and the 8381 and 8391 Courthouse Road
Buildings, the April 15, 1996 purchase of the 400 North Belt and
Woodbranch Buldings, the July 31, 1995 purchase of Mtel Centre',
the October 2, 1995 purchase of the IBM Building and the December
19, 1995 purchase of the Waterstone Building. In addition, the
adjustments include 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 financing on certain
recent property acquisitions as if the transactions occurred
January 1, 1995.
These pro forma consolidated financial statements may not be
indicative of the results that actually would have occurred if
the purchases, 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 financial statements and notes of Parkway
included in its annual report on Form 1O-KSB for the period ended
December 31, 1995.
PARKWAY PROPERTIES, INC. AND SUBSIDIARIES
PRO FORMA CONSOLIDATED BALANCE SHEET
SEPTEMBER 30, 1996
(Unaudited)
Parkway Pro Forma(2) Parkway
Historical Adjustments Pro Forma
---------- ----------- ---------
(In thousands)
Assets
Real estate related investments
Office buildings.............$129,507 $ - $129,507
Accumulated depreciation..... (8,671) - (8,671)
-------- -------- --------
120,836 - 120,836
Real estate held for sale
Land....................... 8,206 - 8,206
Operating properties....... 3,928 - 3,928
Mortgage loans............... 6,173 (5,784) 389
Real estate securities....... 507 - 507
Real estate partnerships and
corporate joint venture.... 312 - 312
-------- -------- --------
139,962 (5,784) 134,178
Interest and rents receivable
and other assets............. 3,865 (227) 3,638
Cash and cash equivalents...... 134 8,115 8,249
-------- -------- --------
$143,961 $ 2,104 $146,065
======== ======== ========
Liabilities
Notes payable to banks.........$ 6,836 $(6,836) $ -
Mortgage notes payable without
recourse..................... 53,452 9,850 63,302
Mortgage notes payable on wrap
mortgages.................... 4,470 (4,470) -
Accounts payable and other
liabilities.................. 5,999 - 5,999
-------- -------- --------
70,757 (1,456) 69,301
-------- -------- --------
Shareholders' Equity
Preferred stock, $.001 par
value, 576,000 shares
authorized, 576,000 shares
issued in 1996............... 1 1
Common stock, $.001 par value,
69,424,000 shares authorized,
3,636,421 shares issued...... 3 - 3
Additional paid-in capital..... 51,924 - 51,924
Retained earnings.............. 21,061 3,560 24,621
-------- -------- --------
72,989 3,560 76,549
Unrealized gain on securities.. 215 - 215
-------- -------- --------
73,204 3,560 76,764
-------- -------- --------
$143,961 $ 2,104 $146,065
======== ======== ========
PARKWAY PROPERTIES, INC. AND SUBSIDIARIES
PRO FORMA CONSOLIDATED STATEMENT OF INCOME
FOR THE TWELVE MONTHS ENDED 12/31/95
(Unaudited)
Parkway Pro Forma Parkway
Historical Adjustments Pro Forma
---------- ----------- ---------
(In thousands, except per share data)
Revenues
Income from real estate
properties.......................$ 8,941 $16,149 (a)$25,090
Interest on mortgage loans......... 1,421 (1,265)(e) 156
Management company income.......... 1,041 - 1,041
Equity in earnings
Real estate companies............ 135 - 135
Real estate partnerships and
corporate joint venture........ 116 - 116
Interest on investments............ 167 - 167
Dividend income.................... 601 - 601
Deferred gains and other income.... 345 - 345
Gain on real estate
and mortgage loans............... 6,552 - 6,552
Gain on securities................. 4,314 - 4,314
------- ------- -------
23,633 14,884 38,517
------- ------- -------
Expenses
Real estate owned
Operating expense................ 4,876 7,508 (a) 12,384
Interest expense................. 2,230 3,065 (c) 5,295
Depreciation and amortization.... 1,331 1,922 (a) 3,253
Minority interest................ (100) - (100)
Interest expense
Notes payable to banks........... 156 (156) (e) -
Notes payable on wrap mortgages.. 135 - 135
Management company expenses........ 804 - 804
Other expenses..................... 2,299 - 2,299
------- ------- -------
11,731 12,339 24,070
------- ------- -------
Income before taxes................ 11,902 2,545 14,447
Income tax provision............... 82 - (4) 82
------- ------- -------
Net income.........................$11,820 $ 2,545 $14,365
======= ======= =======
Net income per share...............$ 4.24 $ 3.66
======= =======
Weighted average shares
outstanding...................... 2,787 3,927
======= =======
PARKWAY PROPERTIES, INC. AND SUBSIDIARIES
PRO FORMA CONSOLIDATED STATEMENT OF INCOME
FOR THE NINE MONTHS ENDED 9/30/96
(Unaudited)
Parkway Pro Forma Parkway
Historical Adjustments Pro Forma
---------- ----------- ---------
(In thousands, except per share data)
Revenues
Income from real estate
properties...................... $13,559 $ 6,186 (b) $19,745
Management company income......... 537 - 537
Interest on mortgage loans........ 1,435 (1,384)(f) 51
Equity in earnings:
Real estate partnerships and
corporate joint venture....... 121 - 121
Gain on securities................ 304 - 304
Interest on investments........... 471 - 471
Deferred gains and other income... 91 - 91
Dividend income................... 118 - 118
Gain on real estate and mortgage
loans........................... 5,863 - 5,863
------- ------- -------
22,499 4,802 27,301
------- ------- -------
Expenses
Real estate owned:
Operating expense............... 6,570 2,525 (b) 9,095
Interest expense................ 2,390 1,226 (d) 3,616
Depreciation and amortization... 1,591 797 (b) 2,388
Minority interest............... (12) - (12)
Interest expense:
Notes payable to banks.......... 95 (95)(f) -
Notes payable on wrap mortgages. 340 - 340
Management company expenses....... 483 - 483
Other expenses.................... 2,198 - 2,198
------- ------- -------
13,655 4,453 18,108
------- ------- -------
Income before taxes............... 8,844 349 9,193
Income tax provision.............. 23 - (4) 23
------- ------- -------
Net income........................ $ 8,821 $ 349 $ 9,170
======= ======= =======
Net income per share.............. $ 2.54 $ 2.20
======= =======
Weighted average shares
outstanding 3,474 4,169
======= =======
PARKWAY PROPERTIES, INC.
Notes to Pro Forma Consolidated Financial Statements
(Unaudited)
1. On December 24, 1996, Parkway Properties, Inc. ("Parkway" or the
"Company") sold the Virginia Beach mortgage loan to an unrelated
party for $9,700,000. A portion of the proceeds from the sale
were used to repay the underlying first mortgages on the buildings
totaling $4,415,000.
2. On September 30, 1996, Parkway Carolina, Inc., a wholly-owned
subsidiary of Parkway Properties, Inc. ("Parkway" or the
"Company") purchased the BB&T Financial Center for $24,500,000
from an unrelated party. This building consists of approximately
239,000 net rentable square feet.
3. The pro forma adjustments to the Consolidated Balance Sheet as of
September 30, 1996 include Parkway's sale of the Virginia Beach
mortgage loan as if the transaction occurred on September 30,
1996. No pro forma adjustments were needed for the purchase of
the BB&T Finanical Center due to the September 30th purchase
date.
4. The pro forma adjustments to the Consolidated Statements of
Income for the twelve months ended December 31, 1995 and the nine
months ended September 30, 1996 include the September 30, 1996
purchase of the BB&T Financial Center, August 9, 1996 purchase of
the Falls Pointe and Roswell North Buildings, the July 9, 1996
purchase of the Cherokee Business Center and the 8381 and 8391
Courthouse Road Buildings, the April 15, 1996 purchase of the 400
North Belt and Woodbranch Buldings, the July 31, 1995 purchase of
Mtel Centre', the October 2, 1995 purchase of the IBM Building
and the December 19, 1995 purchase of the Waterstone Building. In
addition, the adjustments include 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
financing on certain recent property acquisitions. These pro
forma adjustments are detailed below by property for the twelve
months ended December 31, 1995 and nine months ended September
30, 1996.
The effect on income and expenses from real estate properties due
to the above purchases are as follows:
(a) For the twelve months ended December 31, 1995:
Revenue Expenses
----------- ---------------------------
Income From Real Estate Owned
Real Estate Operating Depreciation
Properties Expense Expense
----------- ------------ ------------
Mtel Centre' $ 2,420,000 $ 1,442,000 $ 177,000
IBM Building 959,000 449,000 102,000
Waterstone 1,183,000 499,000 181,000
400 North Belt
& Woodbranch 3,470,000 1,970,000 347,000
Cherokee &
Courthouse
Road Bldgs. 1,848,000 841,000 249,000
Falls Pointe &
Roswell North 2,270,000 929,000 315,000
BB&T Financial
Center 3,999,000 1,378,000 551,000
----------- ----------- -----------
$16,149,000 $ 7,508,000 $ 1,922,000
=========== =========== ===========
(b) For the nine months ended September 30, 1996:
Revenue Expenses
----------- ---------------------------
Income From Real Estate Owned
Real Estate Operating Depreciation
Properties Expense Expense
----------- ------------ ------------
400 North Belt
& Woodbranch $ 1,036,000 $ 551,000 $ 102,000
Cherokee &
Courthouse
Road Bldgs. 917,000 480,000 124,000
Falls Pointe &
Roswell North 1,161,000 439,000 158,000
BB&T Financial
Center 3,072,000 1,055,000 413,000
----------- ----------- -----------
$ 6,186,000 $ 2,525,000 $ 797,000
=========== =========== ===========
Depreciation is provided by the straight-line method over the
estimated useful lives of the buildings (40 years).
Pro forma interest expense on real estate owned reflects the non-
recourse debt placed on the buildings at the actual amounts and
rates by property as if placed January 1, 1995 is as follows:
Property/Placement Twelve Months Nine Months
Date/Rate Debt 12/31/95 (c) 9/30/96 (d)
------------------ ----------- ------------- -----------
Mtel Centre
12/95 7.75% $11,000,000 $ 595,000 $ -
IBM Building
2/96 7.78% 4,800,000 370,000 41,000
Waterstone
6/96 8.00% 5,620,000 450,000 185,000
400 North Belt &
Woodbranch
7/96 8.25% 10,000,000 825,000 382,000
Falls Pointe &
Roswell North
12/96 8.375% 9,850,000 825,000 618,000
---------- ----------
$3,065,000 $1,226,000
========== ==========
The January 1, 1995 pro forma effect of the sale of 157 mortgage
loans on May 31, 1996 and the Virginia Beach mortgage loans on
December 24, 1996 is as follows:
Twelve Months Nine Months
12/31/95 (e) 9/30/96 (f)
------------- -----------
Interest Income:
Mortgage loans $ (1,265,000) (1,384,000)
5. No additional income tax expenses were provided because of the
Company's net operating loss carryover.
6. All per share information for the twelve months ended December
31, 1995 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, 1995.
NOTE PURCHASE AGREEMENT
THIS NOTE PURCHASE AGREEMENT (this "Agreement") is made and
entered into by and between (i) Parkway Properties, Inc., a Maryland
corporation ("Seller"), and (ii) Allied Capital Commercial
Corporation, a Maryland corporation ("BUYER").
Seller proposes to sell and assign, and Buyer proposes to buy and
assume, those certain debt instruments and loan documents owned by
Seller as more fully set forth and defined on Exhibit A attached
hereto (collectively referred to as the Mortgage Loans").
NOW, THEREFORE, in consideration of the premises, of the mutual
covenants of the parties hereto, and of other good and valuable
consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto, intending legally and equitably to
be bound, hereby agree as set forth below
1. CLOSING. The consummation of the transaction contemplated by this
Agreement shall take place on a date agreed upon by both parties, but
no later than December 30, 1996 (the "Closing"). At Closing, Seller
shall deliver to Buyer: (1) the original Series A Notes and the
original Series B Note, as re-executed on or about the date hereof,
together with a copy of the original Main Note, and an original of the
versions re-executed by the Maker on October 21, 1996 and on or about
the date hereof (all as defined on attached Exhibit A and collectively
referred to as the "Notes"), all endorsed to Buyer, (2) the original
(or copies, if such original is not ~ Seller's possession) Loan
Documents evidencing the obligations transferred at such Closing,
including without limitation the mortgages and related collateral
documents (collectively with the Notes referred to as the "Loan
Documents" and attached hereto as a part of Exhibit A), together with
copies of all other documents in Seller's possession pertaining to the
Notes being transferred and the Loan Documents (collectively, the
"Loan Piles"). At Closing, Seller shall assign and Buyer shall assume
all of Seller's rights and obligations under the Loan Documents, and
all liens and security interests securing the Notes so transferred.
Closing may be effected, as the parties hereto elect, pursuant to an
Escrow Agreement in the form attached hereto as Exhibit B.
2. PURCHASE PRICE. At Closing, Buyer will pay Seller the sum of Nine
Million Seven Hundred Thousand Dollars ($9,700,000.00) (the "Purchase
Price").
3. POWER OF SALE AND ASSUMPTION. Upon payment in full of the Purchase
Price, Seller shall assign to Buyer, its successors and assigns, all
of the rights, powers (including the power of sale) and privileges
conferred by the Notes, mortgages and other Loan Documents to the same
extent as Seller is authorized and empowered to exercise the same.
Further, at Closing, Buyer shall assume ~ full all of Seller's
obligations, liabilities and responsibilities with respect to the
Mortgage Loans and the Loan Documents. Buyer hereby agrees to
indemnify, and hold Seller harmless and their respective agents and
attorneys harmless from and against (i) any and all losses, claims,
liabilities, damages, deficiencies, costs and expenses suffered or
incurred by Seller resulting from: (a) a material breach by Buyer of
any representation, warranty or covenant contained herein; and (b)
Buyer's ownership, servicing or management of the Mortgage Loans; and
(ii) any and all actions, suits, proceedings, claims, complaints,
demands, assessments, judgments, costs and expenses suffered or
incurred by Seller, including reasonable attorneys' fees and
disbursements incident to any such indemnified matter.
4. REPRESENTATIONS AND WARRANTIES. Seller makes the representations
and warranties, as of the date of execution of this Agreement and as
of Closing (which shall, in accordance with Section 80, survive for a
one (1)-year period beginning on the date of Closing), as set forth
below.
(a) Authority. Seller is a corporation duly formed, organized,
existing and in good standing under the laws of the State of Maryland.
Seller has full legal right, power and authority to execute and fully
perform its obligations under this Agreement. The execution, delivery
and performance by Seller of this Agreement and all transactions
contemplated hereby have been duly authorized.
(b) Non-Contravention. Neither the execution and delivery of this
Agreement nor the consummation of ~e transactions contemplated hereby
will (i) conflict with or constitute a breach of, or constitute a
default under or any event which, with or without notice or lapse of
time or both, would be a breach of or default under Seller's Articles
of Incorporation, Bylaws or any other governing documents, (ii)
constitute a violation of any law, regulation, judgment, order or
decree applicable to Seller, or (iii) require any consent, approval,
authorization, order, license or permit from any person
(c) Sole Owner. The Seller is the sole owner of the Mortgage
Loans.
(d) Right to Sell. Except as to the consents required pursuant to
the Series A. and B Notes (which consents have been duly obtained and
are attached hereto as a part of the Notes included no Exhibit A
hereto), the Seller has full right and authority to sell, assign and
transfer the Mortgage Loans, and such assignment shall be a legal,
valid and binding assignment of the Mortgage Loans to the Buyer.
(e) Not Cross-Collateralized; Whole Loans. The Mortgage Loans are
not cross-collateralized with any other indebtedness which is not
subject to this Agreement, and the Mortgage Loans are whole loans and
are not participations or other partial interests. To Seller's Actual
Knowledge, there are no retained claims, residual interests or other
ownership rights relating to the Mortgage Loans which Seller is not
duly assigning to Buyer hereby.
(f) Servicing and Collection. The servicing and collection
practices used by Seller (and its subsidiaries and affiliates) in
connection with the Mortgage Loans have been in compliance with
applicable state or federal laws, rules and regulations pertaining to
their business in all material respects. Buyer acknowledges that Seller
did not originate the Mortgage Loans and have only serviced the
Mortgage Loans since April 27, 1g95.
(g) Good Title. The Seller is transferring the Mortgage Loans to
Buyer free and clear of any and all liens, pledges, charges or security
interests of any nature encumbering the Mortgage Loans
(h) No Additional Advance. There is no requirement for any
advances under the Mortgage Loans from and after Closing.
(i) Valid Loans. Except as set forth in the Loan Documents or the
Loan File, to Seller's Actual Knowledge no facts currently exist which
would impair the validity or the enforceability of the Mortgage Loans
by Buyer, except as such enforcement may be limited in the future by
bankruptcy, insolvency, reorganization or other similar laws affecting
the enforcement of creditors' rights generally, and by general
principles of equity (regardless of whether such enforcement is
considered in a proceeding in equity or at law). The Seller (and its
subsidiaries and affiliates) has received no notice of any actual or
alleged offset, defense, counterclaim or right to rescission with
respect to the Notes or other Loan Documents.
(j) Escrows. All taxes and governmental assessments that prior to
Closing became due and owing in respect of, and affect, the related
mortgage properties have been paid, or an escrow of funds in an amount
sufficient to to cover such payments has been established by Seller (or
its subsidiaries or affiliates), and the same shall be assigned to
Buyer at closing. Except as set forth on Exhibit C relating to those
certain reserves for capital expenditures, insurance and taxes escrowed
by Seller in the amounts set forth on Exhibit C and to be delivered by
Seller to Buyer at Closing, Seller (or its subsidiaries or affiliates)
holds no escrow deposits or similar accounts with respect to any of the
property or assets of the Loan Documents.
(k) Note Modifications, etc. Except as set forth in the Loan
Files, the terms of the Notes and related Loan Documents have not been
modified, waived, altered, satisfied, canceled or subordinated in any
respect by Seller (or its subsidiaries or affiliates) or rescinded by
Seller (or its subsidiaries or affiliates), nor has the maker of the
Notes been released from its obligations thereunder by Seller (or its
subsidiaries or affiliates), in whole or in any part, nor has any
instrument nent been executed by Seller (or its subsidiaries or
affiliates) that would effect any such cancellation, subordination,
rescission or release.
(1) Pay History. Since Seller (and its subsidiaries and
affiliates) has serviced the Mortgage Loans, and except as described in
Exhibit D hereto, all payments of principal and interest due and owing
under the Mortgage Loans have been timely paid, and the Seller has
delivered to the Buyer a complete account statement and history of the
Mortgage Loans. as set forth as Exhibit D.
(m) Valid Collateral Interests. To Seller's Actual Knowledge, the
mortgages securing the Notes (including any related security agreement
included therewith) are valid and enforceable liens on the related
mortgaged properties, which mortgaged properties are free and clear of
all encumbrances and liens having priority over the lien of such
Mortgage Loans, except as set forth in that certain title policy
issued by Lawyers Title Insurance Corporation and attached hereto as
Exhibit F.
(n) No Condemnation. Seller (and its subsidiaries and affiliates)
has received no notice that there is any proceeding pending for the
total or partial condemnation of the mortgaged properties securing the
Mortgage Loans.
(o) Mortgage Modifications, etc. Except as set forth in the Loan
Documents and Loan Files, the collateral interests securing the Notes,
including without limitation the related mortgages and BCC security
interests, have not been modified, waived, altered, satisfied,
canceled or subordinated in any respect by Seller (or its subsidiaries
or affiliates) or rescinded by Seller (or its subsidiaries or
affiliates), and the related properties have not been released from
the lien or other subsidiaries of, nor has the borrower thereof been
released from its obligations under, the mortgages and security
interests by Seller (or its subsidiaries or affiliates), in whole or
in any part, in a manner which materially interferes with the benefits
of the security intended to be provided by the related mortgages or
security interests or the use, enjoyment, value or marketability of
the related properties for the purposes specified in the mortgage and
other security documents, nor has any instrument been executed by
Seller (or its subsidiaries or affiliates) that would effect any such
cancellation, subordination, rescission or release.
(p) Balance. As of even date herewith, the principal balance,
accrued interest and any late fees or collection costs due and owing
under the Mortgage Loans, are as set out in Exhibit C attached hereto.
5. REPRESENTATIONS AND WARRANTIES OF BUYER. Buyer makes the
representations and warranties, as of the date of execution of this
Agreement and as of Closing, as set forth below.
(a) Authority. Buyer is a corporation duly formed, organized,
existing and in good standing under the laws of the State of Maryland.
Buyer has full legal right, power and authority to execute and fully
perform its obligations under this Agreement. The execution, delivery
and performance by Buyer of this Agreement and all transactions
contemplated hereby have been duly authorized.
(b) Non-Contravention. Neither the execution and delivery of this
Agreement nor the consummation of the transactions contemplated hereby
will (I) conflict with or constitute a breach of, or constitute a
default under or any event which, with or without notice or lapse of
time or both, would be a breach of or default under Buyer's Articles
of Incorporation, Bylaws or any other governing documents, (ii)
constitute a violation of any law, regulation, judgment. order or
decree applicable to Buyer, or (iii) require any consent, approval,
authorization, order, license or permit from any person.
(c) Independent Investigation. Buyer has made an independent
investigation, to the extent Buyer deems necessary or appropriate,
concerning the Mortgage Loans, including an investigation of the
related Loan Documents and the physical condition of the collateral
related thereto. By closing this transaction, Buyer acknowledges that
they have completed such investigations to their satisfaction.
However, it is understood and agreed that this provision shall in no
way be deemed to limit Buyer's reliance on, or the accuracy of,
Seller's representations and warranties set forth in this Agreement,
which it is acknowledged are a material inducement to Buyer entering
into this Agreement.
(d) ACKNOWLEDGMENT. BUYER HEREBY EXPRESSLY ACKNOWLEDGES THAT IT
HAS INSPECTED AND EXAMINED OR WILL INSPECT AND EXAMINE THE MORTGAGE
LOANS, THE RELATED LOAN DOCUMENTS, INCLUDING WITHOUT LIMITATION, THE
TITLE INSURANCE POLICY, AND THE COLLATERAL TO THE EXTENT DEEMED
NECESSARY BY BUYER IN ORDER TO ENABLE BUYER TO EVALUATE THE PURCHASE
OF THE MORTGAGE LOANS. BUYER REPRESENTS THAT IT IS A KNOWLEDGEABLE
BUYER OF LOANS AND THAT, EXCEPT AS SET FORTH IN SECTION 4, IT IS
RELYING ON ITS OWN EXPERTISE AND THAT OF BUYER'S CONSULTANTS, AND
THAT BUYER HAS CONDUCTED OR WILL CONDUCT COMPREHENSIVE INSPECTIONS AND
INVESTIGATIONS OF THE MORTGAGE LOANS, LOAN DOCUMENTS AND, IF IT DEEMS
NECESSARY, THE COLLATERAL. EXCEPT FOR SELLER'S REPRESENTATIONS
EXPRESSLY SET FORTH HEREIN, BUYER FURTHER ACKNOWLEDGES AND AGREES THAT
BUYER IS ACQUIRING THE MORTGAGE LOANS ON AN "AS IS, WHERE IS, WITH ALL
FAULTS BASIS," WITHOUT REPRESENTATIONS, WARRANTIES OR COVENANTS,
EXPRESS OR IMPLIED, OF ANY KIND OR NATURE, STATUTORY OR OTHERWISE,
INCLUDING, WITHOUT LIMITATION, ANY WARRANTY WITH RESPECT TO THE VALUE
OF ANY COLLATERAL SECURING ANY MORTGAGE LOAN, THE CREDIT WORTHINESS OF
ANY MORTGAGE, THE VALIDITY OR PRIORITY OF ANY SECURITY INTEREST WITH
RESPECT TO ANY COLLATERAL AND THE ENFORCEABILITY OF ANY LOAN
DOCUMENTS, AND SELLER DOES HEREBY DISCLAIM AND RENOUNCE ALL SUCH
REPRESENTATIONS OR WARRANTIES, EXCEPT AS OTHERWISE SET FORTH IN THIS
AGREEMENT.
6. RECORDING PROCEDURES, ETC. After Closing, Seller shall take such
further action and execute and deliver such further instruments as
Buyer, or its agents and nominees, shall reasonably request, within
five (5) days of such request, to consummate the transactions
contemplated by this Agreement, including but not limited to executing
any such instruments as are necessary to further evidence or perfect
Buyer's interest ~ the Mortgage Loans, :he Loan Documents, or any
collateral related thereto. Buyer understands that the Mortgage Loans
are sold "servicing released" so that the Seller will retain no
obligation to collect payments from the debtor under the Mortgage
Loans. Seller agrees to comply with reasonable requests made by Buyer
after the sale in regard to matters pertaining to the Mortgage Loan
being sold "servicing released. n Any payment received by Seller after
Closing, which are for the period after Closing, will be forwarded by
Sellers to Buyer,
7. COSTS; ATTORNEYS' FEES. Buyer shall be solely responsible for all
costs of transfer (including endorsements to the title insurance
policies, title and UCC searches, recording fees, any other transfer
tax, documentary stamp or similar tax or fee) which becomes payable
solely by reason of the transfer of the Mortgage Loans from Seller to
Buyer. Seller shall be responsible for all other such costs of
transfer as they relate to Seller delivering the Mortgage Loans to
Buyer in accordance with the representations and warranties set forth
in this Agreement. Additionally, Seller shall be responsible for the
full payment and satisfaction prior to Closing of those certain
wrapped deeds of trust and any other senior claims to Buyer's
interests in the underlying collateral, which undertaking it is
understood shall be a condition of Buyer's obligation to close
hereunder. Each party shall bear its own expenses of Closing. Buyer
and Seller specifically acknowledge that if any litigation arises
between the parties in respect of this Agreement, however, the
prevailing party shall be entitled to recover costs thereof, including
reasonable attorneys' fees.
8. MISCELLANEOUS.
(a) Brokers Except for the separate agreement between Seller and
Dan Friedman of Enterprise, the parties represent to each other that
neither of them nor their representatives has incurred any liability
for any broker's, finder's or similar fee in connection with this
Agreement and the transactions contemplated hereby and agree to
indemnify and hold the other harmless with respect to any claims by
brokers through such party. Seller shall pay the fees of Dan Friedman,
and Seller hereby releases and indemnifies Buyer, its directors,
officers, employees and agents from any and all liability arising from
a breach of such undertaking.
(b) Officers. The respective officers who execute this Agreement,
and any certificate or other document required under this Agreement,
are executing this Agreement and such certificate or other document in
their respective capacities as officers of such entity and not
individually.
(c) Notices. Any notice, request, demand or other communication
required or permitted under this Agreement shall be given in writing
and shall be delivered or sent by certified mail, return receipt
requested in a prepaid envelope, by overnight mail or courier, or by
facsimile transmission, to the addresses set forth below or such other
addresses as such party shall hereafter specify in accordance with
this Section:
If to Buyer: Allied Capital Commercial Corporation
1666 K Street, N.W.
Washington, D.C. 20006
Attention: Robert J. Corry, Senior Vice President
With a copy to: Andrews &: Kurth L.L.P.
1701 Pennsylvania Avenue, N.W., Suite 200
Washington, D.C. 20006
Attention: Thomas R. Salley, Esquire
If to Seller: Parkway Properties, Inc.
One Jackson Place, Suite 300
Jackson, MS 39201
Attention: David R. Fowler, Vice President
With a copy to: Forman, Perry, Watkins & Krutz
A Professional Limited Liability Company
188 E. Capitol Street, Suite 1200
Jackson, MS 39201
Attention: Tim Gray, Esquire
Such notice or other communication shall be deemed to have been
given (i) when delivered, if sent by certified mail or delivered
personally or by facsimile transmission, or (ii) on the second
following business day if sent by overnight mail or overnight courier.
(b) Choice of Law and Venue. The validity of this Agreement, its
construction, interpretation, and enforcement, and the rights of the
parties hereto, shall be determined under, governed by, and construed
in accordance with the internal laws of the Commonwealth of Virginia,
the situs of the property securing the Mortgage Loans, without regard
to principles of conflicts of laws. The parties agree that all actions
or proceedings arising in connection with this Agreement shall be tried
and litigated only in the state and federal courts located in the
Commonwealth of Virginia. Buyer and Seller waive any right each may
have to assert the doctrine of forum non conveniens or to object to
venue to the extent any proceeding is brought in accordance with this
Section.
(c) Waiver. Waiver of any term, provision or condition of this
Agreement must be in writing signed by the party making such waiver to
be enforceable against such party and shall be limited to the
particular matter so waived and specified in such waiver, and such
waiver shall not be deemed to constitute a waiver of any other term,
provision or condition, nor shall such waiver be deemed Q waiver of a
subsequent breach of the same, provision or condition. Failure or delay
by any party to require strict performance of any term, provision or
condition of this Agreement will not impair such party's right to
require full performance thereof at any other tune.
(d) Binding Effect; Severability; Captions. This Agreement is
binding and inures to the benefit of the parties hereto, and their
respective successors and assigns. Any provision of this Agreement that
may be unenforceable in a particular jurisdiction as to any particular
state of facts shall be, as applied in such jurisdiction and to such
facts, ineffective only to the extent of such unenforceability and
without invalidating the remaining provisions hereof in such or any
other jurisdiction. The captions herein shall not be construed as part
of the text hereof.
(e) Entire Agreement; Amendments. This Agreement, including any
attachments, exhibits and schedules referred to herein and attached,
constitutes the entire agreement between ~e parties pertaining to the
subject matter hereof and supersedes any and all prior agreements,
representations and understandings of the parties, written or oral. The
terms of this Agreement shall not be modified or amended except by
subsequent written agreement of the parties.
(f) WAIVER OF JURY TTRIAL/SERVICE OF PROCESS. BUYER AND SELLER
EACH HEREBY WAIVE TRIAL BY JURY AND ANY RIGHT THERETO, AND FURTHER
AGREE THAT SERVICE OF PROCESS MAY BE DULY EFFECTED UPON THEM BY SERVICE
BY NATIONALLY RECOGNIZED OVERNIGHT COURIER SERVICE AND CERTIFIED MAIL,
RETURN RECEIPT REQUESTED, CHARGES PREPAID, TO THE ADDRESSES SET FORTH
ABOVE.
(g) Assignments; Binding Effect. This Agreement shall not be
assigned by either party without the express written consent of the
other party. This Agreement shall inure to the benefit of and be
binding upon the respective successors end permitted assigns of ~e
parties.
(h) Survival. Each of the representations, warranties, covenants
and all other provisions contained in this Agreement or in any document
given or furnished under or in connection with this Agreement shall
survive the Closing for a period of one (1) year, and any action
attempting to enforce this Agreement shall be commenced within such one
(1)-year period or forever barred. Thereafter, all of the
representations and warranties made in this Agreement shall be deemed
null, void and without any further force or effect.
(i) Limitation on Liability. Notwithstanding anything contained
herein to the contrary, Buyer acknowledges and agrees that no trustee,
holder of any beneficial interests, officer or employee of Seller nor
any affiliate of Seller 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 Buyer shall have recourse hereunder only against Seller's
assets. Each document to be executed by Seller at Closing shall contain
a similar exculpation.
(j) Actual Knowledge. Reference to Seller's Actual Knowledge shall
mean the actual subjective awareness of any employee employed since
April 27, 1995 or of any officer of: Seller, any subsidiary of Seller,
or any affiliate of Seller. References to Seller having notice of any
particular fact shall mean actual notice to any employee employed since
April 27, 1995 or to any officer of: Seller, any subsidiary of Seller,
or any affiliate of Seller. Reference to Buyer's Actual Knowledge shall
mean the actual subjective awareness of any employee employed since
April 27, 1995 or of any officer of Buyer. References to Buyer having
notice of any particular fact shall mean actual notice to any employee
employed since July 1, 1996 or to any officer of Buyer.
(k) Knowledge as a Defense. Seller shall have no liability with respect
to a breach of the covenants, representations and warranties of Seller
set forth in this Agreement or any documents delivered hereto to the
extent that Purchaser proceeds with the Closing of the transaction
contemplated with Actual Knowledge of such breach.
(1) Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be deemed an original and all of
which shall constitute one and the same instrument.
IN WITNESS WHEREOF the undersigned have caused this Agreement to
be executed as of December 24, 1996.
PARKWAY PROPERTIES, INC.
By:
Name:
Title:
Witness: By:
Name:
Title:
ALLIED CAPITAL COMMERCIAL
CORPORATION
Attest: By:
, (Assistant) Secretary
List of Exhibits
A. List of Mortgage Loans and Loan Documents
B. Form of Escrow Agreement
C. Statement of Principal Balance, Accrued Interest,
Escrowed Amounts, Late Fees, etc.
D. Pay History
E. Title Insurance Policies and Endorsements
