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 earliest event reported): November 12, 1998
-----------------
PARKWAY PROPERTIES, INC.
- -----------------------------------------------------------------
(Exact name of Registrant as specified in its charter)
Maryland 1-11533 74-2123597
- ------------------------------------------------------------------
(State or other (Commission File Number) (IRS Employer
jurisdiction of Identification
incorporation) Number)
One Jackson Place Suite 1000
188 East Capitol Street
P. O. Box 24647
Jackson, Mississippi 39225-
4647
- ------------------------------------------------------------------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (601) 948-4091
---------------
- ------------------------------------------------------------------
(Former name or former address, if changed since last report)
FORM 8-K
PARKWAY PROPERTIES, INC.
Item 5. Other Events.
On October 7, 1998, Parkway Properties, Inc. closed a three-year
$150,000,000 unsecured credit facility with a consortium of 14
banks arranged by Chase Securities, Inc. The interest rate on
the new line of credit is equal to LIBOR plus 112.5 to 137.5
basis points depending upon overall company leverage, with the
current rate set at LIBOR plus 125 basis points, or 6.625%. The
new credit facility reflects a 15 basis point interest rate
reduction (based on current leverage) and a $50,000,000 increase
over the previous lines of credit, which were secured lines of
credit. The lead agent for the credit facility is Chase Bank of
Texas, which is joined by a syndicate of banks including PNC
Bank, serving as documentation agent, Wells Fargo Bank, First
Union National Bank, SouthTrust Bank, AmSouth Bank, First
National Bank of Commerce, Compass Bank, First Tennessee Bank,
Hibernia National Bank, First American National Bank operating as
Deposit Guaranty National Bank, Comerica Bank, Trustmark National
Bank, and Bancorp South Bank.
Item 7. Financial Statements and Exhibits
(c) Exhibits
(99)(a) Credit Agreement among Parkway
Properties LP, Chase Bank of Texas, National
Association, and PNC Bank, National Association
and the Lenders. Parkway agrees to furnish
supplementally to the Securities and Exchange
Commission on request a copy of any omitted
schedule or exhibit to this agreement.
(99)(b) Form of Note by Parkway Properties LP as
maker and Chase Bank of Texas, National
Association as agent. 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: November 12, 1998 PARKWAY PROPERTIES, INC.
BY: /s/Sarah P. Clark
Sarah P. Clark
Senior Vice President,
Chief Financial Officer,
Treasurer and Secretary
CREDIT AGREEMENT
Dated
October 7, 1998
among
PARKWAY PROPERTIES LP
CHASE BANK OF TEXAS, NATIONAL ASSOCIATION,
as Administrative Agent
PNC BANK, NATIONAL ASSOCIATION
as Documentation Agent
and
the Lenders
TABLE OF CONTENTS
1. Definitions 1
2. The Loans 14
2.1 Advances 14
2.2 Payments 15
2.3 Pro Rata Treatment 16
2.4 Non-Receipt of Funds by the Agent 16
2.5 Sharing of Payments, Etc. 17
2.6 Fees 17
3. Conditions 18
3.1 All Loans 18
3.2 First Loan 18
3.3 Options Available 18
3.4 Designation and Conversion 19
3.5 Special Provisions Applicable to Eurodollar Rate
Borrowings 19
3.6 Funding Offices; Adjustments Automatic 22
3.7 Funding Sources, Payment Obligations 22
3.8 Mitigation, Non-Discrimination 22
4. Representations and Warranties 23
4.1. Organization 23
4.2 Financial Statements 23
4.3 Enforceable Obligations; Authorization 24
4.4 Other Debt 24
4.5 Litigation 24
4.6 Taxes 24
4.7 Regulation U 24
4.8 Subsidiaries 24
4.9 Securities Act of 1933 24
4.10 No Contractual or Corporate Restrictions 25
4.11 Investment Company Act Not Applicable 25
4.12 Public Utility Holding Company Act Not Applicable 25
4.13 ERISA Not Applicable 25
5. Affirmative Covenants 25
5.1 Taxes, Existence, Regulations, Property, etc. 26
5.2 Financial Statements and Information 26
5.3 Financial Tests 26
5.4 Inspection 27
5.5 Further Assurances 27
5.7 Insurance 27
5.8 Notice of Certain Matters 27
5.9 Use of Proceeds 27
5.10 Expenses of and Claims Against the Agent and the
Lenders 27
5.11 Legal Compliance; Indemnification 28
5.12 Obligors' Performance 28
5.13 Professional Services 29
5.14 Capital Adequacy 29
5.15 Property Pool 30
6. Negative Covenants 31
6.1 Indebtedness 31
6.2 Mergers, Consolidations and Acquisitions of Assets 31
6.3 Redemption 31
6.4 Nature of Business; Management 31
6.5 Transactions with Related Parties 31
6.6 Loans and Investments 31
6.7 Limiting Agreements 32
6.8 Restricted Payments 33
7. Events of Default and Remedies 33
7.1. Events of Default 33
7.2 Remedies Cumulative 35
8. The Agent 35
8.1 Appointment, Powers and Immunities 35
8.2 Reliance 36
8.3 Defaults 37
8.4 Rights as a Lender 37
8.5 Indemnification 37
8.6 Non-Reliance on Agent and Other Lenders 38
8.7 Failure to Act 38
8.8 Resignation of Agent 39
8.9 No Partnership 39
9. Miscellaneous 39
9.1 No Waiver, Amendments 39
9.2 Notices 40
9.3 Venue 40
9.4 Choice of Law 41
9.5 Survival; Parties Bound; Successors and Assigns 41
9.6 Counterparts 42
9.7 Usury Not Intended; Refund of Any Excess Payments 42
9.8 Captions 42
9.9 Severability 42
9.10 Disclosures 43
9.11 Entire Agreement 43
EXHIBITS
Schedule I - Rating Tables
Schedule II - Approved Markets
A - Officer's Certificate
B - Request for Loan
C - Note
D - Legal Opinion
CREDIT AGREEMENT
THIS CREDIT AGREEMENT (the "Agreement") is made and entered
into as of October 7, 1998, by and among PARKWAY PROPERTIES LP, a
Delaware limited partnership (the "Borrower"), the financial
institutions (including Chase, the "Lenders") which are now or
may hereafter become signatories hereto, CHASE BANK OF TEXAS,
NATIONAL ASSOCIATION, a national banking association ("Chase"),
as Administrative Agent for Lenders (in such capacity, "Agent"),
and PNC BANK, NATIONAL ASSOCIATION, as Documentation Agent for
Lenders.
1. Definition
Unless a particular word or phrase is otherwise defined or
the context otherwise requires, capitalized words and phrases
used in Credit Documents have the meanings provided below.
Adjusted Eurodollar Interbank Rate shall mean, with respect
to each Interest Period applicable to a Eurodollar Rate
Borrowing, a rate per annum equal to the quotient, expressed as a
percentage, of (a) the Eurodollar Interbank Rate with respect to
such Interest Period divided by (b) 1.0000 minus the Eurodollar
Reserve Requirement in effect on each day during such Interest
Period.
Affiliate shall mean any Person controlling, controlled by
or under common control with any other Person. For purposes of
this definition, "control" (including "controlled by" and "under
common control with") means the possession, directly or
indirectly, of the power to direct or cause the direction of the
management and policies of such Person, whether through the own
ership of voting securities or otherwise.
Annual Audited Financial Statements shall mean the annual
financial statements of a Person, including all notes thereto,
which statements shall include a balance sheet as of the end of
such fiscal year and an income statement and a statement of cash
flows, all setting forth in comparative form the corresponding
figures from the previous fiscal year, all prepared in conformity
with Generally Accepted Accounting Principles and accompanied by
a report and opinion of independent certified public accountants
satisfactory to the Agent, which shall state that such financial
statements, in the opinion of such accountants, present fairly
the financial position of such Person as of the date thereof and
the results of its operations for the period covered thereby in
conformity with Generally Accepted Accounting Principles. Such
statements shall be accompanied by a certificate of such
accountants that in making the appropriate audit and/or
investigation in connection with such report and opinion, such
accountants did not become aware of any Default or, if in the
opinion of such accountant any such Default exists, a description
of the nature and status thereof. The Annual Audited Financial
Statements shall be prepared on a consolidated basis in
accordance with Generally Accepted Accounting Principles.
Applicable Margin shall mean (a) whenever and for so long as
the Borrower has not received an S&P Rating and a Moody's Rating,
the percentage which will be in effect whenever and for so long
as the corresponding Total Liabilities to Total Asset Value Ratio
reflected in Table 1 on Schedule I attached hereto and hereby
made a part hereof, is in effect; and (b) whenever and for so
long as the Borrower has received an S&P Rating and a Moody's
Rating, the percentage which will be in effect whenever and for
so long as the Borrower has received the corresponding S&P Rating
or Moody's Rating, whichever is lower, reflected in Table 2 on
Schedule I attached hereto.
Approved Market shall mean each of the cities described on
Schedule II attached hereto and hereby made a part hereof.
Base Rate shall mean for any day a rate per annum equal to
the Applicable Margin on that day plus the greater on a daily
basis of (a) the Prime Rate for that day, or (b) the Federal
Funds Effective Rate for that day plus one-half of one percent
(1/2%).
Base Rate Borrowing shall mean that portion of the principal
balance of the Loans at any time bearing interest at the Base
Rate. Business Day shall mean a day other than (a) a day when
the main office of the Agent is not open for business, or (b) a
day that is a federal banking holiday in the United States of
America.
Calculation Date shall mean the beginning of the first full
calendar quarter after a Property has been acquired by the
Borrower.
Capital Expenditures shall mean, as to any Person, for any
period, the aggregate of all expenditures (whether payable in
cash or other Property or accrued as a liability (but without
duplication)) during such period that, in conformity with
Generally Accepted Accounting Principles, are required to be
included in or reflected by the Borrower's or any of its
Subsidiaries' fixed asset accounts as reflected in any of their
respective balance sheets; provided, however, Capital
Expenditures shall include the sum of all expenditures by the
Borrower for tenant improvements, leasing commissions, property
level capital expenditures (e.g., roof replacement, parking lot
repairs, etc., but not capital expenditures in connection with
expansions) but shall exclude upgrade capital expenditures
budgeted at the time of, and made within the first twelve (12)
months after, the acquisition of a Property. Capital
Expenditures shall be calculated on a consolidated basis in
accordance with Generally Accepted Accounting Principles and
shall include (without duplication) the Equity Percentage of
Capital Expenditures for the Borrower's Unconsolidated
Affiliates.
Ceiling Rate shall mean, on any day, the maximum nonusurious
rate of interest permitted for that day by whichever of
applicable federal or Texas laws permits the higher interest
rate, stated as a rate per annum. On each day, if any, that
Texas law establishes the Ceiling Rate, the Ceiling Rate shall be
the "weekly ceiling" (as defined in Chapter 303 of the Texas
Finance Code (the "Texas Finance Code") and Chapter 1D of Title
79, Tex.Rev.Civ. Stats. 1925 ("Chapter 1D"), as amended,
respectively) for that day. The Agent may from time to time, as
to current and future balances, implement any other ceiling under
the Texas Finance Code or Chapter 1D by notice to the Borrower,
if and to the extent permitted by the Texas Finance Code or
Chapter 1D. Without notice to the Borrower or any other person
or entity, the Ceiling Rate shall automatically fluctuate upward
and downward as and in the amount by which such maximum
nonusurious rate of interest permitted by applicable law fluctu
ates.
Change of Control means a change resulting when (a) any
Person or Persons acting together which would constitute a Group
together with any Affiliates thereof shall at any time either (i)
Beneficially Own more than 50% of the aggregate voting power of
all classes of Voting Stock of Parkway Properties, Inc. or (ii)
succeed in having sufficient of its or their nominees elected to
the Board of Directors of Parkway Properties, Inc. such that such
nominees, when added to any existing directors remaining on the
Board of Directors of Parkway Properties, Inc. after such
election who is an Affiliate of such Person or Group, shall
constitute a majority of the Board of Directors of Parkway
Properties, Inc.; or (b) Parkway Properties, Inc. ceases to own,
directly, at least fifty-one percent (51%) of the evidence of
ownership of the Borrower. As used herein (1) "Beneficially Own"
means "beneficially own" as defined in Rule 13d-3 of the
Securities Exchange Act of 1934, as amended, or any successor
provision thereto; provided, however, that, for purposes of this
definition, a Person shall not be deemed to Beneficially Own
securities tendered pursuant to a tender or exchange offer made
by or on behalf of such Person or any of such Person's Affiliates
until such tendered securities are accepted for purchase or
exchange; (2) "Group" means a "group" for purposes of Section
13(d) of the Securities Exchange Act of 1934, as amended; and
(3)"Voting Stock" of any Person shall mean capital stock of such
Person which ordinarily has voting power for the election of
directors (or persons performing similar functions) of such
Person, whether at all times or only so long as no senior class
of securities has such voting power by reason of any contingency.
Code shall mean the Internal Revenue Code of 1986, as
amended, as now or hereafter in effect, together with all regula
tions, rulings and interpretations thereof or thereunder by the
Internal Revenue Service.
Commitment shall mean the commitment of the Lenders to lend
funds under Section 2.1 of this Agreement.
Credit Documents shall mean this Agreement, the Notes, the
Guaranties, all instruments, certificates and agreements now or
hereafter executed or delivered to the Agent or the Lenders
pursuant to any of the foregoing, and all amendments,
modifications, renewals, extensions, increases and rearrangements
of, and substitutions for, any of the foregoing.
EBITDA shall mean an amount derived from (a) net earnings,
plus (b) depreciation, amortization, interest expense and income
taxes, plus or minus (c) any losses or gains resulting from
sales, write-downs, write-ups, write-offs or other valuation
adjustments of assets or liabilities, in each case, as determined
on a consolidated basis in accordance with Generally Accepted
Accounting Principles, and including (without duplication) the
Equity Percentage of EBITDA for the Borrower's Unconsolidated
Affiliates.
Eligible Ground Lease shall mean a lease either expressly
approved by Agent in writing or a lease meeting at least the
following requirements: (a) a remaining term (including renewal
options exercisable at lessee's sole option) of at least forty
(40) years, (b) the leasehold interest is transferable and
assignable without the landlord's prior consent, (c) the ground
lease is financeable in that, among other things, it provides or
allows for, without further consent from the landlord, (i) notice
and right to cure to lessee's lender, (ii) a pledge and mortgage
of the leasehold interest, (iii) recognition of a foreclosure of
the leasehold interest including entering into a new lease with
the lender, and (iv) no right of landlord to terminate without
consent of lessee's lender.
Eligible Institution shall mean a commercial bank or a
finance company, insurance company or other financial institution
which is regularly engaged in making, purchasing or investing in
loans and which has base capital of at least $500,000,000.00, but
shall not include any Person which is an Affiliate of any
Obligor.
Equity Percentage shall mean the aggregate ownership
percentage of Borrower in each Unconsolidated Affiliate.
Eurodollar Business Day shall mean a Business Day on which
transactions in United States dollar deposits between banks may
be carried on in the London interbank dollar market.
Eurodollar Interbank Rate shall mean, for each Interest
Period, the rate of interest per annum, rounded, if necessary, to
the next highest whole multiple of one-sixteenth percent (1/16%),
quoted by Agent at or before 11:00 a.m., London time (or as soon
thereafter as practicable), on the date two (2) Eurodollar
Business Days before the first day of such Interest Period, to be
the arithmetic average of the prevailing rates per annum at the
time of determination and in accordance with the then existing
practice in the London interbank dollar market, for the offering
to Agent by one or more prime banks selected by Agent in its sole
discretion, in the London interbank dollar market, of deposits in
United States dollars for delivery on the first day of such
Interest Period and having a maturity equal to the length of such
Interest Period and in an amount equal (or as nearly equal as may
be) to the Eurodollar Rate Borrowing to which such Interest
Period relates. Each determination by Agent of the Eurodollar
Interbank Rate shall be prima facie evidence thereof.
Eurodollar Rate shall mean for any day a rate per annum
equal to the sum of the Applicable Margin for that day plus the
Adjusted Eurodollar Interbank Rate in effect on the first day of
the Interest Period for the applicable Eurodollar Rate Borrowing.
Each Eurodollar Rate is subject to adjustments for reserves,
insurance assessments and other matters as provided for in
Section 3.5 hereof.
Eurodollar Rate Borrowing shall mean that portion of the
principal balance of the Loans at any time bearing interest at a
Eurodollar Rate.
Eurodollar Reserve Requirement shall mean, on any day, that
percentage (expressed as a decimal fraction and rounded, if
necessary, to the next highest one ten thousandth) which is in
effect on such day for determining all reserve requirements
(including, without limitation, basic, supplemental, marginal and
emergency reserves) applicable to "Eurocurrency liabilities," as
currently defined in Regulation D, all as specified by any
Governmental Authority, including but not limited to those
imposed under Regulation D. Each determination of the Eurodollar
Reserve Requirement by Agent shall be prima facie evidence
thereof.
Event of Default shall mean any of the events specified as
an event of default in Section 7 of this Agreement, and Default
shall mean any of such events, whether or not any requirement for
notice, grace or cure has been satisfied.
Federal Funds Effective Rate shall to the extent necessary
be determined by the Agent separately for each day and shall for
each such day be a rate per annum equal to the weighted average
of the rates on overnight Federal funds transactions with members
of the Federal Reserve System arranged by Federal funds brokers,
as published for each such day (or if any such day is not a
Business Day, for the next immediately preceding Business Day) by
the Federal Reserve Bank of New York, or if the weighted average
of such rates is not so published for any such day which is a
Business Day, the average of the quotations for any such day on
such transactions received by the Agent from three Federal funds
brokers of recognized standing selected by the Agent.
Fixed Charge Coverage Ratio shall mean the ratio of (a) the
Borrower's EBITDA for the immediately preceding four (4) calendar
quarters less an amount equal to the greater of actual Capital
Expenditures for such period, or the Square Footage Unit Capital
Expenditures for such period, to (b) all of the principal payable
and principal paid on the Borrower's Indebtedness plus all of the
Borrower's Interest Expense, in each case for the period used to
calculate EBITDA.
Funds Available for Distribution shall mean Funds From
Operations, less adjustments for straight line rents and Capital
Expenditures.
Funds From Operations shall mean net income of the Borrower
determined in accordance with Generally Accepted Accounting
Principles, plus depreciation and amortization; provided, that
there shall not be included in such calculation any gain or loss
from debt restructuring and sales of Property. Funds From
Operations will be calculated, on an annualized basis, on the
four (4) calendar quarters immediately preceding the date of the
calculation. Funds From Operations shall be calculated on a
consolidated basis in accordance with Generally Accepted
Accounting Principles, and including (without duplication) the
Equity Percentage of Funds From Operations for the Borrower's
Unconsolidated Affiliates.
Funding Loss shall mean, with respect to (a) Borrower's
payment or prepayment of principal of a Eurodollar Rate Borrowing
on a day other than the last day of the applicable Interest
Period; (b) Borrower's failure to borrow a Eurodollar Rate
Borrowing on the date specified by Borrower; (c) Borrower's
failure to make any prepayment of the Loans (other than Base Rate
Borrowings) on the date specified by Borrower, or (d) any
cessation of a Eurodollar Rate to apply to the Loans or any part
thereof pursuant to Section 3.5, in each case whether voluntary
or involuntary, any direct loss, expense, penalty, premium or
liability incurred by any Lender (including but not limited to
any loss or expense incurred by reason of the liquidation or
reemployment of deposits or other funds acquired by a Lender to
fund or maintain a Loan).
Generally Accepted Accounting Principles shall mean, as to a
particular Person, such accounting practice as, in the opinion of
the independent accountants of recognized national standing regu
larly retained by such Person and acceptable to the Agent,
conforms at the time to generally accepted accounting principles,
consistently applied. Generally Accepted Accounting Principles
means those principles and practices (a) which are recognized as
such by the Financial Accounting Standards Board, (b) which are
applied for all periods after the date hereof in a manner con
sistent with the manner in which such principles and practices
were applied to the most recent audited financial statements of
the relevant Person furnished to the Lenders or where a change
therein has been concurred in by such Person's independent
auditors, and (c) which are consistently applied for all periods
after the date hereof so as to reflect properly the financial
condition, and results of operations and changes in financial
position, of such Person.
Governmental Authority shall mean any foreign governmental
authority, the United States of America, any State of the United
States and any political subdivision of any of the foregoing, and
any agency, department, commission, board, bureau, court or other
tribunal having jurisdiction over the Agent, any Lender or any
Obligor or their respective Property.
Guarantors (whether one or more) shall mean Parkway
Properties, Inc., Parkway Properties General Partners, Inc.,
Parkway Lamar LLC, Parkway Jackson LLC, and 111 Capitol Building
Limited Partnership.
Guaranties (whether one or more) shall mean the Guaranties
executed by the Guarantors and delivered to the Agent in
accordance with this Agreement.
Historical Value shall mean the purchase price of Property
(including improvements) and ordinary related purchase
transaction costs, plus the cost of subsequent capital
improvements made by the Borrower, less any provision for losses,
all determined in accordance with Generally Accepted Accounting
Principles. If the Property is purchased as a part of a group of
properties, the Historical Value shall be calculated based upon a
reasonable allocation of the aggregate purchase price by the
Borrower for all purposes, and consistent with Generally Accepted
Accounting Principles.
Indebtedness shall mean and include, without duplication
(1) all obligations for borrowed money, letter of credit
reimbursement obligations, preferred stock redeemable at the
option of the stockholder, (2) all obligations evidenced by
bonds, debentures, notes or other similar agreements, (3) all
obligations to pay the deferred purchase price of Property or
services, except trade accounts payable arising in the ordinary
course of business (unless included in (6) below), (4) all guar
anties, endorsements, and other contingent obligations in respect
of, or any obligations to purchase or otherwise acquire, Total
Liabilities of others (but not including contracts to purchase
real property and assume related liabilities which are not yet
consummated if the buyer has the ability to terminate the
contract at its option), (5) all Total Liabilities secured by any
Lien existing on any interest of the Person with respect to which
Indebtedness is being determined in Property owned subject to
such Lien whether or not the Total Liabilities secured thereby
shall have been assumed, (6) accounts payable, dividends of any
kind or character or other proceeds payable with respect to any
stock and accrued expenses, and (7) payments received in
consideration for sale of ownership interests in a Person when
the amount of ownership interest so sold is determined, and the
date of delivery, is more than one (1) month after receipt of
such payment. Indebtedness shall be calculated on a consolidated
basis in accordance with Generally Accepted Accounting
Principles, and including (without duplication) the Equity
Percentage of Indebtedness for the Borrower's Unconsolidated
Affiliates.
Interest Coverage Ratio shall mean the ratio of (a) the
Borrower's EBITDA for the immediately preceding four (4) calendar
quarters to all of the Borrower's Interest Expense for the period
used to calculate EBITDA.
Interest Expense shall mean all of a Person's paid, accrued
or capitalized interest expense on such Person's Indebtedness
(whether direct, indirect or contingent, and including, without
limitation, interest on all convertible debt), and including
(without duplication) the Equity Percentage of Interest Expense
for the Borrower's Unconsolidated Affiliates.
Interest Options shall mean the Base Rate and the Eurodollar
Rate, and "Interest Option" means either of them.
Interest Payment Dates shall mean (a) the first (1st) day of
each calendar month and the Maturity Date, for Base Rate
Borrowings and (b) the last day of each Interest Period and, if
the Interest Period is longer than three (3) months, at the end
of each three (3) months, and the Maturity Date, for Eurodollar
Rate Borrowings.
Interest Period shall mean, for each Eurodollar Rate
Borrowing, a period commencing on the date such Eurodollar Rate
Borrowing was made and ending on the numerically corresponding
day which is, subject to availability, one (1), two (2), three
(3) or six (6) months thereafter; provided, (v) any Interest
Period which would otherwise end on a day which is not a
Eurodollar Business Day shall be extended to the next succeeding
Eurodollar Business Day, unless such Eurodollar Business Day
falls in another calendar month, in which case such Interest
Period shall end on the next preceding Eurodollar Business Day;
(w) any Interest Period which begins on the last Eurodollar
Business Day of a calendar month (or on a day for which there is
no numerically corresponding day in the calendar month at the end
of such Interest Period) shall end on the last Eurodollar
Business Day of the appropriate calendar month; (x) no Interest
Period shall ever extend beyond the Maturity Date; and
(y) Interest Periods shall be selected by Borrower in such a
manner that the Interest Period with respect to any portion of
the Loans which shall become due shall not extend beyond such due
date.
Legal Requirement shall mean any law, statute, ordinance,
decree, requirement, order, judgment, rule, regulation (or inter
pretation of any of the foregoing) of, and the terms of any
license or permit issued by, any Governmental Authority.
Lender Commitment means, for any Lender, the amount set
forth opposite such Lender's name on its signature page of this
Agreement, or as may hereafter become a signatory hereto.
Lien shall mean any mortgage, pledge, charge, encumbrance,
security interest, collateral assignment or other lien or
restriction of any kind, whether based on common law,
constitutional provision, statute or contract, and shall include
reservations, exceptions, encroachments, easements, rights of
way, covenants, conditions, restrictions, leases and other title
exceptions.
Limiting Agreements shall mean any agreement, instrument or
transaction, including, without limitation, an Obligor's
Organizational Documents, which has or may have the effect of
prohibiting or limiting any Obligor's ability to pledge assets in
the Pool to Agent as security for the Loans.
Loans shall mean the Loans described in Sections 2.1 and 2.2
hereof. Loan shall mean any such Loan.
Majority Lenders shall mean the Lenders with an aggregate
amount of at least sixty-six and 67/100 percent (66.67%) of the
amount of the Commitment then outstanding.
Material Adverse Change shall mean a change which could
reasonably be expected to have a Material Adverse Effect.
Material Adverse Effect means a material adverse effect on
(a) the financial condition, or results of operations of Borrower
and its Subsidiaries taken as a whole, (b) the ability of an
Obligor to perform its material obligations under the Credit
Documents to which it is a party taken as a whole, (c) the
validity or enforceability of such Credit Documents taken as a
whole, or (d) the material rights and remedies of Lenders and
Agent under the Credit Documents taken as a whole.
Maturity Date shall mean three (3) years after the date of
this Agreement, as the same may hereafter be accelerated pursuant
to the provisions of any of the Credit Documents.
Moody's Rating shall mean the senior unsecured debt rating
from time to time received by the Borrower from Moody's Investors
Service, Inc.
Net Operating Income shall mean, for any income producing
operating Property, the difference between (a) any cash rentals,
proceeds and other income received from such Property (but
excluding security or other deposits, late fees, early lease
termination or other penalties, or other income of a non-
recurring nature) during the determination period, less (b) an
amount equal to all costs and expenses (excluding interest
expense and any expenditures that are capitalized in accordance
with Generally Accepted Accounting Principles) incurred as a
result of, or in connection with, or properly allocated to, the
operation or leasing of such Property during the determination
period; provided, however, that the amount for the expenses for
the management of a Property included in clause (b) above shall
be the greater of the management fee, the expenses that would be
covered by a management fee, or three percent (3%) of the amount
provided in clause (a) above. Net Operating Income shall be
calculated on a consolidated basis in accordance with Generally
Accepted Accounting Principles, and including (without
duplication) the Equity Percentage of Net Operating Income for
the Borrower's Unconsolidated Affiliates.
Net Worth shall mean Tangible Net Worth, plus intangibles
deducted in determining Tangible Net Worth. Net Worth shall be
calculated on a consolidated basis in accordance with Generally
Accepted Accounting Principles.
Non-recourse Debt shall mean any Indebtedness the payment of
which the Borrower or any of its Subsidiaries is not obligated to
make other than to the extent of any security therefor.
Notes shall mean the promissory notes of the Borrower
described in Section 2.1 hereof, any and all renewals, exten
sions, modifications, rearrangements and replacements thereof and
any and all substitutions therefor, and Note shall mean any one
of them.
Obligations shall mean, as at any date of determination
thereof, the sum of (a) the aggregate amount of Loans outstanding
hereunder plus (b) all other liabilities, obligations and
Indebtedness of any Parties under any Credit Document.
Obligors means any Person now or hereafter primarily or
secondarily obligated to pay all or any part of the Obligations,
including Borrower and Guarantors.
Occupancy Level shall mean the occupancy level of a Property
that is leased to bona fide tenants not Affiliates of any Obligor
or the subject property manager (or any of their respective
Affiliates) paying rent under written leases, based on the
occupancy level at the time of determination.
Officer's Certificate shall mean a certificate in the form
attached hereto as Exhibit A.
Organizational Documents shall mean, with respect to a
corporation, the certificate of incorporation, articles of
incorporation and bylaws of such corporation; with respect to a
partnership, the partnership agreement establishing such
partnership; with respect to a joint venture, the joint venture
agreement establishing such joint venture, and with respect to a
trust, the instrument establishing such trust; in each case
including any and all modifications thereof as of the date of the
Credit Document referring to such Organizational Document and any
and all future modifications thereof which are consented to by
the Lenders.
Opinion Letters shall mean the opinion letters of
independent counsel for the Obligors, each in Proper Form.
Parties shall mean all Persons other than the Agent, or any
Lender executing any Credit Document.
Past Due Rate shall mean, on any day, a rate per annum equal
to the Ceiling Rate for that day, or only if applicable law
imposes no maximum nonusurious rate of interest for that day,
then the Past Due Rate for that day shall be a rate per annum
equal to the Base Rate plus an additional five percent (5%) per
annum, but in any event not to exceed the Ceiling Rate.
Percentage shall mean the amount, expressed as a percentage,
of each Lender Commitment as compared to the Commitment, set
forth opposite the Lender's name on its signature page of this
Agreement, or as may hereafter become signatory hereto.
Permitted Encumbrances shall mean (a) encumbrances
consisting of zoning restrictions, easements, or other
restrictions on the use of real property, provided that such
items do not materially impair the use of such property for the
purposes intended and none of which is violated in any material
respect by existing or proposed structures or land use; (b) the
following: (i) Liens for taxes not yet due and payable, or being
diligently contested in good faith; or (ii) materialmen's,
mechanic's, warehousemen's and other like Liens arising in the
ordinary course of business, securing payment of Total
Liabilities whose payment is not yet due, or that are being
contested in good faith by appropriate proceedings diligently
conducted, and for or against which the Property owner has
established adequate reserves in accordance with Generally
Accepted Accounting Principles; (c) Liens for taxes, assessments
and governmental charges or assessments that are being contested
in good faith by appropriate proceedings diligently conducted,
and for or against which the Property owner has established
adequate reserves in accordance with Generally Accepted
Accounting Principles; (d) Liens on real property which are
insured around or against by title insurance; (e) Liens securing
assessments or charges payable to a property owner association or
similar entity which assessments are not yet due and payable or
are being diligently contested in good faith; and (f) Liens
securing this Agreement and Indebtedness hereunder, if any.
Person shall mean any individual, corporation, trust, unin
corporated organization, Governmental Authority or any other form
of entity.
Prime Rate shall mean, as of a particular date, the prime
rate of interest per annum most recently determined by the Agent,
automatically fluctuating upward or downward with and at the time
specified in each such determination without notice to Borrower
or any other Person; each change in the Prime Rate shall be
effective on the date such change is determined; which Prime Rate
may not necessarily represent the Agent's lowest or best rate
actually charged to a customer.
Proper Form shall mean in form and substance reasonably
satisfactory to the Agent and the Majority Lenders.
Property shall mean any interest in any kind of property or
asset, whether real, leasehold, personal or mixed, tangible or
intangible.
Quarterly Unaudited Financial Statements shall mean the
quarterly financial statements of a Person, including all notes
thereto, which statements shall include a balance sheet as of the
end of such quarter and an income statement for such fiscal
quarter, and for the fiscal year to date, a statement of cash
flows for such quarter and for the fiscal year to date, subject
to normal year-end adjustments, all setting forth in comparative
form the corresponding figures for the corresponding fiscal
period of the preceding year (or, in the case of the balance
sheet, the end of the preceding fiscal year), prepared in
accordance with Generally Accepted Accounting Principles except
that the Quarterly Unaudited Financial Statements may contain
condensed footnotes as permitted by regulations of the United
States Securities and Exchange Commission, and containing a
detailed listing of the Borrower's Property and the Historical
Value thereof, and certified as true and correct by a managing
director, senior vice president, or vice president of Borrower.
The Quarterly Unaudited Financial Statements shall be prepared on
a consolidated basis in accordance with Generally Accepted
Accounting Principles.
Rate Designation Date shall mean 12:00 noon, Houston, Texas
time, on the date three (3) Eurodollar Business Days preceding
the first day of any proposed Interest Period.
Regulation D shall mean Regulation D of the Board of
Governors of the Federal Reserve System from time to time in
effect and shall include any successor or other regulation
relating to reserve requirements applicable to member lenders of
the Federal Reserve System.
Request for Loan shall mean a written request substantially
in the form of Exhibit B.
S&P Rating shall mean the senior unsecured debt rating from
time to time received by the Borrower from Standard & Poor's
Rating Services.
Secured Debt shall mean the Indebtedness of the Borrower
secured by a Lien, and any Indebtedness of any of the Borrower's
Subsidiaries owed to a Person not an Affiliate of the Borrower or
such Subsidiary.
Secured Debt to Total Asset Value Ratio shall mean the ratio
(expressed as a percentage) of Secured Debt to Total Asset Value.
Square Footage Capital Expenditure shall mean, on an annual
basis, an amount equal to (a) for use in the Fixed Charged
Coverage Ratio, the product of (i) the daily average aggregate
number of gross square feet contained in each completed,
operating Property owned by Borrower or any Subsidiary during the
immediately preceding four (4) calendar quarters, multiplied by
(ii) $1.00; and (b) for use in defining Value, the product of (i)
the aggregate number of gross square feet contained in each
completed, operating Property owned by Borrower or any Subsidiary
as of the last day of the immediately preceding calendar quarter,
multiplied by (ii) $1.00 .
Stated Rate shall, on any day, mean whichever of the Base
Rate or the Eurodollar Rate has been designated and provided
pursuant to this Agreement; provided that, if on any day such
rate shall exceed the Ceiling Rate for that day, the Stated Rate
shall be fixed at the Ceiling Rate on that day and on each day
thereafter until the total amount of interest accrued at the
Stated Rate on the unpaid principal balance of the Notes equals
the total amount of interest which would have accrued if there
had been no Ceiling Rate. If the Notes mature (or are prepaid)
before such equality is achieved, then, in addition to the unpaid
principal and accrued interest then owing pursuant to the other
provisions of the Credit Documents, Borrower promises to pay on
demand to the order of the holders of the Notes interest in an
amount equal to the excess (if any) of (a) the lesser of (i) the
total interest which would have accrued on the Notes if the
Stated Rate had been defined as equal to the Ceiling Rate from
time to time in effect and (ii) the total interest which would
have accrued on the Notes if the Stated Rate were not so
prohibited from exceeding the Ceiling Rate, over (b) the total
interest actually accrued on the Notes to such maturity (or
prepayment) date.
Subsidiary shall mean, as to a particular parent entity, any
entity of which more than fifty percent (50%) of the indicia of
voting equity or ownership rights (whether outstanding capital
stock or otherwise) is at the time directly or indirectly owned
by, such parent entity, or by one or more of its other
Subsidiaries.
Tangible Net Worth shall mean total assets based on book
value, and including the book value of equity investments in each
Unconsolidated Affiliate multiplied by the Equity Percentage for
that Unconsolidated Affiliate), less (1) all intangibles and
(2) all liabilities (including contingent and indirect
liabilities), all determined in accordance with Generally
Accepted Accounting Principles. The term "intangibles" shall
include, without limitation, (i) deferred charges, (ii) the
amount of any write-up in the book value of any assets contained
in any balance sheet resulting from revaluation thereof or any
write-up in excess of the cost of such assets acquired, and
(iii) the aggregate of all amounts appearing on the assets side
of any such balance sheet for franchises, licenses, permits,
patents, patent applications, copyrights, trademarks, trade
names, goodwill, treasury stock, experimental or organizational
expenses and other like intangibles. The term "liabilities"
shall include, without limitation, (i) Total Liabilities secured
by Liens on Property of the Person with respect to which Tangible
Net Worth is being computed whether or not such Person is liable
for the payment thereof, (ii) deferred liabilities, and
(iii) obligations under leases which have been capitalized.
Tangible Net Worth shall be calculated on a consolidated basis in
accordance with Generally Accepted Accounting Principles.
Taxes shall mean any tax, levy, impost, duty, charge or fee.
Total Asset Value shall mean the sum of (without
duplication) (a) the aggregate Value of all of Borrower's
operating real estate assets, plus (b) the amount of any cash
and cash equivalents, excluding tenant security and other
restricted deposits of the Borrower, plus (c) investments in
Unconsolidated Affiliates that are engaged primarily in the
business of investment in and operation of office and industrial
office buildings, valued at an amount equal to the Value of each
Unconsolidated Affiliate's operating real estate assets
multiplied by the Equity Percentage for that Unconsolidated
Affiliate (subject to the maximum investment limitation contained
in Section 6.6(f)), plus (d) investments in readily marketable
securities of another Person, not an Affiliate of any Obligor,
traded on a national trading exchange, that is a real estate
investment trust under Section 856(c)(1) of the Code, or that is
a real estate operating company (subject to the maximum
investment limitation contained in Section 6.6(i)), plus (e)
investments in real estate assets that are being constructed or
developed to be office or industrial buildings, but are not yet
in operation (subject to the maximum investment and cost
limitation contained in Section 6.6(k)). Total Asset Value shall
be calculated on a consolidated basis in accordance with
Generally Accepted Accounting Principles.
Total Liabilities shall mean and include, without
duplication, the sum of (a) Indebtedness and (b) all other items
which in accordance with Generally Accepted Accounting Principles
would be included on the liability side of a balance sheet on the
date as of which Total Liabilities is to be determined (excluding
capital stock, surplus, surplus reserves and deferred credits),
and including (without duplication) the Equity Percentage of
Total Liabilities of the Borrower's Unconsolidated Affiliates.
Total Liabilities to Total Asset Value Ratio shall mean the
ratio (expressed as a percentage) of Total Liabilities to Total
Asset Value, with Total Asset Value based on the immediately
preceding calendar quarter.
Unconsolidated Affiliate shall mean, in respect of any
Person, any other Person (other than a Person whose stock is
traded on a national trading exchange) in whom such Person holds
a voting equity or ownership interest and whose financial results
would not be consolidated under Generally Accepted Accounting
Principles with the financial results of such Person on the
consolidated financial statements of such Person.
Unencumbered Interest Coverage Ratio shall mean the ratio of
(a) the Net Operating Income for Property that is not subject to
any Lien for the immediately preceding four (4) calendar
quarters, to (b) an amount equal to the greater of (i) the
Borrower's Interest Expense on all of the Borrower's Indebtedness
other than Secured Debt, or (ii) interest on the Borrower's
Indebtedness other than Secured Debt calculated at seven and one-
half (7.50%) per annum, in each case for the period used to
calculate Net Operating Income.
Value shall mean the sum of (a) for Property that has
reached the Calculation Date and that Borrower has owned for the
full determination period, the result of dividing (i) the
aggregate Net Operating Income of the subject Property based on
the immediately preceding calendar quarter and multiplied by four
(4), less the aggregate Square Footage Capital Expenditure for
such Property, by (ii) nine and one-fourth percent (9.25%); plus
(b) for Property that has not reached the Calculation Date or
that has not been owned by Borrower for the full determination
period, the aggregate Historical Value of the subject Property.
The following terms shall have the respective meanings
ascribed to them in the Uniform Commercial Code as enacted and in
force in the State of Texas on the date hereof:
accessions, continuation statement, fixtures, general
intangibles, proceeds, security interest and security
agreement.
2. The Loans.
2.1 Advances. (a) Subject to the terms and conditions of
this Agreement, each Lender severally agrees to make Loans prior
to the Maturity Date to the Borrower not to exceed an amount (in
the aggregate, the "Commitment") at any one time outstanding
equal to the Lender's Lender Commitment. Each such request for a
Loan by Borrower shall be deemed a request for a Loan from each
Lender equal to such Lender's Percentage of the aggregate amount
so requested, and such aggregate amount shall be in an amount at
least equal to $1,000,000.00 and equal to a multiple of
$250,000.00, or the difference between the Commitment and the
aggregate principal balance of the Notes, whichever is less.
Each repayment of the Loans shall be deemed a repayment of each
Lender's Loan equal to such Lender's Percentage of the amount so
repaid. The obligations of the Lenders hereunder are several and
not joint, and the preceding two sentences will give rise to
certain inappropriate results if special provisions are not made
to accommodate the failure of a Lender to fund a Loan as and when
required by this Agreement; therefore, notwithstanding anything
herein to the contrary, (A) no Lender shall be required to make
Loans at any one time outstanding in excess of such Lender's
Percentage of the Commitment and (B) if a Lender fails to make a
Loan as and when required hereunder and Borrower subsequently
makes a repayment on the Loans, such repayment shall be divided
among the non-defaulting Lenders ratably in accordance with their
respective Percentages until each Lender has its Percentage of
all of the outstanding Loans, and the balance of such repayment
shall be divided among all of the Lenders in accordance with
their respective Percentages. The Loans shall be evidenced by
the Notes substantially in the form of Exhibit C attached hereto.
The Borrower, the Agent and the Lenders agree that Chapter 346 of
the Texas Finance Code shall not apply to this Agreement, the
Notes or any Loan.
(b) The Borrower shall give the Agent notice of each
borrowing to be made hereunder as provided in Section 3.1 hereof,
and the Agent shall deliver same to each Lender promptly
thereafter. Not later than 11:00 a.m., Houston, Texas time, on
the date specified for each such borrowing hereunder, each Lender
shall make available the amount of the Loan, if any, to be made
by it on such date to the Agent at the Agent's principal office
in Houston, Texas, in immediately available funds, for the
account of the Borrower. Such amounts received by the Agent will
be held in Agent's general ledger account. The amounts so
received by the Agent shall, subject to the terms and conditions
of this Agreement, be made available to the Borrower by wiring or
otherwise transferring, in immediately available funds not later
than 12:00 noon, Houston, Texas time, such amount to an account
designated by the Borrower and maintained with Chase in Houston,
Texas or any other account or accounts which the Borrower may
from time to time designate to the Agent by a written notice as
the account or accounts to which borrowings hereunder are to be
wired or otherwise transferred.
2.2 Payments. (a) Except to the extent otherwise provided
herein, all payments of principal, interest and other amounts to
be made by the Borrower hereunder, under the Notes and under the
other Credit Documents shall be made in immediately available
funds to the Agent, for the account of the Lenders, at its
principal office in Houston, Texas (or in the case of a successor
Agent, at the principal office of such successor Agent in the
United States), not later than 12:00 noon Houston, Texas time on
the date on which such payment shall become due (each such
payment made after such time on such due date to be deemed to
have been made on the next succeeding Business Day).
(b) The Borrower may, at the time of making each payment
hereunder, under any Note or under any other Credit Document,
specify to the Agent the Loans or other amounts payable by the
Borrower hereunder or thereunder to which such payment is to be
applied, which must be pro rata on the basis of each Lender's
Percentage (and in the event that it fails so to specify, such
payment shall be applied to the Loans or, if no Loans are
outstanding, to other amounts then due and payable, provided that
if no Loans or other amounts are then due and payable or an Event
of Default has occurred and is continuing, the Agent may apply
such payment to the Obligations in such order as it may elect in
its sole discretion, but subject to the other terms and
conditions of this Agreement, including without limitation
Section 2.3 hereof). Each payment received by the Agent
hereunder, under any Note or under any other Credit Document for
the account of a Lender shall be paid promptly to such Lender, in
immediately available funds. If the Agent receives a payment for
the account of a Lender prior to 12:00 noon Houston, Texas time,
such payment must be delivered to the Lender on that same day and
if it is not so delivered due to the fault of the Agent, the
Agent shall pay to the Lender entitled to the payment the
interest accrued on the amount of the payment pursuant to said
Lender's Note and this Agreement from the date the Agent receives
the payment to the date the Lender received the payment.
(c) If the due date of any payment hereunder or under any
Note falls on a day which is not a Business Day or a Eurodollar
Business Day, as the case may be, the due date for such payments
shall be extended to the next succeeding Business Day or
Eurodollar Business Day, respectively, and interest shall be
payable for any principal so extended for the period of such
extension; provided, however, that with respect to Eurodollar
Rate Borrowings if such extension would cause the Eurodollar
Business Day of payment to fall in another calendar month, the
payment shall be due on the Eurodollar Business Day next
preceding the due date of the payment.
(d) The Borrower shall give the Agent at least one (1)
Business Day's prior written notice of the Borrower's intent to
make any payment of principal or interest under the Credit
Documents not scheduled to be paid under the Credit Documents.
Any such notification of payment shall be irrevocable after it is
made by the Borrower. Upon receipt by the Agent of such
notification of payment, it shall deliver same to the other
Lenders.
2.3 Pro Rata Treatment. Except to the extent otherwise
provided herein: (a) each borrowing from the Lenders under
Section 2.1(a) hereof shall be made ratably from the Lenders on
the basis of their respective Percentages, each payment of the
Fee (hereinafter defined) shall be made for the account of the
Lenders, and shall be applied, pro rata, according to the
Lenders' respective Lender Commitment; and (b) each payment by
the Borrower of principal or interest on the Loans or any other
sums advanced by the Lenders pursuant to the Credit Documents,
and of any other amount owed to the Lenders other than the Fee,
or any other sums designated by this Agreement as being owed to a
particular Lender, shall be made to the Agent for the account of
the Lenders pro rata in accordance with the respective unpaid
principal amounts of the Loans held by the Lenders.
2.4 Non-Receipt of Funds by the Agent. Unless the Agent
shall have been notified by a Lender or the Borrower (the
"Payor") prior to the date on which such Lender is to make
payment to the Agent of the proceeds of a Loan to be made by it
hereunder or the Borrower is to make a payment to the Agent for
the account of one or more of the Lenders, as the case may be
(such payment being herein called the "Required Payment"), which
notice shall be effective upon receipt, that the Payor does not
intend to make the Required Payment to the Agent, the Agent may
assume that the Required Payment has been made and may, in
reliance upon such assumption (but shall not be required to),
make the amount thereof available to the intended recipient on
such date and, if the Payor has not in fact made the Required
Payment to the Agent, the recipient of such payment shall, on
demand, pay to the Agent the amount made available by the Agent
together with interest thereon in respect of the period
commencing on the date such amount was so made available by the
Agent until the date the Agent recovers such amount at a rate per
annum equal to (a) the Past Due Rate for such period if the
recipient returning a Required Payment is the Borrower, or (b)
the Federal Funds Effective Rate for such period if the recipient
returning a Required Payment is the Agent or a Lender.
2.5 Sharing of Payments, Etc. The Borrower agrees that,
in addition to (and without limitation of) any right of set-off,
bankers' lien or counterclaim a Lender may otherwise have, each
Lender shall be entitled, at its option, to offset balances held
by it for the account of the Borrower at any of its offices,
against any principal of or interest on any of such Lender's
Loans to the Borrower hereunder, or other Obligations of the
Borrower hereunder, which is not paid (regardless of whether such
balances are then due to the Borrower), in which case it shall
promptly notify the Borrower and the Agent thereof, provided that
such Lender's failure to give such notice shall not affect the
validity thereof. If a Lender shall obtain payment of any
principal of or interest on any Loan made by it under this
Agreement or other Obligation then due to such Lender hereunder,
through the exercise of any right of set-off, banker's lien,
counterclaim or similar right, or otherwise, it shall promptly
purchase from the other Lenders portions of the Loans made or
other Obligations held by the other Lenders in such amounts, and
make such other adjustments from time to time as shall be
equitable to the end that all the Lenders shall share the benefit
of such payment (net of any expenses which may be incurred by
such Lender in obtaining or preserving such benefit) pro rata in
accordance with the unpaid principal and interest on the
Obligations then due to each of them. To such end all the
Lenders shall make appropriate adjustments among themselves (by
the resale of participations sold or otherwise) if such payment
is rescinded or must otherwise be restored. Nothing contained
herein shall require any Lender to exercise any such right or
shall affect the right of any Lender to exercise, and retain the
benefits of exercising, any such right with respect to any other
indebtedness or obligation of the Borrower.
2.6 Fees. The Borrower shall pay to the Agent for the
account of each Lender fees (collectively, the "Fee") equal to an
amount payable as a commitment fee by the Borrower to the Agent
for the account of each Lender equal to the portion of the daily
unused amount of the Commitment multiplied by the rate per annum
corresponding to (a) the Total Liabilities to Total Asset Value
Ratio reflected in Table 1 on Schedule I attached hereto (as
determined as of the last day of each of the Borrower's fiscal
quarters) whenever and for so long as the Borrower has not
received an S&P Rating and a Moody's Rating; and (b) the S&P
Rating or Moody's Rating, whichever is lower, reflected in Table
2 on Schedule I attached hereto, as same is in effect from time
to time, whenever and for so long as the Borrower has received an
S&P Rating and a Moody's Rating; such commitment fee to be
payable in arrears on or before the tenth (10th) day of each
April, July, October and January. The Fee shall not be
refundable. Any portion of the Fee which is not paid by the
Borrower when due shall bear interest at the Past Due Rate from
the date due until the date paid by the Borrower. The Fee shall
be calculated on the actual number of days elapsed in a year
deemed to consist of 360 days.
3. Conditions.
3.1 All Loans. The obligation of any Lender to make any
Loan is subject to the accuracy of all representations and
warranties of the Borrower on the date of such Loan, to the
performance by the Borrower of its obligations under the Credit
Documents and to the satisfaction of the following further
conditions: (a) the Agent shall have received the following, all
of which shall be duly executed and in Proper Form: (1) a Request
for Loan (i) by 11:00 a.m., Houston, Texas time, one (1) Business
Day before the date (which shall also be a Business Day) of the
proposed Loan which is to be a Base Rate Borrowing, or (ii) by
the Rate Designation Date of the proposed Loan which is to be a
Eurodollar Rate Borrowing; and (2) such other documents as the
Agent may reasonably require to satisfy itself or the request of
any Lender; (b) no Default or Event of Default shall have
occurred and be continuing; (c) the making of the Loan shall not
be prohibited by any Legal Requirement; and (d) the Borrower
shall have paid all legal fees and expenses of the type described
in Section 5.10 hereof through the date of such Loan.
3.2 First Loan. In addition to the matters described in
Section 3.1 hereof, the obligation of the Lenders to make the
first Loan under this Agreement is subject to the receipt by the
Lenders of each of the following, in Proper Form: (a) the Notes,
executed by the Borrower; (b) a certificate executed by the
Secretary or Assistant Secretary of each Obligor dated as of the
date hereof as to the resolutions of such Person authorizing the
execution of the Credit Documents and as to the incumbency of the
officers of such Person; (c) a certificate from the Secretary of
State or other appropriate public official of the state of
organization of each Obligor as to the continued existence and
good standing of such Obligor; (d) a certificate from the
appropriate public official of every state where the location of
the Obligor's Property requires it to be qualified to do business
as to the due qualification and good standing of such Obligor;
(e) a legal opinion from independent counsel for the Obligors as
to the matters set forth on Exhibit D acceptable to the Lenders;
and (f) an Officer's Certificate in the form of Exhibit A; and to
the further condition that, at the time of the initial Loan, all
legal matters incident to the transactions herein contemplated
shall be satisfactory to Liddell, Sapp, Zivley, Hill & LaBoon,
L.L.P., counsel for the Agent.
3.3 Options Available. The outstanding principal balance
of the Notes shall bear interest at the Base Rate; provided, that
(1) all past due amounts, both principal and accrued interest,
shall bear interest at the Past Due Rate, and (2) subject to the
provisions hereof, Borrower shall have the option of having all
or any portion of the principal balance of the Notes from time to
time outstanding bear interest at a Eurodollar Rate. The records
of the Lenders with respect to Interest Options, Interest Periods
and the amounts of Loans to which they are applicable shall be
prima facie evidence thereof. Interest on the Loans shall be
calculated at the Base Rate except where it is expressly provided
pursuant to this Agreement that a Eurodollar Rate is to apply.
3.4 Designation and Conversion. Borrower shall have the
right to designate or convert its Interest Options in accordance
with the provisions hereof. Provided no Event of Default has
occurred and is continuing and subject to the provisions of
Section 3.5, Borrower may elect to have a Eurodollar Rate apply
or continue to apply to all or any portion of the principal
balance of the Notes. Each change in Interest Options shall be a
conversion of the rate of interest applicable to the specified
portion of the Loans, but such conversion shall not change the
respective outstanding principal balance of the Notes. The
Interest Options shall be designated or converted in the manner
provided below:
(a) Borrower shall give Agent a Request for Loan. Each
such written notice shall specify the amount of Loan which is the
subject of the designation, if any; the amount of borrowings into
which such borrowings are to be converted or for which an
Interest Option is designated; the proposed date for the
designation or conversion and the Interest Period, if any,
selected by Borrower. The Request for Loan shall be irrevocable
and shall be given to Agent no later than the applicable Rate
Designation Date. The Agent shall promptly deliver the Request
for Loan to the Lenders.
(b) No more than five (5) Eurodollar Rate Borrowings with
five (5) Interest Periods shall be in effect at any time.
(c) Each designation or conversion of a Eurodollar Rate
Borrowing shall occur on a Eurodollar Business Day.
(d) Except as provided in Section 3.5 hereof, no Eurodollar
Rate Borrowing shall be converted on any day other than the last
day of the applicable Interest Period.
(e) Unless a Request for Loan to the contrary is received
as provided in this Agreement, each Eurodollar Rate Borrowing
will convert to a Base Rate Borrowing after the expiration of the
Interest Period.
3.5 Special Provisions Applicable to Eurodollar Rate
Borrowings.
(a) Options Unlawful. If the adoption of any applicable
Legal Requirement or any change in any applicable Legal Require
ment or in the interpretation or administration thereof by any
Governmental Authority or compliance by the Lenders with any
request or directive (whether or not having the force of law) of
any central bank or other Governmental Authority shall at any
time make it unlawful or impossible for any Lender to permit the
establishment of or to maintain any Eurodollar Rate Borrowing,
the commitment of the Lenders to establish or maintain such
Eurodollar Rate Borrowing shall forthwith be suspended until such
condition shall cease to exist and Borrower shall forthwith, upon
demand by Agent to Borrower, (1) convert the Eurodollar Rate
Borrowing with respect to which such demand was made to a Base
Rate Borrowing; (2) pay all accrued and unpaid interest to date
on the amount so converted; and (3) pay any amounts required to
compensate the Lenders for any additional cost or expense which
the Lenders may incur as a result of such adoption of or change
in such Legal Requirement or in the interpretation or
administration thereof and any Funding Loss which the Lenders may
incur as a result of such conversion. If, when Agent so notifies
Borrower, Borrower has given a Request for Loan specifying a
Eurodollar Rate Borrowing but the selected Interest Period has
not yet begun, such Request for Loan shall be deemed to be of no
force and effect, as if never made, and the balance of the Loans
specified in such Request for Loan shall bear interest at the
Base Rate until a different available Interest Option shall be
designated in accordance herewith.
(b) Increased Cost of Borrowings. If the adoption of any
applicable Legal Requirement or any change in any applicable
Legal Requirement or in the interpretation or administration
thereof by any Governmental Authority or compliance by any Lender
with any request or directive of general applicability (whether
or not having the force of law) of any central bank or
Governmental Authority shall at any time as a result of any
portion of the principal balance of the Notes being maintained on
the basis of a Eurodollar Rate:
(1) subject any Lender (or make it apparent that any
Lender is subject) to any Taxes, or any deduction
or withholding for any Taxes, on or from any
payment due under any Eurodollar Rate Borrowing or
other amount due hereunder, other than income and
franchise taxes of the United States and its
political subdivisions; or
(2) change the basis of taxation of payments due from
Borrower to any Lender under any Eurodollar Rate
Borrowing (otherwise than by a change in the rate
of taxation of the overall net income of a
Lender); or
(3) impose, modify, increase or deem applicable any
reserve requirement (excluding that portion of any
reserve requirement included in the calculation of
the applicable Eurodollar Rate), special deposit
requirement or similar requirement (including, but
not limited to, state law requirements and
Regulation D) imposed, modified, increased or
deemed applicable by any Governmental Authority
against assets held by any Lender, or against
deposits or accounts in or for the account of any
Lender, or against loans made by any Lender, or
against any other funds, obligations or other
property owned or held by any Lender; or
(4) impose on any Lender any other condition regarding
any Eurodollar Rate Borrowing;
and the result of any of the foregoing is to increase
the cost to any Lender of agreeing to make or of
making, renewing or maintaining such Eurodollar Rate
Borrowing, or reduce the amount of principal or
interest received by any Lender, then, upon demand by
Agent, Borrower shall pay to such Lender, from time to
time as specified by such Lender, additional amounts
which shall compensate such Lender for such increased
cost or reduced amount. Agent will promptly notify
Borrower in writing of any event which will entitle any
Lender to additional amounts pursuant to this para
graph. A Lender's determination of the amount of any
such increased cost, increased reserve requirement or
reduced amount shall be prima facie evidence thereof.
Borrower shall have the right, if it receives from
Agent any notice referred to in this paragraph, upon
three Business Days' notice to Agent, either (i) to
repay in full (but not in part) any borrowing with
respect to which such notice was given, together with
any accrued interest thereon, or (ii) to convert the
Eurodollar Rate Borrowing which is the subject of the
notice to a Base Rate Borrowing; provided, that any
such repayment or conversion shall be accompanied by
payment of (x) the amount required to compensate a
Lender for the increased cost or reduced amount
referred to in the preceding paragraph; (y) all accrued
and unpaid interest to date on the amount so repaid or
converted, and (z) any Funding Loss which any Lender
may incur as a result of such repayment or conversion.
(c) Inadequacy of Pricing and Rate Determination. If
for any reason with respect to any Interest Period
Agent shall have determined (which determination shall
be prima facie evidence thereof) that:
(1) Agent is unable through its customary general
practices to determine any applicable Eurodollar
Rate, or
(2) by reason of circumstances affecting the
applicable market generally, Agent is not being
offered deposits in United States dollars in such
market, for the applicable Interest Period and in
an amount equal to the amount of any applicable
Eurodollar Rate Borrowing requested by Borrower,
or
(3) any applicable Eurodollar Rate will not adequately
and fairly reflect the cost to the Lenders of
making and maintaining such Eurodollar Rate
Borrowing hereunder for any proposed Interest
Period,
then Agent shall give Borrower notice thereof and
thereupon, (A) any Request for Loan previously given by
Borrower designating the applicable Eurodollar Rate
Borrowing which has not commenced as of the date of
such notice from Agent shall be deemed for all purposes
hereof to be of no force and effect, as if never given,
and (B) until Agent shall notify Borrower that the
circumstances giving rise to such notice from Agent no
longer exist, each Request for Loan requesting the
applicable Eurodollar Rate shall be deemed a request
for a Base Rate Borrowing, and any applicable
Eurodollar Rate Borrowing then outstanding shall be
converted, without any notice to or from Borrower, upon
the termination of the Interest Period then in effect
with respect to it, to a Base Rate Borrowing.
(d) Funding Losses. Borrower shall indemnify the Agent and
each Lender against and hold the Agent and each Lender harmless
from any Funding Loss. This agreement shall survive the payment
of the Notes. A certificate as to any additional amounts payable
pursuant to this subsection and setting forth the reasons for the
Funding Loss submitted by Agent to Borrower shall be prima facie
evidence thereof.
3.6 Funding Offices; Adjustments Automatic. Any Lender
may, if it so elects, fulfill its obligation as to any Eurodollar
Rate Borrowing by causing a branch or affiliate of such Lender to
make such Loan and may transfer and carry such Loan at, to, or
for the account of, any branch office or affiliate of such
Lender; provided, that in such event for the purposes of this
Agreement such Loan shall be deemed to have been made by such
Lender and the obligation of Borrower to repay such Loan shall
nevertheless be to such Lender and shall be deemed held by it for
the account of such branch or affiliate. Without notice to
Borrower or any other person or entity, each rate required to be
calculated or determined under this Agreement shall automatically
fluctuate upward and downward in accordance with the provisions
of this Agreement.
3.7 Funding Sources, Payment Obligations. Notwithstanding
any provision of this Agreement to the contrary, each Lender
shall be entitled to fund and maintain its funding of all or any
part of the Loans in any manner it sees fit, it being understood,
however, that for the purposes of this Agreement all
determinations hereunder shall be made as if each Lender had
actually funded and maintained each Eurodollar Rate Borrowing
during each Interest Period through the purchase of deposits
having a maturity corresponding to such Interest Period and
bearing an interest rate equal to the Eurodollar Rate for such
Interest Period. Notwithstanding the foregoing, Funding Losses,
increased costs and other obligations relating to Eurodollar Rate
Borrowings described in Section 3.5 of this Agreement will only
be paid by the Borrower as and when actually incurred by the
Lenders.
3.8 Mitigation, Non-Discrimination. (a) Each Lender will
notify the Borrower through the Agent of any event occurring
after the date of this Agreement which will require or enable
such Lender to take the actions described in Sections 3.5(a) or
(b) of this Agreement as promptly as practicable after it obtains
knowledge thereof and determines to request such action, and (if
so requested by the Borrower through the Agent) will designate a
different lending office of such Lender for the applicable
Eurodollar Rate Borrowing or will take such other action as the
Borrower reasonably requests if such designation or action is
consistent with the internal policy of such Lender and legal and
regulatory restrictions, can be undertaken at no additional cost,
will avoid the need for, or reduce the amount of, such action and
will not, in the sole opinion of such Lender, be disadvantageous
to such Lender (provided that such Lender will have no obligation
to designate a different lending office which is located in the
United States of America).
(b) None of the Lenders shall be able to pass through to
the Borrower charges and costs under Sections 3.5 or 5.14 of this
Agreement on a discriminating basis, such that such charges and
costs are not also passed through by each Lender to other
customers of such Lender similarly situated where such customer
is subject to documents providing for such pass through.
(c) If any Lender elects under Section 3.5 of this
Agreement to suspend or terminate the availability of Eurodollar
Rate Borrowings for any material period of time, and the event
giving rise to such election is not generally applicable to all
of the Lenders, the Borrower may within sixty (60) days after
notification of such Lender's election, and so long as no Event
of Default is then in existence, either (i) demand that such
Lender, and upon such demand, such Lender shall promptly, assign
its Lender Commitment to another financial institution subject to
and in accordance with the provisions of Section 9.5 of this
Agreement for a purchase price equal to the unpaid balance of
principal, accrued interest, the unpaid balance of the Fee and
expenses owing to such Lender pursuant to this Agreement, or (ii)
pay such Lender the unpaid balance of principal, accrued
interest, the unpaid balance of the Fee and expenses owing to
such Lender pursuant to this Agreement, whereupon, such Lender
shall no longer be a party to this Agreement or have any rights
or obligations hereunder or under any other Credit Documents, and
the Commitment shall immediately and permanently be reduced by an
amount equal to the Lender Commitment of such Lender.
4. Representations and Warranties.
To induce the Lenders to enter into this Agreement and to
make the Loans, the Borrower represents and warrants to the Agent
and the Lenders as follows:
4.1 Organization. Each Obligor is duly organized, validly
existing and in good standing under the laws of the state of its
organization; has all power and authority to conduct its business
as presently conducted; and is duly qualified to do business and
in good standing in every state where the location of its
Property requires it to be qualified to do business, unless the
failure to be so qualified would not reasonably be expected to
have a Material Adverse Effect.
4.2 Financial Statements. The financial statements
delivered to the Agent fairly present, in accordance with
Generally Accepted Accounting Principles (provided, however, that
the Quarterly Unaudited Financial Statements are subject to
normal year-end adjustments and may contain condensed footnotes
as permitted by regulations of the United States Securities and
Exchange Commission), the financial condition and the results of
operations of the Borrower and of Parkway Properties, Inc. as at
the dates and for the periods indicated. No Material Adverse
Change has occurred since the dates of such financial statements.
No Obligor is subject to any instrument or agreement which would
materially prevent it from conducting its business as it is now
conducted or as it is contemplated to be conducted.
4.3 Enforceable Obligations; Authorization. The Credit
Documents are legal, valid and binding obligations of the
Parties, enforceable in accordance with their respective terms,
except as may be limited by bankruptcy, insolvency and other laws
affecting creditors' rights generally and by general equitable
principles. The execution, delivery and performance of the
Credit Documents have all been duly authorized by all necessary
action; are within the power and authority of the Parties; do not
and will not contravene or violate any Legal Requirement or the
Organizational Documents of the Parties; do not and will not
result in the breach of, or constitute a default under, any
agreement or instrument by which the Parties or any of their
respective Property may be bound or affected; and do not and will
not result in the creation of any Lien upon any Property of any
of the Parties except as expressly contemplated therein. All
necessary permits, registrations and consents for such making and
performance have been obtained.
4.4 Other Debt. No Obligor is in default in the payment
of any other Total Liabilities or under any agreement, mortgage,
deed of trust, security agreement or lease to which it is a
party.
4.5 Litigation. There is no litigation or administrative
proceeding pending or, to the knowledge of the Borrower,
threatened against, or any outstanding judgment, order or decree
affecting, the Obligors before or by any Governmental Authority
which is not adequately covered by insurance. No Obligor is in
default with respect to any judgment, order or decree of any
Governmental Authority.
4.6 Taxes. Each Obligor has filed all tax returns required
to have been filed and paid all taxes shown thereon to be due,
except those for which extensions have been obtained, those which
are being contested in good faith.
4.7 Regulation U. None of the proceeds of any Loan will be
used for the purpose of purchasing or carrying directly or
indirectly any margin stock or for any other purpose that would
constitute this transaction a "purpose credit" within the meaning
of Regulation U of the Board of Governors of the Federal Reserve
System.
4.8 Subsidiaries. The Borrower has no Subsidiaries
(excluding wholly-owned Subsidiaries which have executed a
Guaranty) which individually or in the aggregate own more than
ten percent (10%) in value of the Borrower's and the
Subsidiaries' consolidated assets determined in accordance with
Generally Accepted Accounting Principles. Each of the Borrower's
Subsidiaries is a "qualified REIT subsidiary" under Section 856
of the Code.
4.9 Securities Act of 1933. Other than the Agent's efforts
in syndicating the Loans (for which the Agent is responsible)
neither the Borrower nor any agent acting for it has offered the
Notes or any similar obligation of the Borrower for sale to or
solicited any offers to buy the Notes or any similar obligation
of the Borrower from any Person other than the Agent or any
Lender, and neither the Borrower nor any agent acting for it will
take any action which would subject the sale of the Note to the
provisions of Section 5 of the Securities Act of 1933, as
amended.
4.10 No Contractual or Corporate Restrictions. No Obligor
is a party to, or bound by, any contract, agreement or charter or
other corporate restriction materially and adversely affecting
its business, Property, assets, operations or condition,
financial or otherwise.
4.11 Investment Company Act Not Applicable. The Borrower is
not an "investment company", or a company "controlled" by an
"investment company", within the meaning of the Investment
Company Act of 1940, as amended.
4.12 Public Utility Holding Company Act Not Applicable. The
Borrower is not a "holding company", or a "subsidiary company" of
a "holding company", or an "affiliate" of a "holding company", or
an affiliate of a "subsidiary company" of a "holding company", as
such terms are defined in the Public Utility Holding Company Act
of 1935, as amended.
4.13 ERISA Not Applicable. No Obligor is subject to any
requirements of the Employee Retirement Income Security Act of
1974 as amended from time to time, or any rules, regulations,
rulings or interpretations adopted by the Internal Revenue
Service or the Department of Labor thereunder.
4.14 Year 2000. Any reprogramming required to permit the
proper functioning, in and following the year 2000 as it relates
to the two digit issues associated therewith, of (a) the
Borrower's computer systems and (b) equipment containing
embedded microchips (including systems and equipment supplied by
others or with which Borrower's systems interface) and the
testing of all such systems and equipment, as so reprogrammed,
will be completed by January 1, 1999. The cost to the Borrower
of such reprogramming and testing and of the reasonably
foreseeable consequences of year 2000 to the Borrower (including,
without limitation, reprogramming errors and the failure of
others' systems or equipment) will not result in a Default or a
Material Adverse Effect. Except for such of the reprogramming
referred to in the preceding sentence as may be necessary, the
computer and management information systems of the Borrower and
its Subsidiaries are and, with ordinary course upgrading and
maintenance, will continue for the term of this Agreement to be,
sufficient to permit the Borrower to conduct its business without
Material Adverse Effect.
5. Affirmative Covenants.
The Borrower covenants and agrees with the Agent and the
Lenders that prior to the termination of this Agreement it and
each of the other Obligors will do, and if necessary cause to be
done, each and all of the following:
5.1 Taxes, Existence, Regulations, Property, etc. At all
times (a) pay when due all taxes and governmental charges of
every kind upon it or against its income, profits or Property,
unless and only to the extent that the same shall be contested in
good faith and reserves which are adequate under Generally
Accepted Accounting Principles have been established therefor;
(b) do all things necessary to preserve its existence,
qualifications, rights and franchises in all States where such
qualification is necessary or desirable, except where failure to
obtain the same could not reasonably be expected to have a
Material Adverse Effect; (c) comply with all applicable Legal
Requirements in respect of the conduct of its business and the
ownership of its Property; and (d) cause its Property to be
protected, maintained and kept in good repair (reasonable wear
and tear excepted) and make all replacements and additions to its
Property as may be reasonably necessary to conduct its business.
5.2 Financial Statements and Information. Furnish to the
Agent each of the following: (a) as soon as available and in any
event within 90 days after the end of each respective fiscal year
of the Borrower and of Parkway Properties, Inc., Annual Audited
Financial Statements of the Borrower and of Parkway Properties,
Inc. (which shall include an unaudited statement of Funds From
Operations); (b) as soon as available and in any event within 45
days after the end of each quarter (except the last quarter) of
each respective fiscal year of the Borrower and of Parkway
Properties, Inc., Quarterly Unaudited Financial Statements of the
Borrower and of Parkway Properties, Inc. (which shall include a
statement of Funds From Operations); (c) within forty-five (45)
days after the end of the calendar quarter and concurrently with
the financial statements provided for in Subsections 5.2(a) and
(b) hereof, an Officer's Certificate, together with such
schedules, computations and other information (including, without
limitation, information as to Unconsolidated Affiliates of the
Borrower), in reasonable detail, as may be required by the Agent
to demonstrate compliance with the covenants set forth herein or
reflecting any non-compliance therewith as of the applicable
date, all certified as true, correct and complete by a managing
director, vice president or senior vice president, of Borrower;
(d) promptly after the filing thereof, all reports to or filings
made by Parkway Properties, Inc., the Borrower or any of their
respective Subsidiaries with the Securities and Exchange
Commission, including, without limitation, registration
statements and reports on Forms 10-K, 10-Q and 8-K (or their
equivalents); (e) within two (2) Business Days after the receipt
thereof, a copy of the notification to the Borrower of the
Borrower's S&P Rating or Moody's Rating, or change therein, and
(f) such other information relating to the financial condition
and affairs of the Borrower as from time to time may be
reasonably requested by any Lender. The Agent will send to each
Lender the information received by the Agent pursuant to this
Section 5.2 promptly after the receipt thereof by Agent.
5.3 Financial Tests. The Borrower shall have and maintain,
on a consolidated basis in accordance with Generally Accepted
Accounting Principles: (a) a Secured Debt to Total Asset Value
Ratio no greater than (i) forty percent (40%) at all times
through and including March 31, 2000, and (ii) thirty-five
percent (35%) at all times thereafter; (b) an Interest Coverage
Ratio of not less than 2.25:1.0 at all times; (c) a Fixed Charge
Coverage Ratio of not less than 1.75:1.00 at all times; (d) a
Tangible Net Worth of at least Three Hundred Twenty-Five Million
Dollars ($325,000,000.00), plus ninety percent (90%) of the net
proceeds (gross proceeds less reasonable and customary costs of
sale and issuance paid to Persons not Affiliates of any Obligor)
received by the Borrower at any time from the issuance of an
ownership interest in the Borrower, at all times; (e) an
Unencumbered Interest Coverage Ratio of not less than 2.00:1.00
at all times; and (f) a Total Liabilities to Total Asset Value
Ratio no greater than fifty-five percent (55%) at all times.
5.4 Inspection. In order to permit the Agent to ascertain
compliance with the Credit Documents, during normal business
hours permit the Agent to inspect its Property, to examine its
files, books and records and make and take away copies thereof,
and to discuss its affairs with its officers and accountants, all
at such times and intervals and to such extent as a Lender may
reasonably desire.
5.5 Further Assurances. Promptly execute and deliver any
and all other and further instruments which may be reasonably
requested by the Agent to cure any defect in the execution and
delivery of any Credit Document or more fully to describe
particular aspects of the Borrower's agreements set forth in the
Credit Documents or so intended to be.
5.6 Books and Records. Maintain books of record and
account in accordance with Generally Accepted Accounting
Principles.
5.7 Insurance. Maintain insurance with such insurers, on
such of its properties, in such amounts and against such risks as
is consistent with insurance maintained by businesses of
comparable type and size in the industry, and furnish the Agent
satisfactory evidence thereof promptly upon request.
5.8 Notice of Certain Matters. Notify the Agent promptly
upon acquiring knowledge of the occurrence of any of the
following: the institution or threatened institution of any
lawsuit or administrative proceeding affecting any Obligor in
which the claim exceeds $1,000,000.00; when the Borrower believes
that there has been a Material Adverse Change; or the occurrence
of any Event of Default or any Default. The Borrower will notify
the Agent in writing at least thirty (30) Business Days prior to
the date that any Obligor changes its name or the location of its
chief executive office or principal place of business or the
place where it keeps its books and records.
5.9 Use of Proceeds . The proceeds of the Loans will be
used for general business purposes. Notwithstanding the
foregoing, none of the proceeds of the Loans will be used to
finance, fund or complete any hostile acquisition of any Person.
5.10 Expenses of and Claims Against the Agent and the
Lenders . To the extent not prohibited by applicable law, the
Borrower will pay all reasonable costs and expenses incurred to
third parties and reimburse the Agent and each Lender, as the
case may be, for any and all reasonable expenditures of every
character incurred or expended from time to time, in connection
with (a) regardless of whether a Default or Event of Default
shall have occurred, the Agent's preparation, negotiation and
completion of the Credit Documents, and (b) during the
continuance of an Event of Default, all costs and expenses
relating to the Agent's and such Lender's exercising any of its
rights and remedies under this or any other Credit Document,
including, without limitation, attorneys' fees, legal expenses,
and court costs; provided, that no rights or option granted by
the Borrower to the Agent or any Lender or otherwise arising
pursuant to any provision of this or any other instrument shall
be deemed to impose or admit a duty on the Agent or any Lender to
supervise, monitor or control any aspect of the character or
condition of any property or any operations conducted in
connection with it for the benefit of the Borrower or any other
person or entity other than the Agent or such Lender.
5.11 Legal Compliance; Indemnification . (a) The Obligors
shall operate their respective Property and businesses in full
compliance with all Legal Requirements. Parkway Properties, Inc.
will comply with all Legal Requirements to maintain, and will at
all times qualify as and maintain, its status as a real estate
investment trust under Section 856(c)(1) of the Code.
(b) The Borrower shall indemnify the Agent and each
Lender, their directors, officers, employees and shareholders
(the "Indemnified Parties") for and defend and hold the
Indemnified Parties harmless against any and all claims, demands,
liabilities, causes of action, penalties, obligations, damages,
judgments, deficiencies, losses, costs or expenses (including,
without limitation, interest, penalties, attorneys' fees, and
amounts paid in settlement) threatened or incurred by reason of,
arising out of or in any way related to any failure of any
Obligor to so comply with the provisions of any Legal
Requirement, this Agreement or the other Credit Documents, and
any and all matters arising out of any act, omission, event or
circumstance, regardless of whether the act, omission, event or
circumstance constituted a violation of any such Legal
Requirement, this Agreement or the other Credit Documents at the
time of its existence or occurrence. THE BORROWER SHALL
INDEMNIFY THE AGENT AND EACH LENDER PURSUANT TO THIS SECTION
REGARDLESS OF WHETHER THE ACT, OMISSION, FACTS, CIRCUMSTANCES OR
CONDITIONS GIVING RISE TO SUCH INDEMNIFICATION WERE CAUSED IN
WHOLE OR IN PART BY THE AGENT'S OR SUCH LENDER'S NEGLIGENCE
(SIMPLE, BUT NOT GROSS NEGLIGENCE OR WILLFUL MISCONDUCT).
5.12 Obligors' Performance . If any Obligor should fail to
comply with any of the agreements, covenants or obligations
required of it under this Agreement or any other Credit Document,
then the Agent (in the Obligor's name or in Agent's name) may
perform them or cause them to be performed for the account of the
said Obligor and at the sole expense, but shall not be obligated
to do so. Any and all expenses thus incurred or paid by the
Agent and by any Lender shall be the Borrower's demand
obligations to the Agent or such Lender and shall bear interest
from the date of demand therefor until the date that the Obligor
repays it to the Agent or the applicable Lender at the Past Due
Rate. Upon making any such payment or incurring any such
expense, the Agent or the applicable Lender shall be fully
subrogated to all of the rights of the Person receiving such
payment. Any amounts owing by any Obligor to the Agent or any
Lender pursuant to this provision or any other provision of this
Agreement shall automatically and without notice be secured by
any collateral provided by the Credit Documents. The amount and
nature of any such expense and the time when paid shall, absent
manifest error, be fully established by the affidavit of the
Agent or the applicable Lender or any of the Agent's or the
applicable Lender's officers or agents.
5.13 Professional Services . Promptly upon the Agent's
request to satisfy itself or the request of any Lender, the
Borrower, at the Borrower's sole cost and expense, shall: (a)
allow an inspection and/or appraisal of the Obligors' Property to
be made by a Person approved by the Agent in its sole discretion;
and (b) whenever the Agent or such other Lender has reasonable
cause to believe that a potential Default may exist, cause to be
conducted or prepared any other written report, summary, opinion,
inspection, review, survey, audit or other professional service
relating to the Obligors' Property or any operations in
connection with it (all as designated in the Agent's request),
including, without limitation, any accounting, architectural,
consulting, engineering, design, legal, management, pest control,
surveying, title abstracting or other technical, managerial or
professional service relating to such property or its operations.
5.14 Capital Adequacy . (a) If after the date of this
Agreement, the Agent or any Lender shall have determined that the
adoption or effectiveness of any applicable law, rule or
regulation regarding capital adequacy of general applicability,
or any change therein, or any change in the interpretation or
administration thereof by any Governmental Authority, central
bank or comparable agency charged with the interpretation or
administration thereof, or compliance by the Agent or any Lender
with any request or directive regarding capital adequacy of
general applicability (whether or not having the force of law) of
any such Governmental Authority, central bank or comparable
agency, has or would have the effect of reducing the rate of
return on the Agent's or any Lender's capital as a consequence of
its obligations hereunder to a level below that which the Agent
or such Lender could have achieved but for such adoption, change
or compliance (taking into consideration the Agent's or such
Lender's policies with respect to capital adequacy) by an amount
deemed by the Agent or such Lender to be material, then from time
to time, the Borrower shall pay to the Agent or such Lender such
additional amount or amounts as will compensate the Agent or such
Lender for such reduction.
(b) A certificate of the Agent or such Lender setting
forth such amount or amounts as shall be necessary to compensate
the Agent or such Lender as specified in Section 5.14(a) hereof
and making reference to the applicable law, rule or regulation
shall be delivered as soon as practicable to the Borrower and
shall be prima facie evidence thereof. The Borrower shall pay
the Agent or such Lender the amount shown as due on any such
certificate within fourteen (14) Business Days after the Agent or
such Lender delivers such certificate. In preparing such
certificate, the Agent or such Lender may employ such assumptions
and allocations of costs and expenses as it shall in good faith
deem reasonable and may use any reasonable averaging and
attribution method. Section 3.8(b) hereof shall apply to the
costs assessed under this Section.
5.15 Property Pool . A. The Borrower will at all times own
(in fee simple title, through an Eligible Ground Lease, or in a
wholly-owned Subsidiary of Borrower, and including the leasehold
interest in the Morgan Keegan Tower in Memphis, Tennessee) a pool
(the "Pool") of assets that are not mortgaged, pledged,
hypothecated, or encumbered in any manner, other than Permitted
Encumbrances, with an aggregate Value (calculated based on the
immediately preceding calendar quarter, and annualized) equal to
at least two hundred percent (200%) of the Borrower's
Indebtedness other than Secured Debt outstanding from time to
time, with the following characteristics: (a) assets in the Pool
shall be completed income producing office buildings with net
rentable area of not less than 50,000 square feet and not more
than 500,000 square feet (except that the Pavilion Center in
Atlanta, Georgia need not meet the minimum square footage
requirement), with parking sufficient to meet all Legal
Requirements and consistent with market conditions that will
accommodate full occupancy of the building; (b) each individual
Property must have an Occupancy Level of at least seventy percent
(70%); (c) assets in the Pool must be located in Approved
Markets, except that no more than twenty percent (20%) of the
Value of the Pool can be located in any one Approved Market other
than Memphis, Tennessee, where no more than twenty-five percent
(25%) of the Value of the Pool can be located, (d) the Borrower
must have received from third party independent consultants,
written assessments (including, without limitation, Phase I
environmental reports) for each Property in, or to be added to,
the Pool that do not disclose any material environmental
conditions, structural defects or title defects, or other
material risks related to such Property, (e) the Property is not
subject to or affected by any Limiting Agreement, and (f) the
Occupancy Level of the Pool in the aggregate must be at least
eighty percent (80%). If requested by the Agent, the Borrower
will provide to the Agent written assessments from third party
independent environmental consultants for all Pool properties
acquired after the date of this Agreement. If the Agent
determines that there are material environmental conditions
existing on or risks to such properties, the properties will be
excluded from the Pool.
B. Notwithstanding the foregoing, the maximum value of the
Pool that consists of Eligible Ground Leases is ten percent (10%)
of the value of the Pool.
C. If any Property to be included in the Pool is owned by
a wholly-owned Subsidiary of Borrower, it may be included in the
Pool only if the owner thereof executes a Guaranty in Proper Form
of the Obligations and delivers it to the Agent, and thereafter
during the time such Guaranty remains in full force and effect
without any default existing hereunder.
D. If the Borrower requests inclusion of assets in the
Pool that do not meet the requirements of this Section 5.15, then
such assets may only be included in the Pool upon the prior
written approval of the Majority Lenders.
6. Negative Covenants.
The Borrower covenants and agrees with the Agent and the
Lenders that prior to the termination of this Agreement it will
not (without consent given in accordance with Section 9.1) do any
of the following:
6.1 Indebtedness . Create, incur, suffer or permit to
exist, or assume or guarantee, directly or indirectly,
contingently or otherwise, or become or remain liable with
respect to any Secured Debt except Non-recourse Debt, and except
for liabilities customarily excepted from nonrecourse mortgage
financing, such as fraud, criminal activity and misapplication of
funds.
6.2 Mergers, Consolidations and Acquisitions of Assets .
In any single transaction or series of related transactions,
directly or indirectly: (a) liquidate or dissolve; (b) other than
a merger or consolidation in which the Borrower is the surviving
entity and the value of the assets of the other party to such
merger or consolidation is less than fifteen percent (15%) of the
value of the assets of the Borrower on a consolidated basis (in
accordance with Generally Accepted Accounting Principles) after
such merger or consolidation, be a party to any merger or
consolidation; (c) other than an acquisition in which the
Borrower acquires all or substantially all of the assets of
another Person and the value of the assets acquired is less than
fifteen percent (15%) of the value of the assets of the Borrower
on a consolidated basis (in accordance with Generally Accepted
Accounting Principles) after such acquisition, acquire all or
substantially all of the assets of any Person; or (d) except for
sales or leases executed in the ordinary course of business,
sell, convey or lease all or any substantial part of its assets.
6.3 Redemption . Neither the Borrower nor Parkway
Properties, Inc., shall at any time buy back, redeem, retire or
otherwise acquire, directly or indirectly, any shares of its
capital stock if such action would cause the Borrower to not be
in compliance with this Agreement, and so long as the aggregate
market value of such stock when acquired shall not exceed, from
the date of this Agreement through December 31, 1998, and during
any calendar year thereafter, fifteen percent (15%) of Borrower's
Net Worth.
6.4 Nature of Business; Management . Change the nature of
its business or enter into any business which is substantially
different from the business in which it is presently engaged.
6.5 Transactions with Related Parties . Enter into any
transaction or agreement with any officer, director, or holder of
more than five percent (5%) (based on voting rights) of the
issued and outstanding capital stock of the Borrower (or any
Affiliate of the Borrower), unless the same is upon terms
substantially similar to those obtainable from qualified wholly
unrelated sources.
6.6 Loans and Investments . Make any loan, advance,
extension of credit or capital contribution to, or make or have
any investment in, any Person, or make any commitment to make any
such extension of credit or investment, except (a) travel
advances in the ordinary course of business to officers,
employees and agents; (b) readily marketable securities issued or
fully guaranteed by the United States of America (or investments
or money market accounts consisting of the same); (c) commercial
paper rated "Prime 1" by Moody's Investors Service, Inc. or A-1
by Standard and Poor's Corporation (or investments or money
market accounts consisting of the same); (d) certificates of
deposit or repurchase certificates issued by financial
institutions acceptable to the Agent (or investments or money
market accounts consisting of the same), all of the foregoing b,
c and d not having a maturity of more than one (1) year from the
date of issuance thereof; (e) investments in Subsidiaries through
which the Borrower invests in real estate assets permitted by
this Agreement; (f) investments in Unconsolidated Affiliates
that are engaged primarily in the business of investment in and
operation of office or industrial buildings (valued at an amount
equal to the Value of each Unconsolidated Affiliate's operating
real estate assets multiplied by the Equity Percentage for that
Unconsolidated Affiliate), so long as the aggregate amount of
such investments described in this clause (f) does not exceed ten
percent (10%) of the Total Asset Value after giving effect to
such investments; (g) loans, advances, and extensions of credit
to Persons (who are not Affiliates of any Obligor) secured by
valid and enforceable first priority liens on real estate so long
as the aggregate amount does not exceed three and one-half
percent (3-1/2%) of Total Asset Value, after giving effect to
such investments, (h) undeveloped land, so long as the aggregate
Historical Value of such land does not exceed three and one-half
percent (3-1/2%) of Total Asset Value, after giving effect to
such investments; (i) investments in readily marketable
securities (valued at the lower of cost or then market price) of
another Person, not an Affiliate of any Obligor, traded on a
national trading exchange, that is a real estate investment trust
under Section 856(c)(1) of the Code, or that is a real estate
operating company, so long as the aggregate amount of such
investments does not exceed seven and one-half percent (7-1/2%)
of Total Asset Value, after giving effect to such investments;
(j) investments in office or industrial buildings; (k)
investments in real estate assets that are being constructed or
developed to be office or industrial buildings, but are not yet
in operation, so long as the total actual and budgeted cost of
construction or development, in the aggregate, at that time does
not exceed seven and one-half percent (7-1/2%) of the Total Asset
Value after giving effect to such investments; and (l) unsecured
loans to Persons (who are not Affiliates of any Obligor) engaged
primarily in the business of investment in and operation of
office or industrial buildings, so long as the aggregate amount
outstanding at any one time does not exceed $10,000,000.00. The
Borrower will not mortgage, pledge, hypothecate or encumber in
any manner the loans, advances or extensions of credit made
pursuant to Section 6.6(g) or the securities held pursuant to
Section 6.6(i). The calculations in this Section will be made
without duplication if a loan or investment is within more than
one category described in this Section.
6.7 Limiting Agreements . Neither Borrower nor any of its
Subsidiaries has entered into, and after the date hereof, neither
Borrower nor any of its Subsidiaries shall enter into, any
Limiting Agreements.
6.8 Restricted Payments . Parkway Properties, Inc. will
not make any Restricted Payment during any calendar quarter
which, when added to all Restricted Payments made during the
three (3) immediately preceding calendar quarters, (a) exceeds
eighty-five percent (85%) of the Funds From Operations during the
immediately preceding four (4) calendar quarters, or (b) exceeds
ninety-five percent (95%) of the Funds Available for Distribution
during the immediately preceding four (4) calendar quarters;
provided that the foregoing shall not prohibit Parkway
Properties, Inc. from (x) making the minimum amount of Restricted
Payments required to be made in order for Parkway Properties,
Inc. to comply with the provisions of Section 5.11, or (y)
issuing stock in Parkway Properties, Inc. to a transferor (not an
Affiliate of any Obligor) of Property to the Borrower as a result
of said transferor's election to convert partnership interests in
the Borrower to stock in Parkway Properties, Inc. pursuant to
agreements with said transferor allowing said conversion as a
portion of the consideration for the transfer. For purposes of
this provision "Restricted Payment" means (i) any dividend or
other distribution on any shares of a Person's capital stock
(except dividends payable solely in shares of its capital stock
or in rights to subscribe for or purchase shares of its capital
stock) or (ii) any payment on account of the purchase,
redemption, retirement or acquisition of (x) any shares of a
Person's capital stock or (y) any option, warrant or other right
to acquire shares of a Person's capital stock.
7. Events of Default and Remedies.
7.1 Events of Default . If any of the following events
shall occur, then, as to the events described in Sections 7.1(b),
(c), and (d), if the event has not been waived, cured or remedied
within twenty (20) days after the Agent gives the Borrower
written notice of such event, at any time thereafter, and as to
all of the other events described herein, at any time, the Agent
may do any or all of the following: (1) without notice to the
Borrower, declare the Notes to be, and thereupon the Notes shall
forthwith become, immediately due and payable, together with all
accrued interest thereon, without notice of any kind, notice of
acceleration or of intention to accelerate, presentment and
demand or protest, all of which are hereby expressly waived;
(2) without notice to the Borrower, terminate the Commitment;
(3) exercise, as may any other Lender, its rights of offset
against each account and all other Property of the Borrower in
the possession of the Agent or any such Lender, which right is
hereby granted by the Borrower to the Agent and each Lender; and
(4) exercise any and all other rights pursuant to the Credit
Documents:
(a) The Borrower shall fail to pay or prepay any
principal of or interest on the Notes or any fee or any
other obligation hereunder when due; or
(b) Any Obligor shall fail to pay when due, or within
any applicable period of grace, any principal of or interest
on any other Indebtedness in excess of $5,000,000.00, or
(c) Any written representation or warranty made in any
Credit Document by or on behalf of any Obligor, when taken
as a whole shall prove to have been incorrect, false or
misleading in any material respect; or
(d) Default shall occur in the punctual and complete
performance of any covenant of the Borrower or any other
Person other than the Agent or the Lenders contained in any
Credit Document not specifically set forth in this Section;
or
(e) A final judgment or judgments in the aggregate for
the payment of money in excess of $5,000,000.00 shall be
rendered against any Obligor and the same shall remain
undischarged for a period of thirty (30) days during which
execution shall not be effectively stayed; or
(f) Any order shall be entered in any proceeding
against any Obligor decreeing the dissolution, liquidation
or split-up thereof, and such order shall remain in effect
for more than thirty (30) days; or
(g) Any Obligor shall make a general assignment for
the benefit of creditors or shall petition or apply to any
tribunal for the appointment of a trustee, custodian,
receiver or liquidator of all or any substantial part of its
business, estate or assets or shall commence any proceeding
under any bankruptcy, reorganization, arrangement,
insolvency, readjustment of debt, dissolution or liquidation
law of any jurisdiction, whether now or hereafter in effect;
or
(h) Any such petition or application shall be filed or
any such proceeding shall be commenced against any Obligor
and such Person by any act or omission shall indicate
approval thereof, consent thereto or acquiescence therein,
or an order shall be entered appointing a trustee,
custodian, receiver or liquidator of all or any substantial
part of the assets of any Obligor or granting relief to any
Obligor or approving the petition in any such proceeding,
and such order shall remain in effect for more than ninety
(90) days; or
(i) Any Obligor shall fail generally to pay its debts
as they become due or suffer any writ of attachment or
execution or any similar process to be issued or levied
against it or any substantial part of its Property which is
not released, stayed, bonded or vacated within thirty (30)
days after its issue or levy; or
(j) Any Obligor shall have concealed, removed, or
permitted to be concealed or removed, any part of its
Property, with intent to hinder, delay or defraud its
creditors or any of them, or made or suffered a transfer of
any of its Property which may be fraudulent under any
bankruptcy, fraudulent conveyance or similar law; or shall
have made any transfer of its Property to or for the benefit
of a creditor at a time when other creditors similarly
situated have not been paid; or
(k) Any Change of Control shall occur.
7.2 Remedies Cumulative . No remedy, right or power
conferred upon the Agent or the Lenders is intended to be
exclusive of any other remedy, right or power given hereunder or
now or hereafter existing at law, in equity, or otherwise, and
all such remedies, rights and powers shall be cumulative.
8. The Agent.
8.1 Appointment, Powers and Immunities . Each Lender
hereby irrevocably appoints and authorizes the Agent to act as
its agent hereunder and under the other Credit Documents with
such powers as are specifically delegated to the Agent by the
terms hereof and thereof, together with such other powers as are
reasonably incidental thereto. The Agent (i) shall not have any
duties or responsibilities except those expressly set forth in
this Agreement and the other Credit Documents, and shall not by
reason of this Agreement or any other Credit Document be a
trustee for any Lender; (ii) shall not be responsible to any
Lender for any recitals, statements, representations or
warranties contained in this Agreement or any other Credit
Document, or in any certificate or other document referred to or
provided for in, or received by any of them under, this Agreement
or any other Credit Document, or for the value, validity,
effectiveness, genuineness, enforceability, execution, filing,
registration, collectibility, recording, perfection, existence or
sufficiency of this Agreement or any other Credit Document or any
other document referred to or provided for herein or therein or
any property covered thereby or for any failure by any Party or
any other Person to perform any of its obligations hereunder or
thereunder, and shall not have any duty to inquire into or pass
upon any of the foregoing matters; (iii) shall not be required to
initiate or conduct any litigation or collection proceedings
hereunder or any other Credit Document except to the extent
requested by the Majority Lenders; (iv) SHALL NOT BE RESPONSIBLE
FOR ANY MISTAKE OF LAW OR FACT OR ANY ACTION TAKEN OR OMITTED TO
BE TAKEN BY IT HEREUNDER OR UNDER ANY OTHER CREDIT DOCUMENT OR
ANY OTHER DOCUMENT OR INSTRUMENT REFERRED TO OR PROVIDED FOR
HEREIN OR THEREIN OR IN CONNECTION HEREWITH OR THEREWITH,
INCLUDING, WITHOUT LIMITATION, PURSUANT TO ITS OWN NEGLIGENCE,
BUT NOT INCLUDING AND EXCEPT FOR THE GROSS NEGLIGENCE OR WILLFUL
MISCONDUCT OF THE AGENT; (v) shall not be bound by or obliged to
recognize any agreement among or between the Borrower, the Agent,
and any Lender other than this Agreement and the other Credit
Documents, regardless of whether the Agent has knowledge of the
existence of any such agreement or the terms and provisions
thereof; (vi) shall not be charged with notice or knowledge of
any fact or information not herein set out or provided to the
Agent in accordance with the terms of this Agreement or any other
Credit Document; (vii) shall not be responsible for any delay,
error, omission or default of any mail, telegraph, cable or
wireless agency or operator, and (viii) shall not be responsible
for the acts or edicts of any Governmental Authority. The Agent
may employ agents and attorneys-in-fact and shall not be
responsible for the negligence or misconduct of any such agents
or attorneys-in-fact selected by it with reasonable care.
(b) Without the prior written consent of Agent and all of
the Lenders, Agent shall not (i) modify or amend in any respect
whatsoever the interest rate provisions of the Credit Documents,
(ii) increase the Commitment above $150,000,000.00, (iii) extend
the Maturity Date other than in accordance with the express
provisions of the Credit Documents, (iv) extend or reduce the due
date for or the amount of the scheduled payments of principal or
interest on the Loans or the Fee, (v) amend the definition of
Majority Lenders or any requirement that certain actions be taken
only with the consent of a certain number of the Lenders, (vi)
release any Guarantor or any collateral for the Loans, or (vii)
modify or amend any provision of any Credit Document which by its
terms requires the consent of all of the Lenders for amendment.
From time to time upon Agent's request, each Lender shall execute
and deliver such documents and instruments as may be reasonably
necessary to enable Agent to effectively administer and service
the Loan in its capacity as Agent and in the manner contemplated
by the provisions of this Agreement. No amendment or agreement
shall increase the Lender Commitment of any Lender without the
written consent of such Lender.
(c) All information provided to the Agent under or pursuant
to the Credit Documents, and all rights of the Agent to receive
or request information, or to inspect information or Property,
shall be by the Agent on behalf of the Lenders. If any Lender
requests that it be able to receive or request such information,
or make such inspections, in its own right rather than through
the Agent, the Borrower will cooperate with the Agent and such
Lender in order to obtain such information or make such
inspection as such Lender may reasonably require.
(d) The Borrower shall be entitled to rely upon a written
notice or a written response from the Agent as being pursuant to
concurrence or consent of the Majority Lenders unless otherwise
expressly stated in the Agent's notice or response.
8.2 Reliance. The Agent shall be entitled to rely upon any
certification, notice or other communication (including any
thereof by telephone, telex, telecopy, telegram or cable)
reasonably believed by it to be genuine and correct and to have
been signed or sent by or on behalf of the proper Person or
Persons, and upon advice and statements of legal counsel (which
may be counsel for the Borrower), independent accountants and
other experts selected by the Agent. The Agent shall not be
required in any way to determine the identity or authority of any
Person delivering or executing the same. As to any matters not
expressly provided for by this Agreement or any other Credit
Document, the Agent shall in all cases be fully protected in
acting, or in refraining from acting, hereunder and thereunder in
accordance with instructions of the Majority Lenders, and any
action taken or failure to act pursuant thereto shall be binding
on all of the Lenders. If any order, writ, judgment or decree
shall be made or entered by any court affecting the rights,
duties and obligations of the Agent under this Agreement or any
other Credit Document, then and in any of such events the Agent
is authorized, in its sole discretion, to rely upon and comply
with such order, writ, judgment or decree which it is advised by
legal counsel of its own choosing is binding upon it under the
terms of this Agreement, the relevant Credit Document or
otherwise; and if the Agent complies with any such order, writ,
judgment or decree, then it shall not be liable to any Lender or
to any other Person by reason of such compliance even though such
order, writ, judgment or decree may be subsequently reversed,
modified, annulled, set aside or vacated.
8.3 Defaults. The Agent shall not be deemed to have
constructive knowledge of the occurrence of a Default (other than
the non-payment of principal of or interest on Loans) unless it
has received notice from a Lender or the Borrower specifying such
Default and stating that such notice is a "Notice of Default".
In the event that the Agent receives such a notice of the
occurrence of a Default, or whenever the Agent has actual
knowledge of the occurrence of a Default, the Agent shall give
prompt written notice thereof to the Lenders (and shall give each
Lender prompt notice of each such non-payment). The Agent shall
(subject to Section 8.7 hereof) take such action with respect to
such Default as shall be directed by the Majority Lenders and
within its rights under the Credit Documents and at law or in
equity, provided that, unless and until the Agent shall have
received such directions, the Agent may (but shall not be
obligated to) take such action, or refrain from taking such
action, permitted hereby with respect to such Default as it shall
deem advisable in the best interests of the Lenders and within
its rights under the Credit Documents in order to preserve,
protect or enhance the collectibility of the Loans, at law or in
equity. Provided, however, that if there is an occurrence of an
Event of Default, then in no event or under any circumstances
shall any of the actions described in Sections 8.1(b)(i) through
(vii) of this Agreement be taken, without in each instance the
written consent of Agent and all of the Lenders.
8.4 Rights as a Lender. With respect to the Commitment and
the Loans made, Agent, in its capacity as a Lender hereunder
shall have the same rights and powers hereunder as any other
Lender and may exercise the same as though it were not acting in
its agency capacity, and the term "Lender" or "Lenders" shall,
unless the context otherwise indicates, include the Agent in its
individual capacity. The Agent may (without having to account
therefor to any other Lender) as a Lender, and to the same extent
as any other Lender, accept deposits from, lend money to and
generally engage in any kind of banking, trust, letter of credit,
agency or other business with the Borrower (and any of its
Affiliates) as if it were not acting as the Agent but solely as a
Lender. The Agent may accept fees and other consideration from
the Borrower (in addition to the fees heretofore agreed to
between the Borrower and the Agent) for services in connection
with this Agreement or otherwise without having to account for
the same to the Lenders.
8.5 Indemnification. The Lenders agree to indemnify the
Agent, its officers, directors, agents and Affiliates, ratably in
accordance with each Lender's respective Percentage, for any and
all liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, costs, expenses or disbursements of
any kind and nature whatsoever (INCLUDING BUT NOT LIMITED TO, THE
CONSEQUENCES OF THE NEGLIGENCE OF THE AGENT) which may be imposed
on, incurred by or asserted against the Agent in any way relating
to or arising out of this Agreement or any other Credit Document
or any other documents contemplated by or referred to herein or
therein, or the transactions contemplated hereby or thereby
(including, without limitation, interest, penalties, reasonable
attorneys' fees and amounts paid in settlement in accordance with
the terms of this Section 8, but excluding, unless a Default has
occurred and is continuing, normal administrative costs and
expenses incident to the performance of its agency duties
hereunder) or the enforcement of any of the terms hereof or
thereof or of any such other documents, INCLUDING BUT NOT LIMITED
TO THE NEGLIGENCE OF THE AGENT, provided that no Lender shall be
liable for any of the foregoing to the extent they arise from the
gross negligence or willful misconduct of the party to be
indemnified, or from the Agent's default in the express
obligations of the Agent to the Lenders provided for in this
Agreement. The obligations of the Lenders under this Section 8.5
shall survive the termination of this Agreement and the repayment
of the Obligations.
8.6 Non-Reliance on Agent and Other Lenders. Each Lender
agrees that it has received current financial information with
respect to the Obligors and that it has, independently and
without reliance on the Agent or any other Lender and based on
such documents and information as it has deemed appropriate, made
its own credit analysis of the Obligors and decision to enter
into this Agreement and that it will, independently and without
reliance upon the Agent or any other Lender, and based on such
documents and information as it shall deem appropriate at the
time, continue to make its own analysis and decisions in taking
or not taking action under this Agreement or any of the other
Credit Documents. The Agent shall not be required to keep itself
informed as to the performance or observance by any Party of this
Agreement or any of the other Credit Documents or any other
document referred to or provided for herein or therein or to
inspect the properties or books of the Borrower or any Party
except as specifically required by the Credit Documents. Except
for notices, reports and other documents and information
expressly required to be furnished to the Lenders by the Agent
hereunder or the other Credit Documents, the Agent shall not have
any duty or responsibility to provide any Lender with any credit
or other information concerning the affairs, financial condition
or business of the Borrower or any other Party (or any of their
affiliates) which may come into the possession of the Agent.
Each Lender assumes all risk of loss in connection with its
Percentage in the Loans to the full extent of its Percentage
therein. The Agent assumes all risk of loss in connection with
its Percentage in the Loans to the full extent of its Percentage
therein.
8.7 Failure to Act. Except for action expressly required
of the Agent, as the case may be, hereunder, or under the other
Credit Documents, the Agent shall in all cases be fully justified
in failing or refusing to act hereunder and thereunder unless it
shall receive further assurances to its satisfaction by the
Lenders of their indemnification obligations under Section 8.5
hereof against any and all liability and expense which may be
incurred by it by reason of taking or continuing to take any such
action.
8.8 Resignation of Agent. Subject to the appointment and
acceptance of a successor Agent as provided below, the Agent may
resign at any time by giving notice thereof to the Lenders and
the Borrower. Upon any such resignation, (i) the Majority
Lenders without the consent of the Borrower shall have the right
to appoint a successor Agent so long as such successor Agent is
also a Lender at the time of such appointment and (ii) the
Majority Lenders shall have the right to appoint a successor
Agent that is not a Lender at the time of such appointment so
long as the Borrower (if no Event of Default is then in
existence) consents to such appointment (which consent shall not
be unreasonably withheld). If no successor Agent shall have been
so appointed by the Majority Lenders and accepted such
appointment within 30 days after the retiring Agent's giving of
notice of resignation, then the retiring Agent may, on behalf of
the Lenders, and with the consent of the Borrower which shall not
be unreasonably withheld, appoint a successor Agent. Any
successor Agent shall be an Eligible Institution. Upon the
acceptance of any appointment as Agent hereunder by a successor
Agent, such successor Agent shall thereupon succeed to and become
vested with all the rights, powers, privileges and duties of the
retiring Agent, and the retiring Agent shall be discharged from
its duties and obligations as Agent thereafter arising hereunder
and under any other Credit Documents, but shall not be discharged
from any liabilities for its actions as Agent prior to the date
of discharge. Such successor Agent shall promptly specify by
notice to the Borrower its principal office referred to in
Section 2.1 and Section 2.2 hereof. After any retiring Agent's
resignation hereunder as Agent, the provisions of this Section 8
shall continue in effect for its benefit in respect of any
actions taken or omitted to be taken by it while it was acting as
the Agent.
8.9 No Partnership. Neither the execution and delivery of
this Agreement nor any of the other Credit Documents nor any
interest the Lenders, the Agent or any of them may now or
hereafter have in all or any part of the Obligations shall create
or be construed as creating a partnership, joint venture or other
joint enterprise between the Lenders or among the Lenders and the
Agent. The relationship between the Lenders, on the one hand,
and the Agent, on the other, is and shall be that of principals
and agent only, and nothing in this Agreement or any of the other
Credit Documents shall be construed to constitute the Agent as
trustee or other fiduciary for any Lender or to impose on the
Agent any duty, responsibility or obligation other than those
expressly provided for herein and therein.
9. Miscellaneous.
9.1 No Waiver, Amendments. No waiver of any Default shall
be deemed to be a waiver of any other Default. No failure to
exercise or delay in exercising any right or power under any
Credit Document shall operate as a waiver thereof, nor shall any
single or partial exercise of any such right or power preclude
any further or other exercise thereof or the exercise of any
other right or power. Except as may be prohibited by Section 8.1
hereof, no amendment, modification or waiver of any provision of
any Credit Document shall be effective unless the same is in
writing and signed by the Borrower and the Majority Lenders. No
notice to or demand on the Borrower or any other Person shall
entitle the Borrower or any other Person to any other or further
notice or demand in similar or other circumstances.
9.2 Notices. All notices under the Credit Documents shall
be in writing and either (i) delivered against receipt therefor,
or (ii) mailed by registered or certified mail, return receipt
requested, in each case addressed as set forth herein, or to such
other address as a party may designate. Notices shall be deemed
to have been given (whether actually received or not) when
delivered (or, if mailed, on the next Business Day). Provided,
however, that as between the Agent and the Lenders and among the
Lenders, notice may be given by telecopy or facsimile effective
upon the earlier of actual receipt or confirmation of receipt by
telephone.
9.3 Venue. HARRIS COUNTY, TEXAS SHALL BE A PROPER PLACE OF
VENUE TO ENFORCE PAYMENT OR PERFORMANCE OF THIS AGREEMENT AND THE
OTHER CREDIT DOCUMENTS, UNLESS THE AGENT SHALL GIVE ITS PRIOR
WRITTEN CONSENT TO A DIFFERENT VENUE. THE BORROWER HEREBY
IRREVOCABLY SUBMITS TO THE NONEXCLUSIVE JURISDICTION OF THE STATE
AND FEDERAL COURTS IN THE STATE OF TEXAS AND AGREES AND CONSENTS
THAT SERVICE OF PROCESS MAY BE MADE UPON IT IN ANY PROCEEDING
ARISING OUT OF ANY OF THE CREDIT DOCUMENTS BY SERVICE OF PROCESS
AS PROVIDED BY TEXAS LAW. THE BORROWER HEREBY IRREVOCABLY
WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW, ANY OBJECTION
WHICH IT MAY NOW OR HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY
SUIT, ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO ANY OF
THE CREDIT DOCUMENTS IN THE DISTRICT COURTS OF HARRIS COUNTY,
TEXAS, OR IN THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN
DISTRICT OF TEXAS, HOUSTON DIVISION, AND HEREBY FURTHER
IRREVOCABLY WAIVES ANY CLAIMS THAT ANY SUCH SUIT, ACTION OR
PROCEEDING BROUGHT IN ANY SUCH COURT HAS BEEN BROUGHT IN AN
INCONVENIENT FORUM. THE BORROWER (A) AGREES TO DESIGNATE AND
MAINTAIN AN AGENT FOR SERVICE OF PROCESS IN THE STATE OF TEXAS IN
CONNECTION WITH ANY SUCH SUIT, ACTION OR PROCEEDING AND TO
DELIVER TO THE AGENT EVIDENCE THEREOF AND (B) IRREVOCABLY
CONSENTS TO THE SERVICE OF PROCESS OUT OF ANY OF THE
AFOREMENTIONED COURTS IN ANY SUCH SUIT, ACTION OR PROCEEDING BY
NOTICE GIVEN AS PROVIDED FOR IN THIS AGREEMENT. NOTHING HEREIN
SHALL AFFECT THE RIGHT OF THE AGENT OR THE LENDERS TO COMMENCE
LEGAL PROCEEDINGS OR OTHERWISE PROCEED AGAINST THE BORROWER IN
ANY JURISDICTION OR TO SERVE PROCESS IN ANY MANNER PERMITTED BY
APPLICABLE LAW. THE BORROWER HEREBY IRREVOCABLY AGREES THAT ANY
LEGAL ACTION OR PROCEEDING AGAINST THE AGENT OR ANY LENDER
ARISING OUT OF OR IN CONNECTION WITH THIS AGREEMENT OR THE OTHER
CREDIT DOCUMENTS SHALL BE BROUGHT AND MAINTAINED IN THE DISTRICT
COURTS OF HARRIS COUNTY, TEXAS, OR THE UNITED STATES DISTRICT
COURT FOR THE SOUTHERN DISTRICT OF TEXAS, HOUSTON DIVISION.
9.4 Choice of Law. THIS AGREEMENT, THE NOTES AND THE OTHER
CREDIT DOCUMENTS HAVE BEEN NEGOTIATED, EXECUTED AND DELIVERED IN
THE STATE OF TEXAS AND SHALL BE GOVERNED BY, AND CONSTRUED AND
INTERPRETED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF TEXAS,
INCLUDING ALL APPLICABLE FEDERAL LAW, FROM TIME TO TIME IN FORCE
IN THE STATE OF TEXAS.
9.5 Survival; Parties Bound; Successors and Assigns.
(a) All representations, warranties, covenants and agreements
made by or on behalf of the Borrower in connection herewith shall
survive the execution and delivery of the Credit Documents, shall
not be affected by any investigation made by any Person, and
shall bind the Borrower and its successors, trustees, receivers
and assigns and inure to the benefit of the successors and
assigns of the Agent and the Lenders; provided, however, that the
Borrower may not assign or transfer any of its rights or
obligations hereunder without the prior written consent of the
Agent and all of the Lenders, and any such assignment or transfer
without such consent shall be null and void.
(b) Subject to Sections 9.5(d) and (e) of this
Agreement, a Lender may assign part of its Lender Commitment to
an Eligible Institution so long as such assignment shall (1)
include the voting rights and all other rights and obligations
attributable thereto, and include a written assumption by the
assignee of the assigning Lender's obligations under the Credit
Documents, (2) require the written consent of the Borrower (so
long as no Event of Default is then in existence) and the Agent,
such consent not to be unreasonably withheld, (3) be in a minimum
amount of $5,000,000.00 if assigned to a Person not already a
Lender, (4) not reduce the Lender's Lender Commitment to an
amount less than $5,000,000.00, and (5) include payment to the
Agent by the Lender of a service fee for each assignment equal to
$3,000.00.
(c) Subject to Section 9.5(d) and (e) of this
Agreement, a Lender may sell participating interests in any of
its Loans to an Eligible Institution so long as such
participation shall (1) limit the voting rights of the
participant, if any, to the ability to vote for changes in the
amount of the Commitment, the interest rate on the Loans, the
amount of the Fee, the requirements for Guaranties and for
collateral, and the Maturity Date, and (2) require written notice
to the Agent and the Borrower but not any consent of the Agent,
the Borrower or any other Lender. In connection with any sale of
a participating interest made in compliance with this Agreement,
(i) the participating Lender shall continue to be liable for its
Lender Commitment and its other obligations under the Credit
Documents, (ii) the Agent, the Borrower and the other Lenders
shall continue to deal solely and directly with the participating
Lender in connection with such Lender's rights and obligations
under the Credit Documents, and (iii) the participant may not
require the participating Lender to take or refrain from taking
any action under the Credit Documents that is in conflict with
the terms and provisions of the Credit Documents.
(d) A Lender may assign all or any part of its Loans
or its Lender Commitment to an Affiliate of the Lender without
written consent of the Agent and the Borrower.
(e) Notwithstanding any provision hereof to the
contrary, any Lender may assign and pledge all or any portion of
its Lender Commitment and Loans to a Federal Reserve Bank;
provided, however, that any such assignment or pledge shall not
relieve such Lender from its obligations under the Credit
Documents.
(f) The term of this Agreement shall be until the
final maturity of the Notes and the payment of all amounts due
under the Credit Documents.
9.6 Counterparts. This Agreement may be executed in
several identical counterparts, and by the parties hereto on
separate counterparts, and each counterpart, when so executed and
delivered, shall constitute an original instrument, and all such
separate counterparts shall constitute but one and the same
instrument.
9.7 Usury Not Intended; Refund of Any Excess Payments. It
is the intent of the parties in the execution and performance of
this Agreement to contract in strict compliance with the usury
laws of the State of Texas and the United States of America from
time to time in effect. In furtherance thereof, the Agent, the
Lenders and the Borrower stipulate and agree that none of the
terms and provisions contained in this Agreement or the other
Credit Documents shall ever be construed to create a contract to
pay for the use, forbearance or detention of money with interest
at a rate in excess of the Ceiling Rate and that for purposes
hereof "interest" shall include the aggregate of all charges
which constitute interest under such laws that are contracted
for, reserved, taken, charged or received under this Agreement.
In determining whether or not the interest paid or payable, under
any specific contingency, exceeds the Ceiling Rate, the Borrower,
the Agent and the Lenders shall, to the maximum extent permitted
under applicable law, (a) characterize any nonprincipal payment
as an expense, fee or premium rather than as interest,
(b) exclude voluntary prepayments and the effects thereof, and
(c) "spread" the total amount of interest throughout the entire
contemplated term of the Loans. The provisions of this paragraph
shall control over all other provisions of the Credit Documents
which may be in apparent conflict herewith.
9.8 Captions. The headings and captions appearing in the
Credit Documents have been included solely for convenience and
shall not be considered in construing the Credit Documents.
9.9 Severability. If any provision of any Credit
Documents shall be invalid, illegal or unenforceable in any
respect under any applicable law, the validity, legality and
enforceability of the remaining provisions shall not be affected
or impaired thereby.
9.10 Disclosures. Every reference in the Credit Documents
to disclosures of the Borrower to the Agent and the Lenders in
writing, to the extent that such references refer to disclosures
at or prior to the execution of this Agreement, shall be deemed
strictly to refer only to written disclosures delivered to the
Agent and the Lenders in an orderly manner concurrently with the
execution hereof.
9.11 Entire Agreement. THIS AGREEMENT AND THE OTHER CREDIT
DOCUMENTS TOGETHER CONSTITUTE A WRITTEN AGREEMENT AND REPRESENT
THE FINAL AGREEMENT BETWEEN THE PARTIES AND MAY NOT BE
CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS OR SUBSEQUENT
ORAL AGREEMENTS OF THE PARTIES. THERE ARE NO UNWRITTEN ORAL
AGREEMENTS BETWEEN THE PARTIES.
IN WITNESS WHEREOF, the parties hereto have executed this
Agreement as of the date set forth above.
PARKWAY PROPERTIES LP,
a Delaware limited partnership
By: Parkway Properties General Partners,
Inc., General Partner
By: Steven G. Rogers
Name: Steven G. Rogers
Title: CEO & President
By: Sarah P. Clark
Name: Sarah P. Clark
Title: Sr. VP, CFO, Treasurer & Secy.
Address:
188 E.Capitol St., Ste. 1000
Jackson, Mississippi 39201
Attention: Chief Financial Officer
Parkway Properties, Inc. executes this Agreement solely to
acknowledge and agree to Sections 5.2, 5.11(a), 6.3 and 6.8.
PARKWAY PROPERTIES, INC.
By: Steven G. Rogers
Name: Steven G. Rogers
Title: CEO & President
By: Sarah P. Clark
Name: Sarah P. Clark
Title: Sr. VP, CFO, Treasurer & Secy.
Lender Commitment: $15,000,000.00 CHASE BANK OF TEXAS, NA
Percentage: 10.000000000% as Agent and as a Lender
By: Susan M. Tate
Name: Susan M. Tate
Title: Vice President
Address:
712 Main Street
Houston, Texas 77002
Attention: Manager, Real
Estate Group
Telephone No.: 713-216-1511
Telecopy No.: 713-216-7713
Lender Commitment: $15,000,000.00 PNC BANK, NA
Percentage: 10.000000000% Documentation Agent and
as a Lender
By: Maureen A. Dunne
Name: Maureen A. Dunne
Title: Vice President
By:
Name:
Title:
Address:
201 East Fifth St., 8th Floor
Commercial Real Estate
Cincinnati, Ohio 45201
Attention: Maureen Dunne
Telephone No.: Maureen Dunne
513-651-8697
Telecopy No: 513-651-8931
Lender Commitment: $13,000,000.00 AMSOUTH BANK
Percentage: 8.666666667%
By: Terry W. Howard
Name: Terry W. Howard
Title: Vice President
Address:
1900 Fifth Avenue North
Commercial Real Estate, AST9
Birmingham, Alabama 35201
Attention: Terry Howard
Telephone No.: Terry Howard
205-326-5651
Telecopy No.: 205-326-4075
Lender Commitment: $13,000,000.00 FIRST NATIONAL BANK OF
Percentage: 8.666666667% COMMERCE
By: Susan B. Bell
Name: Susan B. Bell
Title: Vice President
Address:
201 Saint Charles Avenue
28th Floor
New Orleans, Louisiana 70170
Attention: Cate Raymond
Telephone No.: Cate Raymond
504-623-1577
Telecopy No.: 504-623-3616
Lender Commitment: $13,000,000.00 FIRST UNION NATIONAL BANK
Percentage: 8.666666667%
By: Rex E. Rudy Name:
Rex E. Rudy
Title: Vice President
Address:
One First Union Center, TW6
Charlotte, NC 28288
Attention: Rex Rudy
Telephone No.: Rex Rudy
704-383-6506
Telecopy No.: 704-383-6205
Lender Commitment: $13,000,000.00 SOUTHTRUST BANK, NA
Percentage: 8.666666667%
By: Sam Boroughs
Name: Sam Boroughs
Title: Assistant VP
Address:
420 N. 20th Street
Corporate Banking, 11th Floor
Birmingham, Alabama 35203
Attention: Sam Boroughs
Telephone No.: Sam Boroughs
205-254-5039
Telecopy No.: 205-254-5022
Lender Commitment: $13,000,000.00 WELLS FARGO BANK, NA
Percentage: 8.666666667%
By: Samuel Wammock
Name: Samuel Wammock
Title: Vice President
Address:
2859 Paces Ferry Rd Ste 1805
Atlanta, Georgia 30339
Attention: Sam Wammock
Telephone No.: Sam Wammock
770-435-3800
Telecopy No.: 770-435-2262
Lender Commitment: $10,000,000.00 COMPASS BANK
Percentage: 6.666666667%
By: Randy S. Baker
Name: Randy S. Baker
Title: Vice President
Address:
15 S. 20th St., Ste. 1500
Birmingham, Alabama 35233
Attention: Jo Paley
Telephone No.: Jo Paley
205-933-3851
Telecopy No: 205-715-7994
Lender Commitment: $10,000,000.00 FIRST TENNESSEE BANK NA
Percentage: 6.666666667%
By: Daniel B. Neuschaefer
Name: Daniel B. Neuschaefer
Title: Vice President
Address:
Commercial Real Estate
165 Madison Avenue, 1st Floor
Memphis, Tennessee 38103
Attention: Dan Neuschaefer
Telephone No.: 901-523-4049
DanNeuschaefer
Telecopy No: 901-523-4032
Lender Commitment: $10,000,000.00 HIBERNIA NATIONAL BANK
Percentage: 6.666666667%
By: Yancey Jones
Name: Yancey Jones
Title: Assistant V.P.
By:
Name:
Title:
Address:
313 Carondelet
New Orleans, Louisiana 70130
Attention: Yancey Jones
Telephone No.: Yancey Jones
504-533-5087
Telecopy No: 504-533-2042
Lender Commitment: $7,500,000.00 COMERICA BANK
Percentage: 5.000000000%
By: Charles L. Weddell
Name: Charles L. Weddell
Title: Vice President
Address:
500 Woodward Avenue, MC3256
Detroit, Michigan 48226
Attention: Charles Weddell
Telephone No.: 313-222-3323
Charles Weddell
Telecopy No: 313-222-9295
Lender Commitment: $7,500,000.00 FIRST AMERICAN NATIONAL BANK,
Percentage: 5.000000000% operating as DEPOSIT GUARANTY
NATIONAL BANK
By: Mark W. McDowell
Name: Mark W. McDowell
Title: Vice President
Address:
1 Jackson Place, Suite 250
188 E. Capital Street
Jackson, Mississippi 39201
Attention: Mark McDowell
Telephone No.: 601-968-4945
Mark McDowell
Telecopy No: 601-354-8035
Lender Commitment: $6,000,000.00 TRUSTMARK NATIONAL BANK
Percentage: 4.000000000%
By: Monica Day
Name: Monica Day
Title: Vice President
Address:
248 East Capitol, Suite 814
Jackson, Mississippi 39205
Attention:
George Gunn/Monica Day
Telephone No.:
George Gunn/Monica Day
601-949-6793/6735
Telecopy No: 601-949-6823
Lender Commitment: $4,000,000.00 BANCORPSOUTH BANK
Percentage: 2.666666667%
By: Kenneth E. Farmer
Name: Kenneth E. Farmer
Title: Sr. Vice President
Address:
525 E. Capitol St., Ste. 300
Jackson, MS 39215-1605
Attention: Ken Farmer
Telephone No.: Ken Farmer
601-944-3727
Telecopy No: 601-944-3605
SCHEDULE I
TABLE 1
APPLICABLE MARGIN
TOTAL LIABILITIES
TO TOTAL ASSET EURODOLLAR RATE BASE RATE
VALUE RATIO BORROWING BORROWING FEE RATE
Less than 35% 1.125% 0 .20%
Greater than or 1.250% 0 .25%
equal to 35% but
less than 45%
Greater than or 1.375% 0 .25%
equal to 45%
TABLE 2
APPLICABLE MARGIN
S&P RATING/ EURODOLLAR RATE BASE RATE
MOODY'S RATING BORROWING BORROWING FEE RATE
BBB+/Baal 0.875% 0 .15%
BBB/Baa2 1.000% 0 .15%
BBB-/Baa3 1.125% 0 .20%
Worse than BBB- 1.375% 0 .25%
/Baa3
SCHEDULE II
APPROVED MARKETS
Houston, Texas
Jackson, Mississippi
Atlanta, Georgia
Knoxville, Tennessee
Memphis, Tennessee
Columbia, South Carolina
Norfolk, Virginia
Richmond, Virginia
Winston-Salem, North Carolina
Fairfax County, Virginia and Tysons Corner, McLean and
Springfield, Virginia
Ft. Lauderdale, Florida
St. Petersburg, Florida
Charlotte, North Carolina
Little Rock, Arkansas
Greenville, South Carolina
Birmingham, Alabama
Indianapolis, Indiana
FORM OF NOTE
EXHIBIT C
______________________ _____________7, 1998
FOR VALUE RECEIVED PARKWAY PROPERTIES LP, a Delaware limited
partnership (herein called "Maker") promises to pay to the order
of ____________________, a _______________ ("Payee"), at the
offices of Chase Bank of Texas, National Association, a national
banking association, as "Agent" under the Credit Agreement, at
712 Main Street, Houston, Texas 77002, or at such other place as
the holder (the "Holder", whether or not Payee is such holder) of
this note may hereafter designate in writing, in immediately
available funds and in lawful money of the United States of
America, the principal sum of _______________________________
Dollars (________________) (or the unpaid balance of all
principal advanced against this note, if that amount is less),
together with interest on the unpaid principal balance of this
note from time to time outstanding at the Stated Rate and
interest on all past due amounts, both principal and accrued
interest, at the Past Due Rate; provided, that for the full term
of this note the interest rate produced by the aggregate of all
sums paid or agreed to be paid to the Holder of this note for the
use, forbearance or detention of the debt evidenced hereby
(including, but not limited to, all interest on this note at the
Stated Rate) shall not exceed the Ceiling Rate.
1. Definitions. Any terms not defined herein shall have
the meaning given to them in the Credit Agreement dated of even
date herewith among the Maker, the Agent and certain other
Lenders (as the same may be amended or modified the "Credit
Agreement").
2. Rates Change Automatically and Without Notice. Without
notice to Maker or any other person or entity and to the full
extent allowed by applicable law from time to time in effect, the
Prime Rate and the Ceiling Rate shall each automatically
fluctuate upward and downward as and in the amount by which
Agent's said prime rate, and such maximum nonusurious rate of
interest permitted by applicable law, respectively, fluctuate.
3. Calculation of Interest. Interest shall be computed
for the actual number of days elapsed in a year (up to 365, or
366 in a leap year) deemed to consist of 360 days, unless the
Ceiling Rate would thereby be exceeded, in which event, to the
extent necessary to avoid exceeding the Ceiling Rate, interest
shall be computed on the basis of the actual number of days
elapsed in the applicable calendar year in which it accrued.
4. Excess Interest Will be Refunded or Credited. If, for
any reason whatever, the interest paid or received on this note
during its full term produces a rate which exceeds the Ceiling
Rate, the Holder of this note shall refund to the payor or, at
the Holder's option, credit against the principal of this note
such portion of that interest as shall be necessary to cause the
interest paid on this note to produce a rate equal to the Ceiling
Rate.
5. Interest Will be Spread. All sums paid or agreed to be
paid to the Holder of this note for the use, forbearance or
detention of the indebtedness evidenced hereby, to the extent
permitted by applicable law and to the extent necessary to avoid
violating applicable usury laws, shall be amortized, prorated,
allocated and spread in equal parts throughout the full term of
this note, so that the interest rate is uniform throughout the
full term of this note.
6. Payment Schedule. The principal of this note shall be
due and payable on the Maturity Date. Accrued and unpaid
interest shall be due and payable on each Interest Payment Date.
All payments shall be applied first to accrued interest, the
balance to principal.
7. Prepayment. Maker may prepay this note only as
provided in the Credit Agreement.
8. Revolving Credit. Upon and subject to the terms and
conditions of the Credit Agreement and the other provisions of
this note, Maker may borrow, repay and reborrow against this note
at any time unless and until a default (however designated) or
event (an "Event of Potential Default") which, if not cured after
notice or before the lapse of time (or both) would develop into a
default under this note, the Credit Agreement or any other Credit
Documents has occurred which the Holder has not declared to have
been fully cured or waived, and (except as the Credit Agreement
or any of the other Credit Documents may otherwise provide) there
is no limit on the number of advances against this note so long
as the total unpaid principal of this note at any time
outstanding does not exceed the Payee's Lender Commitment.
Interest on the amount of each advance against this note shall be
computed on the amount of the unpaid balance of that advance from
the date it is made until the date it is repaid. If Maker's
right (if any) to borrow against this note shall ever lapse
because of the occurrence of any default, it shall not be
reinstated (or construed from any course of conduct or otherwise
to have been reinstated) unless and until the Holder shall
declare in a signed writing that it has been cured or waived.
The unpaid principal balance of this note at any time shall be
the total of all principal lent against this note to Maker or for
Maker's account less the sum of all principal payments and
permitted prepayments on this note received by the Holder.
Absent manifest error, the Holder's computer records shall on any
day conclusively evidence the unpaid balance of this note and its
advances and payments history posted up to that day. All loans
and advances and all payments and permitted prepayments made on
this note may be (but are not required to be) endorsed by the
Holder on the schedule attached hereto (which is hereby made a
part hereof for all purposes) or otherwise recorded in the
Holder's computer or manual records; provided, that any Holder's
failure to make notation of (a) any principal advance or accrual
of interest shall not cancel, limit or otherwise affect Maker's
obligations or any Holder's rights with respect to that advance
or accrual, or (b) any payment or permitted prepayment of
principal or interest shall not cancel, limit or otherwise affect
Maker's entitlement to credit for that payment as of the date of
its receipt by the Holder. Maker and Payee expressly agree, as
expressly allowed by Chapter 346 of the Texas Finance Code, that
Chapter 346 (which relates to open-end line of credit revolving
loan accounts) shall not apply to this note or to any loan
evidenced by this note and that neither this note nor any such
loan shall be governed by Chapter 346 or subject to its
provisions in any manner whatsoever.
9. Credit Agreement. This note has been issued pursuant to the
terms of the Credit Agreement, to which reference is made for all
purposes. Advances against this note by Payee or other Holder
hereof shall be governed by the Credit Agreement. Payee is
entitled to the benefits of the Credit Agreement. As additional
security for this note, Maker hereby grants to Payee and all
other present and future Holders an express lien against,
security interest in and contractual right of setoff in and to,
all property and any and all deposits (general or special, time
or demand, provisional or final) at any time held by the Payee or
other Holder for any Maker's credit or account.
10. Defaults and Remedies. Time is of the essence. Maker's
failure to pay any principal or accrued interest owing on this
note when due and after expiration of any applicable period for
notice and right to cure such a default which is specifically
provided for in the Credit Agreement or any other provision of
this note, or the occurrence of any default under the Credit
Agreement or any other Credit Documents shall constitute default
under this note, whereupon the Holder may elect to exercise any
or all rights, powers and remedies afforded (a) under the Credit
Agreement and all other papers related to this note and (b) by
law, including the right to accelerate the maturity of this
entire note.
In addition to and cumulative of such rights, the Holder is
hereby authorized at any time and from time to time after any
such default, at Holder's option, without notice to Maker or any
other person or entity (all rights to any such notice being
hereby waived), to set off and apply any and all of any Maker's
deposits at any time held by the Holder, and any other debt at
any time owing by the Holder to or for the credit or account of
any Maker, against the outstanding balance of this note, in such
order and manner as Holder may elect in its sole discretion.
The Holder's right to accelerate this note on account of any
late payment or other default shall not be waived or deemed
waived by the Holder by reason of the Holder's having previously
accepted one or more late payments or by reason of any Holder's
otherwise not accelerating this note or exercising other remedies
for any default, and no Holder shall ever be obligated or deemed
obligated to notify Maker or any other person that Holder is
requiring strict compliance with this note or any papers securing
or otherwise relating to it before such Holder may accelerate
this note or exercise any other remedy.
11. Legal Costs. If any Holder of this note retains an attorney
in connection with any such default or to collect, enforce or
defend this note or any papers intended to secure or guarantee it
in any lawsuit or in any probate, reorganization, bankruptcy or
other proceeding, or if Maker sues any Holder in connection with
this note or any such papers and does not prevail, then Maker
agrees to pay to each such Holder, in addition to principal and
interest, all reasonable costs and expenses incurred by such
Holder in trying to collect this note or in any such suit or
proceeding, including reasonable attorneys' fees.
12. Waivers. Except only for any notices which are specifically
required by the Credit Agreement, Maker and any and all co-
makers, endorsers, guarantors and sureties severally waive notice
(including, but not limited to, notice of intent to accelerate
and notice of acceleration, notice of protest and notice of
dishonor), demand, presentment for payment, protest, diligence in
collecting and the filing of suit for the purpose of fixing
liability and consent that the time of payment hereof may be
extended and re-extended from time to time without notice to any
of them. Each such person agrees that his, her or its liability
on or with respect to this note shall not be affected by any
release of or change in any guaranty or security at any time
existing or by any failure to perfect or maintain perfection of
any lien against or security interest in any such security or the
partial or complete unenforceability of any guaranty or other
surety obligation, in each case in whole or in part, with or
without notice and before or after maturity.
13. Rate of Return Maintenance Covenant. If at any time after
the date of this note, any Holder determines that (a) any
applicable law, rule or regulation regarding capital adequacy of
general applicability has been adopted or changed, or (b) its
interpretation or administration by any governmental authority,
central bank or comparable agency has changed, and determines
that such change or the Holder's compliance with any request or
directive regarding capital adequacy of general applicability
(whether or not having the force of law) of any such authority,
central bank or comparable agency, has or would have the effect
of reducing the rate of return on the Holder's capital as a
consequence of its obligations under this note or any related
papers to a level below that which the Holder could have achieved
but for such adoption, change or compliance (taking into
consideration the Holder's own capital adequacy policies) by an
amount the Holder deems to be material, then Maker promises to
pay from time to time to the order of the Holder such additional
amount or amounts as will compensate the Holder for such
reduction. A certificate of any Holder setting forth the amount
or amounts necessary to compensate the Holder as specified above
shall be given to Maker as soon as practicable after the Holder
has made such determination and shall be conclusive and binding,
absent manifest error. Maker shall pay the Holder the amount
shown as due on any such certificate within 15 days after the
Holder gives it. In preparing such certificate, the Holder may
employ such assumptions and make such allocations of costs and
expenses as the Holder in good faith deems reasonable and may use
any reasonable averaging and attribution method. Section 3.8(b)
of the Credit Agreement shall apply to the charges assessed under
this Section.
14. Governing Law, Jurisdiction and Venue. THIS NOTE SHALL BE
GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE
STATE OF TEXAS AND THE UNITED STATES OF AMERICA FROM TIME TO TIME
IN EFFECT.
15. General Purpose of Loan. Maker warrants and represents to
Payee and all other Holders that all loans evidenced by this note
are and will be for business, commercial, investment or other
similar purpose and not primarily for personal, family, household
or agricultural use, as such terms are used in Chapter One.
16. Participations and Assignments. Payee and each other Holder
reserves the right to sell participations, assign interests or
both, in all or any part of this note or the debt evidenced by
this note, in accordance with the Credit Agreement.
PARKWAY PROPERTIES LP,
a Delaware limited
partnership
By: Parkway Properties
General Partners, Inc.,
General Partner
By:
Name:
Title:
By:
Name:
Title:
