<PAGE> 1
EXHIBIT 99(d) EXECUTION COPY
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933, AS AMENDED, OR THE SECURITIES LAW OF ANY STATE, AND
MAY NOT BE SOLD, TRANSFERRED OR OTHERWISE DISPOSED OF EXCEPT PURSUANT TO AN
EFFECTIVE REGISTRATION STATEMENT UNDER SUCH ACT AND APPLICABLE STATE SECURITIES
LAWS OR PURSUANT TO AN APPLICABLE EXEMPTION TO THE REGISTRATION REQUIREMENTS OF
SUCH ACT AND SUCH LAWS. SUCH SECURITIES MAY NOT BE SOLD, TRANSFERRED OR
OTHERWISE DISPOSED OF EXCEPT IN COMPLIANCE WITH THE CONDITIONS SPECIFIED IN THIS
COMMON STOCK PURCHASE WARRANT.
COMMON STOCK PURCHASE WARRANT
No. W-1 October 6, 2000
Void after October 6, 2007
Warrant to Purchase 75,000
Common Shares
PARKWAY PROPERTIES, INC., a Maryland corporation (the
"Company"), for value received, hereby certifies that FIVE ARROWS REALTY
SECURITIES III L.L.C., or its registered assigns (the "Holder"), is entitled to
purchase from the Company 75,000 duly authorized, validly issued, fully paid and
nonassessable shares of common stock, par value $.001 per share, of the Company
(the "Common Shares"), at a purchase price, subject to Section 3.2 herein, of
$35.00 per share, at any time or from time to time prior to 5:00 P.M., New York
City time, on October 6, 2007 (the "Expiration Date"), all subject to the terms,
conditions and adjustments set forth below in this Warrant.
This Warrant is originally issued pursuant to the terms of a
certain Investment Agreement, dated as of the date hereof, between the Company
and Five Arrows Realty Securities III L.L.C. (the "Purchase Agreement").
Capitalized terms used herein and not otherwise defined herein shall have the
meanings assigned to such terms in the Purchase Agreement.
1. Definitions. As used herein, unless the context otherwise
requires, the following terms shall have the meanings indicated:
"Additional Common Shares" shall mean all Common Shares issued
or sold (or, pursuant to Section 3.3, deemed to be issued) by the Company after
the date hereof, whether or not subsequently reacquired or retired by the
Company provided that the following shares shall not constitute Additional
Common Shares:
(a) (i) shares issued upon the exercise of this Warrant or
upon the conversion of the Company's Series B Convertible Cumulative
Preferred Shares and (ii) such number of additional shares as may
become issuable upon the exercise of this Warrant or upon conversion of
the Series B Convertible Cumulative Preferred Shares by reason of
<PAGE> 2
adjustments required pursuant to the anti-dilution provisions
applicable to this Warrant or the Series B Convertible Cumulative
Preferred Shares as in effect on the date hereof, and
(b) (i) shares issued in the acquisition by the Company or a
subsidiary of one hundred percent (100%) of a public company by way of
merger, consolidation or exchange offer, (ii) shares issued pursuant to
a tender or exchange offer for one hundred percent (100%) of a public
company, (iii) shares issued upon the exercise, conversion or
redemption of options, warrants or units existing or outstanding on
October 4, 2000 or the issuance of shares pursuant to contractual
commitments in effect as of October 4, 2000, (iv) shares or operating
partnership units issued in the acquisition of property or equity
interests in property (e.g., partnership interests of a property-owning
partnership) by the Company or a subsidiary of the Company; (v) shares
issued under the Company's Dividend Reinvestment and Stock Purchase
Plan; and (vi) shares issued under equity award plans (including stock
option plans) for officers and employees of the Company and its
subsidiaries (including Parkway Properties LP) if such plans have been
approved by the Company's stockholders.
"Business Day" shall mean any day other than a Saturday or a
Sunday or a day on which commercial banking institutions in the City of New York
are authorized by law to be closed. Any reference to "days" (unless Business
Days are specified) shall mean calendar days.
"Commission" shall mean the Securities and Exchange Commission
or any successor agency having jurisdiction to enforce the Securities Act.
"Common Shares" shall have the meaning assigned to it in the
introduction to this Warrant, such term to include any shares of capital stock
into which such Common Shares shall have been changed or any shares of capital
stock resulting from any reclassification of such Common Shares.
"Company" shall have the meaning assigned to it in the
introduction to this Warrant, such term to include any corporation or other
entity which shall succeed to or assume the obligations of the Company hereunder
in compliance with Section 4.
"Convertible Securities" shall mean any evidences of
indebtedness, shares of capital stock (other than Common Shares) or other
securities directly or indirectly convertible into, redeemable for or
exchangeable for Additional Common Shares.
"Current Market Price" shall mean, on any date specified
herein, the average of the daily closing prices for the five consecutive Trading
Days preceding such date specified herein.
"Exchange Act" shall mean the Securities Exchange Act of 1934,
as amended from time to time, and the rules and regulations thereunder, or any
successor statute.
"Expiration Date" shall have the meaning assigned to it in the
introduction to this Warrant.
2
<PAGE> 3
"Fair Value" shall mean, on any date specified herein (i) in
the case of cash, the dollar amount thereof, (ii) in the case of a security, the
Current Market Price, and (iii) in all other cases, the fair value thereof (as
of a date which is within 20 days of the date as of which the determination is
to be made) determined in good faith jointly by the Company and the Holder;
provided, however, that if such parties are unable to reach agreement within a
reasonable period of time, the Fair Value shall be determined in good faith, by
an independent investment banking firm selected jointly by the Company and the
Holder or, if that selection cannot be made within ten days, by an independent
investment banking firm selected by the American Arbitration Association in
accordance with its rules, and provided further, that the Company and the Holder
shall each pay one-half of all of the fees and expenses of any third parties
incurred in connection with determining the Fair Value.
"Holder" shall have the meaning assigned to it in the
introduction to this Warrant.
"Operating Agreement" shall mean the Operating Agreement dated
as of October 6, 2000, between the Company and Five Arrows Realty Securities III
L.L.C.
"Options" shall mean any rights, options or warrants to
subscribe for, purchase or otherwise acquire either Additional Common Shares or
Convertible Securities.
"Other Securities" shall mean any shares of capital stock
(other than Common Shares) and other securities of the Company or any other
Person (corporate or otherwise) which the holders of the Warrants at any time
shall be entitled to receive, or shall have received, upon the exercise of the
Warrants, in lieu of or in addition to Common Shares, or which at any time shall
be issuable or shall have been issued in exchange for or in replacement of
Common Shares or Other Securities pursuant to Section 4 or otherwise.
"Person" shall mean any individual, firm, partnership,
corporation, trust, joint venture, association, joint stock company, limited
liability company, unincorporated organization or any other entity or
organization, including a government or agency or political subdivision thereof,
and shall include any successor (by merger or otherwise) of such entity.
"Purchase Agreement" shall have the meaning assigned to it in
the introduction to this Warrant.
"Purchase Price" shall mean initially $35.00 per share,
subject to adjustment and readjustment from time to time as provided in Section
3.2, and, as so adjusted or readjusted, shall remain in effect until a further
adjustment or readjustment thereof is required by Section 3.
"Restricted Securities" shall mean (i) any Warrants bearing
the applicable legend set forth in Section 9.1, (ii) any Common Shares (or Other
Securities) issued or issuable upon the exercise of Warrants which are (or, upon
issuance, will be) evidenced by a certificate or certificates bearing the
applicable legend set forth in such Section, and (iii) any Common Shares (or
Other Securities) issued subsequent to the exercise of any of the Warrants as a
distribution with respect to, or resulting from a subdivision of the outstanding
Common Shares (or other Securities) into a greater number of shares by
reclassification, share splits or otherwise, or in
3
<PAGE> 4
exchange for or in replacement of the Common Shares (or Other Securities) issued
upon such exercise, which are evidenced by a certificate or certificates bearing
the applicable legend set forth in such Section.
"Rights" shall have the meaning assigned to it in Section 3.9.
"Securities Act" shall mean the Securities Act of 1933, as
amended from time to time, and the rules and regulations thereunder, or any
successor statute.
"Series B Convertible Cumulative Preferred Shares" shall mean
shares of the Company's Series B Convertible Cumulative Preferred Stock, $.001
par value per share, sold by the Company pursuant to the Purchase Agreement.
"Trading Day" shall mean a day on which the Common Shares are
traded on the New York Stock Exchange, or other national exchange or quotation
system used to determine the Current Market Price.
"Warrant" shall mean this Warrant.
2. Exercise of Warrant.
2.1. Manner of Exercise; Payment of the Purchase Price. (a)
This Warrant may be exercised by the Holder, in whole or in part, at any time or
from time to time prior to the Expiration Date, by surrendering to the Company
at its principal office this Warrant, with the form of Election to Purchase
Shares attached hereto as Exhibit A (or a reasonable facsimile thereof)
completed and duly executed by the Holder and accompanied by payment of the
Purchase Price for the number of Common Shares specified in such form.
(b) Payment of the Purchase Price may be made as follows (or
by any combination of the following): (i) in United States currency by cash or
delivery of a certified check or bank draft payable to the order of the Company
or by wire transfer to the Company, (ii) by cancellation of such number of the
Common Shares otherwise issuable to the Holder upon such exercise as shall be
specified in such Election to Purchase Shares, such that the excess of the
aggregate Current Market Price of such specified number of shares on the date of
exercise over the portion of the Purchase Price attributable to such shares
shall equal the Purchase Price attributable to the Common Shares to be issued
upon such exercise, in which case such amount shall be deemed to have been paid
to the Company and the number of shares issuable upon such exercise shall be
reduced by such specified number, or (iii) by surrender to the Company for
cancellation certificates representing Common Shares of the Company owned by the
Holder (properly endorsed for transfer in blank) having an aggregate Current
Market Price on the date of Warrant exercise equal to the Purchase Price.
2.2. When Exercise Effective. Each exercise of this Warrant
shall be deemed to have been effected immediately prior to the close of business
on the Business Day on which this Warrant shall have been surrendered to, and
the Purchase Price shall have been received by, the Company as provided in
Section 2.1, and at such time the Person or Persons in whose name or names any
certificate or certificates for Common Shares (or Other Securities) shall be
issuable
4
<PAGE> 5
upon such exercise as provided in Section 2.3 shall be deemed to have become the
holder or holders of record thereof for all purposes.
2.3. Delivery of Share Certificates, etc.; Charges, Taxes and
Expenses. (a) As soon as practicable after each exercise of this Warrant, in
whole or in part, and in any event within three Trading Days thereafter, the
Company shall cause to be issued in the name of and delivered to the Holder
hereof or, subject to Section 9, as the Holder may direct,
(i) a certificate or certificates for the number of Common
Shares (or Other Securities) to which the Holder shall be entitled upon
such exercise plus, in lieu of issuance of any fractional share to
which the Holder would otherwise be entitled, if any, a check for the
amount of cash equal to the same fraction multiplied by the Current
Market Price per share on the date of Warrant exercise, and
(ii) in case such exercise is for less than all of the Common
Shares purchasable under this Warrant, a new Warrant or Warrants of
like tenor, for the balance of the Common Shares purchasable hereunder.
(b) An issuance of certificates for Common Shares upon the
exercise of this Warrant shall be made without charge to the Holder
hereof for any issue or transfer tax or other incidental expense, in
respect of the issuance of such certificates, all of which such taxes
and expenses shall be paid by the Company; provided, however, that the
Company shall not be required to pay any tax that may be payable in
respect of any transfer involved in the issue or delivery of Common
Shares or other securities or property in a name other than that of the
Holder hereof, and no such issue or delivery shall be made unless and
until the person requesting such issue or delivery has paid to the
Company the amount of any such tax or established, to the reasonable
satisfaction of the Company, that such tax has been paid.
3. ADJUSTMENT OF COMMON SHARES ISSUABLE UPON EXERCISE.
3.1. Adjustment of Number of Shares.
Upon each adjustment of the Purchase Price as a result of
the calculations made in this Section 3, this Warrant shall thereafter evidence
the right to receive, at the adjusted Purchase Price, that number of Common
Shares (calculated to the nearest one-tenth) obtained by dividing (i) the
product of the aggregate number of shares covered by this Warrant immediately
prior to such adjustment and the Purchase Price in effect immediately prior to
such adjustment of the Purchase Price by (ii) the Purchase Price in effect
immediately after such adjustment of the Purchase Price.
3.2. Adjustment of Purchase Price.
3.2.1. Below Purchase Price. In case the Company shall issue
or sell Additional Common Shares (including Additional Common Shares deemed to
be issued pursuant to Section 3.3 but excluding Additional Common Shares
purchasable upon the exercise of Rights referred to
5
<PAGE> 6
in Section 3.9) without consideration or for a consideration per share (without
taking into account customary underwriters' or placement agents' discounts) less
than the Purchase Price in effect immediately prior to such issue or sale, then
the Purchase Price shall be reduced, concurrently with such issue or sale, to
the amount of consideration for such issuance or sale (or, if for no
consideration, to zero).
3.2.2. Extraordinary Distributions. If the Company shall
distribute to all holders of its Common Shares any shares of capital stock of
the Company (other than Common Shares or the Rights referred to in Section 3.9
hereof), evidence of its indebtedness or assets (excluding regularly scheduled
cash dividends payable out of legally available funds) or Options or Convertible
Securities to subscribe for or purchase any of its securities (excluding those
Options and Convertible Securities issued to all holders of Common Shares
entitling them for a period expiring within 45 days after the record date
referred to in Section 3.3 below to subscribe for or purchase Common Shares,
which Options and Convertible Securities are referred to in and treated under
Section 3.3 below), then, in each such case, subject to Section 3.7, the
Purchase Price in effect immediately prior to the close of business on the
record date fixed for the determination of holders of any class of securities
entitled to receive such distribution shall be reduced, effective as of the
close of business on such record date, to a price determined by multiplying such
Purchase Price by a fraction
(x) the numerator of which shall be the Current Market Price
in effect on such record date or, if the Common Shares trade on an
ex-distribution basis, on the date prior to the commencement of
ex-distribution trading, less the Fair Value of such distribution
applicable to one Common Share, and
(y) the denominator of which shall be such Current Market
Price.
3.3. Treatment of Options and Convertible Securities. If the
Company shall issue Options or Convertible Securities to all holders of Common
Shares entitling them (for a period expiring within 45 days after the record
date mentioned below) to subscribe for or purchase Common Shares at a price per
share less than the Current Market Price per share of Common Shares on the
record date for the determination of stockholders entitled to receive such
Options or Convertible Securities, then the Purchase Price in effect at the
opening of business on the day next following such record date shall be adjusted
to equal the ratio determined by dividing (I) the Purchase Price in effect
immediately prior to the opening of business on the day next following the date
fixed for such determination by (II) a fraction, the numerator of which shall be
the sum of (A) the number of Common Shares outstanding on the close of business
on the date fixed for such determination and (B) the number of Common Shares
that the aggregate proceeds to the Company from the exercise of such Options or
Convertible Securities would purchase at such Current Market Price, and the
denominator of which shall be the sum of (A) the number of Common Shares
outstanding on the close of business on the date fixed for such determination
and (B) the number of Additional Common Shares offered for subscription or
purchase pursuant to such Options or Convertible Securities. Such adjustment
shall become effective immediately after the opening of business on the day next
following such record date. In determining whether any Options or Convertible
Securities entitle the holders thereof to subscribe for or purchase Common
Shares at less than such Current Market Price, there shall be
6
<PAGE> 7
taken into account any consideration received by the Company upon issuance and
upon exercise of such Options or Convertible Securities, with the value of such
consideration, if other than cash, to be determined by the Board of Directors.
3.4. Treatment of Share Distributions, Share Splits, etc. If
the Company shall (A) pay a dividend or make a distribution with respect to its
capital stock in Common Shares, (B) subdivide its outstanding Common Shares into
a greater number of shares, (C) combine its outstanding Common Shares into a
smaller number of shares or (D) issue any shares of capital stock by
reclassification of its Common Shares, the Purchase Price in effect at the
opening of business on the day next following the date fixed for the
determination of stockholders entitled to receive such dividend or distribution
or at the opening of business on the day following the day on which such
subdivision, combination or reclassification becomes effective, as the case may
be, shall be adjusted so that the holder of this Warrant shall be entitled to
receive the number of Common Shares that such holder would have owned or have
been entitled to receive after the happening of any of the events described
above had any unexercised portion of the Warrant been exercised in full
immediately prior to the record date in the case of a dividend or distribution
or the effective date in the case of a subdivision, combination or
reclassification. An adjustment made pursuant to this Section 3.4 shall become
effective immediately after the opening of business on the day next following
the record date in the case of a dividend or distribution and shall become
effective immediately after the opening of business on the day next following
the effective date in the case of a subdivision, combination or
reclassification.
3.5. Computation of Consideration. For the purposes of this
Section 3,
(a) the consideration for the issue or sale of any Additional
Common Shares shall, irrespective of the accounting treatment of such
consideration,
(i) insofar as it consists of cash, be computed at
the amount of cash payable to the Company, without deducting
any expenses paid or incurred by the Company or any
commissions or compensations paid or concessions or discounts
allowed to underwriters, dealers or others performing similar
services in connection with such issue or sale,
(ii) insofar as it consists of property (including
securities) other than cash, be computed at the Fair Value
thereof at the time of such issue or sale, and
(iii) in case Additional Common Shares are issued or
sold together with other shares of capital stock or securities
or other assets of the Company for a consideration which
covers both, be the portion of such consideration so received,
computed as provided in clauses (i) and (ii) above, allocable
to such Additional Common Shares, such allocation to be
determined in the same manner that the Fair Value of property
not consisting of cash or securities is to be determined as
provided in the definition of "Fair Value" herein;
7
<PAGE> 8
(b) Additional Common Shares deemed to have been issued
pursuant to Section 3.3, relating to Options and Convertible
Securities, shall be deemed to have been issued for a consideration per
share determined by dividing
(i) the total amount, if any, received and receivable
by the Company as consideration for the issue, sale, grant or
assumption of the Options or Convertible Securities in
question, plus the minimum aggregate amount of additional
consideration (as set forth in the instruments relating
thereto, without regard to any provision contained therein for
a subsequent adjustment of such consideration to protect
against dilution) payable to the Company upon the exercise in
full of such Options or the conversion or exchange of such
Convertible Securities or, in the case of Options for
Convertible Securities, the exercise of such Options for
Convertible Securities and the conversion or exchange of such
Convertible Securities, in each case computing such
consideration as provided in the foregoing subdivision (a),
by
(ii) the maximum number of Common Shares (as set
forth in the instruments relating thereto, without regard to
any provision contained therein for a subsequent adjustment of
such number to protect against dilution) issuable upon the
exercise of such Options or the conversion or exchange of such
Convertible Securities; and
(c) Additional Common Shares deemed to have been issued
pursuant to Section 3.4, relating to distributions, share splits, etc.,
shall be deemed to have been issued for no consideration.
3.6. Adjustments for Combinations, etc. In case the
outstanding Common Shares shall be combined or consolidated, by reclassification
or otherwise, into a lesser number of Common Shares, the Purchase Price in
effect immediately prior to such combination or consolidation shall,
concurrently with the effectiveness of such combination or consolidation, be
proportionately increased and the number of Common Shares issuable upon exercise
of this Warrant shall be proportionately decreased.
3.7. De Minimis Adjustments. No adjustment in the Conversion
Ratio shall be required unless such adjustment would require a cumulative
increase or decrease of at least 1% thereof; provided, however, that any
adjustments that by reason of this Section 3.7 are not required to be made shall
be carried forward and taken into account in any subsequent adjustment until
made. All calculations under this Section 3 shall be made to the nearest cent
(with $.005 being rounded upward) or to the nearest one-tenth of a share (with
.05 of a share being rounded upward), as the case may be.
3.8. Abandoned Distribution. If the Company shall take a
record of the holders of its Common Shares for the purpose of entitling them to
receive a distribution (which results in an adjustment to the Purchase Price
under the terms of this Warrant) and shall, thereafter, and
8
<PAGE> 9
before such distribution is paid or delivered to stockholders entitled thereto,
abandon its plan to pay or deliver such distribution, then any adjustment made
to the Purchase Price and number of Common Shares purchasable upon exercise of
this Warrant by reason of the taking of such record shall be reversed, and any
subsequent adjustments, based thereon, shall be recomputed.
3.9. Stockholder Rights Plan. With respect to the Company's
Rights Agreement dated September 7, 1995, as amended (the "Rights"), the Company
shall, in lieu of making any adjustment pursuant to Section 3.2.1 or Section
3.2.2 hereof, make proper provision so that each Holder who exercises a Warrant
after the record date for such distribution and prior to the expiration or
redemption of the Rights shall be entitled to receive upon such exercise, in
addition to the Common Shares issuable upon such exercise, a number of Rights to
be determined as follows: (i) if such exercise occurs on or prior to the date
for the distribution to the holders of Rights of separate certificates
evidencing such Rights (the "Distribution Date"), the same number of Rights to
which a holder of a number of Common Shares equal to the number of Common Shares
issuable upon such exercise at the time of such exercise would be entitled in
accordance with the terms and provisions of and applicable to the Rights; and
(ii) if such exercise occurs after the Distribution Date, the same number of
Rights to which a holder of the number of shares into which the Warrant so
exercised was exercisable immediately prior to the Distribution Date would have
been entitled on the Distribution Date in accordance with the terms and
provisions of and applicable to the Rights.
4. CONSOLIDATION, MERGER, ETC.
4.1. Adjustments upon Certain Transactions. If the Company
shall be a party to any transaction (including, without limitation, a merger,
consolidation, statutory share exchange, self tender offer for all or
substantially all Common Shares, sale of all or substantially all of the
Company's assets or recapitalization of the Common Shares (each of the foregoing
being referred to herein as a "Transaction"), in each case as a result of which
Common Shares shall be converted into the right to receive shares, stock,
securities or other property (including cash or any combination thereof) (other
than a capital reorganization or reclassification resulting in the issue of
Additional Common Shares for which adjustment in the Purchase Price is provided
in Section 3.2.1 or 3.2.2), then, and in the case of each such Transaction,
proper provision shall be made so that, upon the basis and the terms and in the
manner provided in this Warrant, the Holder of this Warrant, upon the exercise
hereof at any time after the consummation of such Transaction, shall be entitled
to receive (at the aggregate Purchase Price in effect at the time of such
consummation for all Common Shares or Other Securities issuable upon such
exercise immediately prior to such consummation), in lieu of the Common Shares
or Other Securities issuable upon such exercise prior to such consummation, the
kind and amount of shares, stock, securities and other property (including cash
or any combination thereof) to which such Holder would actually have been
entitled as a stockholder upon the consummation of such Transaction if such
Holder had exercised this Warrant immediately prior thereto, assuming such
Holder (i) is not a person with which the Company consolidated or into which the
Company merged or which merged into the Company or to which such sale or
transfer was made, as the case may be (a "Constituent Person"), or an affiliate
of a Constituent Person and (ii) failed to exercise his or her appraisal rights
or rights of election, if any, as to the kind or amount of shares, stock,
securities and other property (including cash) receivable in such Transaction
(provided that
9
<PAGE> 10
if the kind or amount of stock, securities and other property (including cash)
receivable upon such Transaction is not the same for each Common Share of the
Company held immediately prior to such Transaction by other than a Constituent
Person or an affiliate thereof and in respect of which such rights of election
shall not have been exercised ("Non-electing Share"), then for the purpose of
this Section 4.1 the kind and amount of stock, securities and other property
(including cash) receivable upon such Transaction by each Non-electing Share
shall be deemed to be the kind and amount so receivable per share by a plurality
of the Non-electing Shares). The Company shall not be a party to any Transaction
unless the terms of such Transaction are consistent with the provisions of this
Section 4.1, and it shall not consent or agree to the occurrence of any
Transaction until the Company has entered into an agreement with the successor
or purchasing entity, as the case may be, for the benefit of the Holder of this
Warrant that will contain provisions enabling such Holder to receive the
securities, cash or other property to which such Holder would actually have been
entitled as a stockholder upon such consummation if such Holder had exercised
this Warrant immediately prior thereto, subject to adjustments (subsequent to
such consummation) as nearly equivalent as possible to the adjustments provided
for in Sections 3 and 4. The provisions of this Section 4.1 shall similarly
apply to successive Transactions.
4.2. Assumption of Obligations. Notwithstanding anything
contained in this Warrant or in the Purchase Agreement to the contrary, the
Company shall not effect any Transaction unless, prior to the consummation
thereof, each Person (other than the Company) which may be required to deliver
any stock, securities, cash or property upon the exercise of this Warrant as
provided herein shall assume, by written instrument delivered to, and reasonably
satisfactory to, the Holder of this Warrant, (a) the obligations of the Company
under this Warrant (and if the Company shall survive the consummation of such
transaction, such assumption shall be in addition to, and shall not release the
Company from, any continuing obligations of the Company under this Warrant), (b)
the obligations of the Company under the Operating Agreement and (c) the
obligation to deliver to the Holder such shares of stock, securities, cash or
property as, in accordance with the foregoing provisions of this Section 4, the
Holder may be entitled to receive. Nothing in this Section 4 shall be deemed to
authorize the Company to enter into any transaction not otherwise permitted by
the Purchase Agreement.
5. NO DILUTION OR IMPAIRMENT. The Company shall not, by
amendment of its articles of incorporation or through any consolidation, merger,
reorganization, transfer of assets, dissolution, issue or sale of securities or
any other voluntary action, avoid or seek to avoid the observance or performance
of any of the terms of this Warrant, but will at all times in good faith assist
in the carrying out of all such terms and in the taking of all such action as
may be necessary or appropriate in order to protect the rights of the Holder of
this Warrant against dilution or other impairment. Without limiting the
generality of the foregoing, the Company (a) shall not permit the par value of
any shares of capital stock receivable upon the exercise of this Warrant to
exceed the amount payable therefor upon such exercise, (b) shall at all times
reserve and keep available, free from preemptive rights, out of the aggregate of
its authorized but unissued Common Shares solely for the purpose of effecting
the exercise of this Warrant, the full number of Common Shares deliverable upon
the full exercise of this Warrant, (c) shall take all such action as may be
necessary or appropriate in order that the Company may validly and legally issue
fully paid and nonassessable shares of capital stock, free from all taxes,
10
<PAGE> 11
liens, security interests, encumbrances, preemptive rights and charges on the
exercise of this Warrant from time to time outstanding and, (d) shall not take
any action which results in any adjustment of the Purchase Price if the total
number of Common Shares (or Other Securities) issuable after the action upon the
full exercise of this Warrant would exceed the total number of Common Shares (or
Other Securities) then authorized by the Company's articles of incorporation and
available for the purpose of issue upon such exercise.
6. NOTICE OF ADJUSTMENTS. In each case of any adjustment or
readjustment in the Common Shares (or Other Securities) issuable upon the
exercise of this Warrant, the Company at its expense shall promptly compute such
adjustment or readjustment in accordance with the terms of this Warrant and
prepare a notice of such adjustment or readjustment setting forth such
adjustment or readjustment and the effective date of such adjustment or
readjustment and shall mail such notice of such adjustment or readjustment to
each holder of a Warrant at such holder's address as it appears in the Warrant
Register (as defined below).
7. NOTICES OF COMPANY ACTION. if:
(a) the Company shall declare a distribution on the Common
Shares (other than the Regular Quarterly Dividend); or
(b) the Company shall authorize the granting to all holders of
Common Shares of rights or warrants to subscribe for or purchase any
shares of any class of capital stock; or
(c) there shall be any reclassification of the Common Shares
or any consolidation or merger to which the Company is a party and for
which approval of any stockholders of the Company is required, or a
statutory share exchange, or self tender offer by the Company for all
or substantially all of its outstanding Common Shares or the sale or
transfer of all or substantially all of the assets of the Company as an
entity; or
(d) there shall occur the involuntary or voluntary
liquidation, dissolution or winding up of the Company;
then the Company shall cause to be mailed to the holder of this Warrant, at the
address as it appears in the Warrant Register, as promptly as possible, but at
least 15 Business Days prior to the applicable date hereinafter specified, a
notice stating (A) the date on which a record is to be taken for the purpose of
such distribution or rights or warrants, or, if a record is not to be taken, the
date as of which the holders of Common Shares of record to be entitled to such
distribution or rights or warrants are to be determined or (B) the date on which
such reclassification, consolidation, merger, statutory share exchange, sale,
transfer, liquidation, dissolution or winding up is expected to become
effective, and the date as of which it is expected that holders of Common Shares
shall be entitled to exchange their Common Shares for securities or other
property, if any, deliverable upon such reclassification, consolidation, merger,
statutory share exchange, sale, transfer, liquidation, dissolution or winding
up. Failure to give or receive such
11
<PAGE> 12
notice or any defect therein shall not affect the legality or validity of the
proceedings described in this Section 7.
8. REGISTRATION OF COMMON SHARES. If any Common Shares
required to be reserved for purposes of exercise of this Warrant require
registration with or approval of any governmental authority under any federal or
state law (other than the Securities Act) before such shares may be issued upon
exercise, the Company shall, at its expense and as expeditiously as possible,
use its reasonable best efforts to cause such shares to be duly registered or
approved, as the case may be. At any such time as Common Shares are listed on
any national securities exchange, the Company shall endeavor to list the Common
Shares required to be delivered upon exercise of this Warrant, prior to such
delivery, upon each such national securities exchange and maintain the listing
of such shares after their issuance; and the Company shall also endeavor to list
on any such national securities exchange and maintain such listing of, any Other
Securities that at any time are issuable upon exercise of this Warrant, if and
at the time that any securities of the same class shall be listed on any such
national securities exchange(s) by the Company. The covenants contained in this
Section 8 shall terminate upon the Expiration Date.
9. RESTRICTIONS ON TRANSFER.
9.1. Restrictive Legends.
Except as otherwise permitted by this Section 9, the Warrant and each
certificate for Common Shares (or Other Securities) issued upon the exercise of
the Warrant, and each certificate issued upon the transfer of any such Common
Shares (or Other Securities), shall be stamped or otherwise imprinted with a
legend in substantially the following form:
"THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR THE
SECURITIES LAW OF ANY STATE, AND MAY NOT BE SOLD, TRANSFERRED OR
OTHERWISE DISPOSED OF EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION
STATEMENT UNDER SUCH ACT AND APPLICABLE STATE SECURITIES LAWS OR
PURSUANT TO AN APPLICABLE EXEMPTION TO THE REGISTRATION REQUIREMENTS OF
SUCH ACT AND SUCH LAWS. SUCH SECURITIES MAY NOT BE SOLD, TRANSFERRED OR
OTHERWISE DISPOSED OF EXCEPT IN COMPLIANCE WITH THE CONDITIONS
SPECIFIED IN THE COMMON STOCK PURCHASE WARRANT ISSUED BY PARKWAY
PROPERTIES, INC. (THE "COMPANY") TO FIVE ARROWS REALTY SECURITIES III
L.L.C. A COMPLETE AND CORRECT COPY OF THE FORM OF SUCH WARRANT IS
AVAILABLE FOR INSPECTION AT THE PRINCIPAL OFFICE OF THE COMPANY OR AT
THE OFFICE OR AGENCY MAINTAINED BY THE COMPANY AS PROVIDED IN SUCH
WARRANT AND WILL BE FURNISHED TO THE HOLDER OF SUCH SECURITIES UPON
WRITTEN REQUEST AND WITHOUT CHARGE."
12
<PAGE> 13
9.2. Transfer to Comply With the Securities Act. Restricted
Securities may not be sold, assigned, pledged, hypothecated, encumbered or in
any manner transferred or disposed of, in whole or in part, except in compliance
with (i) the provisions of the Securities Act and state securities or Blue Sky
laws, (ii) the terms and conditions of the Purchase Agreement and (iii) the
terms and conditions hereof.
9.3. Termination of Restrictions. The restrictions imposed by
this Section 9 on the transferability of Restricted Securities shall cease and
terminate as to any particular Restricted Securities (a) when a registration
statement with respect to the sale of such securities shall have been declared
effective under the Securities Act and such securities shall have been disposed
of in accordance with such registration statement, (b) when such securities are
sold pursuant to Rule 144 (or any similar provision then in force) under the
Securities Act, or (c) when, in the opinion of both counsel for the Holder and
counsel for the Company, such restrictions are no longer required or necessary
in order to protect the Company against a violation of the Securities Act upon
any sale or other disposition of such securities without registration
thereunder. Whenever such restrictions shall cease and terminate as to any
Restricted Securities, the Holder shall be entitled to receive from the Company,
without expense, new securities of like tenor not bearing the applicable legends
required by Section 9.1.
10. RESERVATION OF SHARES, ETC. The transfer agent for the
Common Shares, which may be the Company ("Transfer Agent"), and every subsequent
Transfer Agent for any shares of the Company's equity securities issuable upon
the exercise of any of the purchase rights represented by this Warrant, are
hereby irrevocably authorized and directed at all times until the Expiration
Date to reserve such number of authorized and unissued shares as shall be
requisite for such purpose. The Company shall keep copies of this Warrant on
file with the Transfer Agent for the Common Shares and with every subsequent
Transfer Agent for any of the Company's equity securities issuable upon the
exercise of the rights of purchase represented by this Warrant. The Company
shall supply such Transfer Agent with duly executed share certificates for such
purpose. All Warrant Certificates surrendered upon the exercise of the rights
thereby evidenced shall be canceled, and such canceled Warrants shall constitute
sufficient evidence of the number of shares of capital stock which have been
issued upon the exercise of such Warrants. Subsequent to the Expiration Date, no
shares of capital stock need be reserved in respect of any unexercised Warrant.
11. REGISTRATION AND TRANSFER OF WARRANTS, ETC.
12.1. Warrant Register; Ownership of Warrants. Each Warrant
issued by the Company shall be numbered and shall be registered in a warrant
register (the "Warrant Register") as it is issued and transferred, which Warrant
Register shall be maintained by the Company at its principal office or, at the
Company's election and expense, by a Warrant Agent or the Company's transfer
agent. The Company shall be entitled to treat the registered Holder of any
Warrant on the Warrant Register as the owner in fact thereof for all purposes
and shall not be bound to recognize any equitable or other claim to or interest
in such Warrant on the part of any other Person, and shall not be affected by
any notice to the contrary, except that, if and when any Warrant is properly
assigned in blank, the Company may (but shall not be obligated to) treat the
bearer thereof as the owner of such Warrant for all purposes. Subject to Section
9, a Warrant, if
13
<PAGE> 14
properly assigned, may be exercised by a new holder without a new Warrant first
having been issued.
11.2. Transfer of Warrants. Subject to compliance with Section
9, if applicable, this Warrant and all rights hereunder are transferable in
whole or in part, without charge to the Holder hereof, upon surrender of this
Warrant with a properly executed Form of Assignment attached hereto as Exhibit B
at the principal office of the Company. Upon any partial transfer, the Company
shall at its expense issue and deliver to the Holder a new Warrant of like
tenor, in the name of the Holder, which shall be exercisable for such number of
Common Shares with respect to which rights under this Warrant were not so
transferred. The Holder shall be responsible for payment of any transfer tax
payable in connection with any transfer, in whole or in part of this Warrant.
11.3. Replacement of Warrant. On receipt by the Company of
evidence reasonably satisfactory to the Company of the loss, theft, destruction
or mutilation of this Warrant and, in the case of any such loss, theft or
destruction of this Warrant, on delivery of an indemnity agreement reasonably
satisfactory in form and amount to the Company or, in the case of any such
mutilation, on surrender of such Warrant to the Company at its principal office
and cancellation thereof, the Company at its expense shall execute and deliver,
in lieu thereof, a new Warrant of like tenor.
11.4. Adjustments To Purchase Price and Number of Shares.
Notwithstanding any adjustment in the Purchase Price or in the number or kind of
Common Shares purchasable upon exercise of this Warrant, any Warrant theretofore
or thereafter issued may continue to express the same number and kind of Common
Shares as are stated in this Warrant, as initially issued.
11.5. Fractional Shares. Notwithstanding any adjustment
pursuant to Section 3 in the number of Common Shares covered by this Warrant or
any other provision of this Warrant, the Company shall not be required to issue
fractions of shares upon exercise of this Warrant or to distribute certificates
which evidence fractional shares. In lieu of fractional shares, the Company
shall make payment to the Holder, at the time of exercise of this Warrant as
herein provided, in an amount in cash equal to such fraction multiplied by the
Current Market Price of a Common Share on the date of Warrant exercise.
12. REMEDIES; SPECIFIC PERFORMANCE. The Company stipulates
that there would be no adequate remedy at law to the Holder of this Warrant in
the event of any default or threatened default by the Company in the performance
of or compliance with any of the terms of this Warrant and accordingly, the
Company agrees that, in addition to any other remedy to which the Holder may be
entitled at law or in equity, the Holder shall be entitled to seek to compel
specific performance of the obligations of the Company under this Warrant,
without the posting of any bond, in accordance with the terms and conditions of
this Warrant in any court of the United States or any State thereof having
jurisdiction, and if any action should be brought in equity to enforce any of
the provisions of this Warrant, the Company shall not raise the defense that
there is an adequate remedy at law. Except as otherwise provided by law, a delay
or omission by the Holder hereto in exercising any right or remedy accruing upon
any such
14
<PAGE> 15
breach shall not impair the right or remedy or constitute a waiver of or
acquiescence in any such breach. No remedy shall be exclusive of any other
remedy. All available remedies shall be cumulative.
13. NO RIGHTS OR LIABILITIES AS STOCKHOLDER. Nothing contained
in this Warrant shall be construed as conferring upon the Holder hereof any
rights as a stockholder of the Company or as imposing any obligation on the
Holder to purchase any securities or as imposing any liabilities on the Holder
as a stockholder of the Company, whether such obligation or liabilities are
asserted by the Company or by creditors of the Company.
14. NOTICES. All notices and other communications (and
deliveries) provided for or permitted hereunder shall be made in writing by hand
delivery, telecopier, any courier guaranteeing overnight delivery or first class
registered or certified mail, return receipt requested, postage prepaid,
addressed (a) if to the Company, to the attention of its President at its
principal office located at One Jackson Place Suite 1000, 188 East Capitol
Street, Jackson, Mississippi 39201-2195, or such other address as may hereafter
be designated in writing by the Company to the Holder in accordance with the
provisions of this Section, or (b) if to the Holder, at its address as it
appears in the Warrant Register.
All such notices and communications (and deliveries) shall be
deemed to have been duly given: at the time delivered by hand, if personally
delivered; when receipt is acknowledged, if telecopied; on the next Business
Day, if timely delivered to a courier guaranteeing overnight delivery; and five
days after being deposited in the mail, if sent first class or certified mail,
return receipt requested, postage prepaid; provided, that the exercise of any
Warrant shall be effective in the manner provided in Section 2.
15. AMENDMENTS. This Warrant and any term hereof may not be
amended, modified, supplemented or terminated, and waivers or consents to
departures from the provisions hereof may not be given, except by written
instrument duly executed by the party against which enforcement of such
amendment, modification, supplement, termination or consent to departure is
sought.
16. DESCRIPTIVE HEADINGS, ETC. The headings in this Warrant
are for convenience of reference only and shall not limit or otherwise affect
the meaning of terms contained herein. Unless the context of this Warrant
otherwise requires: (1) words of any gender shall be deemed to include each
other gender; (2) words using the singular or plural number shall also include
the plural or singular number, respectively; (3) the words "hereof", "herein"
and "hereunder" and words of similar import when used in this Warrant shall
refer to this Warrant as a whole and not to any particular provision of this
Warrant, and Section and paragraph references are to the Sections and paragraphs
of this Warrant unless otherwise specified; (4) the word "including" and words
of similar import when used in this Warrant shall mean "including, without
limitation," unless otherwise specified; (5) "or" is not exclusive; and (6)
provisions apply to successive events and transactions.
15
<PAGE> 16
17. GOVERNING LAW. This Warrant shall be governed by, and
construed in accordance with, the laws of the State of New York (without giving
effect to the conflict of laws principles thereof).
18. JUDICIAL PROCEEDINGS; WAIVER OF JURY. Any legal action,
suit or proceeding brought against the Company with respect to this Warrant may
be brought in any federal court of the Southern District of New York or any
state court located in New York County, State of New York, and by execution and
delivery of this Warrant, the Company hereby irrevocably and unconditionally
waives any claim (by way of motion, as a defense or otherwise) of improper
venue, that it is not subject personally to the jurisdiction of such court, that
such courts are an inconvenient forum or that this Warrant or the subject matter
may not be enforced in or by such court. The Company hereby irrevocably and
unconditionally consents to the service of process of any of the aforementioned
courts in any such action, suit or proceeding by the mailing of copies thereof
by registered or certified mail, postage prepaid, at its address set forth or
provided for in Section 14, such service to become effective 10 days after such
mailing. Nothing herein contained shall be deemed to affect the right of any
party to serve process in any manner permitted by law or commence legal
proceedings or otherwise proceed against any other party in any other
jurisdiction to enforce judgments obtained in any action, suit or proceeding
brought pursuant to this Section. The Company irrevocably submits to the
exclusive jurisdiction of the aforementioned courts in such action, suit or
proceeding. THE COMPANY HEREBY IRREVOCABLY WAIVES TRIAL BY JURY IN ANY ACTION,
SUIT OR PROCEEDING, WHETHER AT LAW OR EQUITY, BROUGHT BY IT OR THE HOLDER IN
CONNECTION WITH THIS WARRANT OR THE TRANSACTIONS CONTEMPLATED HEREBY.
19. OPERATING AGREEMENT. The Common Shares (and Other
Securities) issuable upon exercise of this Warrant (or upon conversion of any
Common Shares issued upon such exercise) shall constitute Registrable Securities
(as such term is defined in the Operating Agreement). Each holder of this
Warrant shall be entitled to all of the benefits afforded to a holder of any
such Registrable Securities under the Operating Agreement and such holder, by
its acceptance of this Warrant, agrees to be bound by and to comply with the
terms and conditions of the Operating Agreement applicable to such holder as a
holder of such Registrable Securities.
PARKWAY PROPERTIES, INC.
By: /s/ Steven G. Rogers
--------------------------------------------
Title: President and Chief Executive Officer
16
<PAGE> 17
EXHIBIT A to
Common Shares Purchase Warrant
[FORM OF]
ELECTION TO PURCHASE SHARES
The undersigned hereby irrevocably elects to exercise the
Warrant to purchase ____ shares of Common Stock, par value $.001 per share
("Common Shares"), of PARKWAY PROPERTIES, INC. and hereby [makes payment of
$________ therefor] [or] [makes payment therefor by reduction pursuant to
Section 2.1(b)(ii) of the Warrant of the number of Common Shares otherwise
issuable to the Holder upon Warrant exercise by ___ shares] [or] [makes payment
therefor by delivery of the following Common Shares Certificates of the Company
(properly endorsed for transfer in blank) for cancellation by the Company
pursuant to Section 2.1(b)(iii) of the Warrant, certificates of which are
attached hereto for cancellation ___________________[list certificates by number
and amount]]. The undersigned hereby requests that certificates for such shares
be issued and delivered as follows:
ISSUE TO: ______________________________________________________________________
(NAME)
________________________________________________________________________________
(ADDRESS, INCLUDING ZIP CODE)
________________________________________________________________________________
(SOCIAL SECURITY OR OTHER IDENTIFYING NUMBER)
DELIVER TO: ____________________________________________________________________
(NAME)
________________________________________________________________________________
(ADDRESS, INCLUDING ZIP CODE)
If the number of Common Shares purchased (and/or reduced)
hereby is less than the number of Common Shares covered by the Warrant, the
undersigned requests that a new Warrant representing the number of Common Shares
not so purchased (or reduced) be issued and delivered as follows:
ISSUE TO: ______________________________________________________________________
FIVE ARROWS REALTY SECURITIES III L.L.C.
________________________________________________________________________________
(ADDRESS, INCLUDING ZIP CODE)
DELIVER TO: ____________________________________________________________________
FIVE ARROWS REALTY SECURITIES III L.L.C.
________________________________________________________________________________
(ADDRESS, INCLUDING ZIP CODE)
Dated: _____________, ______ FIVE ARROWS REALTY SECURITIES III L.L.C.
By_______________________________
Name:
Title:
17
<PAGE> 18
EXHIBIT B to
Common Shares Purchase Warrant
[FORM OF] ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sells, assigns, and
transfers unto the Assignee named below all of the rights of the undersigned to
purchase shares of Common Stock, par value $.001 per share ("Common Shares") of
PARKWAY PROPERTIES, INC. represented by the Warrant, with respect to the number
of Common Shares set forth below:
Name of Assignee Address No. of Shares
---------------- ------- -------------
and does hereby irrevocably constitute and appoint ________ Attorney to make
such transfer on the books of PARKWAY PROPERTIES, INC. maintained for that
purpose, with full power of substitution in the premises.
Dated: _______________, ______ FIVE ARROWS REALTY SECURITIES III L.L.C.
By_________________________________
Name:
Title:
