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Exhibit 99(a) EXECUTION COPY
INVESTMENT AGREEMENT
BETWEEN
PARKWAY PROPERTIES, INC.
AND
FIVE ARROWS REALTY SECURITIES III L.L.C.
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DATED AS OF OCTOBER 6, 2000
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TABLE OF CONTENTS
ARTICLE 1 DEFINED TERMS
Section 1.1 Defined Terms...................................................................................1
Section 1.2 Terms Defined Herein............................................................................6
ARTICLE 2 SALE AND PURCHASE OF PREFERRED SHARES
Section 2.1 Sale of Preferred Shares........................................................................6
Section 2.2 Payment for the Investor Preferred Shares.......................................................7
Section 2.3 Transfer Taxes..................................................................................7
ARTICLE 3 CLOSINGS
Section 3.1 Closings........................................................................................7
Section 3.2 Closing Dates...................................................................................7
Section 3.3 Cancellation of Subsequent Closings.............................................................7
ARTICLE 4 REPRESENTATIONS AND WARRANTIES OF THE COMPANY
Section 4.1 Due Incorporation and Status of the Company.....................................................8
Section 4.2 Authority.......................................................................................8
Section 4.3 Valid Agreement of the Company..................................................................8
Section 4.4 No Default......................................................................................8
Section 4.5 No Required Consents............................................................................9
Section 4.6 Reservation of Shares...........................................................................9
Section 4.7 Validity of Preferred Shares....................................................................9
Section 4.8 Disclosure......................................................................................9
Section 4.8.1 No Misstatement or Omission.....................................................................9
Section 4.8.2 Financial Statements...........................................................................10
Section 4.8.3 Subsequent Events..............................................................................10
Section 4.9 Capitalization.................................................................................10
Section 4.10 Litigation.....................................................................................10
Section 4.11 ERISA..........................................................................................10
Section 4.12 Environmental Matters..........................................................................11
Section 4.13 Investment Company.............................................................................12
Section 4.14 Taxes..........................................................................................12
Section 4.15 Insurance......................................................................................12
Section 4.16 Affiliated Transactions........................................................................12
Section 4.17 Liabilities....................................................................................13
Section 4.18 Agreement and Waiver...........................................................................13
Section 4.19 No Event of Default............................................................................13
Section 4.20 No Brokers.....................................................................................13
Section 4.21 Integration....................................................................................13
Section 4.22 Full Disclosure................................................................................14
ARTICLE 5 REPRESENTATIONS AND WARRANTIES OF THE INVESTOR
Section 5.1 Organization...................................................................................14
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Section 5.2 Accredited Investor............................................................................14
Section 5.3 Valid Agreements of the Investor...............................................................14
Section 5.4 No Default.....................................................................................14
Section 5.5 No Brokers.....................................................................................15
Section 5.6 Investment Company.............................................................................15
ARTICLE 6 COVENANTS AND UNDERTAKINGS
Section 6.1 Closings.......................................................................................15
Section 6.2 Expenses of Rothschild Realty, Inc.............................................................15
Section 6.3 Fees and Expenses of Counsel to the Investor...................................................15
Section 6.4 Use of Proceeds................................................................................15
Section 6.5. Stockholder Approval...........................................................................16
Section 6.6. Most favored Nation............................................................................16
ARTICLE 7 CONDITIONS PRECEDENT TO THE OBLIGATION OF THE INVESTOR TO CLOSE
Section 7.1 Representations and Covenants..................................................................16
Section 7.2 Good Standing Certificates.....................................................................17
Section 7.3 Governmental Permits and Approvals.............................................................17
Section 7.4 Legislation....................................................................................17
Section 7.5 Legal Proceedings..............................................................................17
Section 7.6 Third Party Consents...........................................................................18
Section 7.7 Stock Certificates.............................................................................18
Section 7.8 Approval of Counsel to the Investor............................................................18
Section 7.9 Articles Supplementary.........................................................................18
Section 7.10 Operating Agreement............................................................................18
Section 7.11 Opinions of Counsel............................................................................18
Section 7.12 No Stop Order..................................................................................18
Section 7.13 Listing of Common Stock........................................................................18
Section 7.14 Agreement and Waiver...........................................................................18
Section 7.15 Dividends on Preferred Shares..................................................................18
Section 7.16 Director and Officer Insurance.................................................................19
Section 7.17 Subsequent Events..............................................................................19
Section 7.18 Use of Proceeds................................................................................19
Section 7.19 Amendment of Partnership Agreement.............................................................19
Section 7.20 Warrant........................................................................................19
ARTICLE 8 CONDITIONS PRECEDENT TO THE OBLIGATION OF THE COMPANY TO CLOSE
Section 8.1 Representations and Covenants..................................................................19
Section 8.2 Governmental Permits and Approvals.............................................................20
Section 8.3 Legal Proceedings..............................................................................20
Section 8.4 Third Party Consents...........................................................................20
Section 8.5 Purchase Price.................................................................................20
Section 8.6 Approval of Counsel to the Company.............................................................20
Section 8.7 No Stop Order..................................................................................20
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ARTICLE 9 ASSIGNMENT
Section 9.1 Assignability by Investor......................................................................20
Section 9.2 Assignability by the Company...................................................................20
Section 9.3 Binding Agreement..............................................................................21
ARTICLE 10 MISCELLANEOUS
Section 10.1 Applicable Law.................................................................................21
Section 10.2 Notices........................................................................................21
Section 10.3 Entire Agreement; Amendments...................................................................21
Section 10.4 Remedies for Breaches of This Agreement........................................................21
Section 10.5 Confidentiality................................................................................23
Section 10.6 Standstill.....................................................................................23
Section 10.7 Lock-Up........................................................................................24
Section 10.8 Termination....................................................................................24
Section 10.9 Remedies for Violations of Sections 10.5, 10.6 and 10.7........................................25
Section 10.10 Counterparts...................................................................................25
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INVESTMENT AGREEMENT
INVESTMENT AGREEMENT dated as of October 6, 2000 between Parkway
Properties, Inc., a corporation organized under the laws of the State of
Maryland (the "Company") and Five Arrows Realty Securities III L.L.C., a limited
liability company organized under the laws of the State of Delaware (the
"Investor").
WHEREAS, the Company wishes to issue the Preferred Shares (as defined
herein) to the Investor, and the Investor wishes to make the investment and
purchase of the Preferred Shares from the Company (the "Investment"); and
WHEREAS, the Company has, concurrently with the execution and delivery
of this Agreement, issued and delivered to the Investor the Warrant, registered
in the Investor's or its nominee's name.
NOW THEREFORE, in consideration of the promises and the mutual
covenants herein contained and for other good and valuable consideration, the
receipt and adequacy of which are hereby acknowledged, the parties hereto,
intending to be legally bound, hereby agree as follows:
ARTICLE 1 DEFINED TERMS.
Section 1.1 Defined Terms. The following terms shall, unless the
context otherwise requires, have the meanings set forth in this Section 1.1.
"Adverse Consequences" means all actions, suits, proceedings, hearings,
investigations, charges, complaints, claims, demands, injunctions, judgments,
orders, decrees, rulings, damages, dues, penalties, fines, costs, amounts paid
in settlement, liabilities, obligations, taxes, liens, losses, expenses, and
fees, including court costs and reasonable attorneys' fees and disbursements.
"Affiliate" means, with respect to any Person, (a) any member of the
Immediate Family of such Person or a trust established for the benefit of such
member, (b) any beneficiary of a trust described in (a), (c) any Entity which,
directly or indirectly though one or more intermediaries, is deemed to be the
beneficial owner of 10% or more of the voting equity of the Person for the
purposes of Section 13(d) of the Exchange Act, (d) any officer of the Person or
any member of the Board of Directors of the Person, or (e) any Entity which,
directly or indirectly through one or more intermediaries, controls, is
controlled by, or is under common control with, such Person, including such
Person or Persons referred to in the preceding clauses (a) or (d); provided,
however, that none of the Investor, Rothschild or their respective Affiliates
nor any of their respective officers, directors, partners, members or Affiliates
nor any Preferred Director (as such term is defined in the Articles
Supplementary) shall be considered an Affiliate of the Company or its
Subsidiaries for purposes of this Agreement.
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"Agreement" means this Investment Agreement, as originally executed and
as hereafter from time to time supplemented, amended and restated.
"Agreement and Waiver" means the Agreement and Waiver, dated as of the
date of the initial Closing, between the Company and the Investor in the form of
Exhibit A attached hereto.
"Articles Supplementary" means the Articles Supplementary classifying
2,142,857 shares of authorized preferred stock of the Company as Series B
Cumulative Convertible Preferred Stock of the Company in the form of Exhibit B
attached hereto.
"Benefit Plan" means a defined benefit plan as defined in Section 3(35)
of ERISA that is subject to Title IV of ERISA (other than a Multiemployer Plan)
and in respect of which the Company or any ERISA Affiliate is or within the
immediately preceding six (6) years was an "employer" as defined in Section 3(5)
of ERISA.
"Business Day" means any Monday, Tuesday, Wednesday, Thursday or Friday
which is not a day in which banking institutions in New York City are authorized
or obligated by law or executive order to close.
"Charter" means the Articles of Incorporation of the Company,
including, without limitation, the Articles Supplementary, as currently in
effect and as amended, corrected or supplemented in the future in a manner that
is not inconsistent with the terms of the Operative Instruments.
"Code" means the Internal Revenue Code of 1986, as amended from time to
time or any successor statute thereto.
"Common Stock" means the shares of the common stock, par value $.001
per share, of the Company.
"Confidential Information" means the identity of the Company in the
context of the Investment, the existence and contents of discussions regarding
the Investment, the terms of the Investment and information concerning the
assets, operations, business, records, projections and prospects of the Company;
provided, however, that the term "Confidential Information" does not include
information that (i) is or becomes available to the public other than as a
result of disclosure by any of the Investor or Rothschild or any of their
respective representatives, (ii) was available to the Investor or Rothschild or
was within the Investor's or Rothschild's knowledge prior to its disclosure by
the Company to the Investor or Rothschild, or (iii) becomes available to the
Investor or Rothschild from a source other than the Company, provided that such
source is not known by the Investor or Rothschild to be bound by a
confidentiality agreement with the Company or its representative.
"Entity" means any general partnership, limited partnership,
corporation, joint venture, trust, business trust, real estate investment trust,
limited liability company, unincorporated organization, cooperative or
association.
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"Environmental Claim" means any complaint, summons, citation, notice,
directive, order, claim, litigation, investigation, judicial or administrative
proceeding, judgment, letter or other communication from any governmental
agency, department, bureau, office or other authority, or any third party
alleging violations of Environmental Laws or Releases of Hazardous Materials.
"Environmental Laws" means the Comprehensive Environmental Response,
Compensation and Liability Act ("CERCLA"), 42 U.S.C. 9601 et seq., as amended;
the Resource Conservation and Recovery Act ("RCRA), 42 U.S.C. 6901 et seq., as
amended; the Clean Air Act ("CAA"), 42 U.S.C. 7401 et seq., as amended; the
Clean Water Act ("CWA"), 33 U.S.C. 1251 et seq., as amended; the Occupational
Safety and Health Act ("OSHA"), 29 U.S.C. 655 et seq. and any other federal,
state, local or municipal laws, statutes, regulations, rules or ordinances
imposing liability or establishing standards of conduct for protection of the
environment.
"Environmental Liabilities" means any monetary obligations, losses,
liabilities (including strict liability), damages, punitive damages, treble
damages, costs and expenses (including all reasonable out-of-pocket fees,
disbursements and expenses of counsel, reasonable out-of-pocket expert and
consulting fees and reasonable out-of-pocket costs for environmental site
assessments, remedial investigation and feasibility studies), fines, penalties,
sanctions and interest incurred as a result of any Environmental Claim filed by
any governmental authority or any third party against the Company or its
Subsidiaries or any predecessors in interest which relate to any violations of
Environmental Laws, Response Actions, Releases or threatened Releases of
Hazardous Materials from or onto (i) any assets, properties or businesses
presently or formerly owned by the Company, its Subsidiaries or a predecessor in
interest, or (ii) any facility which received Hazardous Materials generated by
the Company, its Subsidiaries or a predecessor in interest.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended, and any successor statute of similar import, and regulations
thereunder, in each case as in effect from time to time. References to sections
of ERISA shall be construed also to refer to any successor sections.
"ERISA Affiliate" means any (i) corporation which is a member of the
same controlled group of corporations (within the meaning of Section 414(b) of
the Code) as the Company, (ii) partnership or other trade or business (whether
or not incorporated) under common control (within the meaning of Section 414(c)
of the Code) with the Company, or (iii) member of the same affiliated service
group (within the meaning of Section 414(m) of the Code) as the Company, any
corporation described in clause (i) above or any partnership or trade or
business described in clause (ii) above.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"GAAP" means United States generally accepted accounting principles, as
in effect from time to time.
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"Hazardous Materials" include (a) any element, compound, or chemical
that is defined, listed or otherwise classified as a contaminant, pollutant,
toxic pollutant, toxic or hazardous substances, extremely hazardous substance or
chemical, hazardous waste, medical waste, biohazardous or infectious waste,
special waste, or solid waste under Environmental Laws; (b) petroleum,
petroleum-based or petroleum-derived products; (c) electrical equipment
containing polychlorinated biphenyls at a level greater than 50 ppm; (d) any
substance exhibiting a hazardous waste characteristic (as identified in
Regulations adopted pursuant to Environmental Laws, i.e. corrosivity,
ignitibility, toxicity or reactivity) as well as any radioactive or explosive
materials; and (e) asbestos-containing materials.
"Immediate Family" means, with respect to any Person, such Person's
spouse, parents, parents-in-law, descendants, nephews, nieces, brothers,
sisters, brothers-in-law, sisters-in-law, stepchildren, sons-in-law and
daughters-in-law.
"Lien" means and includes any lien, security interest, pledge, charge,
option, right of first refusal, claim, mortgage, lease, easement or any other
encumbrance whatsoever.
"Material Adverse Effect," when used with reference to events, acts,
failures or omissions to act, or conduct of a specified Person, means that such
events, acts, failures or omissions to act, or conduct would have a material
adverse effect on (i) the condition (financial or otherwise), earnings, affairs
or prospects of such Person and its consolidated subsidiaries, considered as one
enterprise, or (ii) the ability of such Person to perform its obligations under
the Operative Instruments.
"Multiemployer Plan" means a "multiemployer plan" as defined in Section
4001(a)(3) of ERISA and subject to Title IV of ERISA which is, or within the
immediately preceding six (6) years was, contributed to by the Company or any
ERISA Affiliate.
"Operating Agreement" means the Operating Agreement, dated as of the
initial Closing Date, between the Company and the Investor, in the form of
Exhibit C attached hereto.
"Operative Instruments" means this Agreement, the Warrant, the Articles
Supplementary, the Agreement and Waiver and the Operating Agreement.
"PBGC" means the Pension Benefit Guaranty Corporation.
"Permit" means a permit, license, consent, order or approval by any
federal, state or local governmental agency.
"Person" means any individual or Entity.
"Plan" means an employee benefit plan defined in Section 3(3) of ERISA
in respect of which the Company or any ERISA Affiliate is, or within the
immediately preceding six (6) years was, an "employer" as defined in Section
3(5) of ERISA.
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"Preferred Shares" means the shares of the Company designated in the
Articles Supplementary as Series B Cumulative Convertible Preferred Stock.
"Registration Statement" means the registration statement of the
Company on Form S-3 (Registration No. 333-48161) filed on March 17, 1998 with
the SEC pursuant to the Securities Act.
"REIT" means a real estate investment trust described in Code Section
856.
"Release" means any spilling, leaking, pumping, emitting, emptying,
discharging, injecting, escaping, leaching, migrating, dumping, or disposing of
Hazardous Materials (including the abandonment or discarding of barrels,
containers or other closed receptacles containing Hazardous Materials) into the
environment.
"Response Action" means all actions taken to (i) clean up, remove,
remediate, contain, treat, monitor, assess, evaluate or in any other way address
Hazardous Materials in the environment as required by Environmental Laws; (ii)
prevent or minimize a Release or threatened Release of Hazardous Materials so
they do not migrate or endanger or threaten to endanger to cause substantial
danger to public health or welfare or the environment as required by 42 U.S.C.
9601; (iii) perform pre-remedial studies and investigations and post-remedial
operation and maintenance activities as required by 42 U.S.C. 9601; or (iv) any
other actions authorized by 42 U.S.C. 9601.
"Reportable Event" means any of the events described in Section 4043(c)
of ERISA (other than events for which the notice requirements have been waived).
"Representatives" means, with respect to any Person, the directors,
officers, employees, Affiliates, representatives (including, but not limited to,
financial advisors, attorneys and accountants), agents or potential sources of
financing of such person.
"Rothschild" means Rothschild Realty Inc.
"SDAT" means the State Department of Assessment and Taxation of
Maryland.
"SEC" means the Securities and Exchange Commission or any successor
regulatory authority.
"Securities Act" means the Securities Act of 1933, as amended.
"Subsidiary" of any Person or Entity means an Entity in which such
Person or Entity has the ability, whether by the direct or indirect ownership of
shares or other equity interests, by contract or otherwise, to elect a majority
of the directors of a corporation or the trustees of a real estate investment
trust, to select the managing partner of a partnership, or otherwise to select,
or have the power to remove and then select, a majority of those persons
exercising governing authority over such Entity. A limited partnership shall be
deemed to be a Subsidiary of a Person or Entity if such Person or Entity or a
Subsidiary of such Person or Entity serves as a general partner thereof. A trust
shall be deemed to be a Subsidiary of a Person or
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Entity if such Person or Entity or a Subsidiary of such Person or Entity serves
as any trustee thereof or any Person having the right to select any such
trustee.
"Termination Event" means (i) a Reportable Event with respect to any
Benefit Plan (with respect to which the 30 day notice requirement has not been
waived); (ii) the withdrawal of the Company or any ERISA Affiliate from a
Benefit Plan during a plan year in which the Company or any ERISA Affiliate was
a "substantial employer" as defined in Section 4001(a)(2) of ERISA; (iii)
providing a written notice of intent to terminate a Benefit Plan to affected
parties of a distress termination described in Section 4041(c) of ERISA; or (iv)
the institution by the PBGC of proceedings to terminate a Benefit Plan.
"Warrant" means the warrant, in the form of Exhibit D attached hereto.
Section 1.2 Terms Defined Herein. In addition to the terms defined in
Section 1.1 above, the following terms shall, unless the context otherwise
requires, have the meanings set forth in this Agreement in the section set forth
next to such term
Defined Term Section
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Accredited Investor....................................................5.2
Balance Sheet..........................................................4.17
Breach.................................................................4.19
Closing................................................................2.1
Excess Stock...........................................................4.9
Indemnified Party......................................................10.4.3
Indemnifying Party.....................................................10.4.3
Investment.............................................................Recital
Investor...............................................................Introduction
Investor Preferred Shares..............................................2.1
Liabilities............................................................4.17
Ownership Limit Waiver.................................................6.5(b)
2000 10-Qs.............................................................4.8
1999 10-K..............................................................4.2
2000 Proxy Statement...................................................4.8
Preferred Stock........................................................4.9
Purchase Price.........................................................2.1
Third Party Claim......................................................10.4.3
ARTICLE 2 SALE AND PURCHASE OF PREFERRED SHARES.
Section 2.1 Sale of Preferred Shares. At the closings provided for in
Article 3 hereof (each a "Closing"): (i) the Company shall issue and sell an
aggregate of 2,142,857 Preferred Shares (the "Investor Preferred Shares") to the
Investor, and shall deliver to the Investor a stock certificate or certificates
representing all of the Preferred Shares, registered in the
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Investor's or its nominee's name; and (ii) the Investor shall purchase, acquire
and accept such Preferred Shares as the Company issues and sells to it for
$35.00 per share, less the Discount, as defined below (the "Purchase Price");
provided, however, that the number of Investor Preferred Shares shall be reduced
to 1,873,463 in the event the Company's stockholders do not approve the
Ownership Limit Waiver (as defined in Section 6.5). The term "Discount" shall
mean a discount per share of 2.0% of $35.00, or a discount per share of $.70.
Section 2.2 Payment for the Investor Preferred Shares. At the Closings
and in accordance with the provisions set forth in Article 3, the Purchase Price
shall be paid by the Investor to the Company in United States dollars by wire
transfer of funds immediately available to such account(s) as the Company shall
designate in a written notice delivered to the Investor not less than five (5)
Business Days prior to the applicable Closing Date.
Section 2.3 Transfer Taxes. The Company shall pay all stock transfer
taxes, recording fees and other sales, transfer, use, purchase or similar taxes
resulting from the Investment.
ARTICLE 3 CLOSINGS.
Section 3.1 Closings. The Company shall be entitled to designate up to
four Closings, each of which shall provide for the issuance and sale of at least
142,858 Investor Preferred Shares. Each Closing of the sale and purchase of the
Investor Preferred Shares shall take place at the offices of Xxxxxxx Xxxx &
Xxxxx LLP, 000 Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000 at 10:00 a.m. New York
City time.
Section 3.2 Closing Dates. Each Closing shall occur on such Business
Day as the Company notifies the Investor, on not less than ten (10) Business
Days notice to the Investor, or at such other time as the Company and the
Investor mutually agree in writing (each, a "Closing Date"); provided, however,
that if all of the Investor Preferred Shares have not theretofore been sold, the
remaining Investor Preferred Shares shall be issued and sold on the earlier of
the fourth Closing or July 6, 2001.
Section 3.3 Cancellation of Subsequent Closings. In the event that a
Change of Control or a Put Event (each as defined in the Articles Supplementary)
occurs prior to the sale by the Company to the Investor of any of the 2,142,857
Preferred Shares to be sold pursuant to this Agreement, and the Investor
notifies the Company that it elects to cancel the remaining Closings, such
remaining Closings shall be canceled and the Company shall immediately pay to
the Investor by wire transfer in immediately available funds an amount equal to
the product of (x) $.70 multiplied by (y) the difference between (A) 2,142,857
(or the maximum amount of Preferred Shares that the Investor may purchase in the
event that the stockholders of the Company do not approve the Ownership Limit
Waiver at the Company's next annual meeting as provided in Section 6.5) and (B)
the number of Preferred Shares which the Company has sold to the Investor
pursuant to this Agreement (the "Termination Payment").
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ARTICLE 4 REPRESENTATIONS AND WARRANTIES OF THE COMPANY.
The Company hereby represents and warrants to the Investor as follows:
Section 4.1 Due Incorporation and Status of the Company.
Section 4.1.1 Due Incorporation. The Company and each of its
Subsidiaries has been duly organized and is validly existing and in good
standing under the laws of the state of their respective organization and are
qualified or licensed, and in good standing, as a foreign Entity authorized to
do business in each other jurisdiction in which its ownership of properties or
its conduct of business requires such qualification or licensing, except where
the failure to be so qualified or licensed, or in good standing, as a foreign
Entity would not have a Material Adverse Effect on the Company.
Section 4.1.2 REIT Status. As of the date hereof, the Company
qualifies as a REIT under the Code and has taken no action or omitted to take
any action, the effect of which reasonably could be expected to disqualify the
Company as a REIT under the Code.
Section 4.2 Authority. The Company has the power and authority to own,
lease and operate its properties, directly or indirectly, and to conduct its
business as presently conducted and as contemplated by the Annual Report on Form
10-K as filed by the Company under the Exchange Act for the year ended December
31, 1999 (the "1999 10-K"). The Board of Directors has authorized the prompt
taking of all actions necessary for the approval of this Agreement and the
transactions contemplated hereby, including, without limitation, the taking of
the actions contemplated by Section 6.5, and has determined to recommend such
approval to the stockholders of the Company and that this Agreement and such
transactions are in the best interests of the Company and such stockholders.
Section 4.3 Valid Agreement of the Company. The execution and delivery
of, and the performance by the Company of its obligations under, this Agreement,
the Warrant, the Operating Agreement and the Agreement and Waiver have each been
duly authorized by all necessary action by the Company other than the approval
of stockholders of the Company provided for in Section 6.5. This Agreement has
been and the Warrant, Operating Agreement and Agreement and Waiver, upon the
Closing, will be executed and delivered by the Company. This Agreement
represents and the Warrant, Operating Agreement and Agreement and Waiver, upon
the Closing will represent, the valid and binding obligations of the Company,
enforceable against the Company in accordance with their respective terms,
except as enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting the enforcement of
creditors' rights generally and by general principles of equity (whether
enforcement is sought by proceedings in equity or at law) and except for such
actions requiring stockholder approval as provided in Section 6.5.
Section 4.4 No Default. The execution and delivery of the Operative
Instruments by the Company and the performance by the Company of its obligations
do not (or if not yet executed, upon the execution and delivery thereof will
not) (a) violate the Charter or By-Laws of the Company; (b) violate or
constitute a breach of or default under any mortgage,
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indenture, loan agreement, promissory note or other agreement to which the
Company or any of its Subsidiaries is a party, or by which any of them is bound,
or to which any property of the Company or any of its Subsidiaries is subject;
or (c) conflict with or violate any law or any regulation, rule, order or decree
of any governmental body, court or administrative agency having jurisdiction
over the Company or any of its Subsidiaries or the properties of any of them;
except, in the case of clauses (b) and (c) above, for such breaches, defaults,
conflicts or violations which would not, individually or in the aggregate, have
a Material Adverse Effect on the Company or on the ability of the Company to
consummate the transactions contemplated hereby.
Section 4.5 No Required Consents. The execution and delivery of the
Operative Instruments by the Company and the performance by the Company of its
obligations to be performed at or prior to the related Closing do not require
any filing or registration with, or the receipt of any consent by, any
governmental or regulatory authority by the Company or its Subsidiaries other
than (a) any which have already been obtained or waived, (b) such consents as
may be required under the Securities Act, the regulations promulgated thereunder
or applicable state securities laws, and (c) the approval by the holders of
outstanding shares of Common Stock as required by the rules of the New York
Stock Exchange, Inc., which approval the Company shall use its best efforts to
obtain as set forth in Section 6.5.
Section 4.6 Reservation of Shares. The Company has duly reserved solely
for purposes of issuance (i) upon conversion of the Preferred Shares the Common
Shares into which the Preferred Shares may be converted from time to time, and
(ii) upon exercise of the Warrant the Common Shares underlying the Warrant.
Section 4.7 Validity of Preferred Shares. The Company has duly
authorized the issuance and delivery of 2,142,857 shares of Preferred Stock
pursuant to this Agreement and, upon delivery thereof and receipt by the Company
of the Purchase Price therefor, such shares of Preferred Stock will be duly
authorized, validly issued, fully paid and nonassessable. The Preferred Shares
have the dividend, conversion, voting and other terms set forth in the Articles
Supplementary and, to the extent not inconsistent therewith, as set forth in the
Charter and By-Laws of the Company and the Maryland General Corporation Law.
Section 4.8 Disclosure. The Company has heretofore delivered to the
Investor the Proxy Statement relating to its 2000 Annual Meeting of Shareholders
(the "2000 Proxy Statement"), the 1999 10-K, and the Quarterly Reports on Form
10-Q as filed by the Company under the Exchange Act for the quarters ended March
31, 2000 and June 30, 2000 (the "2000 10-Qs").
Section 4.8.1 No Misstatement or Omission. At the time of filing,
the Registration Statement, the 2000 Proxy Statement, the 1999 10-K and the 2000
10-Qs complied in all material respects with the requirements of the Exchange
Act and the rules and regulations promulgated by the SEC thereunder. The
Registration Statement (including, without limitation, the documents
incorporated by reference therein), the 2000 Proxy Statement, the 1999 10-K and
the 2000 10-Qs do not, as of their respective dates, contain an untrue statement
of a material fact or omit to state a material fact required to be stated
therein or necessary in order to make the
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statements made not misleading, in the case of each of the foregoing other than
the Registration Statement, in light of the circumstances under which they were
made.
Section 4.8.2 Financial Statements. The financial statements,
including the notes thereto, and supporting schedules included in the 1999 10-K
and the 2000 10-Qs have been prepared in conformity with GAAP applied on a
consistent basis (except as otherwise noted therein) and present fairly the
financial position of the Company and its Subsidiaries as of the dates indicated
and the results of their operations for the periods shown.
Section 4.8.3 Subsequent Events. Since the respective dates as of
which information is given in the 1999 10-K and the 2000 10-Qs, except as
otherwise stated therein, in any Current Report on Form 8-K filed by the Company
or in the press releases listed on Schedule 4.8.3 hereto and other than changes
in general economic conditions or industry conditions, there has not been any
change in the condition (financial or otherwise) or in the earnings, business
affairs or business prospects of the Company and its Subsidiaries considered as
one enterprise, whether or not arising in the ordinary course of business which
would have a Material Adverse Effect on the Company.
Section 4.9 Capitalization. The authorized capital stock of the Company
consists of: (i) 67,240,000 shares of Common Stock; (ii) 2,760,000 shares of
8.75% Series A Cumulative Redeemable Preferred Stock, par value $.001 per share
(the "Preferred Stock"); and (iii) 30,000,000 shares of excess stock, par value
$.001 per share (the "Excess Stock"). Schedule 4.9 sets forth the issued and
outstanding capital stock of the Company as of October 4, 2000. Except as set
forth on Schedule 4.9 hereto, there are no other shares of capital stock of the
Company outstanding and no other outstanding options, warrants, convertible or
exchangeable securities, subscriptions, rights (including preemptive rights),
stock appreciation rights, calls or commitments of any character whatsoever to
which the Company is a party or may be bound requiring the issuance or sale of
shares of any capital stock of the Company, and there are no contracts or other
agreements by which the Company is or may become bound to issue additional
shares of its capital stock or any options, warrants, convertible or
exchangeable securities, subscriptions, rights (including preemptive rights),
stock appreciation rights, calls or commitments of any character whatsoever
relating to such shares.
Section 4.10 Litigation. Except as set forth in the 1999 10-K or the
2000 10-Qs or 8-Ks, the Company has not received any notice of any outstanding
judgments, rulings, orders, writs, injunctions, awards or decrees of any court
or any foreign, federal, state, county or local government or any other
governmental, regulatory or administrative agency or authority or arbitral
tribunal against or involving the Company or any of its Subsidiaries which is
currently in effect. Neither the Company nor any of its Subsidiaries is a party
to, or to the knowledge of the Company, threatened with, any litigation or
judicial, governmental, regulatory, administrative or arbitration proceeding
which, if decided adversely to their respective interests could have an adverse
effect upon the transactions contemplated hereby or that could reasonably be
expected to have a Material Adverse Effect on the Company.
Section 4.11 ERISA. (a) Each Plan is in substantial compliance with the
applicable provisions of ERISA, the Code and the Plan's terms, (b) no
Termination
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15
Event has occurred nor is reasonably expected to occur with respect to any
Benefit Plan, (c) the most recent annual report (Form 5500 Series) with respect
to each Plan, including Schedule B (Actuarial Information) thereto, copies of
which have been filed with the Internal Revenue Service, is complete and correct
in all material respects and fairly presents the funding status of such Benefit
Plan, and since the date of such report there has been no material adverse
change in such funding status, (d) no Benefit Plan had an accumulated (whether
or not waived) funding deficiency or permitted decreases which would create a
deficiency in its funding standard account within the meaning of Section 412 of
the Code at any time during the previous 60 months, and (e) no Lien imposed
under the Code or ERISA exists or is likely to arise on account of any Benefit
Plan within the meaning of Section 412 of the Code. Neither the Company nor any
of its ERISA Affiliates has incurred any withdrawal liability under ERISA with
respect to any Multiemployer Plan, and the Company is not aware of any facts
indicating that the Company or any of its ERISA Affiliates may in the future
incur any such withdrawal liability. Except as required by Section 4980B of the
Code, the Company does not maintain a welfare plan (as defined in Section 3(1)
of ERISA) which provides benefits or coverage after a participant's termination
of employment. Neither the Company nor any of its ERISA Affiliates have incurred
any liability under the Worker Adjustment and Retraining Notification Act. All
Plans in existence on the Closing Date are set forth on Schedule 4.11 hereto.
Section 4.12 Environmental Matters. Except as set forth in Schedule
4.12 hereto, to the best knowledge of the Company and its Subsidiaries:
(a) The operations and properties of the Company and its Subsidiaries
are in full compliance with Environmental Laws except to the extent that any
failure to comply is not reasonably expected to have a material adverse effect
on the condition or operation of the individual property subject to the
Environmental Laws;
(b) There has been no Release (i) at any assets, properties or
businesses currently owned or operated by the Company, any of its Subsidiaries
or any predecessor in interest; (ii) from adjoining properties or businesses; or
(iii) from or onto any facilities which received Hazardous Materials generated
by the Company, any of its Subsidiaries or any predecessor in interest that
would result in any Environmental Liabilities except to the extent that any such
Release is not reasonably expected to have a material adverse effect on the
individual property subject to the Environmental Liabilities;
(c) No Environmental Claims have been asserted against the Company, any
of its Subsidiaries or any predecessor in interest nor does the Company or any
of its Subsidiaries have knowledge or notice of any threatened or pending
Environmental Claims;
(d) No Environmental Claims have been asserted against any facilities
that may have received Hazardous Materials generated by the Company, any of its
Subsidiaries or any predecessor in interest;
(e) The Company has conducted Phase I Environmental Site Assessments on
all of the material assets, properties and businesses owned or operated by the
Company and its Subsidiaries and has delivered to the Investor true and complete
copies of all material
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16
environmental reports, studies, investigations or material correspondence with
any governmental agency in their possession regarding any Environmental
Liabilities at the assets, properties or businesses of the Company or any of its
Subsidiaries; and
(f) To the extent that any of the assets, properties or businesses
owned or operated by the Company or any of its Subsidiaries are located in
"wetlands" regulated under Environmental Laws, the Company and its Subsidiaries
are in material compliance with Environmental Laws regulating those "wetlands."
Section 4.13 Investment Company. The Company is not, and upon the
issuance and sale of the Preferred Shares as herein contemplated will not be, an
"investment company" or an Entity "controlled" by an "investment company" as
such terms are defined in the Investment Company Act of 1940, as amended.
Section 4.14 Taxes. The Company has filed all federal, state, local or
foreign tax returns that are required to be filed or has duly requested
extensions thereof and has paid all taxes required to be paid by it and any
related assessments, fines or penalties, except for any such tax, assessment,
fine or penalty that is being contested in good faith and by appropriate
proceedings or where the failure to make any such filing or payment would not be
reasonably expected to have a Material Adverse Effect on the Company; and
adequate charges, accruals and reserves have been provided for in the financial
statements of the Company in respect of all material federal, state, local and
foreign taxes for all periods as to which the tax liability of the Company has
not been finally determined or remains open to examination by applicable taxing
authorities. The Company is not currently under review by any federal, state or
local taxing authority.
Section 4.15 Insurance. The Company carries or is entitled to the
benefits of insurance in such amounts and covering such risks as is reasonably
sufficient under the circumstances and is consistent with comparable businesses
and all such insurance is in full force and effect.
Section 4.16 Affiliated Transactions. Except as set forth on Schedule
4.16 or as disclosed in the 1999 10-K, the 2000 10-Qs or 8-Ks or the 2000 Proxy
Statement describe all transactions with, or payments to, any Affiliate in
excess of $60,000 in the aggregate (other than reimbursement of expenses and
compensation payable to employees or officers or directors' fees payable to the
Company's directors). Except as set forth on Schedule 4.16, neither the Company,
nor any officer or director of the Company, nor any of its Subsidiaries, or any
Affiliate of any of the foregoing, or any member of the Immediate Family of any
of the foregoing: (i) owns, directly or indirectly, any interest in (excepting
not more than five (5) percent stock holdings held solely for investment
purposes in securities of any Person which are listed on any national securities
exchange or regularly traded in the over-the-counter market) or is an owner,
sole proprietor, shareholder, partner, director, officer, employee, consultant
or agent of any person which is a competitor, lessor, lessee, customer or
supplier of the Company or any of its Subsidiaries; (ii) owns, directly or
indirectly, in whole or in part, any property, patent, trademark, service xxxx,
trade name, copyright, franchise, invention, permit, license or secret or
confidential information which the Company or any of its Subsidiaries is using
or the use of which is necessary for the
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business of the Company or any of its Subsidiaries; or (iii) has any cause of
action or other suit, action or claim whatsoever against, or owes any amount to,
the Company or any of its Subsidiaries, in each case (i) through (iii) except
for those in the ordinary course of business.
Section 4.17 Liabilities. Except as set forth on Schedule 4.17 or as
reflected in the consolidated balance sheet of the Company at June 30, 2000 as
included in the 2000 10-Qs (the "Balance Sheet"), the Company and its
Subsidiaries do not have any material direct or indirect indebtedness,
liability, claim, loss, damage, deficiency, obligation or responsibility, fixed
or unfixed, xxxxxx or inchoate, liquidated or unliquidated, secured or
unsecured, subordinated or unsubordinated, matured or unmatured, accrued,
absolute, contingent or otherwise, including, without limitation, liabilities on
account of taxes, other governmental, regulatory or administrative charges or
lawsuits brought, whether or not of a kind required by GAAP to be set forth on a
financial statement (collectively, "Liabilities"), that were not fully and
adequately reflected or reserved against on the Balance Sheet of the Company or
incurred in the ordinary course of business since June 30, 2000 (less
Liabilities that have been discharged in the ordinary course of business since
the date of the Balance Sheet of the Company).
Section 4.18 Agreement and Waiver. The Board of Directors of the
Company has approved the provisions of the Agreement and Waiver.
Section 4.19 No Event of Default. No event has occurred and is
continuing and no condition exists which constitutes a breach, an event of
default, or otherwise gives any other party the rights to accelerate or require
payment of any obligation, or with the passage of time would constitute such an
event (a "Breach"), under any agreement or instrument to which the Company or
any of its Subsidiaries is a party that could reasonably be expected to have a
Material Adverse Effect on the Company. Neither the Company nor any of its
Subsidiaries has received any notice that an event has occurred and is
continuing or that a condition exists which constitutes a Breach under any
agreement or instrument to which the Company or any of its Subsidiaries is a
party that could reasonably be expected to have a Material Adverse Effect on the
Company.
Section 4.20 No Brokers. In connection with the Investment, the Company
has not retained or become obligated to any broker or finder other than
Rothschild, UBS Warburg LLC and Mercury Partners LLC.
Section 4.21 Integration. The Preferred Shares and the Common Stock
issuable upon conversion of the Preferred Shares are being issued and sold to
the Investor pursuant to the Registration Statement. The Registration Statement
is currently effective and the Company will use its best efforts to maintain
such effectiveness as long as any Preferred Shares are outstanding and, if
necessary, to have declared effective one or more registration statements under
the Securities Act so as to give effect to the Company's obligations hereunder.
The Registration Statement has not been the subject of an issued stop order or
other proceeding relating to the effectiveness of the Registration Statement
and, to the Company's best knowledge, the Commission has given no notice that it
is contemplating such action. No registration, filing or qualification is
required under any state "blue sky" or other securities laws to sell the
Preferred Shares hereunder or to issue shares of Common Stock upon conversion of
the Preferred Shares.
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Section 4.22 Full Disclosure. All documents and other papers delivered
to the Investor by or on behalf of the Company in connection with this Agreement
and the transactions contemplated hereby are true, complete, accurate and
authentic and, when taken together with the Company's representations and
warranties set forth in this Agreement, do not contain any untrue statement of a
material fact or omit to state a material fact required to be stated therein or
necessary in order to make the statements made, in light of the circumstances
under which they were made, not misleading.
ARTICLE 5 REPRESENTATIONS AND WARRANTIES OF THE INVESTOR.
In order to induce the Company to enter into this Agreement and to
consummate the transactions contemplated hereby, the Investor hereby represents
and warrants to, and covenants with, the Company as follows:
Section 5.1 Organization. The Investor has been duly organized and is
validly existing and in good standing under the laws of the State of Delaware,
and has all requisite power and authority under such laws to carry on its
business as now conducted.
Section 5.2 Accredited Investor. The Investor is an "Accredited
Investor," as such term is defined in Rule 501(a) of Regulation D promulgated
under the Securities Act.
Section 5.3 Valid Agreements of the Investor. The Investor has all
right, power and authority to enter into this Agreement and the Operating
Agreement and to consummate the transactions contemplated hereby and thereby.
All action on the part of the Investor, its officers, managers and members
necessary for the authorization, execution and delivery of the Operative
Agreements and the performance of all obligations of the Investor hereunder have
been taken or will be taken prior to the Closing. Each of the Operative
Instruments to which the Investor is a party has each been duly authorized,
executed and delivered by the Investor, and constitutes a legal, valid and
binding obligation of the Investor, enforceable against the Investor in
accordance with its terms, except as enforceability may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium or similar laws affecting the
enforcement of creditors' rights generally and by general principles of equity
(whether enforcement is sought by proceedings in equity or at law).
Section 5.4 No Default. The execution and delivery of this Agreement
and the Operating Agreement by the Investor and the performance by the Investor
of its obligations thereunder do not (or if not yet executed, upon the execution
and delivery thereof will not) (a) violate the organizational documents of the
Investor; (b) violate or constitute a breach of or default under any mortgage,
indenture, loan agreement, promissory note or other agreement to which the
Investor is a party, or by which the Investor is bound, or to which any property
of the Investor is subject; or (c) conflict with or violate any law or any
regulation, rule, order or decree of any governmental body, court or
administrative agency having jurisdiction over the Investor or its properties
except with respect to clauses (b) and (c) where such conflict, breach, default
or violation would not reasonably be expected to have a Material Adverse Effect
on the Investor.
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Section 5.5 No Brokers. In connection with the Investment, the Investor
has not retained or become obligated to any broker or finder.
Section 5.6 Investment Company. The Investor is not, and upon the
purchase of the Preferred Shares as herein contemplated, will not be, an
"investment company" or an Entity "controlled" by and "investment company" as
such terms are defined in the Investment Company Act of 1940, as amended.
ARTICLE 6 COVENANTS AND UNDERTAKINGS.
Section 6.1 Closings. The Company shall use its best efforts to comply
with all conditions precedent to the Closings, including, without limiting the
foregoing, the Company shall cause the Articles Supplementary to have been
adopted, filed with the SDAT and become effective.
Section 6.2 Expenses of Rothschild Realty, Inc. Except as set forth in
Section 6.3, the Company agrees to reimburse Rothschild at each Closing for its
reasonable out-of-pocket expenses documented to the reasonable satisfaction of
the Company. All such amounts paid pursuant to this Section 6.2 shall be paid by
wire transfer of funds immediately available in New York City to such account(s)
as Rothschild shall designate in a written notice delivered to the Company not
less than two Business Days prior to the initial Closing Date; provided,
however, that the Investor, on behalf of the Company, may directly pay out of
the Purchase Price payable hereunder such fees and expenses to Rothschild;
provided, further, that the aggregate of all such out-of-pocket expenses
including, without limitation, the fees and expenses of counsel to the Investor
provided for in Section 6.3 hereof, shall not exceed (i) $125,000 payable on the
execution and delivery of this Agreement for its services rendered in connection
with the preparation and negotiation of this Agreement and the related
agreements and the first Closing, and (ii) $15,000 payable on each subsequent
Closing for its services rendered in connection with each of the subsequent
Closings.
Section 6.3 Fees and Expenses of Counsel to the Investor. Subject to
the limitation set forth in Section 6.2, the Company agrees to pay to counsel to
the Investor, at each Closing reasonable fees and expenses in connection with
services rendered and expenses incurred in connection with the issuance and sale
of Preferred Shares to the Investor. All such amounts paid pursuant to this
Section 6.3 shall be paid by wire transfer of funds immediately available in New
York City to such account(s) as counsel to the Investor shall designate in a
written notice delivered to the Company not less than two Business Days prior to
each date on which such amount is payable; provided, however, that the Investor,
on behalf of the Company, may directly pay out of the Purchase Price hereunder
such fees and expenses to counsel to the Investor.
Section 6.4 Use of Proceeds. The Company shall apply all of the
proceeds from the sale of the Preferred Shares to the Investor at each Closing
to purchase concurrently an identical number of Series B Preferred Mirror
Limited Partnership Units of Parkway Properties, L.P. (the "Operating
Partnership"), as set forth in Exhibit A to the Amended and Restated
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Agreement of Limited Partnership of the Operating Partnership in the Form of
Exhibit E attached hereto, from the Operating Partnership.
Section 6.5. Stockholder Approval. The Company covenants to submit a
proposal to its stockholders at the next annual meeting of the Company's
stockholders, which shall be held no later than June 15, 2001, for the purpose
of securing authorization for the ownership by the Investor and its successors
and assigns of in excess of 19.9% of the outstanding Common Stock ("the
"Ownership Limit Waiver"). The proxy statement for the Company's regular annual
meeting shall solicit each such stockholder's affirmative vote at such
stockholder meeting in favor of the Ownership Limit Waiver. Such proxy statement
shall reflect that the Board of Directors of the Company has approved the
Ownership Limit Waiver, subject to approval by the Company's stockholders, and
that the Board of Directors recommends to such stockholders that they approve
such proposal. The Company shall use its best efforts to solicit the approval of
the Ownership Limit Waiver. The Investor shall have the opportunity to review
and comment on each version of such proxy statement submitted to or filed with
the SEC. In the event that the stockholders of the Company do not approve the
Ownership Limit Waiver, the Company shall immediately pay to the Investor by
wire transfer in immediately available funds an amount equal to the product of
(x) $.70 multiplied by (y) the difference between (A) 2,142,857 and (B) the
maximum number of Preferred Shares which the Company may sell to the Investor
pursuant to this Agreement in the absence of the Ownership Limit Waiver (the
"Waiver Termination Payment").
Section 6.6. Most Favored Nation. The Company shall not enter into any
agreement with any existing stockholder of the Company in respect of the
issuance by the Company of any shares of Common Stock or securities convertible
into or exchangeable for Common Stock without the prior written consent of the
Investor, and then only if the Investor has been offered the opportunity to
receive rights and benefits equivalent to those proposed for such stockholder in
such agreement, except shares of Common Stock issued under the Company's (i)
Dividend Reinvestment and Stock Purchase Plan and (ii) 1994 Stock Option and
Long Term Incentive Plan for officers and employees of the Company and its
subsidiaries (including Parkway Properties LP), under the terms of such plans as
are in effect on the date hereof. The Company shall furnish to the Investor a
copy of any such agreement. The Company shall not enter into any agreement with
any Person in respect of the granting by the Company of preemptive rights to
such Person with respect to any securities of the Company without the prior
written consent of the Investor, and then only if the Investor has been granted
preemptive rights equivalent to those proposed for such Person in such
agreement.
ARTICLE 7 CONDITIONS PRECEDENT TO THE OBLIGATION
OF THE INVESTOR TO CLOSE.
The obligation of the Investor to complete each Closing is subject, at
its option, to the fulfillment on or prior to the related Closing Date (unless
otherwise provided) of the following conditions, any one (1) or more of which
may be waived by it in its sole discretion:
Section 7.1 Representations and Covenants. The representations and
warranties of the Company contained in this Agreement shall be true, complete
and accurate in
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all material respects on and as of the related Closing Date with the same force
and effect as though made on and as of the related Closing Date, except for
changes contemplated or permitted by this Agreement and except to the extent
that any representation or warranty is made as of a specified date, in which
case, such representation and warranty shall be true and correct in all material
respects as of such date. The Company shall have performed and complied in all
material respects with all covenants and agreements required by this Agreement
to be performed or complied with by the Company on or prior to the related
Closing Date. The Company shall have delivered to the Investor a certificate,
dated the related Closing Date and signed by the President and Chief Financial
Officer of the Company, to the foregoing effect and stating that all conditions
to the Investor's obligations hereunder have been satisfied.
Section 7.2 Good Standing Certificates. The Company shall have
delivered to the Investor: (i) copies of its Charter, including all amendments
thereto, certified by the SDAT; (ii) a certificate from the SDAT to the effect
that the Company is in good standing and subsisting in such jurisdiction and
listing all charter documents of the Company on file in such state; (iii) a
certificate from the Secretary of State or other appropriate official in each
State in which the Company is qualified to do business to the effect that the
Company is in good standing in such State; and (iv) a certificate as to the Tax
status of the Company from the appropriate official in its Maryland and each
State in which the Company is qualified to do business, in each case, dated as
of a date within reasonable proximity to the related Closing Date.
Section 7.3 Governmental Permits and Approvals. Any and all Permits
necessary for the consummation of the transactions contemplated hereby shall
have been obtained and a copy thereof shall have been delivered to the Investor;
except for (a) notice requirements which may be fulfilled subsequent to the
Closing Date and (b) consents, permits, approvals, authorizations, filings and
declarations the failure to obtain or to undertake which will not adversely
affect the ability of the Company to perform its obligations under the Operative
Agreements or any agreement executed in accordance therewith or would not have a
Material Adverse Effect on the Company or its Subsidiaries.
Section 7.4 Legislation. No legislation shall have been proposed, and
approved by a legislative committee, or enacted, and no statute, law, ordinance,
code, rule or regulation shall have been adopted, revised or interpreted, by any
foreign, federal, state, county or local government or any other governmental,
regulatory or administrative agency or authority, which would require, upon or
as a condition to the acquisition of the Preferred Shares or the Warrant by the
Investor, the divestiture or cessation of the conduct of any business presently
conducted by the Company, on the one hand, or by the Investor, on the other
hand, or which, in the good faith judgment of the Investor, may, individually or
in the aggregate, have a Material Adverse Effect on it or on the Company in the
event that the transactions contemplated hereby are consummated.
Section 7.5 Legal Proceedings. No suit, action, claim, proceeding or
investigation shall have been instituted or threatened by or before any court or
any foreign, federal, state, county or local government or any other
governmental, regulatory or administrative agency or authority seeking to
restrain, prohibit or invalidate the issuance or sale of the Preferred
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Shares or the Warrant to the Investor hereunder or the consummation of the
transactions contemplated hereby or to seek damages in connection with such
transactions.
Section 7.6 Third Party Consents. All consents, waivers, licenses,
variances, exemptions, franchises, permits, approvals and authorizations from
parties to any contracts and other agreements (including any amendments and
modifications thereto) with the Company which may be required in connection with
the performance by the Company of its obligations under this Agreement or to
assure such contracts and other agreements continue in full force and effect
after the consummation of the transactions contemplated hereby (without any
Breach by the Company or any of its Subsidiaries) shall have been obtained.
Section 7.7 Stock Certificates. The Company shall have tendered to the
Investor the stock certificate or certificates representing the Preferred Shares
to be purchased on such Closing Date in accordance with Section 3.1 hereof,
registered in the Investor's name.
Section 7.8 Approval of Counsel to the Investor. The Company shall
furnish to counsel for the Investor such certificates and documents as may
reasonably be requested by counsel to the Investor to enable such counsel to
pass on or evaluate the satisfaction of the conditions set forth in this Article
7. All actions and proceedings hereunder and all documents and other papers
required to be delivered by the Company hereunder or in connection with the
consummation of the transactions contemplated hereby, and all other related
matters, shall have been reasonably approved by counsel to the Investor, as to
their form and substance.
Section 7.9 Articles Supplementary. The Articles Supplementary shall be
effective.
Section 7.10 Operating Agreement. The Company shall have executed and
delivered to the Investor the Operating Agreement.
Section 7.11 Opinions of Counsel. The Investor shall have received
favorable opinions, dated as of the related Closing Date, from Xxxxxxx
Xxxxxxxxxxx & Mugel, LLP and Xxxxx Xxxxxxx Xxxxxxx & Xxxxx LLP to the effect of
the matters as the Investor may reasonably request.
Section 7.12 No Stop Order. On the related Closing Date, no stop order
suspending the effectiveness of the Company's Registration Statement shall have
been issued under the Securities Act or proceedings therefor initiated or
threatened by the SEC.
Section 7.13 Listing of Common Stock. The Common Stock issuable upon
conversion of the Preferred Shares and exercise of the Warrant shall have been
approved for listing on the New York Stock Exchange.
Section 7.14 Agreement and Waiver. The Company shall have executed and
delivered to the Investor the Agreement and Waiver.
Section 7.15 Dividends on Preferred Shares. All accrued and unpaid
dividends on any outstanding Preferred Shares, whether or not declared with
respect to any dividend
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payment date, as provided in the Articles Supplementary, that has passed without
payment of such dividends, shall have been paid to, or made available for
payment to, the holders of such outstanding Preferred Shares.
Section 7.16 Director and Officer Insurance. The Company shall have in
place director and officer insurance as provided under Section 2.5 of the
Operating Agreement.
Section 7.17 Subsequent Events. Since the respective dates as of which
information is given in the 1999 10-K, there has not been any change in the
condition (financial or otherwise) or in the earnings, business affairs or
business prospects of the Company and its Subsidiaries considered as one
enterprise, whether or not arising in the ordinary course of business, which has
had, or could reasonably be expected to have, a Material Adverse Effect on the
Company.
Section 7.18 Use of Proceeds. The Company shall provide evidence
reasonably acceptable to the Investor that the issuance by the Operating
Partnership described in Section 6.4 will occur promptly upon Closing.
Section 7.19 Amendment of Partnership Agreement. Exhibit A to the
Amended and Restated Agreement of Limited Partnership of the Operating
Partnership shall be amended and restated as set forth in Exhibit E attached
hereto.
Section 7.20 Warrant. The executed Warrant shall have been delivered by
the Company to the Investor.
ARTICLE 8 CONDITIONS PRECEDENT TO THE OBLIGATION OF
THE COMPANY TO CLOSE.
The obligation of the Company to complete each Closing is subject, at
its option, to the fulfillment on or prior to the related Closing Date of the
following conditions, any one (1) or more of which may be waived it in its sole
discretion:
Section 8.1 Representations and Covenants. The representations and
warranties of the Investor contained in this Agreement shall be true, complete
and accurate in all material respects on and as of the related Closing Date with
the same force and effect as though made on and as of the related Closing Date,
except for changes contemplated or permitted by this Agreement and except to the
extent that any representation or warranty is made as of a specified date, in
which case, such representation and warranty shall be true, complete and
accurate in all material respects as of such date. The Investor shall have
performed and complied in all material respects with all covenants and
agreements required by this Agreement to be performed or complied with by it on
or prior to the related Closing Date. The Investor shall have delivered to the
Company a certificate, dated the related Closing Date and signed by an officer
of the Investor to the foregoing effect and stating that all conditions to the
Company's obligations hereunder have been satisfied.
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Section 8.2 Governmental Permits and Approvals. Any and all Permits
necessary for the consummation of the transactions contemplated hereby shall
have been obtained.
Section 8.3 Legal Proceedings. No suit, action, claim, proceeding or
investigation shall have been instituted or threatened before any court or any
foreign, federal, state, county or local government or any other governmental,
regulatory or administrative agency or authority seeking to restrain, prohibit
or invalidate the sale of the Preferred Shares to the Investor hereunder or the
consummation of the transactions contemplated hereby or to seek damages in
connection with such transactions.
Section 8.4 Third Party Consents. All consents, waivers, licenses,
variances, exemptions, franchises, permits, approvals and authorizations from
parties to any contracts and other agreements (including any amendments and
modifications thereto) with the Investor which may be required in connection
with the performance by the Investor of its obligations under this Agreement
shall have been obtained.
Section 8.5 Purchase Price. The Investor shall have tendered payment
for the Preferred Shares in the amount and in the manner specified in Section
3.1 hereof.
Section 8.6 Approval of Counsel to the Company. The Investor shall
furnish to counsel for the Company such certificates and documents as may
reasonably be requested by counsel to the Company to enable such counsel to pass
on or evaluate the satisfaction of the conditions set forth in this Article 8.
All actions and proceedings hereunder and all documents or other papers required
to be delivered by the Investor hereunder or in connection with the consummation
of the transactions contemplated hereby, and all other related matters, shall be
subject to the reasonable approval of Xxxxxxx Xxxxxxxxxxx & Mugel, LLP, counsel
to the Company, as to their form and substance.
Section 8.7 No Stop Order. On the Closing Date, no stop order
suspending the effectiveness of the Company's Registration Statement shall have
been issued under the Securities Act or proceedings therefor initiated or
threatened by the SEC.
ARTICLE 9 ASSIGNMENT.
Section 9.1 Assignability by Investor. Subject to the terms of the
Agreement and Waiver, the Investor may, without the consent or approval of the
Company, assign its rights and obligations under this Agreement to a Person to
whom the Investor assigns its interest in the Preferred Shares or the Warrant,
pro rata based upon the percentage of Preferred Shares or the Warrant
transferred, provided that such assignee agrees in writing to be bound by the
terms of this Agreement.
Section 9.2 Assignability by the Company. Without the prior written
consent of the Investor, in the sole and absolute discretion of the Investor,
the Company may not assign or delegate its rights or obligations hereunder.
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Section 9.3 Binding Agreement. Subject to the provisions of Sections
9.1 and 9.2, this Agreement shall be binding upon the heirs, successors and
assigns of the parties.
ARTICLE 10 MISCELLANEOUS.
Section 10.1 Applicable Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of New York as applied to be
performed wholly within such State.
Section 10.2 Notices. All notices hereunder shall be in writing and
shall be given: (a) if to the Company, at One Xxxxxxx Place Suite 1000, 000 Xxxx
Xxxxxxx Xxxxxx, Xxxxxxx, Xxxxxxxxxxx 00000-0000, Attention: President, or such
other address or addresses of which the Investor shall have been given notice,
with copies to Xxxxxxx Xxxxxxxxxxx & Mugel, LLP, Twelve Xxxxxxxx Xxxxx, Xxxxxxx,
Xxx Xxxx 00000, Attention: Xxxxxx X. Xxxxxxx, Esq., or such other address of
which the Investor shall have been given notice; and (b) if to the Investor, at
Rothschild Realty, Inc., 0000 Xxxxxx xx xxx Xxxxxxxx, Xxx Xxxx, Xxx Xxxx 00000,
Attn: Xxxxxxx Xxxxxx, or such other address of which the Company shall have been
given notice, with copies to Xxxxxxx Xxxx & Xxxxx LLP, 000 Xxxxx Xxxxxx, Xxx
Xxxx, Xxx Xxxx 00000, Attention: Xxxxx Xxxxx, Esq., or such other address of
which the Company shall have been given notice. Any notice shall be deemed to
have been given if personally delivered or sent by United States mail or by
commercial courier or delivery service or by telegram or telex and shall be
deemed received, unless earlier received, (i) if sent by certified or registered
mail, return receipt requested, three business days after deposit in the mail,
postage prepaid, (ii) if sent by United States Express Mail or by commercial
courier or delivery service, one Business Day after delivery to a United States
Post Office or delivery service, postage prepaid, (iii) if sent by telegram,
telex or facsimile transmission, when receipt is acknowledged by answerback, and
(iv) if delivered by hand, on the date of receipt.
Section 10.3 Entire Agreement; Amendments. This Agreement and other
agreements referred to herein set forth the entire understanding of the parties
hereto, and this Agreement shall not be amended except by an instrument in
writing executed by the Company and the Investor.
Section 10.4 Remedies for Breaches of This Agreement.
Section 10.4.1 Survival of Certain Provisions. All of the
representations and warranties of the Company contained in Article 4 above and
all of the covenants and undertakings of the Company contained in Article 6
above, shall survive the Closings hereunder and continue in full force and
effect provided that such representations and warranties shall survive only
until the second anniversary of the final Closing (subject to any applicable
statutes of limitations), and that the representations and warranties contained
in Sections 4.11 and 4.14 shall survive the Closings hereunder and continue in
full force and effect until the expiration of the applicable statutes of
limitation (giving effect to any extensions thereof), and provided, further, the
representations and warranties contained in Section 4.12 shall survive the
Closings
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hereunder and continue in full force and effect until the sixth anniversary of
the last Closing (subject to any applicable statutes of limitation).
Section 10.4.2 Indemnification Provisions. In the event that either
the Company or the Investor breaches any of its representations, warranties, and
covenants contained herein, provided that the non-breaching party makes a
written claim for indemnification against the breaching party pursuant to
Section 10.2, then the breaching party agrees to indemnify the non-breaching
party from and against the entirety of any Adverse Consequences the
non-breaching party may suffer through and after the date of the claim for
indemnification (including any Adverse Consequences the non-breaching party, its
members or shareholders may suffer after the end of any applicable survival
period) resulting from, arising out of, relating to, in the nature of, or caused
by such breach. In addition to the indemnification rights provided for herein,
the non-breaching party shall also have the right to all such remedies to which
it is entitled as a matter of law or equity. No failure or delay by the
non-breaching party in exercising any right, power or privilege shall operate as
a waiver thereof nor shall any single or partial exercise thereof preclude any
other or further exercise of any right, power or privilege.
Section 10.4.3 Matters Involving Third Parties.
(i) If any third party shall notify any party entitled to be
indemnified hereunder (the "Indemnified Party") with respect to any
matter (a "Third Party Claim") which may give rise to a claim for
indemnification against the Company or the Investor (the "Indemnifying
Party") under this Section 10.4, then the Indemnified Party shall
promptly notify each Indemnifying Party thereof in writing; provided,
however, that no delay on the part of the Indemnified Party in
notifying any Indemnifying Party shall relieve the Indemnifying Party
from any obligation hereunder unless (and then solely to the extent)
the Indemnifying Party thereby is prejudiced.
(ii) Any Indemnifying Party will have the right to assume the
defense of the Third Party Claim with counsel of his or its choice
reasonably satisfactory to the Indemnified Party at any time within 15
days after the Indemnified Party has given notice of the Third Party
Claim; provided, however, that the Indemnifying Party must conduct the
defense of the Third Party Claim actively and diligently thereafter in
order to preserve its rights in this regard; and provided further that
the Indemnified Party may retain separate co-counsel at its sole cost
and expense and participate in the defense of the Third Party Claim.
(iii) So long as the Indemnifying Party has assumed and is
conducting the defense of the Third Party Claim in accordance with
Section 10.4.3(ii) above, the Indemnifying Party will not consent to
the entry of any judgment or enter into any settlement with respect to
the Third Party Claim without the prior written consent of the
Indemnified Party (not to be withheld unreasonably) unless the judgment
or proposed settlement involves only the payment of money damages by
one or more of the Indemnifying Parties and does not impose an
injunction or other equitable relief upon the Indemnified Party.
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(iv) So long as the Indemnifying Party has assumed and is
conducting the defense of the Third Party Claim in accordance with
Section 10.4.3(ii) above, the Indemnified Party will not consent to the
entry of any judgment or enter into any settlement with respect to the
Third Party Claim without the prior written consent of the Indemnifying
Party (not to be withheld unreasonably).
(v) In the event none of the Indemnifying Parties assumes and
conducts the defense of the Third Party Claim in accordance with
Section 10.4.3(ii) above, (A) the Indemnified Party may defend against,
and consent to the entry of any judgment or enter into any settlement
with respect to, the Third Party Claim in any manner he or it
reasonably may deem appropriate (and the Indemnified Party need not
consult with, or obtain any consent from, any Indemnifying Party in
connection therewith) and (B) the Indemnifying Parties will remain
responsible for any Adverse Consequences the Indemnified Party may
suffer resulting from, arising out of, relating to, in the nature of,
or caused by the Third Party Claim to the fullest extent provided in
this Section 10.4.
Section 10.5 Confidentiality. The Investor agrees not to use any
Confidential Information for any purpose other than evaluating the Investment
and the Investor will not divulge, furnish or make available to any other person
or entity other than the Investor's legal counsel, accountants and designated
advisors, and a limited number of the Investor's officers and employees and the
officers and employees of any member of the Investor, solely to the extent
necessary in connection with the evaluation and consummation of the Investment;
such persons and entities shall be informed by the Investor of the confidential
nature of the Confidential Information and shall be directed to treat such
Confidential Information confidentially. Except as required by law, without the
prior written consent of the other party or until such time as a mutually
agreeable public announcement is made, no party hereto will disclose to any
Person other than its Affiliates, attorneys, accountants and other advisors
either the fact that discussion or negotiations are taking place concerning the
Investment or any of the terms, conditions or other facts with respect to the
Investment, including status or that the Confidential Information has been made
available to the Investor and its Representatives.
In the event that the Investor is requested or required (by oral
questions, interrogatories, requests for information or documents, subpoena,
civil investigative demand or similar process) to disclose any of the
Confidential Information, the Investor will provide the Company with prompt
notice of such request or requirements, and the Investor shall cooperate with
the Company in seeking to legally avoid such disclosure. If, in the absence of a
protective order, the Investor is legally compelled, in the opinion of its
counsel, to disclose any of the information, the Company shall either seek and
obtain appropriate protective orders against such disclosure or shall hereby be
deemed to waive the Investor's compliance with the provisions of this Agreement
to the extent necessary to satisfy such request or requirement.
Section 10.6 Standstill. Subject to the provisions of the sentence next
following, the Investor agrees that until the one year anniversary of the date
of this Agreement, none of the Investor, Rothschild, any of their officers,
members, partners, stockholders or subsidiaries and its Affiliates shall (a)
acquire, offer to acquire, or agree to acquire, directly or
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indirectly, by purchase or otherwise, or sell short, any securities, direct or
indirect rights or options to acquire any securities, direct or indirect rights
or options to acquire any securities, or securities or instruments convertible
into voting securities, of the Company; provided, however, that the foregoing
shall not prohibit the acquisition of securities of the Company in an amount
that does not exceed the Ownership Limit, as defined in the Charter, (b) make,
or in any way participate, directly or indirectly, in any "solicitation" of
"proxies" to vote (as such terms are used in the proxy rules of the SEC)
securities of the Company, or seek to advise or influence any person or entity
with respect to any voting of any securities of the Company, (c) form, join or
in any way participate in a "group" within the meaning of Section 13(d)(3) of
the Exchange Act, with respect to any voting securities of the Company, (d) make
any public announcement with respect to or make or submit a proposal or offer
(with or without conditions) for the securities or assets of the Company or any
extraordinary transaction involving the Company or any of its Subsidiaries, (e)
submit or effect any filing or application, or seek to obtain any permit,
consent or agreement, approval or other action, required by or from any
regulatory agency with respect to an acquisition of the Company or any of its
securities or assets, (f) otherwise act alone or in concert with others to seek
to control the management, board of directors or policies of the Company; or (g)
propose any of the foregoing unless and until such proposal is specifically
invited by the Company. Based on the representations of Rothschild to the
Company that Affiliates of Rothschild (which representation Rothschild hereby
reaffirms) not under control of Rothschild have no access to any of the internal
information or files of Rothschild and receive no information, recommendations
or advice from Rothschild, the Company agrees that the prohibitions of the
preceding sentence shall not apply to any Affiliates of Rothschild that are not
under the control of Rothschild and are engaged in the regular business of
trading in publicly-traded securities, so long as such affiliates have not
received, or been given access to, any of the Confidential Information and have
not received any instructions, recommendations or advice pertaining to an
investment in or control of the Company from any party having access to any of
the Confidential Information.
Section 10.7 Lock-Up. The Investor agrees that until the one year
anniversary of the date of this Agreement, it shall not sell transfer, convey,
assign, pledge or hypothecate any of the Preferred Shares or any shares of
Common Stock obtained upon conversion of any Preferred Shares or exercise of the
Warrant, provided, that such restrictions shall not be applicable to transfers
of such shares by Investor to any of its Affiliates.
Section 10.8 Termination. This Agreement may be terminated at any time
prior to the date which all of the Preferred Shares have been sold hereunder:
(a) by the mutual written consent of the Investor and the Company;
(b) by the Investor if the entire amount of Preferred Shares to be sold
by the Company to the Investor hereto have not been sold on or prior to the date
which is two-hundred and seventy days from the date hereof; providing that the
Investor is not in material breach of any of its representations, warranties,
covenants or agreements contained in this Agreement. In the event of termination
by the Company or the Investor pursuant to this Section 10.8, written notice
thereof shall forthwith be delivered to the other party;
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(c) by the Investor, if there is a material breach of any material
representation or warranty set forth in Article 4 hereof or any covenant or
agreement to be complied with or performed by the Investor pursuant to the terms
of this Agreement, provided that the Investor may not terminate this Agreement
prior to the Closing unless the Company has not cured such failure after 10 days
notice thereof; or
(d) by the Company, if there is a material breach of any material
representation or warranty set forth in Article 5 hereof or any covenant or
agreement to be complied with or performed by the Investor pursuant to the terms
of this Agreement, provided that the Company may not terminate this Agreement
prior to the Closing unless the Investor has cured such failure after 10 days
notice thereof.
Section 10.9 Remedies for Violation of Sections 10.5, 10.6 and 10.7.
The provisions of Sections 10.5, 10.6 and 10.7 shall survive the Closings. The
parties agree that, without limiting any other remedies available to the
Company, that the Company shall be entitled to injunctive or other equitable
relief in the event of a failure to comply with the provisions of Sections 10.5,
10.6 and 10.7, No failure or delay by the Company in exercising any right, power
or privilege shall operate as a waiver thereof nor shall any single or partial
exercise thereof preclude any other or further exercise of any right, power or
privilege.
Section 10.10 Counterparts. This Agreement may be executed in more than
one counterpart, each of which may be executed by fewer than all the parties,
with the same effect as if the parties executed one counterpart as of the day
and year first above written.
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IN WITNESS WHEREOF, the parties hereto have hereunto set their hands
and seals as of the day and year first above written.
PARKWAY PROPERTIES, INC.
By: /s/ Xxxxxx X. Xxxxxx
-------------------------------------
Name: Xxxxxx X. Xxxxxx
Title: President and Chief Executive Officer
By: /s/ Xxxxx X. Xxxxx
-------------------------------------
Name: Xxxxx X. Xxxxx
Title: Chief Financial Officer and Secretary
FIVE ARROWS REALTY SECURITIES III L.L.C.
By: /s/ X. Xxxx Xxxxxx
-------------------------------------
Name: X. Xxxx Aloian
Title: Manager
The undersigned hereby acknowledges the terms hereof and hereby agrees
to be bound by the following sections hereof: Sections 10.5, 10.6, 10.7 and
10.9.
ROTHSCHILD REALTY INC.
By: /s/ X. Xxxx Xxxxxx
-------------------------------------
Name: X. Xxxx Aloian
Title: Managing Director
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