SECOND AMENDMENT TO CREDIT AGREEMENT
Exhibit 99.1
SECOND AMENDMENT TO CREDIT AGREEMENT
THIS SECOND AMENDMENT TO CREDIT AGREEMENT (this “Amendment”) dated as of September 20, 2011 by and among PARKWAY PROPERTIES LP, a limited partnership formed under the laws of the State of Delaware (the “Borrower”), PARKWAY PROPERTIES, INC., a corporation incorporated under the laws of the State of Maryland (the “Parent”), each of the Lenders party hereto and XXXXX FARGO BANK, NATIONAL ASSOCIATION, as Administrative Agent (the “Administrative Agent”).
WHEREAS, the Borrower, the Lenders, the Administrative Agent and certain other parties have entered into that certain Credit Agreement dated as of January 31, 2011 as amended by that certain First Amendment to Credit Agreement dated as of July 6, 2011 (as so amended, and as in effect immediately prior to the date hereof, the “Credit Agreement”);
WHEREAS, the Borrower intends to sell a Property commonly known as 000 Xxxx Xxxxxx Xxxxx, Xxxxxxx, Xxxxxxxx (the “Chicago Property”) pursuant to the terms of that certain Purchase and Sale Agreement dated as of August 19, 2011 by and between the Borrower and HUB Properties Trust (the “Purchase Agreement”);
WHEREAS, the Borrower, the Lenders and the Administrative Agent desire to amend certain provisions of the Credit Agreement subject to the terms and conditions of this Amendment; and
NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged by the parties hereto, the parties hereto hereby agree as follows:
Section 1. Specific Amendment to Credit Agreement. The parties hereto agree that the Credit Agreement is amended as follows:
(a) The Credit Agreement is hereby amended by deleting the definition of “Funds From Operations” in its entirety from Section 1.1 and substituting in its place the following:
“Funds From Operations” means, with respect to a Person and for a given period, (a) net income (loss) of such Person determined on a consolidated basis, reduced by Preferred Dividends paid during such period, but excluding (i) gains (or losses) from the restructuring of Indebtedness or the sales of property, (ii) non-recurring impairment charges and (iii) non-cash charges resulting from the redemption of Preferred Stock, plus (b) depreciation with respect to such Person’s real property assets and amortization (other than amortization of deferred financing costs), and after adjustments for Consolidated Affiliates and Unconsolidated Affiliates. Adjustments for unconsolidated partnership and joint ventures will be calculated to reflect funds from operations on the same basis. For purposes of this Agreement, Funds From Operations shall be calculated consistent with the White Paper on Funds from Operations dated April 2002 issued by National Association of Real Estate Investment Trusts, Inc. (the “White Paper”), but without giving effect to any supplements, amendments or other modifications promulgated after the Agreement Date; provided, however, to the extent that the White Paper is inconsistent with the first sentence of this definition, the first sentence of this definition shall control.
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(b) The Credit Agreement is hereby further amended by deleting Section 9.1(f) in its entirety and substituting in its place the following:
“(f) Minimum Tangible Net Worth. The Parent shall not permit Tangible Net Worth at any time to be less than (i) $500,000,000 plus (ii) 85% of the Net Proceeds of all Equity Issuances effected at any time after the Agreement Date by the Parent, the Borrower or any of their Subsidiaries to any Person other than the Parent, the Borrower or any of their Subsidiaries.”
Section 2. Conditions Precedent. The effectiveness of this Amendment is subject to receipt by the Administrative Agent of each of the following, each in form and substance satisfactory to the Administrative Agent:
(a) A counterpart of this Amendment duly executed by the Borrower, the Parent and each of the Lenders;
(b) An Acknowledgement substantially in the form of Exhibit A attached hereto, executed by each Guarantor;
(c) Evidence that the Chicago Property shall have been sold pursuant to the terms of the Purchase Agreement and that all conditions precedent set forth therein shall have been satisfied; and
(d) Such other documents, instruments and agreements as the Administrative Agent may reasonably request.
Section 3. Representations. The Borrower represents and warrants to the Administrative Agent and the Lenders that:
(a) Authorization. The Borrower has the right and power, and has taken all necessary action to authorize it, to execute and deliver this Amendment and to perform its obligations hereunder and under the Credit Agreement, as amended by this Amendment, in accordance with their respective terms. This Amendment has been duly executed and delivered by a duly authorized officer of the Borrower and each of this Amendment and the Credit Agreement, as amended by this Amendment, is a legal, valid and binding obligation of the Borrower enforceable against the Borrower in accordance with its respective terms except as the same may be limited by bankruptcy, insolvency, and other similar laws affecting the rights of creditors generally and the availability of equitable remedies for the enforcement of certain obligations
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(other than the payment of principal) contained herein or therein and as may be limited by equitable principles generally.
(b) Compliance with Laws, etc. The execution and delivery by the Borrower of this Amendment and the performance by the Borrower of this Amendment and the Credit Agreement, as amended by this Amendment, in accordance with their respective terms, do not and will not, by the passage of time, the giving of notice or otherwise: (i) require any Governmental Approval or violate any Applicable Law (including all Environmental Laws) relating to the Parent, the Borrower or any other Loan Party; (ii) conflict with, result in a breach of or constitute a default under the organizational documents of the Parent, the Borrower or any Loan Party, or any indenture, agreement or other instrument to which the Parent, the Borrower or any other Loan Party is a party or by which it or any of its respective properties may be bound; or (iii) result in or require the creation or imposition of any Lien upon or with respect to any property now owned or hereafter acquired by any Loan Party other than in favor of the Administrative Agent for its benefit and the benefit of the Lenders and the Issuing Bank.
(c) No Default. No Default or Event of Default has occurred and is continuing as of the date hereof nor will exist immediately after giving effect to this Amendment.
Section 4. Reaffirmation of Representations by Borrower. The Borrower hereby repeats and reaffirms all representations and warranties made by the Borrower to the Administrative Agent and the Lenders in the Credit Agreement and the other Loan Documents to which it is a party on and as of the date hereof with the same force and effect as if such representations and warranties were set forth in this Amendment in full.
Section 5. Certain References. Each reference to the Credit Agreement in any of the Loan Documents shall be deemed to be a reference to the Credit Agreement as amended by this Amendment.
Section 6. Expenses. The Borrower shall reimburse the Administrative Agent upon demand for all costs and expenses (including attorneys’ fees) incurred by the Administrative Agent in connection with the preparation, negotiation and execution of this Amendment and the other agreements and documents executed and delivered in connection herewith.
Section 7. Benefits. This Amendment shall be binding upon and shall inure to the benefit of the parties hereto and their respective successors and assigns.
Section 8. GOVERNING LAW. THIS AMENDMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO CONTRACTS EXECUTED, AND TO BE FULLY PERFORMED, IN SUCH STATE.
Section 9. Effect. Except as expressly herein amended, the terms and conditions of the Credit Agreement and the other Loan Documents remain in full force and effect. The amendment contained herein shall be deemed to be effective as of the Effective Date.
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Section 10. Counterparts. This Amendment may be executed in any number of counterparts, each of which shall be deemed to be an original and shall be binding upon all parties, their successors and assigns.
Section 11. Definitions. All capitalized terms not otherwise defined herein are used herein with the respective definitions given them in the Credit Agreement.
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IN WITNESS WHEREOF, the parties hereto have caused this Second Amendment to Credit Agreement to be executed as of the date first above written.
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BORROWER:
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PARKWAY PROPERTIES LP
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By:Parkway Properties General Partners, Inc., its sole general partner
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By: /s/ Xxxxxxx X. Xxxxxxx, XX
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Name: Xxxxxxx X. Xxxxxxx, XX
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Title: Executive Vice President, Chief
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Financial Officer and Assistant Secretary
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By: /s/ Xxx X. Xxxxx
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Name: Xxx X. Xxxxx
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Title: Senior Vice President, Treasurer
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and Assistant Secretary
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PARENT:
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PARKWAY PROPERTIES, INC.
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By: /s/ Xxxxxxx X. Xxxxxxx, XX
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Name: Xxxxxxx X. Xxxxxxx, XX
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Title: Executive Vice President, Chief
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Financial Officer and Assistant Secretary
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By: /s/ Xxx X. Xxxxx
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Name: Xxx X. Xxxxx
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Title: Senior Vice President, Treasurer
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and Assistant Secretary
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[Signature Page to Second Amendment to Credit Agreement with Parkway Properties LP]
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XXXXX FARGO BANK, NATIONAL ASSOCIATION,
as Administrative Agent, as Issuing Bank, as Swingline
Lender, and as a Lender
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By: ____________________
Name:
Title:
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[Signature Page to Second Amendment to Credit Agreement with Parkway Properties LP]
BANK OF AMERICA, N.A., as a Lender
By: ____________________
Name:
Title:
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[Signature Page to Second Amendment to Credit Agreement with Parkway Properties LP]
JPMORGAN CHASE BANK, N.A., as a Lender
By: ____________________
Name:
Title:
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[Signature Page to Second Amendment to Credit Agreement with Parkway Properties LP]
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PNC BANK, NATIONAL ASSOCIATION, as a Lender
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By: ____________________
Name:
Title:
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[Signature Page to Second Amendment to Credit Agreement with Parkway Properties LP]
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U.S. BANK NATIONAL ASSOCIATION, as a Lender
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By: __________________________
Name:
Title:
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[Signature Page to Second Amendment to Credit Agreement with Parkway Properties LP]
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TRUSTMARK NATIONAL BANK, as a Lender
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By: _____________________
Name:
Title:
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[Signature Page to Second Amendment to Credit Agreement with Parkway Properties LP]
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BANCORPSOUTH BANK, as a Lender
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By: _____________________
Name:
Title:
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EXHIBIT A
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FORM OF GUARANTOR ACKNOWLEDGEMENT
THIS GUARANTOR ACKNOWLEDGEMENT dated as of ___________, 2011 (this “Acknowledgement”) executed by each of the undersigned (the “Guarantors”) in favor of Xxxxx Fargo Bank, National Association, as Administrative Agent (the “Administrative Agent”) and each “Lender” a party to the Credit Agreement referred to below (the “Lenders”).
WHEREAS, the Borrower, the Lenders, the Administrative Agent and certain other parties have entered into that certain Credit Agreement dated as of January 31, 2011 (as amended, restated, supplemented or otherwise modified from time to time, the “Credit Agreement”);
WHEREAS, each of the Guarantors is a party to that certain Guaranty dated as of January 31, 2011 (as amended, restated, supplemented or otherwise modified from time to time, the “Guaranty”) pursuant to which they guarantied, among other things, the Borrower’s obligations under the Credit Agreement on the terms and conditions contained in the Guaranty;
WHEREAS, the Borrower, the Administrative Agent and the Lenders are to enter into a Second Amendment to Credit Agreement dated as of the date hereof (the “Amendment”), to amend the terms of the Credit Agreement on the terms and conditions contained therein; and
WHEREAS, it is a condition precedent to the effectiveness of the Amendment that the Guarantors execute and deliver this Acknowledgement.
NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged by the parties hereto, the parties hereto agree as follows:
Section 1. Reaffirmation. Each Guarantor hereby reaffirms its continuing obligations to the Administrative Agent and the Lenders under the Guaranty and agrees that the transactions contemplated by the Amendment shall not in any way affect the validity and enforceability of the Guaranty, or reduce, impair or discharge the obligations of such Guarantor thereunder.
Section 2. Governing Law. THIS ACKNOWLEDGEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO CONTRACTS EXECUTED, AND TO BE FULLY PERFORMED, IN SUCH STATE.
Section 3. Counterparts. This Acknowledgement may be executed in any number of counterparts, each of which shall be deemed to be an original and shall be binding upon all parties, their successors and assigns.
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IN WITNESS WHEREOF, each Guarantor has duly executed and delivered this Guarantor Acknowledgement as of the date and year first written above.
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THE GUARANTORS:
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PARKWAY PROPERTIES, INC.
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PARKWAY PROPERTIES GENERAL PARTNERS, INC.
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By: /s/ Xxxxxxx X. Xxxxxxx, XX
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Name: Xxxxxxx X. Xxxxxxx, XX
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Title: Executive Vice President, Chief
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Financial Officer and Assistant
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Secretary
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By: /s/ Xxx X. Xxxxx
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Name: Xxx X. Xxxxx
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Title: Senior Vice President, Treasurer
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and Assistant Secretary
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111 CAPITOL BUILDING LIMITED PARTNERSHIP
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By: Parkway Xxxxxxx LLC, its sole general partner
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By: Parkway Properties LP, its sole member
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By: Parkway Properties General Partners, Inc.,
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its sole general partner
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By: /s/ Xxxxxxx X. Xxxxxxx, XX
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Name: Xxxxxxx X. Xxxxxxx, XX
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Title: Executive Vice President, Chief
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Financial Officer and Assistant
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Secretary
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By: /s/ Xxx X. Xxxxx
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Name: Xxx X. Xxxxx
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Title: Senior Vice President, Treasurer
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and Assistant Secretary
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[Signatures continued on next page]
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[Signature Page to Guarantor Acknowledgement]
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PARKWAY XXXXXXX LLC
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By: Parkway Properties LP, its sole member
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By: Parkway Properties General Partners, Inc.,
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its sole general partner
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By: /s/ Xxxxxxx X. Xxxxxxx, XX
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Name: Xxxxxxx X. Xxxxxxx, XX
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Title: Executive Vice President, Chief
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Financial Officer and Assistant
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Secretary
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By: /s/ Xxx X. Xxxxx
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Name: Xxx X. Xxxxx
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Title: Senior Vice President, Treasurer
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and Assistant Secretary
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PARKWAY XXXXX LLC
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By: Parkway Properties LP, its sole member
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By: Parkway Properties General Partners, Inc.,
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its sole general partner
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By: /s/ Xxxxxxx X. Xxxxxxx, XX
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Name: Xxxxxxx X. Xxxxxxx, XX
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Title: Executive Vice President, Chief
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Financial Officer and Assistant
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Secretary
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By: /s/ Xxx X. Xxxxx
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Name: Xxx X. Xxxxx
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Title: Senior Vice President, Treasurer
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and Assistant Secretary
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[Signatures continued on next page]
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[Signature Page to Guarantor Acknowledgement]
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PARKWAY JHLIC LP
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By: Parkway Properties General Partners, Inc.,
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its sole general partner
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By: /s/ Xxxxxxx X. Xxxxxxx, XX
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Name: Xxxxxxx X. Xxxxxxx, XX
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Title: Executive Vice President, Chief
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Financial Officer and Assistant
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Secretary
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By: /s/ Xxx X. Xxxxx
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Name: Xxx X. Xxxxx
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Title: Senior Vice President, Treasurer
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and Assistant Secretary
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PARKWAY XXXXX, LLC
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By: /s/ Xxxxxxx X. Xxxxxxx, XX
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Name: Xxxxxxx X. Xxxxxxx, XX
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Title: Manager
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By: /s/ Xxx X. Xxxxx
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Name: Xxx X. Xxxxx
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Title: Manager
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[Signatures continued on next page]
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[Signature Page to Guarantor Acknowledgement]
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XXXXX BUILDING ASSOCIATES LP
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By: Parkway Xxxxx, LLC, its sole general partner
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By: /s/ Xxxxxxx X. Xxxxxxx, XX
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Name: Xxxxxxx X. Xxxxxxx, XX
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Title: Manager
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By: /s/ Xxx X. Xxxxx
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Name: Xxx X. Xxxxx
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Title: Manager
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XXXXX GARAGE LLC
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By: Parkway Properties LP,
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its sole member
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By: Parkway Properties General Partners, Inc.,
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its general partner
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By: /s/ Xxxxxxx X. Xxxxxxx, XX
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Name: Xxxxxxx X. Xxxxxxx, XX
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Title: Executive Vice President, Chief
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Financial Officer and Assistant
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Secretary
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By: /s/ Xxx X. Xxxxx
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Name: Xxx X. Xxxxx
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Title: Senior Vice President, Treasurer
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and Assistant Secretary
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