Form 425 PARKWAY PROPERTIES INC Filed by: COUSINS PROPERTIES INC

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

 

FORM 8-K

 

 

CURRENT REPORT

Pursuant to Section 13 OR 15(d)

of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): May 6, 2016

 

 

COUSINS PROPERTIES INCORPORATED

(Exact Name of Registrant as Specified in its Charter)

 

 

 

Georgia		001-11312		58-0869052
(State or Other Jurisdiction of Incorporation)		(Commission File Number)		(IRS Employer Identification No.)

191 Peachtree Street NE, Suite 500 Atlanta, Georgia		30303
(Address of Principal Executive Offices)		(Zip code)

(404) 407-1000

(Registrant’s telephone number, including area code)

N/A

(Former Name or Former Address, if Changed Since Last Report)

 

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

 

x	Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

 

¨	Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

 

¨	Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

 

¨	Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

 

 

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Item 1.01

Entry into a Definitive Agreement.

Letter Agreement

On May 6, 2016, Cousins Properties Incorporated (the “Company”) entered into a letter agreement (the “Letter Agreement”) with Parkway Properties, Inc. (“Parkway”), Parkway Properties LP (“Parkway LP”), a subsidiary of Parkway, PPOF II, LLC (“PPOF”), a subsidiary of Parkway and Teacher Retirement System of Texas (“TRST”).

The Letter Agreement refers to (i) that certain Limited Partnership Agreement of Parkway Properties Office Fund II, L.P. (the “Partnership” and such agreement, as amended from time to time, the “Partnership Agreement”), dated May 14, 2008, by and among PPOF, Parkway LP and TRST, which such Partnership Agreement is incorporated herein by reference from: Exhibit 10.1 to the Current Report on Form 8-K, filed by Parkway with the Securities and Exchange Commission (the “SEC”) on May 19, 2008; the first amendment to such Partnership Agreement, which is incorporated herein by reference from Exhibit 10.3 to the Current Report on Form 8-K, filed by Parkway with the SEC on April 14, 2011; the second amendment to such Partnership Agreement, which is incorporated herein by reference from Exhibit 10.3 to Parkway’s Quarterly Report on Form 10-Q, filed by Parkway with the SEC on November 5, 2012; the third amendment to such Partnership Agreement, which is incorporated herein by reference from Exhibit 10.4 to Parkway’s Annual Report on Form 10-K, filed by Parkway with the SEC on March 3, 2014; and the fourth amendment to such Partnership Agreement, which is incorporated herein by reference from Exhibit 10.1 to Parkway’s Current Report on Form 8-K, filed by Parkway with the SEC on April 16, 2014, and (ii) that certain Agreement and Plan of Merger (the “Merger Agreement”), dated April 28, 2016, by and among the Company, Parkway, Parkway LP, and Clinic Sub Inc., a wholly owned subsidiary of the Company (“Merger Sub”), pursuant to which Parkway will merge with and into Merger Sub (the “Merger”), with Merger Sub continuing as the surviving corporation of the Merger and a wholly owned subsidiary of the Company. Pursuant to the Letter Agreement, among other things:

 

•

TRST agrees that the execution of the Merger Agreement and the consummation of the transactions contemplated thereby do not constitute a change of control, transfer or restricted transfer or other cause for termination under the Partnership Agreement; and

 

•

the Company, TRST, PPOF, and Parkway agreed to amend the Partnership Agreement, as set forth below, which amendment shall be automatically effective upon the closing of the Merger.

The foregoing summary of the Letter Agreement is qualified in its entirety by reference to the Letter Agreement, a copy of which is attached as Exhibit 10.1 hereto and incorporated herein by reference.

Fifth Amendment to Partnership Agreement

Concurrently with the execution of the Letter Agreement, Parkway LP entered into the fifth amendment to the Partnership Agreement (the “Fifth Amendment”). The Fifth Amendment shall become automatically effective upon the closing of the Merger.

The Fifth Amendment provides that, among other things:

 

•

upon the closing of the Merger, the Company will succeed to all rights and obligations of Parkway under the Partnership Agreement, and Cousins Properties LP, a subsidiary of the Company to be formed in connection with the consummation of the Merger, will succeed to all rights and obligations of Parkway LP under the Partnership Agreement;

 

•

TRST consents to the Company, or an affiliate of the Company, acting as the agent for certain services contemplated by the Partnership Agreement, including but not limited to leasing and management services, to the Partnership or any investment thereof; provided that the fee charged to the Partnership by such agent will not be more than the lesser of (a) the fees charged for such services by Parkway Realty Services LLC and (b) the fees charged in an arms-length transaction for such services. If TRST determines that leasing services provided by the Company or an affiliate of the Company present a conflict of interest with other leasing activities of the Company for a particular investment of the Partnership, TRST may require the Company to cease providing leasing services for such investment, subject to certain procedural requirements;

 

•

the asset management fee payable to PPOF will be adjusted as set forth in the Fifth Amendment;

 

•

from the closing of the Merger until December 31, 2017, upon 30 days’ notice, the Company will have a call option to purchase TRST’s interest in the Partnership for a cash purchase price based on TRST’s internal rate of return as of the closing of the Merger, as calculated pursuant to the terms of the Fifth Amendment; and

 

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•

from and after January 1, 2018, TRST will have the right upon notice, on one or more occasions, to cause the sale of one or more investments of the Partnership, in each case, subject to an appraisal and the right of first refusal of PPOF to purchase such investment as set forth in the Fifth Amendment.

Except as amended by the Fifth Amendment, the remaining terms of the Partnership Agreement will remain in full force and effect.

The foregoing summary of the Fifth Amendment is qualified in its entirety by reference to the Fifth Amendment, a copy of which is attached as Exhibit 10.2 hereto and incorporated herein by reference.

Cautionary Note Regarding Forward-Looking Statements

This document may include “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act. All statements other than statements of historical fact are “forward-looking statements” for purposes of federal and state securities laws. These forward-looking statements, which are based on current expectations, estimates and projections about the industry and markets in which Cousins Properties Incorporated (“Cousins”) and Parkway Properties, Inc. (“Parkway”) operate and beliefs of and assumptions made by Cousins management and Parkway management, involve uncertainties that could significantly affect the financial or operating results of Cousins, Parkway, the combined company or any company spun-off by the combined company. Words such as “expects,” “anticipates,” “intends,” “plans,” “believes,” “seeks,” “estimates,” “will,” variations of such words and similar expressions are intended to identify such forward-looking statements. Such forward-looking statements include, but are not limited to, statements about the benefits of the proposed transactions involving Cousins and Parkway, including future financial and operating results, plans, objectives, expectations and intentions. All statements that address operating performance, events or developments that we expect or anticipate will occur in the future — including statements relating to creating value for stockholders, benefits of the proposed transactions to tenants, employees, stockholders and other constituents of the combined company, integrating our companies, cost savings and the expected timetable for completing the proposed transactions — are forward-looking statements. These statements are not guarantees of future performance and involve certain risks, uncertainties and assumptions that are difficult to predict. Although we believe the expectations reflected in any forward-looking statements are based on reasonable assumptions, we can give no assurance that our expectations will be attained and, therefore, actual outcomes and results may differ materially from what is expressed or forecasted in such forward-looking statements. For example, these forward-looking statements could be affected by factors including, without limitation, risks associated with the ability to consummate the proposed merger and the timing of the closing of the proposed merger; risks associated with the ability to consummate the proposed spin-off of a company holding the Houston assets of Cousins and Parkway (“HoustonCo”) and the timing of the closing of the proposed spin-off; risks associated with the ability to list the common stock of HoustonCo on the New York Stock Exchange following the proposed spin-off; risks associated with the ability to consummate certain asset sales contemplated by Parkway and the timing of the closing of such proposed asset sales; risks associated with the ability to consummate the proposed reorganization of certain assets and liabilities of Cousins and Parkway, including the contemplated structuring of Cousins and HoustonCo as “UPREITs” following the consummation of the proposed transactions; the failure to obtain the necessary debt financing arrangements set forth in the commitment letter received in connection with the proposed transactions; the ability to secure favorable interest rates on any borrowings incurred in connection with the proposed transactions; the impact of such indebtedness incurred in connection with the proposed transactions; the ability to successfully integrate our operations and employees; the ability to realize anticipated benefits and synergies of the proposed transactions; the potential liability for a failure to meet regulatory requirements, including the maintenance of REIT status; material changes in the dividend rates on securities or the ability to pay dividends on common shares or other securities; potential changes to tax legislation; changes in demand for developed properties; adverse changes in financial condition of joint venture partner(s) or major tenants; risks associated with the acquisition, development, expansion, leasing and management of properties; risks associated with the geographic concentration of Cousins, Parkway or HoustonCo; risks associated with the industry concentration of tenants; the potential impact of announcement of the proposed transactions or consummation of the proposed transactions on relationships, including with tenants, employees, customers and competitors; the unfavorable outcome of any legal

 

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proceedings that have been or may be instituted against Cousins, Parkway or any company spun-off by the combined company; significant costs related to uninsured losses, condemnation, or environmental issues; the ability to retain key personnel; the amount of the costs, fees, expenses and charges related to the proposed transactions and the actual terms of the financings that may be obtained in connection with the proposed transactions; changes in local, national and international financial market, insurance rates and interest rates; and those additional risks and factors discussed in reports filed with the Securities and Exchange Commission (“SEC”) by Cousins and Parkway. Cousins and Parkway do not intend, and undertake no obligation, to update any forward-looking statement.

Additional Information about the Proposed Transactions and Where to Find It

In connection with the proposed transaction, Cousins intends to file with the SEC a registration statement on Form S-4 that will include a joint proxy statement of Cousins and Parkway that also constitutes a prospectus of Cousins. Investors and security holders are urged to read the joint proxy statement/prospectus and other relevant documents filed with the SEC, when they become available, because they will contain important information about the proposed transaction. Investors and security holders may obtain free copies of these documents, when they become available, and other documents filed with the SEC at www.sec.gov. In addition, investors and security holders may obtain free copies of the documents filed with the SEC by Cousins by contacting Cousins Investor Relations at (404) 407-1898. Investors and security holders may obtain free copies of the documents filed with the SEC by Parkway by contacting Parkway Investor Relations at (407) 650-0593.

Cousins and Parkway and their respective directors and executive officers and other members of management and employees may be deemed to be participants in the solicitation of proxies in respect of the proposed transaction. Information about Cousins’ directors and executive officers is available in Cousins’ proxy statement for its 2016 Annual Meeting, which was filed with the SEC on March 22, 2016. Information about directors and executive officers of Parkway is available in the proxy statement for its 2016 Annual Meeting, which was filed with the SEC on March 28, 2016. Other information regarding the participants in the proxy solicitation and a description of their direct and indirect interests, by security holdings or otherwise, will be contained in the definitive joint proxy statement/prospectus and other relevant materials filed with the SEC regarding the merger when they become available. Investors should read the definitive joint proxy statement/prospectus carefully before making any voting or investment decisions when it becomes available before making any voting or investment decisions. You may obtain free copies of these documents from Cousins or Parkway using the sources indicated above.

This communication and the information contained herein shall not constitute an offer to sell or the solicitation of an offer to buy any securities, nor shall there be any sale of securities in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction. No offering of securities shall be made except by means of a prospectus meeting the requirements of Section 10 of the U.S. Securities Act of 1933, as amended.

 

Item 9.01.

Financial Statements and Exhibits.

 

(d)

Exhibits.

 

Exhibit No.		Description
10.1		Letter Agreement, dated May 6, 2016, by and among Teacher Retirement System of Texas, PPOF II, LLC, Parkway Properties LP and Cousins Properties Incorporated.
10.2		Fifth Amendment to Limited Partnership Agreement of Parkway Properties Office Fund II, L.P., dated May 6, 2016, by and among PPOF II, LLC, Parkway Properties LP and Teacher Retirement System of Texas.

 

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SIGNATURE

Pursuant to the requirements of the Securities and Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

				COUSINS PROPERTIES INCORPORATED
Date: May 12, 2016				By:		/s/ Pamela F. Roper
						Name: Pamela F. Roper
						Title:   Senior Vice President and General Counsel

 

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Exhibit No.		Description
10.1		Letter Agreement, dated May 6, 2016, by and among Teacher Retirement System of Texas, PPOF II, LLC, Parkway Properties LP and Cousins Properties Incorporated.
10.2		Fifth Amendment to Limited Partnership Agreement of Parkway Properties Office Fund II, L.P., dated May 6, 2016, by and among PPOF II, LLC, Parkway Properties LP and Teacher Retirement System of Texas.

 

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Exhibit 10.1

May 6, 2016

COUSINS PROPERTIES INCORPORATED

191 Peachtree Street NE, Suite 500

Atlanta, Georgia 30303

Attention: Pamela F. Roper

 

Re:

Amendment to Limited Partnership Agreement of Parkway Properties Office Fund II, L.P.

Ladies and Gentlemen:

Reference is made to that certain Limited Partnership Agreement of Parkway Properties Office Fund II, L.P. (the “Partnership”), dated as of May 14, 2008 (as amended from time to time, the “Partnership Agreement”), by and among PPOF II, LLC, a Delaware limited liability company, as the general partner of the Partnership (the “General Partner”), Parkway Properties LP, a Delaware limited partnership (“Parkway”), and Teacher Retirement System of Texas, a public pension fund and public entity of the State of Texas (“TRST” and together with Parkway, the “Limited Partners”).

WHEREAS, Parkway and the General Partner have provided notice to TRST that Parkway and Parkway Properties, Inc., a Maryland corporation (“Parkway Parent”), have entered into an Agreement and Plan of Merger (the “Merger Agreement”), dated as of April 28, 2016, by and among Cousins Properties Incorporated, a Georgia corporation (“Cousins”) and Clinic Sub Inc., a wholly owned subsidiary of Cousins (the “Merger”).

WHEREAS, TRST, as a limited partner of the Partnership, wishes to agree that the execution of the Merger Agreement and the consummation of the transactions contemplated thereby, on the terms and conditions set forth in the Merger Agreement (collectively, the “Transactions”) shall not constitute (1) a “Change of Control” under the Partnership Agreement, including under Sections 9.4 or 13.1 thereof, (2) “Cause” under the Partnership Agreement, including under Section 13.1 thereof, or (3) a restricted “transfer” or “Transfer” by PPLP or the General Partner of their respective interests under the Partnership Agreement, including under Section 12.1 thereof.

WHEREAS, TRST, as a limited partner of the Partnership, the General Partner, Parkway and Cousins, as the successor in interest to Parkway Parent upon consummation of the Merger, wish to agree to the modification of the Partnership Agreement as set forth in the attached Amendment, which shall become automatically effective upon the Closing (as such term is defined in the Merger Agreement).

NOW, THEREFORE, in consideration of the mutual covenants herein contained, and other valuable consideration, the receipt and sufficiency of which are hereby acknowledged, and intending to be legally bound hereby, the parties hereto agree as follows:

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1.

Information Regarding Merger. Cousins agrees to furnish such other material information regarding the status of the Merger as TRST may reasonably request, provided that Cousins shall not be required to disclose such material information where such disclosure would jeopardize the attorney-client privilege of Cousins or contravene any law, rule, regulation, order, judgment or decree or binding agreement entered into prior to the date of this letter agreement. Cousins shall promptly notify TRST if the Merger Agreement has been terminated.

 

2.	Representation and Warranty. The General Partner and Cousins represent and warrant that the Merger, if consummated, will not have a material adverse effect on the ability of the General Partner to perform its obligations pursuant to the Partnership Agreement.

 

3.	Effectiveness of Amendment. Upon the Closing of the Merger, the attached Amendment shall become automatically effective.

 

4.

Agreement Regarding Merger. TRST hereby agrees that the execution of the Merger Agreement and the Transactions shall not constitute (1) a “Change of Control” under the Partnership Agreement, including under Sections 9.4 or 13.1 thereof, (2) “Cause” under the Partnership Agreement, including under Section 13.1 thereof, or (3) a restricted “transfer” or “Transfer” by PPLP or the General Partner of their respective interests under the Partnership Agreement, including under Section 12.1 thereof.

 

5.	Drop Dead Date. If the Closing of the Merger does not occur on or prior to March 31, 2017, or Cousins gives notice in writing to TRST that the Merger Agreement has been terminated, this letter agreement and the Amendment shall become null and void ab initio.

 

6.	Legal Fees. Promptly upon demand, Cousins shall pay or reimburse TRST’s legal fees incurred in connection with preparation of this letter and the Amendment.

 

7.	No Other Amendments or Waivers. Except as contemplated hereby, the Partnership Agreement shall remain in full force and effect.

 

8.

Facsimile/PDF Signatures. In order to expedite the execution of this letter agreement, telecopied or PDF signatures may be used in place of original signatures on this letter agreement. Parties intend to be bound by the signatures on the telecopied or PDF document, are aware that the other party will rely on such signatures, and hereby waive any defenses to the enforcement of the terms of this letter agreement based on the form of signature.

 

9.	Counterparts. This letter agreement may be executed and delivered in any number of counterparts, each of which so executed and delivered shall be deemed to be an original and all of which shall constitute one and the same instrument.

 

10.

Governing Law. This letter agreement shall be construed in accordance with and governed by the laws of the State of Delaware, without giving effect to the provisions, policies or principles thereof relating to choice or conflict of laws, subject to the provisions of Section 10.2 of the Partnership Agreement which is incorporated herein, mutatis mutandis.

[Signature Page Follows]

 

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IN WITNESS WHEREOF, the parties hereto have executed this letter agreement as of the date first written above.

 

 

 

 

[Signature Page to Letter Agreement]

EXECUTION VERSION

Exhibit 10.2

FIFTH AMENDMENT TO LIMITED

PARTNERSHIP AGREEMENT OF PARKWAY

PROPERTIES OFFICE FUND II, L.P.

THIS FIFTH AMENDMENT TO LIMITED PARTNERSHIP AGREEMENT OF PARKWAY PROPERTIES OFFICE FUND II, L.P. (the “Partnership”), a Delaware limited partnership (“Amendment”) is made as of May 6, 2016 by and among PPOF II, LLC, a Delaware limited liability company, as the sole general partner of the Partnership (the “General Partner”), Parkway Properties LP., a Delaware limited partnership (“PPLP”), and the Teacher Retirement System of Texas, a public pension fund and public entity of the State of Texas (“TRST” and, together with PPLP, the “Limited Partners”). The General Partner and the Limited Partners are hereinafter sometimes referred to collectively as the “Partners.”

WHEREAS, the Partners executed that certain Limited Partnership Agreement of Parkway Properties Office Fund II, L.P., dated as of May 14, 2008, as amended by that certain First Amendment dated April 10, 2011, that certain Second Amendment dated August 8, 2012, that certain Third Amendment dated August 8, 2013, and that certain Fourth Amendment dated April 10, 2014 (collectively, the “Partnership Agreement”).

WHEREAS, PPLP and the General Partner have provided notice to TRST that PPLP and Parkway Properties, Inc., a Maryland corporation (“Parkway Parent”), have entered into an Agreement and Plan of Merger (the “Merger Agreement”) with Cousins Properties, Incorporated (“Cousins”) and Clinic Sub Inc., a wholly owned subsidiary of Cousins, on April 28, 2016.

WHEREAS, pursuant to that letter agreement, dated concurrently herewith (the “Letter Agreement”), and on the terms and conditions set forth in the Letter Agreement, TRST, as a limited partner of the Partnership, has agreed that the execution of the Merger Agreement and the consummation of the transactions contemplated thereby, on the terms and conditions set forth in the Merger Agreement, shall not constitute (1) a “Change of Control” under the Partnership Agreement, including under Sections 9.4 or 13.1 thereof, (2) “Cause” under the Partnership Agreement, including under Section 13.1 thereof, or (3) a restricted “transfer” or “Transfer” by PPLP or the General Partner of their respective interests under the Partnership Agreement, including under Section 12.1 thereof.

WHEREAS, TRST, as a limited partner of the Partnership, the General Partner, Parkway and Cousins, as the successor in interest to Parkway Parent upon consummation of the Merger, wish to agree to the modification of the Partnership Agreement as set forth herein, which such Amendment shall become automatically effective upon the Closing (as hereinafter defined).

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NOW, THEREFORE, in consideration of the mutual covenants herein contained, and other valuable consideration, the receipt and sufficiency of which are hereby acknowledged, and intending to be legally bound hereby, the parties hereto agree as follows:

 

1.

Capitalized Terms. All capitalized terms used herein but not defined herein shall have the meaning given to such terms in the Partnership Agreement. The following capitalized terms shall have the following meanings:

“Closing” has the meaning set forth in the Merger Agreement.

“Houston Distribution” has the meaning set forth in the Merger Agreement.

“TRST Interest” means TRST’s Interest in the Partnership, on an Investment by Investment basis (which may include more than one Investment), other than such Interest attributable to the Investment in Two Liberty Place, in Philadelphia, Pennsylvania.

 

2.

Effectiveness. Upon the Closing of the Merger, this Amendment shall become automatically effective.

 

3.

Substitution. (a) Each reference to Parkway Properties, Inc. in the Partnership Agreement shall be replaced with Cousins Properties Incorporated, including, for the avoidance of doubt, in the definition of “Change of Control,” in Section 7.5(h) of the Partnership Agreement and in Section 13.3(a) of the Partnership Agreement and (b) each reference to Parkway Properties LP in the Partnership Agreement shall be replaced with Cousins Properties LP, including, for the avoidance of doubt, in the recitals, in the definition of “General Partner,” in the definition of “Change of Control” and in Section 13.3(a) of the Partnership Agreement.

 

4.

Approval Rights. Effective as of the Closing, TRST hereby consents to Cousins or any Affiliate of Cousins acting as the Agent to the Partnership or any Investment thereof; provided that such Agent shall not charge the Partnership or any Partnership investment vehicle or Affiliate more than the “Cost Ceiling,” which is the lesser of (a) the amounts being charged, as of the date of the Letter Agreement, for such services by Parkway Realty Services LLC and (b) what would be charged in an arms-length transaction for such services. Notwithstanding the foregoing, in the event that TRST determines in its commercially reasonable discretion that the provision of leasing services by Cousins (or an Affiliate thereof) for an Investment would present a conflict of interest, in light of other leasing activities then undertaken by Cousins, then TRST may provide written notice of such determination to Cousins (a “Conflict Notice”). Cousins shall promptly notify and provide relevant information to TRST if it believes at any time that such a conflict of interest may have arisen. Cousins and TRST shall discuss such determination in good faith, and in the event that they are unable to agree upon a resolution to such potential conflict within thirty (30) days after receipt of the Conflict Notice, then TRST shall have the right to require that Cousins cease providing leasing services

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for that Investment, effective sixty (60) days after receipt of the Conflict Notice. The appointment of any broker or other agent who is unaffiliated with Cousins to sell the real estate assets of the Partnership is also subject to the consent of TRST, which consent may not be unreasonably withheld, conditioned or delayed.

 

5.

Asset Management Fee. Effective as of the Closing, Exhibit B to the Partnership Agreement is hereby amended to provide that the Asset Management Fee payable to the General Partner shall be equal to 0.75% of ADOCAB of TRST.

 

6.

The language below is hereby added as Section 12.4 to the Partnership Agreement:

 

“Section 12.4 Call Option. From and after the Closing until December 31, 2017, Cousins shall be entitled, upon 30 calendar days’ written notice to TRST, to require that TRST sell the TRST Interest to Cousins for a cash purchase price that reflects TRST’s internal rate of return (“IRR”) on the TRST Interest as of the Closing (the “Call Option”), such IRR calculation being based on the following:

 

(i)

Gross asset valuations contained in the quarterly financial statements of the Partnership attributable to the TRST Interest for the last completed fiscal quarter immediately preceding the date of the Closing, adjusted to reflect any changes in Indebtedness, cash and cash equivalent balances of the Partnership attributable to the TRST Interest from the end of that quarter through the completion of the Houston Distribution. Such asset valuations will not take into account any sale or other fees or costs that would be incurred in connection with the disposition of all or any portion of the TRST Interest (including, for the avoidance of doubt, the disposition fee described on Exhibit C to the Partnership Agreement). The gross asset valuations for purposes of the IRR calculation as of the Closing must be approved by both Cousins and TRST, such approval not to be unreasonably withheld, conditioned or delayed.

 

(ii)

Effective as of the closing of such purchase by Cousins and the payment of any amounts due in connection therewith, TRST shall withdraw as a member of the Partnership in respect of that portion of the TRST Interest so purchased.

For the avoidance of doubt, the Call Option outlined in this Section 12.4 may be exercised on more than one occasion on an Investment by Investment basis.”

 

7.

The language below is hereby added as Section 13.4 to the Partnership Agreement:

“Section 13.4 Forced Sale Option. (a) From and after January 1, 2018, TRST shall have the right, but not the obligation, exercisable by written notice to the General Partner (the “Sale Notice”) to cause the sale of one or more Investments (the “Specified Interest”) for cash at a value determined based on an appraisal in accordance with this Section 13.4.

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(b) Prior to issuing the Sale Notice, TRST shall cause the Fair Market Value of the Specified Interest to have been determined by a qualified independent third-party appraisal firm selected by TRST within sixty (60) days of the date that the Sale Notice is delivered. Upon request, the General Partner shall provide necessary information and access to the Investments to prepare the appraisal.

(c) The General Partner, on behalf of its Affiliates, shall have thirty (30) days from receipt of the Sale Notice to elect to purchase the Specified Interest at the price set forth in the Sale Notice by written notice to TRST. If the General Partner does not elect to purchase the Specified Interest, the Specified Interest shall be offered by the General Partner as a fiduciary for TRST for sale to third parties on the open market, for ninety (90) days, which period can be extended for additional ninety (90) day periods at TRST’s option, with brokers if needed. If the net sale proceeds from any third-party offer to purchase any Investment are equal or greater than 97% of the appraised value of such Investment specified in the Sale Notice, such offer shall be accepted.

(d) If the General Partner elects to purchase the Specified Interest the parties shall execute such documents and instruments reasonably required to sell and transfer the Specified Interest and the closing of such sale shall take place as soon as practicable, but in any event within thirty (30) days after the election to purchase is made. At such closing, the selling party shall sell and transfer its Specified Interest to the buying party free and clear of encumbrances.

For the avoidance of doubt, the forced sale option outlined in this Section 13.4 may be exercised by TRST on more than one occasion. Except as expressly provided for herein, the ability of the General Partner to dispose of Investments or dissolve the Partnership pursuant to Section 7(b) of the Partnership Agreement” is not limited by this Section 13.4.

 

8.

No Other Amendments or Waivers. Except as contemplated hereby, the Partnership Agreement shall remain in full force and effect, and the provisions of the Partnership Agreement are incorporated herein, mutatis mutandis. In the event of a conflict in the terms and provisions of this Amendment and the Partnership Agreement, the terms and provisions of this Amendment shall govern.

 

9.

Facsimile/PDF Signatures. In order to expedite the execution of this Amendment, telecopied or PDF signatures may be used in place of original signatures on this Amendment. Parties intend to be bound by the signatures on the telecopied or PDF document, are aware that the other party will rely on such signatures, and hereby waive any defenses to the enforcement of the terms of this Amendment based on the form of signature.

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10.

Counterparts. This Amendment may be executed and delivered in any number of counterparts, each of which so executed and delivered shall be deemed to be an original and all of which shall constitute one and the same instrument.

 

11.

Governing Law. This Amendment shall be construed in accordance with and governed by the laws of the State of Delaware, without giving effect to the provisions, policies or principles thereof relating to choice or conflict of laws, subject to the provisions of Section 10.2 of the Partnership Agreement are incorporated herein, mutatis mutandis.

Signatures to follow on next page

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IN WITNESS WHEREOF, the parties hereto have executed this Amendment as of the date first written above.

 

GENERAL PARTNER				PPOF II, LLC, a Delaware limited liability company
				By:		/s/ Jeremy R. Dorsett
				Name:		Jeremy R. Dorsett
				Title:		Executive Vice President and General Counsel
				By:		/s/ Jason A. Bates
				Name:		Jason A. Bates
				Title:		Executive Vice President and Chief Investment Officer
PARKWAY:				PARKWAY PROPERTIES, LP, a Delaware limited partnership
				By: Parkway Properties General Partners, Inc., a Delaware corporation, its sole general partner
				By:		/s/ Jeremy R. Dorsett
				Name:		Jeremy R. Dorsett
				Title:		Executive Vice President and General Counsel
				By:		/s/ Jason A. Bates
				Name:		Jason A. Bates
				Title:		Executive Vice President and Chief Investment Officer
TRST				TEACHER RETIREMENT SYSTEM OF TEXAS, a public pension fund and public entity of the State of Texas
				By:		/s/ Grant Walker
				Name:		Grant Walker
				Title:		Senior Director

 

[Signature Page to Amendment Number 5 to the Partnership Agreement]

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Acknowledged and Agreed:

 

COUSINS				COUSINS PROPERTIES INCORPORATED, a Georgia corporation
				By:		/s/ Colin Connolly
				Name:		Colin Connolly
				Title:		Executive Vice President

 

[Signature Page to Amendment Number 5 to the Partnership Agreement]

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