content: UNITED STATES	
   
                     SECURITIES AND EXCHANGE COMMISSION
  
                           WASHINGTON, DC  20549
  
                     ----------------------------------
  
                                  FORM 8-K
  
  
                               CURRENT REPORT
  
  
                        Pursuant to Section 13 or 15(d)
                                   of the
                        Securities Exchange Act of 1934
  
  
  Date of Report (Date of earliest event reported):September 9, 1997 
                                                   -----------------
  
  
                     	PARKWAY PROPERTIES, INC.
  - ------------------------------------------------------------------
       	(Exact name of Registrant as specified in its charter)
    
  
  
  Maryland                    1-11533	                 74-2123597 
  - ------------------------------------------------------------------
  (State or other     (Commission File Number)       	(IRS Employer
  jurisdiction of	                                   Identification
  incorporation)                                        	Number)   
  
  One Jackson Place Suite 1000
  188 East Capitol Street
  P. O. Box 24647
  Jackson, Mississippi                                 39225-4647
  - ------------------------------------------------------------------
  (Address of principal executive offices)            	(Zip Code)
  
  
  Registrant's telephone number, including area code (601) 948-4091
                                                     ---------------
  
  
  - ------------------------------------------------------------------
    (Former name or former address, if changed since last report)
  
                                FORM 8-K
  
                         PARKWAY PROPERTIES, INC.
  
  
  Item 5.  Other Events
  
  Proposed Acquisitions:
  
       (1)  A limited partnership in which Parkway Properties, Inc. 
  is a 99% limited partner and a wholly-owned subsidiary is a 1% 
  general partner, has a contract to purchase First Tennessee Plaza 
  for $29,200,000 from an unrelated party. The Company also expects to 
  pay approximately $786,000 in fees to pay off the existing first
  mortgage.  First Tennessee Plaza is a 419,809 rentable square foot, 
  27 floor office building with a four-level, 390 space parking garage
  located in Knoxville, Tennessee.  This acquisition is still subject
  to Parkway's due diligence review and the negotiation of definitive
  documentation. Therefore, there can be no assurance that the purchase
  of this office property will be completed.
  
       (2)  A limited partnership in which Parkway Properties, Inc. 
  is a 99% limited partner and a wholly-owned subsidiary is a 1% 
  general partner, has a contract to purchase Morgan Keegan Tower 
  for $36,000,000 from Morgan Properties, LLC. The Company
  also expects to pay approximately $591,000 in fees to pay off the 
  existing first mortgage.  Morgan Keegan Tower is a 334,668 rentable
  square foot, 21 floor office building located in Memphis, Tennessee.
  This acquisition is still subject to Parkway's due diligence review
  and the negotiation of definitive documentation.  Therefore, there can 
  be no assurance that the purchase of this office property will be completed.
  
       (3) 	A limited partnership in which Parkway Properties, Inc. is a 
  99% limited partner and a wholly-owned subsidiary is a 1% general 
  partner, has a contract to purchase Hightower Centre for 
  $6,750,000 from an unrelated party.  Hightower Centre consists of 
  two multi-story buildings containing 78,199 rentable square feet 
  with 332 parking spaces in Atlanta, Georgia.  This acquisition is 
  still subject to Parkway's due diligence review and the 
  negotiation of definitive documentation.  Therefore, there can be 
  no assurance that the purchase of this office property will be 
  completed.
  
  
  Item 7.   Financial Statements and Exhibits.
  
  	(a)  Financial Statements
  
  		(1) The following audited financial statement of First 
  Tennessee Plaza for the year ended December 31, 1996 is attached 
  hereto. Also included is the unaudited financial statement for the 
  six months ended June 30, 1997.
  
                                                           			Page
                                                           			----
  	Report of Independent Auditors                              	5
  	Statement of Rental Revenue and          
  	  Direct Operating Expenses	                                 6
  	Notes to Statement of Rental Revenue           
  	  and Direct Operating Expenses                              7
  
  
  		(2)	The following audited financial statement of Morgan 
  Keegan Tower for the year ended December 31, 1996 is attached 
  hereto. Also included is the unaudited financial statement for the 
  six months ended June 30, 1997.
  
                                                              	Page
                                                              	----
  	Report of Independent Auditors                                9
  	Statement of Rental Revenue and          
  	  Direct Operating Expenses                                  10
  	Notes to Statement of Rental Revenue           
  	  and Direct Operating Expenses                              11
  
  
  	(b)  Pro Forma Consolidated Financial Statements
  
  	The following unaudited Pro Forma Consolidated Financial 
  Statements are attached hereto.
  
  PARKWAY PROPERTIES, INC.
  
                                                              		Page
                                                              		----
  Pro Forma Consolidated Financial Statements (Unaudited)       	13
  Pro Forma Consolidated Balance Sheet (Unaudited) -
    As of June 30, 1997                                          15
  Pro Forma Consolidated Statement of Income (Unaudited) -
    For the Year Ended December 31, 1996                         16
  Pro Forma Consolidated Statement of Income (Unaudited) -
    For the Six Months Ended June 30, 1997                       17
  Notes to Pro Forma Consolidated Financial
    Statements (Unaudited)                                       18
  
  
  
  
  	(c)	Exhibits.
  
  		(10)(a)	Purchase and Sale Agreement between Carlyle 
  Real Estate Limited Partnership - XIII and Parkway Properties, 
  L. P. dated August 20, 1997.  Parkway agrees to furnish 
  supplementally to the Securities and Exchange Commission on 
  request a copy of any omitted schedule or exhibit to this 
  agreement.
  
  		(10)(b)  Purchase and Sale Agreement between Morgan 
  Properties, LLC and Parkway Properties, L. P. dated August 28, 
  1997.  Parkway agrees to furnish supplementally to the Securities 
  and Exchange Commission on request a copy of any omitted schedule 
  or exhibit to this agreement.
  
    (23)  Consent of Ernst & Young LLP.
  
  
  
  
                        Report of Independent Auditors
  
  
  The Board of Directors
  Parkway Properties, Inc.
  
  We have audited the accompanying statement of rental revenue and 
  direct operating expenses of First Tennessee Plaza for the year 
  ended December 31, 1996. This statement is the responsibility of 
  management.  Our responsibility is to express an opinion on this 
  statement based on our audit.
  
  We conducted our audit in accordance with generally accepted 
  auditing standards.  Those standards require that we plan and 
  perform the audit to obtain reasonable assurance about whether the 
  statement of rental revenue and direct operating expenses is free 
  of material misstatement.  An audit includes examining, on a test 
  basis, evidence supporting the amounts and disclosures in the 
  statement.  An audit also includes assessing the accounting 
  principles used and significant estimates made by management, as 
  well as evaluating the overall statement presentation.  We believe 
  that our audit provides a reasonable basis for our opinion.
  
  The accompanying statement was prepared for the purpose of 
  complying with the rules and regulations of the Securities and 
  Exchange Commission for inclusion in Form 8-K of Parkway 
  Properties, Inc., as described in Note 2, and is not intended to 
  be a complete presentation of First Tennessee Plaza's revenue and 
  expenses. 
  
  In our opinion, the statement of rental revenue and direct 
  operating expenses referred to above presents fairly, in all 
  material respects, the rental revenue and direct operating 
  expenses described in Note 2 of First Tennessee Plaza for the year 
  ended December 31, 1996, in conformity with generally accepted 
  accounting principles.
  
  We have compiled the accompanying statement of rental revenue and 
  direct operating expenses of First Tennessee Plaza for the six 
  months ended June 30, 1997 in accordance with the Statement on 
  Standards for Accounting and Review Services issued by the 
  American Institute of Certified Public Accountants. A compilation 
  is limited to presenting in the form of a financial statement 
  information that is the representation of management.  We have not 
  audited or reviewed the statement of rental revenue and direct 
  operating expenses of First Tennessee Plaza for the six months 
  ended June 30, 1997 and, accordingly, do not express an opinion or 
  any other form of assurance on the statement.
  
  
  Jackson, Mississippi                			/s/ Ernst & Young LLP
  August 27, 1997
  
  
  
                          First Tennessee Plaza
  
                       Statement of Rental Revenue
                      and Direct Operating Expenses
  
  
  
                                 Year Ended        Six Months Ended
                              December 31, 1996      June 30, 1997 
                             ------------------    ----------------
                                                      (unaudited)
  
  Rental revenue:
   Minimum rents ...............	$5,041,584          	$2,561,797
   Parking fee income...........    428,889             	203,363
   Reimbursed charges and
     other income...............   	487,591             	237,112
                                	----------          	----------
                                	 5,958,064          	 3,002,272
                                	----------          	----------
  
  Direct operating expenses
   (Note 2):
    Utilities...................   	931,191            	 423,338
    Real estate taxes...........   	641,403             	320,702
    Maintenance services
      and supplies..............   	572,238             	267,843
    Janitorial services
      and supplies..............   	273,226             	155,174
    Management fees (Note 3)....	   177,246              	89,597
    Salaries....................   	200,591              	87,348
    Insurance...................    	72,038              	36,019
    Security service............   	102,183	              48,900
    Administrative and
     miscellaneous expenses.....    112,688              	38,744
                                	----------          	----------
                                 	3,082,804           	1,467,665
                                	----------          	----------
  Excess of rental revenue over
    direct operating expenses...	$2,875,260          	$1,534,607
                                	==========          	==========
  
  
                           See accompanying notes.
  
  
  
                            First Tennessee Plaza
  
                    Notes to Statement of Rental Revenue
                     and Direct Operating Expenses
  
  
  1.  Organization and Significant Accounting Policies
  
  Description of Property
  
  Parkway Properties, Inc. (the "Company") expects to complete the 
  acquisition of First Tennessee Plaza (the "Building") effective 
  September 30, 1997 from an unrelated party.  The twenty-seven 
  story building is located in Knoxville, Tennessee and contains 
  approximately 419,809 (unaudited) rentable square feet.
  
  Rental Income
  
  Minimum rents from leases are accounted for ratably over the term 
  of each lease.  Tenant reimbursements are recognized as income as 
  the applicable services are rendered or expenses incurred.
  
  The future minimum rents and noncancelable operating leases at 
  December 31, 1996 are as follows:
  
                          Year            Amount
                     --------------------------------
                          1997         $ 5,047,000
                          1998           4,867,000
                          1999           4,256,000
                          2000           3,519,000
                          2001           3,228,000   
                       Thereafter        9,075,000
                                       -----------
                                       $29,992,000
                                       ===========
  
  The above amounts do not include tenant reimbursements for 
  utilities, taxes, insurance and common area maintenance.
  
  One tenant, whose lease expires September 30, 2004, accounted for 
  approximately 27% of the Building's 1996 rental revenue. 
  
  
  
  
                           First Tennessee Plaza
  
                   Notes to Statement of Rental Revenue
                 and Direct Operating Expenses (continued)
  
  
  2.  Basis of Accounting
  
  The accompanying statement of rental revenue and direct operating 
  expenses is presented on the accrual basis.  The statement has 
  been prepared in accordance with the applicable rules and 
  regulations of the Securities and Exchange Commission for real 
  estate properties acquired.  Accordingly, the statement excludes 
  certain expenses not comparable to the proposed future operations 
  of the Building such as depreciation and mortgage interest 
  expense.  Management is not aware of any material factors relating 
  to the Building that would cause the reported financial 
  information not to be necessarily indicative of future operating 
  results.
  
  3.  Management Fees
  
  Management fees of approximately 3% of revenues received from the 
  operations of the Building were paid to an unrelated management 
  company.
  
  
       
  
                       Report of Independent Auditors
  
  
  The Board of Directors
  Parkway Properties, Inc.
  
  We have audited the accompanying statement of rental revenue and 
  direct operating expenses of Morgan Keegan Tower for the year 
  ended December 31, 1996. This statement is the responsibility of 
  management.  Our responsibility is to express an opinion on this 
  statement based on our audit.
  
  We conducted our audit in accordance with generally accepted 
  auditing standards.  Those standards require that we plan and 
  perform the audit to obtain reasonable assurance about whether the 
  statement of rental revenue and direct operating expenses is free 
  of material misstatement.  An audit includes examining, on a test 
  basis, evidence supporting the amounts and disclosures in the 
  statement.  An audit also includes assessing the accounting 
  principles used and significant estimates made by management, as 
  well as evaluating the overall statement presentation.  We believe 
  that our audit provides a reasonable basis for our opinion.
  
  The accompanying statement was prepared for the purpose of 
  complying with the rules and regulations of the Securities and 
  Exchange Commission for inclusion in Form 8-K of Parkway 
  Properties, Inc. as described in Note 2, and is not intended to be 
  a complete presentation of Morgan Keegan Tower's revenue and 
  expenses. 
  
  In our opinion, the statement of rental revenue and direct 
  operating expenses referred to above presents fairly, in all 
  material respects, the rental revenue and direct operating 
  expenses described in Note 2 of Morgan Keegan Tower for the year 
  ended December 31, 1996, in conformity with generally accepted 
  accounting principles.
  
  We have compiled the accompanying statement of rental revenue and 
  direct operating expenses of Morgan Keegan Tower for the six 
  months ended June 30, 1997 in accordance with the Statement on 
  Standards for Accounting and Review Services issued by the 
  American Institute of Certified Public Accountants. A compilation 
  is limited to presenting in the form of a financial statement 
  information that is the representation of management.  We have not 
  audited or reviewed the statement of rental revenue and direct 
  operating expenses of Morgan Keegan Tower for the six months ended 
  June 30, 1997 and, accordingly, do not express an opinion or any 
  other form of assurance on the statement.
  
  
  Jackson, Mississippi	                  		/s/ Ernst & Young LLP
  August 28, 1997
  
  
                           Morgan Keegan Tower
  
                       Statement of Rental Revenue
                      and Direct Operating Expenses
  
  
  
                                 Year Ended 	     Six Months Ended
                              December 31, 1996     June 30, 1997
                              -----------------   ----------------
                                                    (unaudited)
  
  Rental revenue:
   Minimum rents ...............	$4,166,546        	$  2,014,271
   Parking fee income...........   	191,871              	77,777
   Reimbursed charges and
     other income...............   	274,679             	126,199
                                	----------	          ----------
                                	 4,633,096           	2,218,247
                                	----------          	----------
  
  Direct operating expenses
   (Note 2):
    Utilities...................   	572,971	             287,120
    Real estate taxes...........     88,196              644,098
    Garage expenses.............   	407,321             	166,800
    Maintenance services
     and supplies...............  	 362,798             	260,119
    Janitorial services
     and supplies...............  	 232,079             	128,218
    Management fees (Note 3)....  	 149,440              	61,724
    Salaries....................    	93,379              	46,129
    Insurance...................    	25,158              815,769
    Security service............    	73,649              	41,871
    Administrative and
      miscellaneous expenses....    	87,828              858,383
                                	----------          	----------
  	                               2,092,819           91,110,231
                     	           ----------          	----------
  Excess of rental revenue over
   direct operating expenses....	$2,540,277          	$1,108,016
                                	==========	          ==========
  
  See accompanying notes.
  
  
  
                             Morgan Keegan Tower
  
                     Notes to Statement of Rental Revenue
                       and Direct Operating Expenses
  
  
  1.  Organization and Significant Accounting Policies
  
  Description of Property
  
  Parkway Properties, Inc. (the "Company") expects to complete the 
  acquisition of the Morgan Keegan Tower (the "Building") 
  effective September 30, 1997 from Morgan Properties, LLC, an 
  unrelated party.  The twenty-one story building is located in 
  Memphis, Tennessee and contains approximately 334,668 
  (unaudited) square feet of leasable area.
  
  Rental Income
  
  Minimum rents from leases are accounted for ratably over the term 
  of each lease.  Tenant reimbursements are recognized as income as 
  the applicable services are rendered or expenses incurred.
  
  The future minimum rents on non-cancelable operating leases at 
  December 31, 1996 are as follows:
  
                          Year            Amount
                     --------------------------------
                          1997         $ 4,127,000
                          1998           4,071,000
                          1999           3,905,000
                          2000           3,771,000
                          2001           3,214,000
                       Thereafter        5,999,000
                                       -----------
                                       $25,087,000                  
                                       ===========
  
  The above amounts do not include tenant reimbursements for 
  utilities, taxes, insurance and common area maintenance.
  
  Two tenants, whose leases expire January 31, 2002 and November 30, 
  2003, accounted for approximately 56% of the Building's 1996 
  rental revenue.
  
  
  
  
  
                             Morgan Keegan Tower
   
                     Notes to Statement of Rental Revenue
                   and Direct Operating Expenses (continued)
  
  
  2.  Basis of Accounting
  
  The accompanying statement of rental revenue and direct operating 
  expenses is presented on the accrual basis.  The statement has 
  been prepared in accordance with the applicable rules and 
  regulations of the Securities and Exchange Commission for real 
  estate properties acquired.  Accordingly, the statement excludes 
  certain expenses not comparable to the proposed future operations 
  of the Building such as depreciation and mortgage interest 
  expense.  Management is not aware of any material factors relating 
  to the Building that would cause the reported financial 
  information not to be necessarily indicative of future operating 
  results.
  
  3.  Management Fees
  
  Management fees of approximately 3% of revenues received from the 
  operations of the Building were paid to an unrelated management 
  company.
  
  
                       PARKWAY PROPERTIES, INC.
  
              Pro Forma Consolidated Financial Statements
                             (Unaudited)
  
  
  The following unaudited pro forma consolidated balance sheet as of 
  June 30, 1997 and pro forma consolidated statements of income of 
  Parkway Properties, Inc. ("Parkway") for the year ended December 
  31, 1996 and six months ended June 30, 1997 give effect to the 
  recent purchases of Parkway for the periods stated and the 
  proposed purchases of First Tennessee Plaza, Morgan Keegan Tower 
  and Hightower Centre.  The pro forma consolidated financial 
  statements have been prepared by management of Parkway based upon 
  the historical financial statements of Parkway and the adjustments 
  and assumptions in the accompanying notes to the pro forma 
  consolidated financial statements.
  
  The pro forma consolidated balance sheet sets forth the effect of 
  Parkway's purchases of Lakewood II, NationsBank Tower and Fairway 
  Plaza as well as the proposed purchases of First Tennessee Plaza, 
  Morgan Keegan Tower and Hightower Centre, as if they had been 
  consummated on June 30, 1997.
  
  The pro forma consolidated statements of income sets forth the 
  effects of Parkway's purchases of the following buildings as well 
  as the proposed purchases of First Tennessee Plaza, Morgan Keegan 
  Tower and Hightower Centre. as if they had been consummated on 
  January 1, 1996.  
  
  BUILDING                            DATE OF PURCHASE
  
  Fairway Plaza                           08/12/97
  NationsBank Tower                       07/31/97
  Lakewood II                             07/10/97
  Sugar Grove                             05/01/97
  Vestavia Centre                         04/04/97
  Meridian                                03/31/97
  Charlotte Park Executive Center         03/18/97
  Courtyard at Arapaho                    03/06/97
  Ashford II                              01/28/97          
  Forum II & III                          01/07/97
  Tensor                                  10/31/96   
  BB&T Financial Center                   09/30/96
  Falls Pointe                            08/09/96 
  Roswell North                           08/09/96
  Cherokee                                07/09/96
  Courthouse                              07/09/96
  400 Northbelt                           04/15/96
  Woodbranch                              04/15/96
  One Park 10 Plaza                       03/07/96
  
  In addition to the purchases listed above, the pro forma 
  consolidated statements of income set forth the effect of the May 
  31, 1996 sale of 157 mortgage loans, the placement of non-recourse
  mortgage debt on certain properties acquired during 1995 and 1996 
  or assumed in the purchases, the December 24, 1996 sale of the 
  Virginia Beach mortgage loan and the sale of 2,012,500 shares of 
  common stock on January 22, 1997 as if all the transactions had
  occurred January 1, 1996.
  
  These pro forma consolidated financial statements may not be 
  indicative of the results that actually would have occurred if the 
  purchases, sales and/or financings had been in effect on the dates 
  indicated or which may be obtained in the future.  The pro forma 
  consolidated financial statements should be read in conjunction 
  with the consolidated financial statements and notes of Parkway 
  included in its annual report on Form 1O-KSB for the year ended 
  December 31, 1996.
  
  
  
                	PARKWAY PROPERTIES, INC. AND SUBSIDIARIES
                  	PRO FORMA CONSOLIDATED BALANCE SHEET
                             	June 30, 1997
                              	(Unaudited)
  
                                  Parkway    Pro Forma     Parkway
                                 Historical  Adjustments  Pro Forma
                                 ----------  -----------  ---------
                                            (In thousands)
   Assets
   Real estate related investments:
     Office buildings.............$204,510  $ 112,132(1-6)$316,642
     Land held for development....   1,721          -        1,721
     Accumulated depreciation..... (10,749)         -      (10,749)
                                  --------   --------     --------
                                  	 195,482    112,132      307,614
     Real estate held for sale:
       Land.......................   5,187          -        5,187
       Operating properties.......   1,492          -        1,492
       Other non-core 
       real estate assets.........     253          -          253
     Mortgage loans...............     326          -          326
     Real estate partnership......     311          -          311
                                  --------   --------     --------
                                   203,051    112,132      315,183
   Interest, rents receivable 
     and other assets.............   6,343          -        6,343
   Cash and cash equivalents......     480       (480)           -
                                  --------   --------     --------
                                  $209,874   $111,652		$321,526
                                  ========   ========     ========
  Liabilities
  Notes payable to banks..........$  8,200	   $104,742     $112,942
  Mortgage notes payable
    without recourse..............  61,681      6,910(1)    68,591
  Accounts payable and other 
    liabilities...................   7,644          -        7,644
                                  --------   --------     --------
                                    77,525    111,652		 189,177
                                  --------   --------     --------
  Stockholders' Equity
  Common stock, $.001 par value, 
    70,000,000 shares authorized, 
    6,289,230 shares issued in
    1997..........................       6          -            6
  Additional paid-in capital...... 103,719          -      103,719
  Retained earnings...............  28,624          -       28,624
                                  --------   --------     --------
                                   132,349          -      132,349
                                  --------   --------     --------
                                  $209,874   $111,652		$321,526
                                  ========   ========     ========
                                
                              See accompanying notes
  
                      PARKWAY PROPERTIES, INC. AND SUBSIDIARIES
                     	PRO FORMA CONSOLIDATED STATEMENT OF INCOME
                       	FOR THE YEAR ENDED DECEMBER 31, 1996
                                    (Unaudited)
  
                                  Parkway    Pro Forma    Parkway
                                Historical Adjustments(7) Pro Forma
                                ---------- -------------- ---------
                              (In thousands, except per share data)
  Revenues 
  Income from office properties...$18,840    $37,297 (a)  $56,137
  Income from other real estate 
    properties....................  1,773          -        1,773
  Interest on mortgage loans......  1,740     (1,384)(d)      356
  Management company income.......    784          -          784
  Interest on investments.........    500          -          500
  Dividend income.................    118          -          118
  Deferred gains and other income.    324          -          324
  Gains on real estate held 
    for sale and mortgage loans...  9,909          -        9,909
  Gain on securities..............    549          -          549
                                  -------    -------      -------
                                   34,537     35,913       70,450
                                  -------    -------      -------
  Expenses
  Office properties                                  
    Operating expense.............  8,466     17,564 (a)   26,030
    Interest expense..............  3,526      2,158 (c)    5,684
    Depreciation and amortization.  2,444      5,041 (a)    7,485
    Minority interest.............    (28)         -          (28)
  Other real estate properties
    Operating expense.............  1,379          -        1,379
  Interest expense
    Notes payable to banks........    281      7,921 (e)    8,202
    Notes payable on wrap 
      mortgages...................    340       (340)(f)        -
  Management company expense......    673          -          673
  General and administrative......  2,982          -        2,982
                                  -------    -------      -------
                                   20,063     32,344       52,407 
                                  -------    -------      -------
  Income before income taxes...... 14,474      3,569       18,043
  Income tax expense..............    103          -          103
                                  -------    -------      -------
  Net income......................$14,371    $ 3,569      $17,940
                                  =======    =======      =======
  Net income per share............$  3.92                 $  3.16(8)
                                  =======                 =======
  Weighted average shares 
    outstanding...................  3,662                   5,674
                                  =======                 =======
  
                            See accompanying notes
  
                  PARKWAY PROPERTIES, INC. AND SUBSIDIARIES
                 	PRO FORMA CONSOLIDATED STATEMENT OF INCOME
                  	FOR THE SIX MONTHS ENDED JUNE 30, 1997
                                (Unaudited)
  
                                  Parkway    Pro Forma    Parkway
                                Historical Adjustments(7) Pro Forma
                                ---------- -------------- ---------
                               (In thousands, except per share data)
  Revenues 
  Income from office properties...$18,065    $11,317 (b)   $29,382
  Income from other real estate 
    properties....................    440          -           440
  Interest on mortgage loans......     32          -            32
  Management company income.......    251          -           251
  Interest on investments.........    330          -           330
  Dividend income.................    128          -           128
  Deferred gains and other income.     64          -            64
                                  -------    -------       -------
                                   19,310	   11,317         30,627
                                  -------    -------       -------
  Expenses
  Office properties                                  
    Operating expense.............  7,459      5,198 (b)    12,657
    Interest expense:
      Contractual.................  2,499        279 (c)     2,778
      Amortization of loan cost...     43          -            43
    Depreciation and amortization.  2,255      1,520 (b)     3,775
    Minority interest.............     59          -            59 
  Other real estate properties
    Operating expense.............    293          -           293
  Interest expense on bank notes:
    Contractual...................    130      3,960 (e)     4,090
    Amortization of loan costs....     77          -            77
  Management company expense......    172          -           172
  General and administrative......  1,677          -         1,677
                                  -------    -------       -------
                                   14,664     10,957        25,621 
                                  -------    -------       -------
  Income before gains.............  4,646        360         5,006
                                  -------    -------       -------
  Gain on sales
  Gain on real estate held for 
    sale..........................  1,574          -         1,574
                                  -------    -------       -------
  Net income......................$ 6,220    $   360       $ 6,580
                                  =======    =======       =======
  Net income per share............$  1.04                  $  1.10
                                  =======                  =======
  Weighted average shares 
    outstanding...................  6,004                    6,004
                                  =======                  =======
  
                            See accompanying notes
  
                           PARKWAY PROPERTIES, INC.
  
              Notes to Pro Forma Consolidated Financial Statements
                                  (Unaudited)
  
  
  1. 	On July 10, 1997, the Company purchased the 118,750 square 
      foot Lakewood II office building in Atlanta, Georgia for 
      $11,500,000 from an unrelated party.  This five-story 
      office building was constructed in 1988.  The Company 
      assumed a $6,910,000 first mortgage on the property with an 
      8.08% interest rate as part of the purchase.  The remaining 
      balance was funded with advances under bank lines of 
      credit.
  
  2. 	On July 31, 1997, the Company purchased the 296,797 square 
      foot NationsBank Tower in Columbia, South Carolina for 
      $20,600,000 from an unrelated party. NationsBank Tower is a 
      twenty-story office building with an attached 565 space, 
      eight-level parking deck.  The building was constructed in 
      1973 and is located on Gervais Street in the Central 
      Business District (CBD). The purchase was funded with 
      advances under bank lines of credit.
  
  3. 	On August 12, 1997, the Company purchased Fairway Plaza in 
      Los Colinas, Texas for $6,705,000 from an unrelated party. 
      Fairway Plaza consists of two multi-story office buildings 
      containing 82,268 net rentable square feet with 321 surface 
      parking spaces situated on 6.31 acres.  The purchase was 
      funded with advances under bank lines of credit
      
  4.  The Company has a contract to purchase First Tennessee Plaza 
      in Knoxville, Tennessee for $29,200,000 from an unrelated party.
      The Company also expects to pay approximately $786,000 in fees
      to pay off the existing first mortgage.  First Tennessee Plaza
      is a 27 story office building containing 419,809 net rentable
      square feet with a four level 390 space parking garage.
  
  5.  The Company has a contract to purchase Morgan Keegan Tower in 
      Memphis, Tennessee for $36,000,000 from Morgan Properties, LLC,
      an unrelated party.  The Company also expects to pay approximately 
      $591,000 in fees to pay off the existing first mortgage.  Morgan 
      Keegan Tower is a 21 story office building containing 334,668 net
      rentable square feet.
  
  6.  The Company has a contract to purchase Hightower Centre in 
      Atlanta, Georgia for $6,750,000 from an unrelated party.  
      Hightower Centre consists of two multi-story buildings 
      containing 78,199 rentable square feet with 332 parking 
      spaces.
  
  7. 	The pro forma adjustments to the Consolidated Statement of 
      Income for the year ended December 31, 1996 and six months 
      ended June 30, 1997 set forth the effects of Parkway's 
      purchase of the following buildings as well as the proposed 
      purchase of First Tennessee Plaza, Morgan Keegan Tower and 
      Hightower Centre as if they had been consummated on January 
      1, 1996.  
  
  BUILDING                            DATE OF PURCHASE
  
  Fairway Plaza                           08/12/97
  NationsBank Tower                       07/31/97
  Lakewood II                             07/10/97
  Sugar Grove                             05/01/97
  Vestavia Centre                         04/04/97
  Meridian                                03/31/97
  Charlotte Park Executive Center         03/18/97
  Courtyard at Arapaho                    03/06/97
  Ashford II                              01/28/97
  Forum II & III                          01/07/97
  Tensor                                  10/31/96
  BB&T Financial Center                   09/30/96
  Falls Pointe                            08/09/96
  Roswell North                           08/09/96
  Cherokee                                07/09/96
  Courthouse                              07/09/96
  400 Northbelt                           04/15/96
  Woodbranch                              04/15/96
  One Park 10 Plaza                       03/07/96
  
  In addition to the purchases listed above, the adjustments on 
  the pro forma consolidated statements of income set forth the 
  effect of the May 31, 1996 sale of 157 mortgage loans, the 
  December 24, 1996 sale of the Virginia Beach mortgage loan 
  and the placement of non-recourse mortgage debt on certain 
  properties acquired during 1995 and 1996 or assumed in the 
  purchases as if the transactions occurred January 1, 1996. 
  These pro forma adjustments are detailed below by property 
  for the year ended December 31, 1996 and six months ended 
  June 30, 1997.
  
  The effect on income and expenses from real estate properties 
  due to the above purchases are as follows:
  
  	(a)  For the year ended December 31, 1996:
  
                           Revenue              Expenses
                         -----------   ---------------------------
                         Income From         Real Estate Owned
                         Real Estate     Operating     Depreciation
                         Properties       Expense         Expense
                         -----------   -------------   ------------
  	One Park 10          $    299,000   $     160,000    $    25,000
       400 North Belt
        & Woodbranch       1,036,000         551,000         92,000
  	Cherokee &
  	  Courthouse
  	  Road Bldgs.             917,000         480,000        124,000
  	Falls Pointe &
  	  Roswell North         1,161,000         439,000        191,000
  	BB&T Financial
  	  Center                3,072,000       1,055,000        413,000
       Tensor                810,000         530,000         64,000
       Forum II & III      2,749,000       1,331,000        370,000
       Charlotte Park      2,616,000       1,180,000        333,000
       Ashford II            649,000         441,000         50,000
  	Courtyard at
  	  Arapaho               2,196,000         948,000        340,000
    	Meridian                843,000         503,000        236,000
       Vestavia              878,000         394,000        105,000
       Sugar Grove         1,082,000         643,000        174,000
  	Lakewood II             1,915,000         839,000        259,000
  	NationsBank Tower       4,094,000       1,782,000        464,000
  	Fairway Plaza           1,408,000         682,000        151,000
  	First Tennessee
  	  Plaza                 5,958,000       3,083,000        675,000
  	Morgan Keegan
  	  Tower                 4,633,000       2,093,000        823,000
  	Hightower Centre          981,000		       430,000	    	  152,000
                         -----------     -----------     ----------
                         $37,297,000     $17,564,000     $5,041,000
      	                  ===========     ===========     ==========
  
  	Depreciation is provided by the straight-line method over the 
  estimated useful lives of the buildings (40 years).
  	 
  	(b)  For the six months ended June 30, 1997:
  
                           Revenue              Expenses
                         -----------   ---------------------------
                         Income From         Real Estate Owned
                         Real Estate    Operating     Depreciation
                         Properties      Expense        Expense
                         -----------   ------------   ------------
  	Charlotte Park        $   505,000    $   208,000    $    69,000
       Ashford II             54,000         37,000          4,000
  	Courtyard at
  	  Arapaho                 366,000        164,000         58,000
    	Meridian                354,000        123,000         59,000
       Vestavia              240,000         91,000         26,000
       Sugar Grove           309,000        165,000         43,000
  	Lakewood II               977,000        447,000        129,000
  	NationsBank Tower       2,050,000        860,000        232,000
  	Fairway Plaza             687,000        303,000         75,000
  	First Tennessee
  	  Plaza                 3,002,000      1,468,000        337,000
  	Morgan Keegan
  	  Tower                 2,218,000      1,110,000        412,000
  	Hightower Centre	         555,000	     	 222,000	     	  76,000
                         -----------    -----------    -----------
      	                  $11,317,000    $ 5,198,000    $ 1,520,000
  	                      ===========    ===========    ===========
  
  Depreciation is provided by the straight-line method over the 
  estimated useful lives of the buildings (40 years).
  
  (c)	 Pro forma interest expense on real estate owned reflects 
       the non-recourse debt placed on certain buildings 
       acquired during 1995 and 1996 and debt assumed upon 
       purchase at the actual amounts and rates by property as 
       if placed January 1, 1996 and is detailed below.
   
  	Property/Placement                 Year Ended
  	    Date/Rate           Debt        12/31/96
  	------------------  -----------    ----------
  	IBM Building
  	  2/96 7.78%        $ 4,800,000    $   41,000
  
  	Waterstone
  	  6/96 8.00%          5,620,000       185,000
  
   One Park 10
  	  7/96 8.35%          4,700,000       196,000
  
  	400 North Belt &
  	  Woodbranch
  	  7/96 8.25%         10,000,000       412,000
       
   Falls Pointe & 
     Roswell North
     12/96 8.375%        9,850,000       766,000
  
  	Lakewood II*
  	  7/97 8.08%          6,910,000       558,000
                                      ----------
                                      $2,158,000
                                      ==========
  
  	*The only pro forma adjustment to interest expense on 
  real estate owned for the six months ended June 30, 1997 
  is due to the debt assumed in the purchase of Lakewood 
  II in the amount of $279,000.
  
  (d)	 The January 1, 1996 pro forma effect of the sale of 157 
       mortgage loans on May 31, 1996 and the December 24, 1996 
       sale of the Virginia Beach mortgage loan is as follows:
  
                                        Year Ended
                                         12/31/96
                                       ------------
       	Interest Income:
        		Mortgage loans               $(1,384,000)
  
  (e) 	The pro forma effect of the building purchases as well 
       as the stock offering of 2,012,500 shares on interest 
       expense on notes payable to banks for the year ended 
       December 31, 1996 and six months ended June 30, 1997 is 
       an increase of $7,921,000 and $3,960,000, respectively.
  
  (f) 	The pro forma effect of the sale of the Virginia Beach 
       mortgage loan on interest expense on notes payable on 
       wrap mortgages for the year ended December 31, 1996 is 
       a decrease of $340,000.
  
  8.  The pro forma earnings per share for the year ended December 
      31, 1996 reflect the sale of 2,012,500 shares of common stock 
      under its existing shelf registration on January 22, 1997.
  
  9. 	No additional income tax expenses were provided because of 
      the Company's net operating loss carryover and status as a 
      REIT.
  
  10.	All per share information for the year ended December 31, 
      1996 has been restated to reflect a 3 for 2 common stock 
      split effected as a dividend of one share for every two 
      shares outstanding on April 30, 1996 as well as the June 14, 
      1996 private placement of 1,140,000 shares as if both 
      transactions had occurred January 1, 1996.
  
  
                              FORM 8-K
  
                       PARKWAY PROPERTIES, INC.
  
  
                             SIGNATURES
  
  
  Pursuant to the requirements of the Securities Exchange Act of 
  1934, the Registrant has duly caused this report to be signed on 
  its behalf by the undersigned hereunto duly authorized.
  
  DATE:  September 9, 1997		   	PARKWAY PROPERTIES, INC.
  	
                         							BY:	/s/Sarah P. Clark
                                    Sarah P. Clark			
                                    Senior Vice President,
                                    Chief Financial Officer, 
                                    Treasurer and Secretary	
  		
  
                              PURCHASE AGREEMENT
                  (First Tennessee Plaza; Knoxville, Texas)
  
  THIS AGREEMENT is made and entered into as of August 
  _______, 1997 (the "Effective Date") by and between CARLYLE REAL 
  ESTATE LIMITED PARTNERSHIP-XIII, an Illinois limited partnership 
  (hereinafter called "Seller"), and PARKWAY PROPERTIES, L.P., a 
  Delaware limited partnership (hereinafter called "Buyer").
  
                      R E C I T A L S
  
  	A.	Seller is the owner of that certain real property 
  located in the City of Knoxville, County of Knox, State of 
  Tennessee, consisting primarily of an office building (the 
  "Building") sometimes known as "First Tennessee Plaza".
  
  	B.	Buyer desires to purchase such premises on the terms 
  and conditions hereinafter documented.
  
  	NOW, THEREFORE, in consideration of the mutual undertakings 
  of the parties hereto, it is hereby agreed as follows:
  
  	1.	Purchase and Sale.  Seller shall sell to Buyer, and 
  Buyer shall purchase from Seller, the land (the "Land") 
  described in Exhibit "A" attached hereto and made a part hereof, 
  together with all right, title and interest of Seller in and to 
  all improvements, structures and fixtures located upon the Land, 
  all right, title and interest of Seller in and to those items of 
  personal property described in Exhibit "B" attached hereto and 
  made a part hereof, all right, title and interest of Seller in 
  and to the name "First Tennessee Plaza", to the extent 
  assignable, all right, title and and interest of Seller in and 
  to all contract rights and agreements, and all right, title and 
  interest of Seller in and to all leases, tenant lists, 
  advertising material and telephone exchange numbers relating 
  solely to the Property (hereinafter, collectively, the 
  "Property"), all upon the terms, covenants and conditions 
  hereinafter set forth.
  
  	2.	Purchase Price.
  
  		A.	The purchase price (the "Purchase Price") for the 
  Property shall be the sum of Twenty-Nine Million Two Hundred 
  Thousand and No/100 Dollars ($29,200,000.00).
  
  	3.	Payment of Purchase Price.  The Purchase Price shall 
  be paid to Seller by Buyer as follows:
  
  		A.	Escrow Deposit.  Concurrently herewith, Buyer 
  shall deliver $100,000 (together with all interest thereon, the 
  "Initial Escrow Deposit") to Ticor Title Insurance Company, 201 
  North LaSalle Street, Suite 1400, Chicago, Illinois, 60601, 
  Attention:  Rick Lucchesi (which company, in its capacity as 
  escrow holder hereunder, is called "Escrow Holder").  In 
  addition, if Buyer shall deliver the "Approval Notice" prior to 
  the expiration of the "Due Diligence Period", as provided (and 
  defined) in paragraph 4B hereof, Seller shall concurrently 
  therewith deliver an additional deposit of $150,000 (the 
  "Additional Escrow Deposit") to Escrow Holder.  Each deposit to 
  be made hereunder shall be made by a bank or cashier's check 
  drawn on a major national money center banking institution 
  reasonably acceptable to Seller (or by other delivery of good 
  funds reasonably acceptable to Seller), and the amounts so 
  deposited shall be held by Escrow Holder as a deposit against 
  the Purchase Price in accordance with the terms and provisions 
  of this Agreement.  As used herein, the term "Escrow Deposit" 
  means the Initial Escrow Deposit and, from and after the deposit 
  thereof, the Additional Escrow Deposit, together  with all 
  interest earned on such deposits while the same are held in 
  escrow hereunder.  At all times in which the Escrow Deposit is 
  being held by the Escrow Holder, the Escrow Deposit shall be 
  invested by Escrow Holder in the following investments 
  ("Approved Investments"):  (i) an insured interest bearing 
  account of a financial institution reasonably acceptable to 
  Buyer and Seller, or (ii) such other manner as may be reasonably 
  approved by Seller and Buyer.  The Escrow Deposit shall be 
  disposed of by Escrow Holder only as provided in this Agreement.
  
  		B.	Independent Consideration.  Seller and Buyer 
  acknowledge and agree that One Hundred and No/100 Dollars 
  ($100.00) of the Escrow Deposit (the "Independent Contract 
  Consideration") shall be paid to Seller is terminated for any 
  reason.  Seller and Buyer acknowledge and agree that the 
  Independent Contract Consideration has been bargained for and 
  agreed to as additional consideration for Seller's execution and 
  delivery of this Agreement.  At "Closing" (as hereinafter 
  defined), the Independent Contract Consideration shall be 
  applied to the Purchase Price.  Notwithstanding the foregoing to 
  the contrary, the payment to Seller of such Independent Contract 
  Consideration shall in no way limit, and are in addition to, any 
  other rights or remedies of Seller hereunder (including, without 
  limitation, disposition of the Escrow Deposit in accordance with 
  paragraph 9 below). 
  
  		C.	Existing Debt.  Subject to the provisions of 
  paragraph 4C below, payment of a portion of the Purchase Price 
  shall be evidenced by Buyer taking title to the Property subject 
  to the "Existing Encumbrance" and the "Loan Documents" 
  (including, the "Existing Note") secured thereby (as such terms 
  are defined in Exhibit "C" attached hereto and made a part 
  hereof), such payment being in an amount equal to the 
  outstanding principal balance of the Existing Note as of the 
  "Closing Date" (as hereinafter defined).  Assuming the Closing 
  Date occurs on September 4, 1997, the outstanding principal 
  balance of the Existing Note is anticipated to be approximately 
  $14,900,000.  
  
  		D.	Closing Payment.  The balance of the Purchase 
  Price (i.e., the Purchase Price less the sum of the Deposit and 
  the amounts, if any, deemed paid pursuant to paragraph 3B above, 
  as such amounts shall be adjusted by the prorations and credits 
  specified herein) shall be paid by wire transfer of immediately 
  available federal funds on the Closing Date as directed by 
  Seller (the amount to be paid under this subparagraph D being 
  herein called the "Closing Payment").  Assuming the Closing Date 
  occurs in September, 1997, the
  Closing Payment is anticipated to be approximately $29,200,000, 
  less the Deposit and adjusted by the prorations and credits 
  specified herein (i.e., $26,700,000, less the anticipated 
  principal balance of the Existing Note of approximately 
  $14,900,000).
  
  	4.	Conditions Precedent. 
  
  		A.	Title Matters.
  
  			(1)	Title Report.  Seller has delivered a 
  commitment for title insurance ("Title Commitment") covering the 
  Property from Ticor Title Insurance Company dated June 16, 1997 
  (which company, in its capacity as title insurer hereunder, is 
  herein called the "Title Company").  In addition, Seller has 
  delivered to Buyer an update of that certain survey of the 
  Property dated February 23, 1995, and last revised July 25, 
  1997, prepared by Barge, Waggoner, Sumner & Cannon, Inc., which 
  survey shall be certified to Buyer and the "Lender" (as 
  hereinafter defined) and Title Company ("Survey").  If Buyer 
  shall deliver the Approval Notice on or before the end of the 
  Due Diligence Period, Buyer shall be deemed to have approved the 
  exceptions to title shown on the Title Commitment and the 
  matters disclosed on the Survey so long as the Title Commitment 
  and Survey have been previously delivered to Buyer.  Approval by 
  Buyer of any additional exceptions to title or survey matters 
  disclosed after the end of the Due Diligence Period shall be a 
  condition precedent to Buyer's obligation to purchase the 
  Property (Buyer hereby agreeing that its approval of such 
  additional exceptions to title or survey matters shall not be 
  unreasonably withheld).  Unless Buyer gives written notice that 
  it disapproves any such additional exceptions to title or survey 
  matters, stating the exceptions so disapproved, on or before the 
  sooner to occur of 5 days after receipt of written notice 
  thereof or the Closing Date, Buyer shall be deemed to have 
  approved said exceptions.  If, for any reason, on or before the 
  Closing Date, Seller does not cause any exceptions to title or 
  survey matters which Buyer disapproves (to the extent Buyer is 
  permitted hereunder to so disapprove) either to be removed or to 
  obtain a title endorsement (if available) insuring over such 
  disapproved matter on or before the Closing Date at no cost or 
  expense to Buyer (Seller having the right but not the obligation 
  to do so), the obligation of Seller to sell, and Buyer to buy, 
  the Property as herein provided shall terminate (and Seller and 
  Buyer shall have no further obligations in connection herewith). 
   Buyer shall have the option to waive the condition precedent 
  set forth in this Paragraph 4A(1) by notice to Seller.  In the 
  event of such waiver, such condition shall be deemed satisfied.
  
   			(2)	Exceptions to Title.  Buyer shall be 
  obligated to accept title to the Property, subject to the 
  following exceptions to title:
  
  				(a)	Real estate taxes and assessments not 
  yet due and payable;
  
  				(b)	The Loan Documents; and
  
  				(c)	Such exceptions to title as may be 
  approved or deemed approval by Buyer pursuant to the provisions 
  of subparagraph A(1) above.
  
  Conclusive evidence of the availability of such title shall be 
  the willingness of Title Company to issue to Buyer on the 
  Closing Date an owner's title insurance policy in the standard 
  form issued in the State of Tennessee ("Owner's Policy"), in the 
  face amount of the Purchase Price, which policy shows (i) title 
  to the Property to be vested of record in Buyer, and (ii) the 
  above exceptions to be the only exceptions to title.
  
  		B.	Due Diligence Reviews.  Buyer shall have until 
  5:00 p.m. (Central time) on August 22, 1997 (the "Due Diligence 
  Period") within which to perform and complete all of Buyer's due 
  diligence examinations, reviews and inspections of all matters 
  pertaining to the purchase of the Property, including all 
  leases, documents relating to the existing financing (including 
  Loan Documents), service contracts, survey and title matters, 
  and all physical, environmental and compliance matters and 
  conditions respecting the Property.  During the Due Diligence 
  Period, Seller shall provide Buyer with reasonable access to the 
  Property upon reasonable advance notice and shall also make 
  available to Buyer, upon reasonable advance notice, such leases, 
  service contracts and other contracts respecting the Property as 
  Buyer shall reasonably request (to the extent the same are in 
  Seller's possession).  Buyer shall promptly commence, and shall 
  diligently and in good faith pursue, its due diligence review 
  hereunder.  Buyer shall at all times conduct its due diligence 
  review, inspections and examinations in a manner so as to not 
  cause damage, loss, cost or expense to Seller or the Property 
  and so as to not interfere with or disturb any tenant at the 
  Property, and Buyer will indemnify, defend, and hold Seller and 
  the Property harmless from and against any such damage, loss, 
  cost or expense (the foregoing obligation surviving any 
  termination of this Agreement).  Without limitation on the 
  foregoing, in no event shall Buyer (a) make any intrusive 
  physical testing (environmental, structural or otherwise) at the 
  Property (such as soil borings, water samplings or the like) 
  without Seller's express written consent; (b) contact any tenant 
  of the Property without Seller's express written consent; and 
  (c) contact any governmental authority having jurisdiction over 
  the Property without Seller's express written consent (which 
  consent as to tenants and governmental authorities shall not be 
  unreasonably withheld).  Seller shall have the right, at its 
  option, to cause a representative of Seller to be present at all 
  inspections, reviews and examinations conducted hereunder.  
  Buyer shall promptly deliver to Seller true, accurate and 
  complete copies of any written reports relating to the Property 
  prepared for or on behalf of Buyer by any third party and in the 
  event of termination hereunder, shall return all documents and 
  other materials furnished by Seller hereunder.  Buyer shall keep 
  all information or data received or discovered in connection 
  with any of the inspections, reviews or examinations strictly 
  confidential.  If, on or before the expiration of the Due 
  Diligence Period, based upon such review, examination or 
  inspection, Buyer shall determine that it intends to proceed 
  with the acquisition of the Property, then Buyer shall promptly 
  notify Seller and Escrow Holder of such determination in writing 
  (such notice being herein called the "Approval Notice") and 
  concurrently therewith Buyer shall deliver the Additional Escrow 
  Deposit to Escrow Holder (and thereafter, Buyer shall have no 
  further right to terminate this Agreement pursuant to this 
  paragraph 4B).  If, however, on or before the expiration of the 
  Due Diligence Period, based upon such review, examination or 
  inspection, Buyer shall determine in its sole and absolute 
  discretion that it no longer intends to acquire the Property, 
  then Buyer shall promptly notify Seller of such determination in 
  writing (such notice being herein called the "Termination 
  Notice"), whereupon the Escrow Deposit shall be returned to 
  Buyer and this Agreement, and the obligations of the parties 
  hereunder, shall terminate.  In the event that, on or before the 
  expiration of the Due Diligence Period, Buyer shall fail to have 
  delivered the Approval Notice to Seller (and concurrently 
  therewith deposit the Additional Escrow Deposit with Escrow 
  Holder as provided for in this Agreement), Buyer shall be deemed 
  to have elected not to proceed with the acquisition of the 
  Property whereupon the Escrow Deposit shall be returned to Buyer 
  and this Agreement, and the obligations of the parties 
  hereunder, shall terminate.
  
  		C.	Existing Loan Matters.  Receipt of the written 
  consent to the transactions contemplated herein from all parties 
  whose consent to the assumption by Buyer of such Loan Documents 
  is required thereunder, together with a release of Seller from 
  any liability under the Loan Documents, and an "estoppel 
  certificate" executed by The Prudential Insurance Company of 
  America (the "Existing Lender") certifying that the Loan 
  Documents are in full force and effect and that no default 
  exists thereunder, shall be conditions precedent to Seller's 
  obligation to sell, and Buyer's obligation to purchase, the 
  Property.  To the extent required by the Existing Lender, Seller 
  shall pay to the Existing Lender up to 1% of the outstanding 
  principal balance of the Existing Note as a loan transfer fee or 
  prepayment premium or fee.  Seller shall pay any other transfer, 
  assumption or other fees and costs (including reasonable 
  attorneys' fees, but not attorneys' fees of Buyer's counsel) 
  imposed by any of such parties with respect to such consent and 
  assumption (including any loan transfer, assumption fee or 
  prepayment premium in excess of 1% of the outstanding principal 
  balance of the Existing Note) up to a maximum of $15,000.   
  Buyer shall reasonably cooperate with Seller in connection with 
  such consent and assumption (and shall promptly deliver such 
  information, including financial information, respecting Buyer 
  or its principals as any of such parties may request).  Seller's 
  sole obligations in connection with the consent matters herein 
  contemplated (unless Buyer agrees otherwise) shall be to utilize 
  reasonable efforts to obtain such consents, and to reasonably 
  cooperate with Buyer to the extent necessary, including, but not 
  limited to, with respect to its efforts in connection with 
  substitution of the letter of credit.  If such consents are not 
  obtained on or before the Closing Date, the obligation of Seller 
  to sell, and Buyer to purchase, the Property shall terminate.  
  Seller's sole obligation hereunder with respect to obtaining an 
  "estoppel certificate" from the Existing Lender shall be to 
  utilize reasonable efforts to obtain such "estoppel certificate" 
  (such reasonable efforts not including any obligation to 
  institute legal proceedings or to expend any additional monies 
  therefor, other than for minor administrative charges). 
  
  		D.	Estoppel Certificates.  Receipt of estoppel 
  certificates ("Tenant Estoppel Certificates"), from (i) each 
  tenant listed on Exhibit "D-1" attached hereto and made a part 
  hereof, and (ii) from a sufficient number of the balance of the 
  tenants at the Property so that Tenant Estoppel Certificates 
  shall be received under clauses (i) and (ii) hereof with respect 
  to not less than 80% of the net rentable square feet of space 
  covered by leases in effect as of the Closing Date, shall be a 
  condition precedent to Buyer's obligation to purchase the 
  Property hereunder.  Each Tenant Estoppel Certificate shall 
  either be substantially in the form provided in Exhibit "D-2" 
  attached hereto and made a part hereof or in the form, if any, 
  prescribed in the applicable tenant lease.  Seller's sole 
  obligation hereunder shall be to utilize commercially reasonable 
  efforts to obtain a Tenant Estoppel Certificate from each tenant 
  at the Property (such reasonable efforts obligations not 
  including any obligation to institute legal proceedings or to 
  expend monies therefor), but such obligation shall not affect 
  the provision of such Tenant Estoppel Certificates as a 
  condition precedent to closing.  In addition, it shall be a 
  condition precedent to Buyer's obligation to close hereunder 
  that, as of the Closing Date, Buyer shall have received an 
  estoppel certificate addressed to Buyer from Seller with respect 
  to those tenants which fail to deliver tenant estoppel 
  certificates ("Seller's Estoppel Certificates") certifying the 
  following:  that the applicable lease is in full force and 
  effect, that a true and complete copy of the applicable lease is 
  attached to the applicable Seller's Estoppel Certificate; that 
  neither the tenant nor the landlord under the applicable lease 
  is in default thereunder; that the Seller's Estoppel Certificate 
  states the present amount of annual base rent being paid by the 
  tenant under the applicable lease and the commencement and 
  termination dates under the applicable lease.  A Seller's 
  Estoppel Certificate shall be of no further force and effect as 
  to any tenant which delivers an Tenant Estoppel Certificate 
  subsequent to Seller's delivery of the Seller's Estoppel 
  Certificates to Buyer, provided such Tenant Estoppel Certificate 
  is consistent in all material respects with the information with 
  respect to such tenant contained in the applicable Seller's 
  Estoppel Certificate previously delivered to Buyer.
  
  		E.	Removal of Stained Soil.  The removal of certain 
  black stained soil located in the sump pits of the garage 
  elevators at the Property, as the same was disclosed in a phase 
  I environmental report prepared by PSI for Buyer as project 
  number 360-7E015 ("Buyer's Phase I"), shall be a condition 
  precedent to Buyer's obligation to purchase the Property 
  hereunder. 	
  
  	5.	Closing Procedure.  The closing of the sale and 
  purchase herein provided (the "Closing") shall be consummated at 
  a closing conference ("Closing Conference"), which shall be held 
  on the Closing Date at Seller's offices at 900 North Michigan 
  Avenue, Chicago, Illinois or through escrow through the mail.  
  As used herein, "Closing Date" means the date which is 15 days 
  after the end of the Due Diligence Period, or such earlier date 
  as may be agreed upon by Buyer and Seller; provided, however, if 
  any of the conditions to closing set forth in paragraph 4C above 
  are not satisfied on or before the Closing Date, and so long as 
  Buyer shall not then be in default or have otherwise breached 
  its obligations under this Agreement, Buyer and/or Seller shall 
  have the right to extend the Closing Date for up to forty-five 
  (45) days in order to attempt to satisfy such conditions.
  
  		A.	Escrow.  On or before the Closing Date, the 
  parties shall deliver to Title Company the following:  (1) by 
  Seller, a duly executed and acknowledged original limited 
  warranty deed ("Deed") in the form of Exhibit "E" attached 
  hereto and made a part hereof, and (2) by Buyer, the Closing 
  Payment in immediately available federal funds.  Such deliveries 
  shall be made pursuant to escrow instructions ("Escrow 
  Instructions") to be executed among Buyer, Seller and Title 
  Company in form reasonably acceptable to such parties in order 
  to effectuate the intent hereof.  The conditions to the closing 
  of such escrow shall include the Title Company's receipt of the 
  Deed, the Closing Payment and a notice from each of Buyer and 
  Seller authorizing Title Company to close the transactions as 
  contemplated herein (each of Buyer and Seller being obligated to 
  deliver such authorization notice at the Closing Conference as 
  soon as it is reasonably satisfied that the other party is in a 
  position to deliver the items to be delivered by such other 
  party under subparagraph B below).
  
  		B.	Delivery to Parties.  Upon the satisfaction of 
  the conditions set forth in the Escrow Instructions, then 
  (x) the Deed shall be delivered to Buyer by Title Company's 
  depositing the same for recordation, (y) the Closing Payment 
  (and the Escrow Deposit) shall be delivered by Title Company to 
  Seller and (z) at the Closing Conference, the following items 
  shall be delivered:
  
  			(1)	Seller Deliveries.  Seller shall deliver to 
  Buyer the following:
  
  				(a)	A duly executed and acknowledged bill 
  of sale, assignment and assumption agreement ("Assignment and 
  Assumption Agreement") in the form of Exhibit "F" attached 
  hereto and made a part hereof;
  
  				(b)	Duly executed and acknowledged 
  certificates regarding the "non-foreign" status of Seller;
  
  				(c)	Evidence reasonably satisfactory to 
  Buyer and Title Company respecting the due organization of 
  Seller and the due authorization and execution of this Agreement 
  and the documents required to be delivered hereunder; 
  
  				(d)	Appropriate documentation to evidence 
  the assignment and assumption of the Loan Documents as may be 
  reasonably required in order to effectuate the release, 
  assignment and assumption transactions respecting the Loan 
  Documents as contemplated in this Agreement; 
  
  				(e)	A certificate of Seller ("Seller 
  Closing Certificate") updating the representations and 
  warranties contained in paragraph 7A hereof to the Closing Date, 
  and noting any changes thereto;and
  
  				(f)	Such additional documents as may be 
  reasonably required by Buyer and Title Company in order to 
  consummate the transactions hereunder (provided the same do not 
  materially increase the costs to, or liability or obligations 
  of, Seller in a manner not otherwise provided for herein).
  
  			(2)	Buyer Deliveries.  Buyer shall deliver to 
  Seller the following:
  
  				(a)	A duly executed and acknowledged 
  Assignment and Assumption Agreement;
  
  				(b)	Evidence reasonably satisfactory to 
  Seller and Title Company respecting the due organization of 
  Buyer and the due authorization and execution of this Agreement 
  and the documents required to be delivered hereunder;
  
  				(c)	Appropriate documentation to evidence 
  the assignment and assumption of the Loan Documents as may be 
  reasonably required in order to effectuate the release, 
  assignment and assumption transactions respecting the Loan 
  Documents as contemplated in this Agreement; 
  
  				(d)	A certificate of Buyer ("Buyer's 
  Closing Certificate") updating the representations and 
  warranties contained in paragraph 7B hereof to the Closing Date, 
  and noting any changes thereto;and
  
  				(e)	Such additional documents as may be 
  reasonably required by Seller and Title Company in or to 
  consummate the transactions hereunder (provided the same do not 
  materially increase the costs to, or liability or obligations 
  of, Buyer in a manner not otherwise provided for herein).
  
  		C.	Closing Costs.  Seller shall pay (i) all of any 
  deed or other transfer taxes, mortgage taxes and sales or use 
  taxes applicable to the transactions hereunder, (ii) the costs 
  to update the Survey and (iii) one-half of any escrow or 
  recording charges attributable to the Deed.  Buyer shall pay (i) 
  the title insurance premium for the Owner's Policy, as well as 
  any portion of the title insurance premium attributable to any 
  additional or extended coverage or endorsements requested by 
  Buyer, (ii) one-half of any escrow or recording charges and 
  (iii) all fees, costs or expenses incurred by Buyer in 
  connection with Buyer's due diligence reviews hereunder.  Each 
  of Seller and Buyer shall pay its own attorneys' fees and its 
  respective share of prorations as hereinafter provided.  
  Notwithstanding the foregoing, in the event the sale 
  contemplated hereby does not close on the Closing Date, then 
  each party shall pay all costs incurred by it.
  
  		D.	Prorations.
  
  			(1)	Items to be Prorated.  The following shall 
  be prorated between Seller and Buyer as of the Closing Date:
  
  				(a)	All real estate taxes and assessments 
  on the Property for the current year on a per diem basis.  In no 
  event shall Seller be charged with or be responsible for any 
  increase in the taxes on the Property resulting from the sale of 
  the Property or from any improvements made or leases entered 
  into on or after the Closing Date.  If any assessments on the 
  Property are payable in installments, then the installment for 
  the current period shall be prorated (with Buyer assuming the 
  obligation to pay any installments due after the Closing Date).
  
  				(b)	All fixed and additional rentals under 
  the leases, security deposits and other tenant charges.  Seller 
  shall deliver or provide a credit in an amount equal to all 
  prepaid rentals for periods after the Closing Date and all 
  refundable security deposits (to the extent the foregoing are 
  not applied or forfeited prior to the Closing Date) to Buyer on 
  the Closing Date.  Rents which are delinquent as of the Closing 
  Date shall not be prorated on the Closing Date.  Buyer shall 
  include such delinquencies in its normal billing and shall 
  diligently pursue the collection thereof in good faith after the 
  Closing Date (but Buyer shall not be required to litigate or 
  declare a default in any lease).  To the extent Buyer receives 
  rents on or after the Closing Date, such payments shall be 
  applied first toward then current rent owed to Buyer in 
  connection with the applicable lease for which such payments are 
  received, and any excess monies received shall be applied toward 
  the payment of any delinquent rents, with Seller's share thereof 
  being promptly delivered to Seller.  Buyer may not waive any 
  delinquent rents nor modify a lease so as to reduce or otherwise 
  affect amounts owed thereunder for any period in which Seller is 
  entitled to receive a share of charges or amounts without first 
  obtaining Seller's written consent.  Seller hereby reserves the 
  right to pursue any monetary remedy against any tenant owing 
  delinquent rents and any other amounts to Seller.  Buyer shall 
  reasonably cooperate with Seller in any collection efforts 
  hereunder (but shall not be required to litigate or declare a 
  default in any lease).  With respect to delinquent rents and any 
  other amounts or other rights of any kind respecting tenants who 
  are no longer tenants of the Property as of the Closing Date, 
  Seller shall retain all rights relating thereto.
  
  				(c)	Interest and any other payments, fees 
  and charges owed under the Loan Documents, including, but not 
  limited to, any amounts owed to the Existing Lender, loan 
  administrator or any other party thereunder.
  
  				(d)	On or before the Closing Date, Seller 
  shall pay or cause to be paid (or there shall be escrowed for 
  payment at closing) all tenant improvement costs and leasing and 
  brokerage commissions which are payable with respect to Tenant 
  Leases affecting such Property executed prior to the date hereof 
  (including those costs and commissions set forth on Exhibit "H-
  2" hereto, but excluding the tenant improvement costs due with 
  respect to the GSA-OHA lease), whether the same are due on or 
  prior to the Closing Date or payable in installments subsequent 
  thereto and including any portion thereof due upon any renewals 
  of any such Tenant Lease or options to lease additional space 
  but only if such renewal or additional space option commences 
  prior to the date of this Agreement.  Buyer shall assume the 
  payment of all tenant improvement costs and leasing and 
  brokerage commissions which are or may hereafter become due with 
  respect to (i) any renewals of any Tenant Leases or options to 
  lease additional space under any Tenant Leases if such renewals 
  or additional space options are exercised and commence or arise 
  after the date of this Agreement so long as Buyer has received 
  copies of all commission agreements for such renewals or 
  additional space options prior to the date of this Agreement, 
  (ii) the GSA-OHA lease, and (iii) any Tenant Leases hereinafter 
  executed prior to the closing with Buyer's written consent.
  
  				(e)	All operating expenses.
  
  			(2)	Calculation.  The prorations and payments 
  shall be made on the basis of a written statement submitted to 
  Buyer and Seller by Escrow Holder prior to the Close of Escrow 
  and approved by Buyer and Seller.  In the event any prorations 
  or apportionments made under this subparagraph D shall prove to 
  be incorrect for any reason, then any party shall be entitled to 
  an adjustment to correct the same provided written notice of 
  such inaccuracy and request for correction is given within six 
  months after the date hereof.  Any item which cannot be finally 
  prorated because of the unavailability of information shall be 
  tentatively prorated on the basis of the best data then 
  available and reprorated when the information is available, but 
  not later than six months after the date hereof.
  
  			(3)	Reimbursement of Tenant Improvement and 
  Leasing Costs.  Buyer agrees that it will pay or reimburse 
  Seller or the tenant, as applicable, for all tenant improvement 
  and leasing commission obligations of the landlord under any 
  leases entered into after the date hereof in accordance with 
  paragraph 7D(3) below, and the GSA/OHA lease (with any amounts 
  due to Seller being credited on the Closing Date).
  
  	6.	Condemnation or Destruction of Property.  In the event 
  that, after the date hereof but prior to the Closing Date, 
  either any portion of the Property is taken pursuant to eminent 
  domain proceedings or any of the improvements on the Property 
  are damaged or destroyed by any casualty, Seller shall have no 
  obligation to repair or replace any such damage or destruction. 
   Seller shall, upon consummation of the transaction herein 
  provided, assign to Buyer all claims of Seller respecting any 
  condemnation or casualty insurance coverage, as applicable, and 
  all condemnation proceeds or proceeds from any such casualty 
  insurance received by Seller on account of any casualty (the 
  damage from which shall not have been repaired by Seller prior 
  to the Closing Date), and shall credit the Purchase Price for 
  any applicable deductible relating thereto, as applicable; 
  provided, however, that Seller shall retain any proceeds 
  received (and the right to receive any proceeds) of rental 
  income insurance or a temporary taking award that are 
  attributable to a period prior to the Closing Date.  In the 
  event the condemnation award or the cost of repair of damage to 
  the Property on account of a casualty, as applicable, shall 
  exceed $100,000, Buyer may, at its option, terminate this 
  Agreement by notice to Seller, given on or before the Closing 
  Date.
  
  	7.	Representations, Warranties and Covenants.
  
  		A.	Representations, Warranties and Covenants of 
  Seller.
  
  			(1)	General Disclaimer.  Except as specifically 
  set forth in Paragraph 7A(2) below, the sale of the Property 
  hereunder is and will be made on an "as is" basis, without 
  representations and warranties of any kind or nature, express, 
  implied or otherwise, including, but not limited to, any 
  representation or warranty concerning title to the Property 
  (except to the extent any warranties of title are specifically 
  contained in the Deed), the physical condition of the Property 
  (including, but not limited to, the condition of the soil or the 
  Improvements), the environmental condition of the Property 
  (including, but not limited to, the presence or absence of 
  hazardous substances on or respecting the Property), the 
  compliance of the Property with applicable laws and regulations 
  (including, but not limited to, zoning and building codes or the 
  status of development or use rights respecting the Property), 
  the financial condition of the Property or any other 
  representation or warranty respecting any income, expenses, 
  charges, liens or encumbrances, rights or claims on, affecting 
  or pertaining to the Property or any part thereof.  Buyer 
  acknowledges that, during the Due Diligence Period, Buyer will 
  examine, review and inspect all matters which in Buyer's 
  judgment bear upon the Property and its value and suitability 
  for Buyer's purposes.  Except as to matters specifically set 
  forth in Paragraph 7A(2) below, Buyer will acquire the Property 
  solely on the basis of its own physical and financial 
  examinations, reviews and inspections and the title insurance 
  protection afforded by the Owner's Policy; provided, however, 
  that the foregoing shall in no way affect or limit those 
  warranties of title specifically contained in the Deed.  Without 
  limitation thereon, Buyer hereby waives any and all rights of 
  contribution or other rights or remedies against Seller under 
  the Commercial Environmental Responsibility Compensation and 
  Liability Act or any other applicable environmental laws, rules 
  or regulations.
  
  			(2)	Limited Representations and Warranties of 
  Seller.  Subject to the provisions of Paragraph 7A(1) above, 
  Seller hereby represents and warrants that, except as set forth 
  in Exhibit "G" attached hereto and made a part hereof, Seller 
  has no knowledge that any of the following statements is untrue 
  (and, for this purpose, Seller's knowledge shall mean only the 
  present actual knowledge of Brian K. Ellison, Vice President of 
  JMB Realty Corporation and portfolio manager overseeing the 
  investment of Seller in the Property (after having made inquiry 
  of Seller's third party property manager with respect to the 
  representations and warranties contained in this Agreement):
  
  				(a)	Rent Roll.  Attached as Exhibit "H-1" 
  and made a part hereof is a true, complete and accurate list, as 
  of the date thereof, of all tenant leases respecting the 
  Property ("Rent Roll"), and Seller has not received any written 
  notice of a material default under any of such tenant leases 
  that remains uncured.  Except as disclosed in the Rent Roll, no 
  Tenant Lease has been modified, altered or amended in any 
  respect.  There are no leases, tenancies or other rights of 
  occupancy or use for any portion of the Property other than as 
  set forth in the Rent Roll.  Except as set forth in Exhibit "H-
  2" attached hereto and made a part hereof (the "Additional 
  Tenant Information List"), there are no outstanding tenant 
  improvement or leasing commission obligations of the landlord 
  under the Tenant Leases.   In addition, the Additional Tenant 
  Matter List accurately sets forth amount of any security deposit 
  paid by the tenant under each Tenant Lease.  Notwithstanding 
  anything to the contrary contained herein, Seller shall have no 
  obligation or liability to Buyer with respect to any of the 
  foregoing matters which shall be confirmed as correct in any 
  Tenant Estoppel Certificate which may be delivered hereunder.
  
  				(b)	Litigation.  There is no pending 
  action, litigation, condemnation or other proceeding against the 
  Property or against Seller with respect to the Property.
  
  				(c)	Compliance.  Seller has received no 
  written notice from any insurance company, governmental 
  authority or agency having jurisdiction over the Property (i) 
  regarding any violation of any restrictive covenant or deed 
  restriction affecting the Property and/or to the effect that the 
  Property is not in compliance with applicable laws or 
  ordinances, or (ii) regarding any pending or threatened 
  condemnation proceedings.  
  
  				(d)	Service Agreements.  Other than those 
  which are cancelable on 30 days' notice, Seller has not entered 
  into any service agreements or contracts ("Service Agreements") 
  or other agreements (other than as set forth in this Agreement) 
  relating to the Property which will be in force on the Closing 
  Date, except as described in Exhibit "I" attached hereto, and 
  Seller has not received any written notice of any material 
  default thereunder that remains uncured.  If Buyer requests 
  during the Due Diligence Period, any such Service Agreements 
  will be terminated at Closing; provided, however, that Buyer 
  shall be responsible for paying any termination fees or costs 
  associated therewith.
  
  				(e)	Due Authority.  This Agreement and all 
  agreements, instruments and documents herein provided to be 
  executed or to be caused to be executed by Seller are and on the 
  Closing Date will be duly authorized, executed and delivered by 
  and are binding upon Seller.  Seller is a partnership, duly 
  organized and validly existing under the laws of the State of 
  Illinois, and is duly authorized and qualified to do all things 
  required of it under this Agreement.  Seller has the capacity 
  and authority to enter into this Agreement and consummate the 
  transactions herein provided.
  
  				(f)	Environmental Matters.  Except as set 
  forth in the reports described in Exhibit "J" attached hereto 
  and made a part hereof (the "Environmental Reports"), and in 
  Buyer's Phase I, there has been no release of any material known 
  to Seller to be a "Hazardous Material" at, upon, under or within 
  the Property, in an amount which would, as of the date hereof, 
  give rise to an "Environmental Compliance Cost".  The term 
  "Hazardous Material" shall mean asbestos, petroleum products, 
  and any other hazardous waste or substance which has, as of the 
  date hereof, been determined to be hazardous or a pollutant by 
  the U.S. Environmental Protection Agency, the U.S. Department of 
  Transportation, or any instrumentality authorized to regulate 
  substances in the environment which has jurisdiction over the 
  Property ("Environmental Agency") which substance causes the 
  Property (or any part thereof) to be in material violation of 
  any applicable environmental laws; provided, however, that the 
  term "Hazardous Material" shall not include (x) motor oil and 
  gasoline contained in or discharged from vehicles not used 
  primarily for the transport of motor oil or gasoline, or 
  (y) materials which are stored or used in the ordinary course of 
  a tenant's occupancy at (or the Company's, or the Company's 
  managing agents' operation of) the Property, and which are 
  stored, used, held, or disposed of in compliance with all 
  applicable environmental laws.  The term "Environmental 
  Compliance Cost" means any reasonable out-of-pocket cost, fee or 
  expense exceeding $2,500 and incurred directly to satisfy any 
  requirement imposed by an Environmental Agency to bring the 
  Property into compliance with applicable Federal, State and 
  local laws and regulations directly relating to the existence on 
  the Property of any Hazardous Material.   
  	
  				(g)	Loan Documents.  The loan documents 
  described in Exhibit "K" attached hereto and made a part hereof 
  constitute all of the documents which relate to the Existing 
  Encumbrance.  Seller has not received any written notice of a 
  material default under the Loan Documents that remains uncured.
  
  				(h)	Operating Statements.  The operating 
  statements delivered to Buyer have been prepared by or on behalf 
  of Seller in the ordinary course of business.
  
  		B.	Representations and Warranties of Buyer.  Buyer 
  hereby represents and warrants that this Agreement and all 
  agreements, instruments and documents herein provided to be 
  executed or to be caused to be executed by Buyer are and on the 
  Closing Date will be duly authorized, executed and delivered by 
  and are binding upon Buyer; Buyer is a limited partnership, duly 
  organized and validly existing and in good standing under the 
  laws of the State of Delaware, and is duly authorized and 
  qualified to do all things required of it under this Agreement; 
  and Buyer has the capacity and authority to enter into this 
  Agreement and consummate the transactions herein provided.
  
  		C.	Survival.  Any cause of action of a party for a 
  breach of the foregoing representations and warranties shall 
  survive until December 15, 1997, at which time such 
  representations and warranties (and any cause of action 
  resulting from a breach thereof not then in litigation) shall 
  terminate.  Notwithstanding the foregoing, if Buyer shall have 
  actual knowledge as of the Closing Date that any of the 
  representations or warranties of Seller contained herein are 
  false or inaccurate or that Seller is in breach or default of 
  any of its obligations under this Agreement, and Buyer 
  nonetheless closes the transactions hereunder and acquires the 
  Property, then Seller shall have no liability or obligation 
  respecting such false or inaccurate representations or 
  warranties or other breach or default (and any cause of action 
  resulting therefrom shall terminate upon such closing 
  hereunder).
  
  		D.	Interim Covenants of Seller.  Until the Closing 
  Date or the sooner termination of this Agreement:
  
  			(1)	Seller shall maintain the Property in the 
  same manner as prior hereto pursuant to its normal course of 
  business (such maintenance obligations not including 
  extraordinary capital expenditures or expenditures not incurred 
  in such normal course of business), subject to reasonable wear 
  and tear and further subject to destruction by casualty or other 
  events beyond the control of Seller.  Seller shall maintain 
  current insurance coverage (or substantially equivalent 
  coverage) in place at the Property.  Seller will not initiate or 
  knowingly permit (unless required by applicable law or an 
  existing agreement affecting the Property) any zoning 
  reclassification of the Property or seek any variance under 
  existing zoning ordinances applicable to the Property to use or 
  permit the use of the Property in such a manner which would 
  result in such use becoming a nonconforming use under applicable 
  zoning ordinances.  Seller will not impose any restrictive 
  covenants on the Property or execute or file any subdivision 
  plat affecting the Property.
  
  			(2)	Seller shall not enter into any additional 
  service contracts or other similar agreements without the prior 
  consent of Buyer, except those deemed reasonably necessary by 
  Seller which are cancelable on 30 days' notice without premium 
  or penalty.
  
  			(3)	Seller shall have the right to continue to 
  offer the Property for lease in the same manner as prior hereto 
  pursuant to its normal course of business and, upon request, 
  shall keep Buyer reasonably informed as to the status of leasing 
  prior to the Closing Date.  After the Effective Date (unless 
  Buyer shall have theretofor delivered a termination notice 
  hereunder), Seller shall not enter into any new leases or 
  material modifications of existing leases thereafter without the 
  consent of Buyer (which consent will not be unreasonably 
  withheld or materially delayed).  In no event shall Seller have 
  any obligation to enter into any new lease or modify any 
  existing lease unless Buyer shall agree to pay or reimburse 
  Seller on the Closing Date for all tenant improvement costs and 
  leasing commissions incurred by Seller under or in connection 
  therewith (Buyer's agreement to pay or reimburse for such 
  amounts not to be unreasonably withheld).
  
  			(4)	Subject to the terms and conditions of 
  paragraph 4B above, during normal business hours with 24 hours 
  prior notice to Seller, prior to Closing, Seller agrees to give 
  Buyer and its agents and representatives reasonable access to 
  the Property and the books and records directly relating to the 
  ownership, management, maintenance and operations of the 
  Property and all documents (other than those containing 
  proprietary information) in the possession or control of Seller. 
   
  	9.	DISPOSITION OF DEPOSIT.  IF THE TRANSACTION HEREIN 
  PROVIDED SHALL NOT BE CLOSED BY REASON OF SELLER'S DEFAULT UNDER 
  THIS AGREEMENT OR THE FAILURE OF SATISFACTION OF THE CONDITIONS 
  DESCRIBED IN PARAGRAPH 4 HEREOF OR THE TERMINATION OF THIS 
  AGREEMENT IN ACCORDANCE WITH PARAGRAPH 6 HEREOF, AND BUYER SHALL 
  NOT HAVE DEFAULTED UNDER THIS AGREEMENT, THEN THE ESCROW DEPOSIT 
  SHALL BE RETURNED TO BUYER, AND NEITHER PARTY SHALL HAVE ANY 
  FURTHER OBLIGATION OR LIABILITY TO THE OTHER; PROVIDED, HOWEVER, 
  IF THE TRANSACTIONS HEREUNDER SHALL FAIL TO CLOSE SOLELY BY 
  REASON OF A MATERIAL DEFAULT BY SELLER, AND BUYER SHALL HAVE 
  FULLY PERFORMED ITS OBLIGATIONS HEREUNDER AND SHALL BE READY, 
  WILLING AND ABLE TO CLOSE, THEN BUYER SHALL BE ENTITLED TO 
  EITHER (1) TERMINATE THIS AGREEMENT, RECEIVE A RETURN OF THE 
  ESCROW DEPOSIT AND TO OBTAIN REIMBURSEMENT FROM SELLER FOR 
  BUYER'S ACTUAL OUT-OF-POCKET EXPENSES PAID TO UNAFFILIATED THIRD 
  PARTIES IN CONNECTION WITH ITS DUE DILIGENCE REVIEWS HEREUNDER 
  (SUCH REIMBURSEMENT OBLIGATION NOT TO EXCEED $20,000 IN THE 
  AGGREGATE), OR (2) SPECIFICALLY ENFORCE THIS AGREEMENT (BUT NO 
  OTHER ACTION, FOR DAMAGES OR OTHERWISE, SHALL BE PERMITTED).  IN 
  THE EVENT THE TRANSACTION HEREIN PROVIDED SHALL NOT CLOSE FOR 
  ANY REASON OTHER THAN THE FAILURE OF SATISFACTION OF THE 
  CONDITIONS DESCRIBED IN PARAGRAPH 4 HEREOF OR THE TERMINATION OF 
  THIS AGREEMENT IN ACCORDANCE WITH PARAGRAPH 6 HEREOF OR THE 
  DEFAULT OF SELLER, THEN THE ESCROW DEPOSIT SHALL BE DELIVERED TO 
  SELLER AS FULL COMPENSATION AND LIQUIDATED DAMAGES UNDER AND IN 
  CONNECTION WITH THIS AGREEMENT.  IN THE EVENT THE TRANSACTION 
  HEREIN PROVIDED SHALL CLOSE, THE ESCROW DEPOSIT SHALL BE APPLIED 
  AS A PARTIAL PAYMENT OF THE PURCHASE PRICE.  IN CONNECTION WITH 
  THE FOREGOING, THE PARTIES RECOGNIZE THAT SELLER WILL INCUR 
  EXPENSE IN CONNECTION WITH THE TRANSACTION CONTEMPLATED BY THIS 
  AGREEMENT AND THAT THE PROPERTY WILL BE REMOVED FROM THE MARKET; 
  FURTHER, THAT IT IS EXTREMELY DIFFICULT AND IMPRACTICABLE TO 
  ASCERTAIN THE EXTENT OF DETRIMENT TO SELLER CAUSED BY THE BREACH 
  BY BUYER UNDER THIS AGREEMENT AND THE FAILURE OF THE 
  CONSUMMATION OF THE TRANSACTION CONTEMPLATED BY THIS AGREEMENT 
  OR THE AMOUNT OF COMPENSATION SELLER SHOULD RECEIVE AS A RESULT 
  OF BUYER'S BREACH OR DEFAULT.  IN THE EVENT THE SALE OF THE 
  PROPERTY SHALL NOT BE CONSUMMATED ON ACCOUNT OF BUYER'S DEFAULT, 
  THEN THE RETENTION OF THE ESCROW DEPOSIT SHALL BE SELLER'S SOLE 
  AND EXCLUSIVE REMEDY UNDER THIS AGREEMENT BY REASON OF SUCH 
  DEFAULT, SUBJECT TO THE PROVISIONS OF PARAGRAPH 9I HEREOF.
  
  		                   			                   
  		Seller's Initials			Buyer's Initials
  
  	9.	Miscellaneous.
  
  		A.	Brokers.  
  
  		(1)	Except as provided in subparagraph (2) below, 
  Seller represents and warrants to Buyer, and Buyer represents 
  and warrants to Seller, that no broker or finder has been 
  engaged by it, respectively, in connection with any of the 
  transactions contemplated by this Agreement or to its knowledge 
  is in any way connected with any of such transactions.  In the 
  event of a claim for broker's or finder's fee or commissions in 
  connection herewith, then Seller shall indemnify and defend 
  Buyer from the same if it shall be based upon any statement or 
  agreement alleged to have been made by Seller, and Buyer shall 
  indemnify and defend Seller from the same if it shall be based 
  upon any statement or agreement alleged to have been made by 
  Buyer.  The indemnification obligations under this Paragraph 
  9A(1) shall survive the closing of the transactions hereunder or 
  the earlier termination of this Agreement.
  
  		(2)	If and only if the sale contemplated herein 
  closes, Seller agrees to pay a brokerage commission to Richard 
  Ellis, LLC (the "Broker") pursuant to a separate written 
  agreement.  The foregoing payment shall be the sole commission, 
  fee or payment payable to Broker in connection with the 
  transactions hereunder.
  
  		B.	Limitation of Liability.
  
  			(1)	Notwithstanding anything to the contrary 
  contained herein, if the closing of the transactions hereunder 
  shall have occurred (and Buyer shall not have waived, 
  relinquished or released any applicable rights in further 
  limitation), the aggregate liability of Seller arising pursuant 
  to or in connection with the representations, warranties, 
  indemnifications, covenants or other obligations (whether 
  express or implied) of Seller under this Agreement (or any 
  document executed or delivered in connection herewith) shall not 
  exceed $750,000; provided that, the foregoing shall not limit 
  the liability of Seller arising from or out of Seller's 
  affirmative fraud in connection with the representations, 
  warranties, indemnifications, covenants or other obligations of 
  Seller under this Agreement (or any document executed or 
  delivered in connection herewith).
  
  			(2)	No constituent partner in or agent of 
  Seller, nor any advisor, trustee, director, officer, employee, 
  beneficiary, shareholder, participant, representative or agent 
  of any corporation or trust that is or becomes a constituent 
  partner in Seller (including, but not limited to, JMB Realty 
  Corporation) shall have any personal liability, directly or 
  indirectly, under or in connection with this Agreement or any 
  agreement made or entered into under or pursuant to the 
  provisions of this Agreement, or any amendment or amendments to 
  any of the foregoing made at any time or times, heretofore or 
  hereafter, and Buyer and its successors and assigns and, without 
  limitation, all other persons and entities, shall look solely to 
  Seller's assets for the payment of any claim or for any 
  performance, and Buyer, on behalf of itself and its successors 
  and assigns, hereby waives any and all such personal liability. 
   Notwithstanding anything to the contrary contained in this 
  Agreement, neither the negative capital account of any 
  constituent partner in Seller (or in any other constituent 
  partner of Seller), nor any obligation of any constituent 
  partner in Seller (or in any other constituent partner of 
  Seller) to restore a negative capital account or to contribute 
  capital to Seller (or to any other constituent partner of 
  Seller), shall at any time be deemed to be the property or an 
  asset of Seller or any such other constituent partner (and 
  neither Buyer nor any of its successors or assigns shall have 
  any right to collect, enforce or proceed against or with respect 
  to any such negative capital account of partner's obligation to 
  restore or contribute).
  	
  			(3)	No constituent partner in or agent of Buyer, 
  nor any advisor, trustee, director, officer, employee, 
  beneficiary, shareholder, participant, representative or agent 
  of any corporation or trust that is or becomes a constituent 
  partner in Buyer shall have any personal liability, directly or 
  indirectly, under or in connection with this Agreement or any 
  agreement made or entered into under or pursuant to the 
  provisions of this Agreement, or any amendment or amendments to 
  any of the foregoing made at any time or times, heretofore or 
  hereafter, and Seller and its successors and assigns and, 
  without limitation, all other persons and entities, shall look 
  solely to Buyer's assets for the payment of any claim or for any 
  performance, and Seller, on behalf of itself and its successors 
  and assigns, hereby waives any and all such personal liability. 
   Notwithstanding anything to the contrary contained in this 
  Agreement, neither the negative capital account of any 
  constituent partner in Buyer (or in any other constituent 
  partner of Buyer), nor any obligation of any constituent partner 
  in Buyer (or in any other constituent partner of Buyer) to 
  restore a negative capital account or to contribute capital to 
  Buyer (or to any other constituent partner of Buyer), shall at 
  any time be deemed to be the property or an asset of Buyer or 
  any such other constituent partner (and neither Seller nor any 
  of its successors or assigns shall have any right to collect, 
  enforce or proceed against or with respect to any such negative 
  capital account of partner's obligation to restore or 
  contribute).
  
  			(4)	Notwithstanding the foregoing, (i) if Seller 
  or its successor-in-interest shall fail to retain reserves of at 
  least $850,000 at the time of closing hereunder or (ii) if 
  during the period commencing on the Closing Date and ending on 
  December 15, 1997 (the "Survival Period"), Seller or its 
  successor-in-interest shall utilize such reserves for any 
  purpose other than the payment of claims, expenses, liabilities 
  or attorneys' fees of Seller or such successor-in-interest 
  (including any amounts incurred in connection with resolving or 
  defending any claim of liability hereunder) with respect to a 
  breach or alleged breach of the representations, warranties, 
  indemnifications, covenants or other obligations (whether 
  express or implied) of Seller under this Agreement (or any 
  document executed or delivered in connection herewith), or is 
  otherwise related to, connected with or concerns the Property in 
  any manner (collectively, the "Specified Liabilities"), then 
  subject to the terms and conditions of this Agreement, Buyer 
  may, during the Survival Period, look to the assets of JMB 
  Realty Corporation, as the general partner of Seller, for the 
  payment of any Specified Liabilities; provided, however, the 
  aggregate liability of JMB Realty Corporation in connection 
  therewith shall not exceed $750,000 in the aggregate and shall 
  be further limited as follows:
  			(x)	with respect to the initial reserve amount, 
  such liability shall be limited to the lesser of the amount by 
  which $850,000 exceeds the amount actually reserved by Seller or 
  its successor-in-interest in closing hereunder, and $750,000; or 
  
  			(y)	during the Survival Period, such liability 
  shall be limited to the lesser of the amount of such reserves 
  which, during the Survival Period, are utilized for purposes 
  other than the payment of the Specified Liabilities, and 
  $750,000.
  
  		C.	Entire Agreement.  This Agreement contains the 
  entire agreement between the parties respecting the matters 
  herein set forth and supersedes all prior agreements between the 
  parties hereto respecting such matters.  This Agreement may not 
  be modified or amended except by written agreement signed by 
  both parties.
  
  		D.	Time of the Essence.  Time is of the essence of 
  this Agreement.
  
  		E.	Interpretation.  Paragraph headings shall not be 
  used in construing this Agreement.  Each party acknowledges that 
  such party and its counsel, after negotiation and consultation, 
  have reviewed and revised this Agreement.  As such, the terms of 
  this Agreement shall be fairly construed and the usual rule of 
  construction, to the effect that any ambiguities herein should 
  be resolved against the drafting party, shall not be employed in 
  the interpretation of this Agreement or any amendments, 
  modifications or exhibits hereto or thereto.
  
  		F.	Governing Law.  This Agreement shall be construed 
  and enforced in accordance with the laws of the State of 
  Illinois.
  
  		G.	Successors and Assigns.  Buyer may not assign or 
  transfer its rights or obligations under this Agreement without 
  the prior written consent of Seller (in which event such 
  transferee shall assume in writing all of the transferor's 
  obligations hereunder, but such transferor shall not be released 
  from its obligations hereunder); provided, however, Buyer may 
  assign its interest in this Agreement to a limited partnership 
  in which Buyer is the managing general partner and has not less 
  than a 51% interest in capital and profits in such limited 
  partnership.  No consent given by Seller to any transfer or 
  assignment of Buyer's rights or obligations hereunder shall be 
  construed as a consent to any other transfer or assignment of 
  Buyer's rights or obligations hereunder.  No transfer or 
  assignment in violation of the provisions hereof shall be valid 
  or enforceable.  Subject to the foregoing, this Agreement and 
  the terms and provisions hereof shall inure to the benefit of 
  and be binding upon the successors and assigns of the parties.
  
  		H.	Notices.  Any notice which a party is required or 
  may desire to give the other shall be in writing and shall be 
  sent by personal delivery or by mail (either [i] by United 
  States registered or certified mail, return receipt requested, 
  postage prepaid, or [ii] by Federal Express or similar generally 
  recognized overnight carrier regularly providing proof of 
  delivery), addressed as follows (subject to the right of a party 
  to designate a different address for itself by notice similarly 
  given):
  
  			To Buyer:
  
  			Parkway Properties, L.P.
  			One Jackson Place
  			188 East Capitol Street, Ste. 1000
  			Jackson, MS  39201-2195
  			Attention:	David Fowler
  			Facsimile:	(601) 352-1441
  	
  
  			With Copy To:
  
  			Forman, Perry, Watkins, Krutz & Tardy
  			1200 One Jackson Place
  			188 E. Capitol Street
  			Jackson, Mississippi 39201
  			Attention:	Steven Hendrix, Esq.
  			Facsimile:	(601) 960-8609
  			Telephone:	(601) 960-8600
  
  			To Seller:
  
  			c/o JMB Realty Corporation
  			900 North Michigan Avenue
  			12th Floor
  			Chicago, Illinois 60611
  			Attention: 	Mr. Brian Ellison
  			Facsimile:	(312) 915-2343
  			Telephone:	(312) 915-2399
  
  			With Copy To:
  
  			Pircher, Nichols & Meeks
  			1999 Avenue of the Stars
  			Suite 2600
  			Los Angeles, California 90067
  			Attention: 	Real Estate Notices (GML)
  			Facsimile:	(310) 201-8922
  			Telephone:	(310) 201-8900
  
  			And To:
  
  			Richard Ellis, LLC
  			Three First National Plaza
  			Chicago, Illinois  60602
  			Attention:	Mr. Jeffrey Bramson
  			Facsimile:	(312) 899-8923
  			Telephone:	(312) 899-1900
  			
  
  Any notice so given by mail shall be deemed to have been given 
  as of the date of delivery (whether accepted or refused) 
  established by U.S. Post Office return receipt or the overnight 
  carrier's proof of delivery, as the case may be.  Any such 
  notice not so given shall be deemed given upon receipt of the 
  same by the party to whom the same is to be given.
  
  		I.	Legal Costs.  The parties hereto agree that they 
  shall pay directly any and all legal costs which they have 
  incurred on their own behalf in the preparation of this 
  Agreement, all deeds and other agreements pertaining to this 
  transaction and that such legal costs shall not be part of the 
  closing costs.  In addition, if either Buyer or Seller brings 
  any suit or other proceeding with respect to the subject matter 
  or the enforcement of this Agreement, the prevailing party (as 
  determined by the court, agency or other authority before which 
  such suit or proceeding is commenced), in addition to such other 
  relief as may be awarded, shall be entitled to recover 
  reasonable attorneys' fees, expenses and costs of investigation 
  actually incurred.  The foregoing includes, but is not limited 
  to, attorneys' fees, expenses and costs of investigation 
  (including, without limitation, those incurred in appellate 
  proceedings), costs incurred in establishing the right to 
  indemnification, or in any action or participation in, or in 
  connection with, any case or proceeding under Chapter 7, 11 or 
  13 of the Bankruptcy Code (11 United States Code Sections 101 
  et seq.), or any successor statutes.
  
  		J.	Counterparts.  This Agreement may be executed in 
  one or more counterparts, each of which shall be deemed an 
  original, but all of which shall constitute one and the same 
  document. 
  
  		K.	SEC Requirements.  If required by rules of the 
  Securities and Exchange Commission, Seller grants Buyer the 
  right, at Buyer's sole expense, to prepare an audited income 
  statement of the Property for the most recent fiscal year(s) as 
  specified by Rule 3-14 of Regulation S-X under the Securities 
  Act of 1933 and the Securities Exchange Act of 1934, and Seller 
  shall reasonably cooperate, at Buyer's expense, in making 
  available any and all such other data and financial information 
  which shall be available to Seller (including, without 
  limitation, data and information obtainable from Seller's 
  management agent for the Property) in connection with Buyer's 
  disclosure obligations as a public company subject to the rules 
  and regulations of the Securities and Exchange Commission.
  
  	10.	Indemnification.
  
  	A.	By Buyer.  Buyer shall hold harmless, indemnify and 
  defend Seller and its constituent partners from and against:  
  (1) any and all third party claims for Buyer's torts or breaches 
  of contract related to the Property and occurring on or after 
  the Closing Date, 
  (2) any and all loss, damage and third party claims in any way 
  arising from Buyer's inspections or examinations of the Property 
  prior to the Closing Date, and (3) all costs and expenses, 
  including reasonable attorney's fees incurred by Seller as a 
  result of the foregoing.
  
  		B.	By Seller.  Seller shall hold harmless, indemnify and 
  defend Buyer and its constituent partners from and against:  (1) 
  any and all third party claims for Seller's torts or breaches of 
  contract related to the Property and occurring prior to the 
  Closing Date, and 
  (2) all costs and expenses, including reasonable attorney's fees 
  incurred by Buyer as a result of the foregoing.  The foregoing 
  indemnity shall not cover any matters relating to title or 
  marketability of the Property (Buyer relying on the coverage 
  provided by the Owner's Policy as to such matters.)
  
  	C.	Generally.  Each indemnification under this Agreement 
  shall be subject to the following provisions:  The indemnitee 
  shall notify indemnitor of any such claim against indemnitee 
  within thirty (30) days after it has notice of such claim, but 
  failure to notify indemnitor shall in no case prejudice the 
  rights of indemnitee under this Agreement unless indemnitor 
  shall be prejudiced by such failure and then only to the extent 
  of such prejudice.  Should indemnitor fail to discharge or 
  undertake to defend indemnitee against such liability within 10 
  days after the indemnitee gives the indemnitor written notice of 
  the same, then indemnitee may settle such liability, and 
  indemnitor's liability to indemnitee shall be conclusively 
  established by such settlement, the amount of such liability to 
  include both the settlement consideration and the reasonable 
  costs and expenses, including attorneys' fees, incurred by 
  indemnitee in effecting such settlement.
  
  THE SUBMISSION OF THIS AGREEMENT FOR EXAMINATION IS NOT 
  INTENDED TO NOR SHALL CONSTITUTE AN OFFER TO SELL, OR A 
  RESERVATION OF, OR OPTION OR PROPOSAL OF ANY KIND FOR THE 
  PURCHASE OF THE PROPERTY.  IN NO EVENT SHALL ANY DRAFT OF THIS 
  AGREEMENT CREATE ANY OBLIGATION OR LIABILITY, IT BEING 
  UNDERSTOOD THAT THIS AGREEMENT SHALL BE EFFECTIVE AND BINDING 
  ONLY WHEN A COUNTERPART HEREOF HAS BEEN EXECUTED AND DELIVERED 
  BY EACH PARTY HERETO TO ESCROW HOLDER.  ESCROW HOLDER SHALL DATE 
  THIS AGREEMENT WITH THE DATE ON WHICH ESCROW HOLDER SHALL HAVE 
  RECEIVED THIS AGREEMENT EXECUTED BY 
  
  BOTH BUYER AND SELLER (AND SUCH DATE SHALL BE THE "EFFECTIVE 
  DATE" FOR PURPOSES HEREOF).
  
  	IN WITNESS WHEREOF, the parties hereto have executed this 
  Agreement as of the Effective Date.
  
  				SELLER:
  
  				CARLYLE REAL ESTATE LIMITED PARTNERSHIP-XIII,
  				an Illinois limited partnership
  
  				By:	JMB REALTY CORPORATION,
     					a Delaware corporation,
  			   		General Partner
  
  				By:   ________________________
  				Name:  _______________________
  				Title: _______________________
  
  					BUYER:
  
  
  					PARKWAY PROPERTIES, L.P.,
  					a Delaware limited partnership
  
  					By:	PARKWAY PROPERTIES GENERAL 		
       				PARTNERS, INC.,
  					   	a Delaware corporation
  
  						By:	   _________________________
  						Name:  _________________________                           
  						Title: _________________________  
                                                       	
  						By:	   _________________________
  						Name:  _________________________
  						Title: _________________________
                                                        
  
                       ESCROW HOLDER'S ACKNOWLEDGEMENT
  
  
  	The undersigned hereby executes this Agreement to evidence 
  its agreement to act as Escrow Holder in accordance with the 
  terms of this Agreement.
  
  
  Effective Date: ________, 1997		TICOR TITLE INSURANCE 
  COMPANY,
  						a _______________________________
  
  						By:______________________________	
  	
  						Name:____________________________ 	
  					
       	Title:___________________________
  					       				"Escrow Holder"
  
  
  
                                     EXHIBIT LIST
  
  
  	"A" - Property Description
  
  	"B" - Personal Property
  
  	"C" - Description of Loan Documents
  
  	"D-1" - List of Required Tenants
  
  	"D-2" - Form of Tenant Estoppel Certificate
  
  	"E" - Deed
  
  	"F" - Assignment and Assumption Agreement
  
  	"G" - Exceptions to Seller's Representations
  		and Warranties
  
  	"H-1" - Rent Roll
  
  	"H-2" - Additional Tenant Information List
  
  	"I" - Service Agreements
  
  	"J" - Environmental Reports
  
  
  
                                EXHIBIT "B"
  
                        LIST OF PERSONAL PROPERTY
  
  	
                              (SEE ATTACHED)
  
  
  
                                 EXHIBIT "C"
  
                       DESCRIPTION OF LOAN DOCUMENTS
  
  
  1.	Promissory Note dated April 28, 1995 from Seller to Lender.
  
  2.	Deed of Trust and Security Agreement dated as of April 28, 
  1995 by Seller in 		favor of Lender.
  
  3.	Assignment of Leases and Rents dated as of April 28, 1995, 
  from Seller to			Lender.
  
  4.	Affidavit of Title dated April 28, 1995, from Seller to 
  Lender.
  
  5.	Closing Certification dated April 28, 1995, from Seller to 
  Lender.
  
  6.	Uniform Commercial Code Financing Statement by Seller in 
  favor of Lender and filed 	with the Secretary of State of the 
  State of Tennessee.
  
  7.	Uniform Commercial Code Financing Statement by Seller in 
  favor of Lender and 	recorded with the Knox County 
  Registrar's Office.
  
  8.	ERISA Certification dated as of April 28, 1995, from Seller 
  to Lender.
  
  9.	Escrow Agreement dated as of April 28, 1995, among Seller, 
  Lender and LaSalle 	National Trust, N.A.
  
  
  
                               EXHIBIT "D-1"
  
                         LIST OF REQUIRED TENANTS
  
  
  1.	First Tennessee
  2.	Lacy & Winchester
  3.	Paine, Swiney & Tarwater
  4.	GSA-OHA
  5.	GSA-Bankruptcy
  6.	Coopers & Lybrand
  7.	Watson, Hollan & Reeves
  8.	Wagner, Myers & Sanders
  9.	FIS Associates
  10.	Barger, Wagoner & Sumner
  11.	McCambell & Young
  12.	Jenkins & Jenkins
  13.	Merrill Lynch
  14.	Tennessee Valley Title Insurance
  15.	Arnett, Draper & Hagood
  16.	Kramer, Rayson & McVeigh
  17.	Prudential Securities
  18.	Club LeConte
  19.	Sir Speedy
  20.	J.C. Bradford
  21.	Lunchbox
  22.	Rainwater, Humble & Vowell
  23.	Emporium
  24.	McCord & Troutman, P.C.
  
  
  
                                EXHIBIT "D-2"
  
                    FORM OF TENANT ESTOPPEL CERTIFICATE
  
                             (SEE ATTACHED)
  
  
                              EXHIBIT "E"
  
                             FORM OF DEED
  
                            (SEE ATTACHED)
  
  
  
                              EXHIBIT "F"
  
                    FORM OF ASSIGNMENT AND ASSUMPTION
   
                              (SEE ATTACHED)
  
  
  
                               EXHIBIT "G"
  
            EXCEPTIONS TO SELLER'S REPRESENATIONS AND WARRANTIES
  
  
                                  None.
  
  
                               EXHIBIT "H-1"
  
                                RENT ROLL
  
                              (SEE ATTACHED)
  
  
  
                               EXHIBIT "H-2"
  
                       ADDITIONAL TENANT INFORMATION
  
                              (SEE ATTACHED)
  
  
                           FIRST TENNESSEE PLAZA
  
               OUTSTANDING TENANT IMPROVEMENT OBLIGATIONS
  
  First Tennessee Bank		$500,000	       		1999
  
  Merrill Lynch		      	$70,500		        	Processed
  
  Merrill Lynch		      	$44,220	        		2001
  
  GSA/OHA		           		$500,000 (est.) 		November 1997/January 1998
  
  Emporium			          	$5,218	         		By lease end
  
  First Tennessee Bank		$8,762.74	      		August 1997-Window	Blinds
  
  Sir Speedy	        			$36,000        			Sept./Oct. 1997
  
  Sir Speedy        				$7,500         			New Wall
  
  Rainwater         				$10,912        			By lease end
  
  Barge Waggoner     			$80,455        			Aug./Oct. 1997
  				                 	$22,000	        		January 1999
  
  J.C. Bradford	      		$123,784        		Sept./Oct. 1997
  
  Club LeConte	       		$40,000        			Sept./Oct. 1997
  
  
                                 EXHIBIT "I"
  
                          LIST OF SERVICE AGREEMENTS
  
                               (SEE ATTACHED)
  
  
  
                                EXHIBIT "J"
  
                       LIST OF ENVIRONMENTAL REPORTS
  
  
  1.	Phase I Environmental Assessment dated December 14, 1994 
  and prepared by Versar.
  
  
  
  
                           PURCHASE AND SALE AGREEMENT
  
                                     between
  
                              MORGAN PROPERTIES, LLC
  
                                       and
  
                            PARKWAY PROPERTIES, L.P.
  
                                  AUGUST 28, 1997
  
  
  
  
  
                 PURCHASE AND SALE AGREEMENT
  
  
   This Purchase and Sale Agreement ("Agreement") is made and 
  entered into on or as of the Effective Date (as defined in 
  Section ), by and between Morgan Properties, LLC, a Tennessee 
  limited liability company ("Seller") and Parkway Properties, 
  L.P., a Delaware limited partnership ("Purchaser").
  
  	WHEREAS, Seller is the lessee of a parcel of land located 
  at Fifty Front Street, Memphis, Shelby County, Tennessee, as 
  more specifically described on Exhibit (a) attached hereto (the 
  "Land"); and 
  
  	WHEREAS, there are certain real property improvements in, 
  on or under the Land consisting principally, but not 
  exclusively, of an office building known as "Morgan Keegan 
  Tower" (collectively, the "Improvements"); and
  
  	WHEREAS, Seller is the owner of the Improvements; and
  
  	WHEREAS, Seller desires to sell, transfer, assign and 
  convey to Purchaser, and Purchaser desires to purchase and 
  acquire from Seller all of Seller's right, title and interest in 
  and to the Land, Improvements, and the Personal Property (as 
  defined below) pursuant to the terms and conditions set forth 
  herein.
  
  	NOW, THEREFORE, in consideration of the premises, and the 
  mutual covenants, agreements, representations and warranties 
  contained in this Agreement, and intending to be legally 
  obligated, Purchaser and Seller agree as follows:
  
                              I. 	ARTICLE 
  
                           PURCHASE AND SALE
  
  1.1 	  Purchase and Sale.  Subject to the provisions of, 
  and on the basis of the covenants, agreements, representations 
  and warranties contained in this Agreement, Seller agrees to 
  sell, transfer, assign and convey all of its right, title and 
  interest in and to the Real Property and the Personal Property, 
  as each are defined below (collectively referred to as the 
  "Project") to Purchaser, and Purchaser agrees to purchase and 
  acquire the Project from Seller (this "Transaction").
  
  1.1  	  Real Property Identified.  As used herein, the "Real 
  Property" shall mean:
  
  (a) 	  Description of Land.  The real estate described in 
  Exhibit (a) attached hereto (the "Land").
  
  (a) 	  Description of Improvements.  The Improvements, 
  including Morgan Keegan Tower, Memphis, Tennessee containing 
  approximately 334,668 rentable square feet and Seller's rights 
  as lessee of 350 parking spaces within Tower Place Parking 
  Garage, together with all building materials, fixtures, heating, 
  ventilation and air conditioning systems, canopies, sidewalks, 
  walkways, planters and landscape materials, and all other real 
  property improvements owned or leased by Seller and located in, 
  on or under the Land or related to, used or available for use in 
  the ownership, conduct, operation or maintenance of the Real 
  Property.  
  
  (a) 	  Rights and Appurtenances.  All and singular, the 
  rights and appurtenances pertaining to the Real Property, 
  including, but not limited to, any right, title and interest of 
  Seller in and to adjacent streets, roads, alleys, easements and 
  rights-of-way.  
  
  1.1 	  Personal Property Identified.  As used herein, the 
  "Personal Property" shall mean:
  
  (a) 	  Description of Tangible Personal Property.  The 
  tangible Personal Property consists of all material tangible 
  personal property located on or attached to the Real Property 
  and owned by Seller and used or available for use by Seller in 
  the ownership, operation and/or management of the Real Property 
  and in the repair, operation and maintenance of the Project, 
  including, without limitation, all of Seller's right, title and 
  interest in all equipment, tools, machinery, furniture, 
  furnishings, office and other supplies, inventories, spare parts 
  and other tangible personal property located on or attached to 
  the Real Property.  The tangible Personal Property specifically 
  includes all tangible personal property located in any 
  management office at the Real Property owned or leased by 
  Seller.  The tangible Personal Property is generally described 
  on Exhibit   attached hereto.
  
  (a) 	  Description of Intangible Personal Property.  The 
  intangible Personal Property consists of all material intangible 
  personal property owned by Seller and used by Seller in 
  connection with the operation and/or management of the Real 
  Property and in the repair, operation and maintenance of the 
  Project and includes, without limitation, (i) all assignable 
  guarantees and warranties (including those pertaining to 
  construction of the Project, if any); (ii) all assignable 
  licenses and other permits relating to the Project or the 
  operation thereof; (iii) all assignable contracts, agreements 
  and contract rights; (iv) rights, if any, to use the name 
  "Morgan Keegan Tower" on a non-exclusive basis with respect to 
  the Project only and only for the period Seller is a tenant in 
  the Project; and (v) all leases, tenancies and rental agreements 
  or arrangements with tenants (collectively "Leases" or any one 
  individually "Lease") and security, damage and other deposits 
  and payments which have been collected by Seller with respect to 
  the Leases and not retained by Seller in accordance with the 
  terms of the Leases (collectively "Deposits").  
  
                                1 ARTICLE 
  
                             PURCHASE PRICE
  
  1.1 	  Escrow Deposit.  
  
  	(a) Purchaser shall within two (2) business days following 
  the Effective Date deliver to Lawyer's Title Insurance 
  Corporation-Memphis Branch Office ("Title Company") the sum of 
  NINETY THOUSAND AND NO/100 DOLLARS ($90,000.00) ("Escrow 
  Deposit") in lawful funds of the United States of America.  If 
  Purchaser elects in writing not to proceed with this Transaction 
  prior to the conclusion of the Inspection Period or elects to 
  terminate this Agreement pursuant to the express provisions 
  hereof, then Title Company shall refund to Purchaser the Escrow 
  Deposit and all interest accrued thereon.  Unless this Agreement 
  has been terminated by Purchaser as above provided, Purchaser 
  shall within two (2) business days following expiration of the 
  Inspection Date deliver to Title Company the sum of TWO HUNDRED 
  SIXTY THOUSAND AND NO/100 DOLLARS ($260,000.00) (the "Additional 
  Escrow Deposit").  If Purchaser shall fail to terminate this 
  transaction prior to the conclusion of the Inspection Period or 
  to deliver to the Title Company the Additional Escrow Deposit as 
  herein required, the Escrow Deposit and all interest thereon, 
  shall become non-refundable to Purchaser except in the case:  
  (i)  Seller's default; (ii) the non-satisfaction of the 
  conditions set forth in Section ; or (iii)  except as otherwise 
  set forth herein, but shall be credited toward the Purchase 
  Price upon Closing.  Title Company is hereby instructed to 
  invest the Escrow Deposit and, if received, the Additional 
  Escrow Deposit in an FDIC insured interest bearing account in 
  the name of Purchaser.  Purchaser's taxpayer identification 
  number is 72-1344324.  Purchaser and Seller hereby acknowledge 
  and agree that all accrued interest on the Escrow Deposit and 
  Additional Escrow Deposit shall be credited to Purchaser, 
  provided, however, in the event that this transaction does not 
  Close due to an event of default by Purchaser and through no 
  event of default of Seller unless Seller's performance is 
  excused due to a prior default of Purchaser, the Escrow Deposit, 
  the Additional Escrow Deposit and all accrued interest thereon 
  shall be delivered to Seller as herein set forth.
  
  	(b)  The sole responsibility of Title Company shall be to 
  hold and disburse the Escrow Deposit, the Additional Escrow 
  Deposit and accrued interest in accordance with the terms of 
  this Agreement and, if a dispute shall arise with respect to the 
  disposition of such funds, the Title Company may continue to 
  hold such funds until receipt of written instructions 
  acknowledged and agreed to by Purchaser and Seller or may 
  deposit such funds with the Circuit Court of Shelby County, 
  Tennessee and interplead the Purchaser and Seller in connection 
  therewith.
  
  1.1 	  Purchase Price.  Seller agrees to sell, and 
  Purchaser agrees to purchase, the Project for a total purchase 
  price equal to THIRTY-SIX MILLION AND  NO/100 DOLLARS 
  ($36,000,000.00) ("Purchase Price"), plus or minus prorations 
  and other adjustments provided by this Agreement, upon and in 
  accordance with the terms and conditions of this Agreement.  
  Subject to the provisions hereof.  At Buyer's sole option, with 
  the concurrence of Lender (as defined below) payment of a 
  portion of the Purchase Price may be evidenced by assumption of 
  the "Existing Indebtedness" (as defined below), such payment 
  shall equal the amount of the outstanding principal balance of 
  the existing note. The balance of the Purchase Price, plus or 
  minus prorations, shall be paid in immediately available funds 
  at Closing.
  
  	Subject to Purchaser's review of all loan documents 
  relating to the Existing Indebtedness and of any required 
  assumption documents, Purchaser may at its election assume 
  Seller's obligations under the Loan Documents at Closing.  
  Purchaser agrees to use reasonable efforts to cooperate with 
  Lender in the assumption of the Existing Indebtedness.  Seller 
  acknowledges that Purchaser retains the right to request certain 
  reasonable modifications and/or alterations to the Loan 
  Documents (and to any assumption documents required by Lender) 
  prior to its assumption thereof.   In the event Lender is 
  unwilling to allow Purchaser to assume the Existing Indebtedness 
  on terms consistent with this Agreement, then Purchaser shall 
  pay the Purchase Price in immediately available funds at 
  Closing.
  
  1.1 	  Independent Consideration.  Seller and Purchaser 
  acknowledge and agree that Ten Thousand and No/100 ($10,000.00) 
  of the Escrow Deposit shall be paid to Seller if this Agreement 
  is terminated for any reason (the "Independent Contract 
  Consideration") in lawful funds of the United States of America. 
   Seller and Purchaser acknowledge and agree that the Independent 
  Contract Consideration has been bargained for and agreed to as 
  additional consideration for Seller's execution and delivery of 
  this Agreement.  At Closing (defined below) the Independent 
  Contract Consideration shall be applied to the Purchase Price.  
  In the event this Agreement is terminated for any reason, Seller 
  shall be entitled to the Independent Contract Consideration.
  
                             1 ARTICLE 
  
                          ESCROW; CLOSING
  
  1.1 	  Escrow Agent.  Title Company is authorized and 
  instructed to act as escrow agent pursuant to the terms of this 
  Agreement.  By execution of the acknowledgment attached hereto, 
  Title Company acknowledges receipt of the Escrow Deposit.  
  Purchaser and Seller shall execute any additional escrow 
  instructions reasonably required by Title Company to complete 
  the transactions provided for herein provided that such 
  instructions are not inconsistent with the terms of this 
  Agreement.
  
  1.1 	  Closing.  Closing shall be on such date and location 
  as mutually agreed to by Purchaser and Seller (hereafter 
  referred to as "Closing Date" or "Closing") provided, however, 
  in no event shall the Closing Date be more than fifteen (15) 
  calendar days after the end of the Inspection Period.  
  
  1.1 	  Closing Costs.  
  
  (a) 	  Seller's Payments.  Seller shall pay the cost and 
  expenses, if any, of (i) the title search and title insurance 
  commitment for the owner's title insurance policy; (ii) the fees 
  for recording the assignment of that certain Lease Agreement 
  dated December 27, 1984, by and between Memphis Center City 
  Revenue Finance Corporation, a public not for profit corporation 
  of the State of Tennessee, lessor and One Court Square Investors 
  Limited Partnership, a Tennessee limited partnership, lessee, 
  and all amendments thereto ("Ground Lease"), and for recording 
  the bill of sale if Purchaser requests its recording; and (iii) 
  one-half of any escrow fees charged by Title Company, if any.
   
  (a) 	  Purchaser's Payments.  Purchaser shall pay the cost 
  and expenses, if any, of  (i) the cost of the premium for the 
  owner's extended coverage title policy and all endorsements 
  which Purchaser may obtain to the title insurance policy; (ii) 
  the survey update; and (iii) one-half of any escrow fees charged 
  by Title Company, if any.
  
  (a) 	  Other Costs.  Each party will pay all its own 
  expenses incurred in connection with this Agreement and this 
  Transaction contemplated hereby, including, without limitation 
  (i) all costs and expenses stated herein to be borne by a party, 
  and (ii) all of their respective consulting, accounting, 
  investigation, legal and appraisal fees.  Each party understands 
  that no transfer tax or other documentary stamp or similar tax 
  will be payable in connection with the Transaction contemplated 
  hereby based on the legal opinion of Wyatt, Tarrant & Combs.
  
  1.1 	  Prorations.  The following prorations shall be made 
  effective as of the Closing Date and, to the extent possible, 
  shall be made tentatively at Closing:
  
  (a) 	  Proration Date.  All prorations shall be made as of 
  12:01 a.m., according to the time zone in which the Project is 
  located, on the Closing Date, as if Purchaser were vested with 
  title to the Project during the entire Closing Date.
  
  (a) 	  Rents.  All rents under the Leases for the month in 
  which Closing occurs which are actually received by Seller shall 
  be prorated as of the Closing Date.  All advance payments of 
  rents, other than for the month in which Closing occurs, and all 
  Deposits shall be paid by Seller to Purchaser at Closing.  
  Delinquent rents and additional rents owed for the month during 
  which Closing occurs (for the pro rata period of Seller's 
  ownership of such Project) or prior to the month during which 
  the Closing takes place shall remain the property of Seller, and 
  Purchaser shall use reasonable efforts (not to include 
  commencing any eviction action or other litigation to collect 
  such delinquency) to collect such delinquent rents and 
  additional rents for the benefit of Seller and shall cooperate 
  with Seller in the collection of any such delinquent rents and 
  additional rents.  Seller shall retain the right to pursue all 
  remedies (excluding eviction of tenants) against tenants from 
  whom Purchaser is unable to collect such delinquent rents and 
  additional rents despite reasonable efforts.  All rent received 
  by Purchaser after the Closing Date shall be applied first to 
  current rentals and then to delinquent rentals, if any, in the 
  inverse order of maturity.
  
  (a) 	  Additional Rents.  Seller and Purchaser acknowledge 
  and agree that certain additional rents are collected on an 
  estimated basis and are attributable to percentage rents, 
  expense escalation reimbursements, operating expense pass 
  throughs and/or common area maintenance reimbursements.  The 
  parties further agree to credit any difference in the amounts 
  collected as compared to the actual expenses associated 
  therewith to the applicable party effective as of the Closing 
  Date.
  
  (a) 	  Taxes.  Ad valorem and personal property taxes and 
  assessments against the Project for the year of Closing shall be 
  prorated between Seller and Purchaser as of the Closing Date.  
  If actual taxes are unknown, they shall be prorated based upon 
  the best available information from the local taxing authority. 
   To the extent that the actual taxes for the current year differ 
  from the amounts so apportioned at Closing, Seller and Purchaser 
  shall make all necessary adjustments by appropriate payments 
  between themselves following Closing.
  
  (a) 	  Utilities.  Charges for utilities serving the 
  Project shall be determined as of the day preceding the Closing 
  Date, and Seller shall pay the amount of the utility charges to 
  such date to the utility companies involved or to Purchaser in 
  the event Purchaser is responsible for the payment of such 
  utility charges.  All utility deposits of Seller shall belong to 
  Seller.
  
  (a) 	  Contract Charges.  Charges with respect to Contracts 
  (as defined below) transferred and assigned to Purchaser shall 
  be prorated as of the Closing Date, including, without 
  limitation, the Ground Lease.  Payments for obligations under 
  leases of tangible Personal Property transferred and assigned to 
  Purchaser will be prorated as of the Closing Date.  To the 
  extent not reflected in the closing statements evidencing the 
  Transaction contemplated by this Agreement, Purchaser and Seller 
  agree to adjust between themselves outside of Closing any 
  amounts which are the responsibility of the other party pursuant 
  to this subsection.
  
  (a) 	  Operating Expenses.  Except as otherwise provided 
  herein, any and all expenses and payables relating to the 
  operation, management or ownership of the Project arising or 
  accruing prior to the Closing Date in the ordinary course of 
  business are the responsibility of the Seller and will be paid 
  by Seller promptly upon receipt of billing therefor.
  
  	(h)  Leasing Costs.  Seller shall be responsible for 
  paying all costs, including, without limitation, tenant 
  improvements and leasing commissions, associated with any 
  existing or new lease executed by Seller prior to the 
  expiration of the Inspection Period.  If Purchaser acquires 
  the Project, Purchaser shall be responsible for paying the 
  costs, including without limitation, tenant improvements 
  and leasing commissions, associated with all leases or any 
  lease renewal, expansion or other modification executed 
  after the Inspection Period which have been approved by 
  Purchaser.  If, for any reason, Purchaser does not purchase 
  the Project, Purchaser shall not be responsible or liable 
  to any entity with respect to any such costs or leasing 
  commissions.
  
  	The agreements with respect to prorations in this Section  
  shall survive Closing.  Final settlement of all prorated items 
  shall occur on or before 90 days after the Closing Date, or on 
  the next business day if the 90th day is a Saturday, Sunday or 
  legal holiday, except property taxes and delinquent and pass 
  through rentals which shall be determined upon collection or the 
  date upon which any such amounts shall become ascertainable.  
  Contractual and tort liabilities accruing, or relating to events 
  that occurred, prior to the Closing Date shall remain the 
  responsibility of Seller.  Tort liabilities relating to events 
  that occurred on or after the Closing Date, and contractual 
  liabilities relating to contracts expressly assumed by Purchaser 
  and accruing from and after the Closing Date, shall be the 
  responsibility of Purchaser.
  
                               1 ARTICLE 
  
                             TITLE MATTERS
  
  1.1 	  Title Report/Commitment for Title Insurance.  Seller 
  hereby instructs Title Company to prepare and deliver to 
  Purchaser, Seller and the surveyor described below, at Seller's 
  expense, within five business (5) days after the Effective Date 
  a commitment to issue an owner's title insurance policy to be 
  issued by a title company reasonably acceptable to Purchaser 
  (the "Title Commitment") covering the Real Property, showing all 
  matters affecting title to the Real Property and binding Title 
  Company to issue to Purchaser at Closing an owner's policy of 
  title insurance on an ALTA (1970 form) Extended Form of policy 
  in the full amount of the Purchase Price pursuant to Section 4.4 
  hereof.  Seller and Purchaser further instruct Title Company to 
  deliver to such parties copies of all instruments referenced in 
  Schedule B, Section II of the Title Commitment.
  
  1.1 	  Survey.  Seller shall provide Purchaser with a copy 
  of all existing surveys of the Project which are in Seller's 
  possession or control.  Within five (5) days after the Effective 
  Date, Purchaser shall order an update to Seller's existing 
  survey and shall use reasonable efforts to cause such survey to 
  be delivered to Purchaser and Title Company within ten (10) 
  business days after the Effective Date.  Such survey shall be a 
  currently dated ALTA/ASCM land title survey of the Land and of 
  the Improvements situated thereon (the "Survey"), prepared by a 
  surveyor licensed by the State of Tennessee and certified to 
  Purchaser and Title Company by such surveyors in conformity to 
  the Certificate attached hereto as Exhibit 4.2(a).  In addition 
  to the requirements set forth in attached Exhibit 4.2(b), the 
  Survey shall reflect the total area of the Real Property, the 
  location of all improvements, recorded easements and 
  encroachments, if any, located thereon and all building and set 
  back lines and other matters of record with respect thereto.  
  Said Survey shall also certify that the Land is not in an area 
  identified by FEMA as having special flood or mudslide hazards 
  which require flood insurance under the Flood Insurance Act of 
  1968.  Seller shall provide at Closing a certificate to 
  Purchaser and Title Company if requested, that there have been 
  no improvements made to the Real Property since the date of the 
  Survey which would materially alter the depictions on the 
  Survey.
  
  1.1 	  Title Defects.  Within seven (7) days after receipt 
  of the later of the Title Commitment and the Survey, Purchaser 
  shall notify Seller of any title matters to which Purchaser 
  objects (the "Title Defects") ("Purchaser's Notice").  Any 
  matter disclosed in a Title Commitment or Survey and not 
  objected to by Purchaser or subsequently waived by Purchaser 
  shall be deemed a permitted exception  ("Permitted Exception"). 
   Seller shall notify Purchaser of Seller's decision not to cure 
  any Title Defect within three (3) days after receipt of 
  Purchaser's Notice; provided, however, Seller shall remove 
  monetary liens relating to borrowed funds or other liens 
  securing indebtedness of an ascertainable amount and mechanic or 
  materialmen's liens, if any, except for the Existing 
  Indebtedness if assumed by Purchaser.  Seller's failure to 
  respond shall be deemed a decision by Seller not to cure any 
  Title Defect except for the Existing Indebtedness if assumed by 
  Purchaser.   Within three (3) days of Seller's election not to 
  cure certain Title Defects, Purchaser may elect to waive such 
  Title Defects or terminate this Agreement in which event 
  Purchaser shall receive a return of the Escrow Deposit, the 
  Additional Escrow Deposit, if any, and all interest accrued 
  thereon.  Purchaser's failure to respond shall be deemed a 
  decision by Purchaser to waive the Title Defects to which Seller 
  decides not to cure.  If the Title Defects, that Seller elected 
  to cure, are not cured by Seller or waived by Purchaser  on or 
  before the Closing Date then Purchaser may (i) elect to waive 
  the uncured Title Defects, or (ii) terminate this Agreement in 
  which event Purchaser shall receive a return of the Escrow 
  Deposit, the Additional Escrow Deposit, if any, and all interest 
  accrued thereon.
  
  1.1 	  Title Insurance.  At Closing, Seller and Purchaser 
  shall instruct Title Company to issue a final update to the 
  Title Commitment in which the "GAP" exception has been deleted, 
  binding Title Company to issue to Purchaser an owner policy of 
  title insurance (the "Title Policy") covering the Real Property 
  in the full amount of the Purchase Price.  The Title Policy 
  shall be an ALTA Form 1970-B owner's policy of extended coverage 
  title insurance containing such endorsements as may be 
  reasonably requested by Purchaser and agreed to by Title Company 
  subject only to: (a) current non-delinquent real estate taxes 
  and assessments; (b) matters set forth in the Title Commitment 
  and approved or waived by Purchaser; (c) any other matters 
  approved in writing by Purchaser; (d) title exceptions caused by 
  acts or omissions of Purchaser; and (e) matters excepted or 
  excluded from coverage by the printed terms of the title 
  insurance policy standard form (except for survey (if requested 
  by Purchaser) and mechanics and materialmen's lien exceptions 
  which shall be deleted).  Purchaser shall use reasonable efforts 
  to reach agreement with Title Company regarding any applicable 
  endorsements during the Inspection Period.
  
                              1 ARTICLE 
  
                        INFORMATION SCHEDULES
  
  1.1 	  Information Schedules.  Seller will deliver or cause 
  to be delivered to Purchaser within ten (10) days after the 
  Effective Date, copies of all schedules and documents referred 
  to in this Agreement ("Information Schedules"), including the 
  following schedules and other information described below:
  
  (a) 	  Rent Roll.  A complete list and description, 
  including all Deposits ("Rent Roll"), and true and complete 
  copies, of all Leases.
  
  (a) 	  Delinquency Report.  A complete list and description 
  of any and all delinquencies or defaults under any of the Leases 
  ("Delinquency Report").
  
  (a) 	  Contracts.  An itemized schedule ("Contracts 
  Schedule") of all written and oral service, maintenance, 
  management, leasing, brokerage, and other agreements, equipment 
  or appliance leases, non-governmental franchises, contracts and 
  arrangements relating or pertaining to the Project (collectively 
  "Contracts").  Unless Purchaser makes written request to cancel 
  any Contract contained in the Contracts Schedule prior to the 
  end of the Inspection Period, the Contracts contained in the 
  Contracts Schedule shall be transferred and assigned by Seller 
  to Purchaser at Closing, to the extent assignable.  The 
  Contracts Schedule shall note any Contracts which are not 
  assignable or cancelable at Closing.
  
  (a) 	  Personal Property.  A true and complete schedule and 
  description ("Personal Property Schedule") of all material 
  tangible Personal Property.
  
  (a) 	  Permits.  A list ("Permits Schedule") of all current 
  franchises, business or other licenses, bonds, permits, 
  certificates of occupancy, authorizations and other evidences of 
  consent, approval, authorization or permission relating to or 
  affecting the Project (collectively "Permits") of or from any 
  person, including any governmental authority, held by Seller 
  including any pending applications, but only to the extent that 
  Purchaser may obtain or derive a benefit from such Permits after 
  Closing.  In lieu of providing a detailed Permits Schedule, 
  Seller may provide to Purchaser copies of all Permits in its 
  possession or control.
  
  (a) 	  Property Taxes.  Copies of the two most recent tax 
  statements with respect to the Project, including, without 
  limitation, real and personal property taxes and any special 
  assessments.
  
  (a) 	  Warranties.  A list and description ("Warranty 
  Schedule") of all material third party bonds, warranties and 
  guaranties, including any warranties relating to equipment, 
  structures, roof, landscaping, parking lot or parking lot 
  surfaces, if any, which are in effect with respect to or which 
  benefit any portion of the Project.  
  
  (a) 	  Repair History.  A true and complete list of all 
  major (i.e., costing more than $5,000) repairs of a capital 
  nature which Seller has undertaken with respect to the  Project 
  during its ownership thereof.
  
  (a) 	  Operating Statements.  Materially true and complete 
  copies of all operating statements for the Project for the last 
  two calendar years and for each calendar month of 1997 through 
  the month ending July 31.
  
  (a) 	  Prior Studies.  True and complete copies of any 
  prior third party studies and reports, in the possession of 
  Seller or Seller's agents, affiliates or management companies 
  relating in any manner to the environmental, structural, 
  mechanical, or engineering status of any portion of the Project.
  
  (a) 	  Plans.  Copies of all construction plans, diagrams 
  and schematics of the Real Property and Improvements in Seller's 
  possession or control made available to Purchaser at the 
  Project.  Copies of all existing surveys of the Project.
  
  (a) 	 Operating Agreements.  A list ("Operating Agreements 
  Schedule") of all Ground Leases, skywalk agreements, parking 
  garage agreements and other similar agreements material to the 
  operation of the Project, together with true and complete copies 
  of all such Ground Leases, including, without limitation, any 
  and all amendments or modifications thereto.
  
                             1 ARTICLE 
  
                            INSPECTION
  
  1.1 	  Inspection Period.  During the period beginning upon 
  the Effective Date and ending at 5:00 p.m., local time, on the 
  thirtieth (30th) day after the Effective Date (such period of 
  time hereinafter referred to as the "Inspection Period"), 
  Purchaser and/or its attorneys, consultants or employees 
  ("Authorized Representatives") shall have the right to: (i) make 
  a physical inspection of the Project subject to the rights of 
  tenants, (ii) examine the financial and operating books and 
  records relating to the Project maintained by or for the benefit 
  of Seller, (iii) interview tenants of the Project, and (iv) 
  conduct such non-destructive physical engineering, feasibility 
  and other studies and tests on or of the Project as Purchaser 
  considers to be appropriate.  Purchaser and/or Purchaser's 
  Authorized Representatives may also copy any documents referred 
  to or described in the Information Schedules but not required to 
  be provided to Purchaser as part of any such schedule.  
  Notwithstanding the foregoing, Purchaser shall not be permitted 
  to interfere unreasonably with Seller's operations at the 
  Project or interfere with any tenant's operations at the 
  Project, and the scheduling of any inspections, interviews, 
  and/or testing shall take into account the timing and 
  availability of access to tenant's premises, subject to and in 
  accordance with tenants' rights under the Leases or as tenants 
  may otherwise agree.  Purchaser shall at all times conduct such 
  due diligence in  compliance with applicable laws and the terms 
  of any leases of the Project, and in a manner so as to not cause 
  undue damage, loss, cost or expense to Seller, the Project or 
  the tenants of the Project, and Purchaser shall promptly restore 
  the Project to its condition immediately preceding such 
  inspections and examinations and shall keep the Project free and 
  clear of any mechanic's liens or materialmen's liens in 
  connection with such inspections and investigations.  Seller 
  shall have the right, at its option, to cause a representative 
  of Seller to be present at all such inspections, reviews and 
  examinations.  Purchaser shall keep all information or data 
  received or discovered in connection with such due diligence 
  strictly confidential.  Purchaser shall indemnify, protect, 
  defend and hold Seller harmless from and against any obligation, 
  liability, claim (including any claim for damage to property or 
  injury to or death of any persons), lien or encumbrance, loss, 
  damage, cost or expense, including attorney's fees 
  (collectively, the "Loss"), in any way caused by the inspections 
  or examinations of the Project by Purchaser or its agents or 
  contractors.  The foregoing indemnification shall survive the 
  Closing or the termination of this Agreement for any reason.
  
  1.1 	  Right of Termination.  Notwithstanding anything in 
  this Agreement to the contrary, Purchaser shall have the right, 
  for any reason in Purchaser's sole and absolute discretion, to 
  terminate this Agreement by written notice to Seller on or 
  before the expiration of the Inspection Period and Title Company 
  shall immediately refund to Purchaser the Escrow Deposit and any 
  interest thereon.  In the event the transaction does not close 
  for any reason other than a default by Seller, Purchaser shall 
  deliver to Seller all materials, studies or documents received 
  from third parties or Seller relating to the Project.  On or 
  about August 8, 1997, Purchaser executed and delivered to Seller 
  a Confidentiality Agreement pertaining to Confidential 
  Information as therein defined.  The Confidentiality Agreement, 
  by its terms, shall survive any termination of this Agreement.
  
                               1 ARTICLE 
  
              REPRESENTATIONS AND WARRANTIES OF PURCHASER
  
  	Purchaser's Representations and Warranties.  Purchaser 
  makes the following representations and warranties, as of the 
  date of execution of this Agreement, which shall survive Closing 
  and conveyance of the Project to Purchaser:
  
  1.1 		Authority.  Purchaser is a limited partnership, 
  duly formed,  existing and in good standing under the laws of 
  the State of Delaware; Purchaser has full legal right, power and 
  authority to execute and fully perform its obligations under 
  this Agreement, without the need for any further action under 
  its governing instruments; and the persons executing this 
  Agreement and the other documents required hereunder are the 
  duly designated officers of the sole general partner of 
  Purchaser and are authorized to do so.
  
  1.1 		Inspection.  Purchaser has made, or will make 
  prior to expiration of the Inspection Period, an independent 
  investigation, to the extent Purchaser deems necessary or 
  appropriate, concerning the physical condition, value, 
  development, use, marketability, feasibility and suitability of 
  the Project, including, without limitation, land use, zoning and 
  other governmental restrictions.
  
  1.1 		No Other Seller Representations.  Except as 
  expressly set forth herein, Purchaser acknowledges that no 
  representations or warranties, express or implied, have been 
  made by Seller or Seller's representatives.
  
  1.1 		"AS IS, WHERE IS".  PURCHASER HEREBY EXPRESSLY 
  ACKNOWLEDGES THAT IT HAS INSPECTED AND EXAMINED OR WILL INSPECT 
  AND EXAMINE THE PROJECT TO THE EXTENT DEEMED NECESSARY BY 
  PURCHASER IN ORDER TO ENABLE PURCHASER TO EVALUATE THE PURCHASE 
  OF THE PROJECT.  PURCHASER REPRESENTS THAT IT IS A KNOWLEDGEABLE 
  PURCHASER OF REAL ESTATE AND  RETAIL OFFICE PROPERTIES AND THAT, 
  EXCEPT AS SET FORTH IN ARTICLE , IT IS RELYING SOLELY ON ITS OWN 
  EXPERTISE AND THAT OF PURCHASER'S CONSULTANTS, AND THAT 
  PURCHASER HAS CONDUCTED OR WILL CONDUCT SUCH INSPECTIONS AND 
  INVESTIGATIONS OF THE PROJECT, INCLUDING, BUT NOT LIMITED TO, 
  THE PHYSICAL AND ENVIRONMENTAL CONDITIONS THEREOF.  PURCHASER 
  FURTHER ACKNOWLEDGES AND AGREES THAT PURCHASER IS ACQUIRING THE 
  PROJECT ON AN "AS IS, WHERE IS" BASIS WITHOUT REPRESENTATIONS OR 
  WARRANTIES OTHER THAN THOSE SET FORTH HEREIN AND IN THE 
  DOCUMENTS OF TRANSFER RELATING TO THIS TRANSACTION.
  
  	Initialed by:
  
  	________________			            	________________
  	Seller				                    		Purchaser
  
  
  
                               1 ARTICLE 
  
                 REPRESENTATIONS AND WARRANTIES OF SELLER
  
  	Seller's Representations and Warranties.  Seller makes the 
  following representations and warranties as of the date of 
  execution of this Agreement, which shall survive conveyance of 
  the Project to Purchaser:
  
  1.1 		Authority.  Seller is a limited liability 
  company, duly formed, organized, existing and in good standing 
  under the laws of the State of Tennessee.  Seller has full legal 
  right, power and authority to execute and fully perform its 
  obligations under this Agreement, without the need for any 
  further action under its governing instruments; and the persons 
  executing this Agreement and the other documents required 
  hereunder are the duly designated members or officers of Seller 
  and are authorized to do so.
  
  1.1 		Marketable Title.  At the Effective Date and as 
  of Closing, Seller will own the Personal Property free and clear 
  of all liens, claims, encumbrances, and rights of others, except 
  the leased or financed equipment disclosed pursuant to Exhibit 
  1.3, and will convey same to Purchaser.  Seller is not a party 
  to any contract agreement, or commitment to sell, convey, 
  assign, transfer or otherwise dispose of any portion or portions 
  of the Project.
  
  1.1 		Liabilities.  Except as created by this Agreement 
  or disclosed in the Information Schedules or the documents 
  referenced therein, there are no contractual obligations or to 
  Seller's knowledge, any other liabilities of any type which 
  might, with notice, passage of time or both, have a material 
  adverse effect on the Project.
  
  1.1 		Contracts.  Except as disclosed in the 
  Information Schedules, there are no other management, leasing, 
  brokerage, maintenance, service or other contracts relating to 
  the Project.  If Purchaser requests during the Inspection 
  Period, any such existing contracts which permit Seller's 
  unilateral termination, without monetary penalty, will be 
  terminated at Closing.
  
  1.1 		No Undisclosed Matters.  To Seller's knowledge, 
  there are no unsatisfied written requests for material repairs, 
  restorations or improvements from any insurance carrier or 
  governmental authority.  Seller has not received any written 
  notice from any insurer of any defects or inadequacies in any 
  part of the Project which would adversely affect its 
  insurability, or written notice of any claims of any 
  governmental agency to the effect that the construction, 
  operation or use of any of the Project is in violation of any 
  applicable law, ordinance, rule, regulation or order.  
  
  1.1 		No Defaults.  Seller is not in default in respect 
  of any of its material obligations or liabilities pertaining to 
  the Project (including, but not limited to, such obligations and 
  liabilities under the Contracts or Leases).  To Seller's 
  knowledge, no present dispute or fact exists which might with 
  notice, passage of time or both, give rise to a dispute under 
  any Contracts or Leases.
  
  1.1 		Litigation.  There is no litigation pending or to 
  Seller's knowledge, threatened against Seller or the Project 
  which relates to, or if decided adversely, could have a material 
  adverse effect upon, the Project (including condemnation or 
  similar proceeding).
  
  1.1 		Environmental Matters.  For the purpose of this 
  Agreement, the term "Hazardous Materials" shall mean (i) each 
  and every substance included within the term "hazardous 
  substance" or "hazardous waste" as defined in any one or more of 
  the Comprehensive Environmental Response, Compensation, and 
  Liability Act of 1980, 42 U.S.C.A. Section 9601 et seq. (as 
  heretofore amended), the Hazardous Materials Transportation Act 
  of 1975, 49 U.S.C.A. Section 1801 et seq. (as heretofore 
  amended), the Resource Conservation and Recovery Act of 1976, 42 
  U.S.C.A. Section 6901 et seq. (as heretofore amended) and any 
  other federal, state or local environmental laws or regulations 
  now or hereafter enacted; (ii) all substances to which the rules 
  and regulations promulgated by any Federal or state agency 
  pursuant to any one or more of said statutes applies; and (iii) 
  any and all petroleum products and petroleum derivatives.  
  Seller represents unto Purchaser that the following  matters are 
  true as of the date of execution of this Agreement by Seller, 
  and shall survive Closing and not merge into any documents 
  delivered at Closing:
  
  (i) 	  Seller has no notice or knowledge of any (i) 
  currently existing violations of federal, state, county or 
  municipal environmental laws in respect to the Project, or (ii) 
  past, pending or threatened administrative or judicial 
  litigation or other legal proceedings including, without 
  limitation, any enforcement proceeding under any federal, state, 
  county or municipal statute, ordinance, rule or regulation 
  concerning Hazardous Materials, relating to the Project, or of 
  any settlement thereof; and  
  
  (i) 	  to Seller's knowledge and except for emergency 
  generator purposes, there are no underground storage tanks 
  ("USTs") located on or below the Land.
  
  1.1 		Certification of Rent Roll.  No person has any 
  title, interest or right to possession of any portion of the 
  Project as a lessee, tenant or concessionaire of Seller except 
  as shown on the Rent Roll.  Except as disclosed in writing to 
  Purchaser, the Rent Roll lists all Leases, amendments and 
  modifications thereof.  Seller is not, and to Seller's knowledge 
  no tenant is, in default in the performance of or under any such 
  Lease in any material respect except as disclosed in the 
  Delinquency Report.  The Rent Roll states all Deposits, prepaid 
  rents and other deposits or prepayments for each Lease and 
  Seller or Seller's agent are currently in possession of all such 
  deposits.  No tenant is entitled to any rebate, concession, 
  special allowance or other benefits, except as stated in the 
  Leases.  To Seller's knowledge, no tenant has any counterclaim, 
  defense or offset to any action for collection of rents or other 
  amounts accruing after the Closing Date under any Lease.  The 
  rents and other sums due or to become due under each Lease have 
  not been and will not be assigned, encumbered or subjected to 
  any liens by Seller, except to lenders whose liens shall be 
  released at Closing.  Except as disclosed in the Rent Roll, 
  there has been no waiver of Seller's rights under or 
  modification of any Lease or other documents executed by tenants 
  in connection with the Leases which could have a material 
  adverse affect thereon.  To Seller's knowledge, except for the 
  right of the tenants in possession under the Leases and 
  permitted sublessees, there are no parties in possession of, or 
  claiming any possession to any portion of the Project as 
  lessees, tenants at sufferance, trespassers or otherwise.  To 
  Seller's knowledge, there has been no material, adverse change 
  with respect to the information set forth in the Rent Roll or 
  Delinquency Report.  Except as disclosed in Exhibit , all 
  leasing commissions payable in connection with the Leases have 
  been paid in full.  Exhibit  lists any and all leasing 
  commissions and brokerage agreements which may be due and 
  payable in connection with the Leases upon a subsequent renewal, 
  expansion, modification or waiver of any rights by a tenant 
  under the terms of the Leases.  Seller has paid in full all 
  leasing or similar commissions or payment obligations, if any, 
  relating to any Lease.  Purchaser is not assuming any 
  obligations for tenant improvements or purported leasing 
  commissions except for tenant improvements and leasing 
  commissions set forth on Exhibit  and which relate to renewals, 
  extensions, expansions or modifications occurring after the 
  expiration of the Inspection Period.  Seller shall indemnify and 
  hold Purchaser harmless for any Loss with respect to any claims 
  by tenants or third party brokers for tenant improvements or 
  leasing commissions not expressly assumed by Purchaser.
  
  1.1 		Existing Indebtedness.  The "Loan Documents" 
  described on Exhibit  constitute all of the loan documents 
  relating in any manner to Seller's "Existing Indebtedness" to 
  National Bank of Commerce ("Lender") which relates to the 
  Project.  The outstanding principal balance of the Existing 
  Indebtedness as of the Effective Date is approximately 
  $20,000,000.  The Loan Documents correctly and accurately state 
  the terms and condition of the Existing Indebtedness.  Except as 
  disclosed in writing to Purchaser prior to the expiration of the 
  Inspection Period, the Loan Documents contain the entire 
  agreement between Seller, any guarantors and any lenders; are in 
  full force and effect in accordance with their written terms; 
  and, are valid obligations of the Seller, any guarantors and 
  Lender.  Seller is not,  and to Seller's knowledge any 
  guarantors and Lender are not in default in the performance of 
  or under any of the Loan Documents in any material respect 
  except as disclosed on Exhibit .  Lender is not entitled to any 
  payments, offsets or remuneration of any kind except as set 
  forth in the Loan Documents. As of the Effective Date, and as of 
  the Closing Date, Seller has complied with all requirements of 
  the Loan Documents and is not in default thereunder.
  
  1.1 		Certification of Operating Agreements.  Exhibit  
  lists all Ground Leases, skywalk agreements, parking garage 
  agreements and all amendments and modifications thereof relating 
  to the Project (collectively, "Operating Agreements").  Seller 
  is not, and to Seller's knowledge ground lessor is not, in 
  default in the performance of or under any such Operating 
  Agreements in any material respect.  To Seller's knowledge, no 
  counterclaim, defense or offset exists with respect to any of 
  the Operating Agreements.  Except as disclosed in Exhibit , 
  there has been no waiver of any rights under or modification of 
  any Operating Agreements or other documents executed in 
  connection with the Operating Agreements which could have a 
  material adverse affect thereon. 
  
  1.1 		Operating Statements.  To Seller's knowledge, the 
  Operating Statements are true, accurate and complete in all 
  material respects and present fairly the results of operations 
  for the periods indicated on a consistent basis.
  
  1.1 		Use of Project.  To Seller's knowledge, (i) no 
  governmental, public or private authority intends or desires to 
  appropriate the use of or limit the use of any of the Project 
  pursuant to any condemnation, eminent domain or similar 
  proceeding; (ii) no fact or condition exists which will result 
  in the termination of the Project's current access to and from 
  existing streets and utilities.
  
  1.1 		Documentation.  To Seller's knowledge, all 
  documents which shall be delivered to Purchaser by or on behalf 
  of Seller under this Agreement shall be accurate and complete in 
  all material respects, including, without limitation, the 
  Information Schedules.
  1.2 		FIRPTA.  Seller is not a "foreign person" (as 
  defined in the Internal Revenue Code and Income Tax 
  Regulations).  The provisions of the Foreign Investment in Real 
  Property Tax Act of 1980, as amended, are not applicable to the 
  Transaction.
  
                               1 ARTICLE 
   
                               COVENANTS
  
  	Covenants of Seller.  Seller covenants and agrees with 
  Purchaser as follows:
  
  1.1 		Access.  Subject to the terms and conditions of 
  Section 6.1, during normal business hours prior to Closing, 
  Seller agrees to give to Purchaser and its agents and 
  representatives reasonable access to the Project and the books 
  and records directly relating to the ownership, management, 
  maintenance and operation of the Project, and all documents 
  directly pertaining to the Project that are in the possession of 
  Seller, or any of Seller's agents or representatives.  Prior to 
  Closing, Seller will furnish Purchaser with such additional 
  financial and operating data and other information reasonably 
  available to Seller as may be reasonably necessary for Purchaser 
  to thoroughly evaluate the Project.    
  
  1.1 		Additional Audits.  Purchaser shall have, in 
  addition to any inspection or audit rights contained elsewhere 
  in this Agreement, the right to conduct a full audit of the 
  books and records of Seller relating to the operations and 
  financial results of the Property, in such form and at such 
  time, including up to 270 days after Closing, as Purchaser may 
  reasonably determine is necessary to comply with applicable 
  securities laws requirements, including, without limitation, 
  Regulation 210.3-14 promulgated under the Securities Exchange 
  Act of 1934, as amended.  All costs incurred as a result of a 
  Purchaser's undertaking such audit shall be borne exclusively by 
  Purchaser;  however, Seller shall make available such books, 
  records and materials as may be reasonably requested by 
  Purchaser or its accountants in order to conduct such audit.  
  All such audit activities shall be conducted at Seller's place 
  of business in a commercially reasonable fashion during normal 
  business hours and upon five (5) days prior notice from 
  Purchaser to Seller.
  
  1.1 		No Material Changes.  Prior to Closing, Seller 
  shall:  (i) not cancel or permit cancellation of any hazard or 
  liability insurance carried with respect to the Project; (ii) 
  remedy all material violations of laws, ordinances, orders or 
  requirements relating to the Project which are not caused by 
  Purchaser and of which Seller has received actual  notice and 
  provide Purchaser with evidence of curing of same (provided that 
  Seller shall not be required to expend more than $10,000, in the 
  aggregate, with respect to such matters); and (iii) operate the 
  Project on a basis consistent with Seller's operations 
  including, without limitation, undertaking all reasonably  
  required ordinary maintenance and repair of the Project.  Prior 
  to Closing, Seller also will not, without the prior written 
  consent of Purchaser, (i) sell, transfer or dispose or become 
  obligated to sell, transfer or dispose of any of the Project, 
  except for the use and consumption of inventory, office and 
  other supplies and spare parts, and the replacement of worn out, 
  obsolete and defective tools, equipment and appliances, in the 
  ordinary course of the business, (ii) after the expiration of 
  the Inspection Period except as specifically permitted by this 
  Agreement, enter into any transaction, or make any commitment 
  with respect to the Project other than in the ordinary course of 
  the business, (iii) amend, renew, extend, modify or terminate 
  any Contract, Permit or Lease except as contemplated by this 
  Agreement or except in the ordinary course of business.  Subject 
  to Section  below regarding Seller's continued leasing 
  obligations, prior to Closing, Seller shall operate and maintain 
  the Project in substantially the same manner and condition as 
  Seller has operated and maintained the Project immediately prior 
  to the Effective Date.  Seller will perform current or routine 
  maintenance and repairs in the ordinary course of business of or 
  to the Project as may be required or reasonably appropriate to 
  operate and maintain the Project other than tenant improvements 
  relating to new leases.  Provided, however, that Seller shall 
  not be obligated to make an expenditure, which would be 
  capitalized pursuant to generally accepted accounting 
  principles, in excess of $15,000 and in the event Seller elects 
  not to make an expenditure greater than said amount, then at 
  Closing, Purchaser shall receive a credit for such excess amount 
  as evidenced by a bona fide third party contract, proposal or 
  bid for such item(s).  After expiration of the Inspection 
  Period, Seller shall be required to gain Purchaser's written 
  approval of any new or modified contract or agreement which will 
  affect the operation of the Project, which approval will not be 
  unreasonably withheld, conditioned or delayed.
  
  1.1 		Consents.  Seller and Purchaser shall each 
  promptly file or submit and diligently prosecute any and all 
  applications or notices with federal, state and/or local 
  authorities and all other requests with any private persons or 
  entities for consents, approvals, authorizations and permissions 
  which are reasonably considered necessary or appropriate by the 
  other party for the consummation of the Transaction or to 
  prevent the termination of any Lease, Contract or Permit, or any 
  loss or disadvantage to the Project. 
  
  1.1 		Payments.  Seller will cause to be paid when due 
  or shall be responsible for all taxes, license fees, trade 
  accounts and costs and expenses of operation and maintenance of 
  the Project incurred through the Closing Date, except amounts 
  subject to proration under Section .
  
  1.1 		Cooperation.  Seller will reasonably assist and 
  cooperate with any environmental evaluation, study or audit of 
  the Project prepared by, for or at the request of Purchaser.
  
  1.1 		Notification of Subsequent Events.  Prior to 
  Closing, Seller shall notify Purchaser of any written notice 
  received by Seller of any material adverse change in or to the 
  Project including, without limitation, any notice relating to 
  any insurance contract or policy now held or owned by Seller to 
  cancel or materially increase any premiums relating thereto.
  
  1.1 		Existing Loan Matters.  In the event Purchaser 
  has elected for part of the Purchase Price to be paid by an 
  assumption of of the Existing Indebtedness, Seller and Purchaser 
  shall use their reasonable efforts to obtain the written consent 
  to the transactions contemplated herein from all parties whose 
  consent to the assumption by Purchaser of such Loan Documents is 
  required thereunder, together with a release of Seller from any 
  liability under the Loan Documents, and an "estoppel 
  certificate" executed by Lender substantially in the form 
  attached hereto as Exhibit  certifying that Loan Documents are 
  in full force and effect and that no default exists thereunder. 
   To the extent required by the Lender, Seller shall pay to the 
  Lender up to 1% of the outstanding principal balance of the 
  existing note as a loan transfer and assumption fee.  Seller 
  shall pay any other transfer, assumption or other fees and costs 
  (including reasonable attorneys' fees, but not attorneys' fees 
  of Purchaser's counsel) imposed by any of such parties with 
  respect to such consent and assumption (including any loan 
  transfer or assumption fee in excess of 1% of the outstanding 
  balance of the existing note) up to a maximum of $10,000.  
  Purchaser and Seller shall reasonably cooperate with each other 
  and the Lender in connection with such consent and assumption 
  (and shall promptly deliver such information, including 
  financial information, respecting Purchaser or its principals as 
  any of such parties may request).  The parties' sole obligations 
  in connection with the consent matters herein contemplated  
  shall be to utilize reasonable efforts to obtain such consents, 
  and to reasonably cooperate with Purchaser to the extent 
  necessary.  If such consents are not obtained on or before the 
  Closing Date, the obligation of Purchaser to purchase the 
  Project shall not terminate and the Purchase Price shall be paid 
  in immediately available funds at Closing and the Existing 
  Indebtedness shall be paid in full at Closing.  In the event the 
  Existing Indebtedness is paid in full at Closing, Buyer agrees 
  to and shall pay, on behalf of Seller as additional 
  consideration and not part of or a credit to the Purchase Price, 
  any and all prepayment fees assessed by Lender upon prepayment 
  of the Existing Indebtedness.  Seller's sole obligation 
  hereunder with respect to obtaining an "estoppel certificate" 
  from the Lender shall be to utilize reasonable efforts to obtain 
  such "estoppel certificate" (such reasonable efforts not 
  including any obligation to institute legal proceedings or to 
  expend any additional monies therefor, other than for minor 
  administrative charges).
  
  1.1 		Estoppel Certificates.  Before the expiration of 
  the Inspection Period, Seller shall have delivered currently 
  dated (no earlier than thirty (30) days prior to the scheduled 
  Closing Date) estoppel certificates in material conformance with 
  the form attached hereto as Exhibit .1 from each Major Tenant or 
  a Seller's estoppel certificate in the form attached hereto as 
  Exhibit .2 for each non-major tenant not providing an estoppel 
  certificate directly.  "Major Tenant" shall mean Morgan Keegan & 
  Company, Inc., and tenants identified on Exhibit .3.  Seller and 
  Purchaser shall use reasonable efforts to obtain a Subordination 
  Non-Disturbance and Attornment Agreement ("SD&A") in the form 
  reasonably requested by any lender of Purchaser and from each 
  Tenant requested by any such lender.  Seller and Purchaser shall 
  use reasonable efforts to negotiate the final form of any SD&A 
  with the applicable tenant and lender during the Inspection 
  Period.  If such SD&A are not obtained on or before the Closing 
  Date, the obligation of Purchaser to purchase the Project shall 
  not terminate and the Purchase Price shall be paid in 
  immediately available funds at Closing.  Seller shall also 
  deliver to Purchaser an estoppel certificate from the lessor 
  under the Ground Lease in material conformance with the form 
  attached hereto as Exhibit .4
  
  1.1 		Leasing.  Seller (and/or Seller's agents), in 
  consultation with Purchaser, shall continue in good faith to 
  advance all leasing activities for the Project including, 
  without limitation, new leases, renewals, extensions, expansions 
  or other modifications.  Provided, however, Seller shall not 
  enter into any new lease or any renewal, expansion or other 
  modification of any existing Lease without Purchaser's prior 
  written consent which shall not be unreasonably withheld, 
  conditioned or delayed.  
  
  1.1 		Leasing Commissions.  Except as set forth in 
  Section   and Exhibit , there are no outstanding commissions, 
  leasing, brokerage or otherwise, payable to any leasing agents, 
  brokers,  or similar type parties, regarding the sale of the 
  Project or the execution, renewal, amendment, or modification of 
  any Lease in the Project.
  
  1.1 		Knowledge Standard.  As used in this Agreement, 
  "the Seller's knowledge "or any similar phrase, shall mean the 
  current actual knowledge of Joseph C. Weller; provided, however, 
  that nothing in this Agreement shall be deemed to create or 
  impose any personal liability of any kind on Joseph C. Weller.  
  Joseph C. Weller is the Chief Manager of the Seller with respect 
  to the Project and as such has personal knowledge of the Project 
  and its operations.
  
                            1 ARTICLE 
  
                          CLOSING MATTERS
  
  1.1 	  Conditions to Purchaser's Obligations.  The 
  obligations of Purchaser to consummate the transactions 
  contemplated by this Agreement are subject to the satisfaction 
  of each of the following conditions as of the Closing Date, 
  except to the extent any such condition is waived in whole or in 
  part by Purchaser in writing at or prior to Closing:
  
  (a) 	  Satisfaction.  The representations and warranties of 
  Seller contained in this Agreement shall have been true on the 
  date of this Agreement and on Closing.  Seller shall have 
  performed all obligations and complied with all covenants 
  required by this Agreement.  
    
  (a) 	  No Injunction.  On the Closing Date, there shall be 
  no third party injunction, writ, preliminary restraining order 
  or any order of any nature issued by a court of competent 
  jurisdiction directing that the transactions contemplated herein 
  not be consummated as herein provided which relates to the acts 
  or omissions of Seller.
  
  (a) 	  Certificates. Purchaser shall have received the 
  estoppel certificates  referenced in Section  above, from or for 
  each tenant referenced on the Rent Roll and the ground lessor 
  under the Ground Lease.  
  
  (a) 	 Ground Lease Consent.  Receipt of consent from the 
  ground lessor or other appropriate governmental authority 
  regarding the assignment of the Ground Lease contemplated 
  hereby.
  
  (a) 	  Lease Renewal By Morgan Keegan. Purchaser shall have 
  received an executed lease agreement or renewal from Morgan 
  Keegan & Company, Inc. for a term of at least ten (10) years 
  from Closing encompassing no less than 159,910 rentable square 
  feet on terms and conditions reasonably consistent with the form 
  lease agreement attached hereto as Exhibit .  Purchaser and 
  Seller shall finalize negotiations of the lease agreement during 
  the Inspection Period, however, Seller hereby commits to the 
  financial terms in Paragraphs 1, 3, 4, 5, 19 and 33 of the form 
  lease agreement attached hereto.
  
  (a) 	  No Adverse Change.  No material and adverse change 
  shall have occurred without Purchaser's written consent, in the 
  state or condition of the Project or in the title matters 
  described in the Title Commitment and the Survey.
  
  1.1 	  Conditions to Seller's Obligations.  The obligations 
  of Seller to consummate the transactions contemplated by this 
  Agreement are subject to the satisfaction of each of the 
  following conditions as of the Closing Date, except to the 
  extent any such condition is waived in whole or in part by 
  Seller in writing at or prior to Closing:
  
  (a) 	  Satisfaction.  The representations and warranties of 
  Purchaser contained in this Agreement shall have been true on 
  the date of this Agreement and on Closing.  Purchaser shall have 
  performed all obligations and complied with all covenants 
  required by this Agreement.  
  
  (a) 	  No Injunction.  On the Closing Date, there shall be 
  no third party injunction, writ, preliminary restraining order 
  or any order of any nature issued by a court of competent 
  jurisdiction directing that the transactions contemplated herein 
  not be consummated as herein provided which relates to acts or 
  omissions of Purchaser.
  
  1.1 	  Closing Documents.  At Closing, Seller shall deliver 
  to Purchaser the following documents, all properly executed by 
  Seller and delivered to Purchaser and/or executed by Purchaser 
  and delivered to Seller shall be in a form reasonably acceptable 
  to Purchaser and Seller and include, but are not limited to:
  
  (a) 	  Limited Assignment of Leases.  A limited warranty 
  Assignment of Leases in form attached hereto as Exhibit (a).  
  Such Assignment of Leases shall be joined in by Purchaser for 
  the purpose of assuming all obligations under the Operating 
  Agreements arising from and after the Closing Date.
  
  (a) 	  Assignment and Bill of Sale.  An Assignment and  
  Assumption Agreement and Bill of Sale in form attached hereto as 
  Exhibit (b).  Such Assignment and Bill of Sale shall be joined 
  in by Purchaser for the purpose of assuming all obligations 
  under any assigned item arising from and after the Closing Date.
  
  (a) 	  Existing Indebtedness.  If applicable, appropriate 
  documentation to evidence the assumption by Purchaser of the 
  Loan Documents as contemplated by this Agreement.
  
  (a) 	 Documents.  Executed original copies, or copies 
  certified as correct by Seller, if originals are not available, 
  of (i) all Leases in force on the Closing Date covering portions 
  of the Project and all other documents referred to in the Rent 
  Roll, (ii) all Contracts and Permits of which Seller is aware 
  transferred and assigned to Purchaser, (iii) all "as built" 
  plans, specifications, surveys or other documents relating or 
  pertaining to the Project in the possession of Seller 
  (collectively "Plans"), including, but not limited to, all 
  records relating to repair, renovation and maintenance of the 
  Project; (iv) all notices to tenants relating to this 
  Transaction and the receipt of security deposits as necessary or 
  appropriate under applicable law; and (v) all other documents 
  referred to in the schedules and exhibits referred to herein.
  
  (a) 	  Rent Roll.  A current and updated Rent Roll.
  
  (a) 	  FIRPTA.  Affidavit from Seller that Seller is not a 
  foreign person as defined in the Foreign Investment in Real 
  Property Tax Act of 1980, as amended, in the form attached 
  hereto as Exhibit (f).
  
  (a) 	  Keys.  All keys and master keys in Seller's 
  possession or control  to all locks located on the Project 
  properly tagged for identification as well as cards keys and 
  cards for the security systems, if any.
  
  (a) 	  Telephone and Mail.  Such documents as may be 
  reasonably requested by Purchaser and required by (i) the local 
  telephone company to assign to Purchaser all of Seller's rights 
  and interest in each telephone number or phone line used by 
  Seller exclusively for the operation of the Project, and (ii) 
  the U.S. Postal Service to assign to Purchaser all of Seller's 
  rights and interest in each post office box and drawer 
  exclusively for the operation of the Project.
  
  (a) 	  Evidence of Authority.  Both parties will deliver to 
  each other and the Title Company such evidence or documents as 
  may reasonably be required evidencing the authority of any 
  person who is executing any of the documents required hereunder.
  
  (a) 	  Miscellaneous.  Such other documents as may be 
  required under other provisions of this Agreement or as may 
  reasonably be required by Purchaser to consummate the 
  Transaction, so long as such document does not increase either 
  party's liability or obligations hereunder, including, but not 
  limited to, (i) a Closing Statement, (ii) tenant's notice 
  letter, and (iii) a Quitclaim Deed with the legal description 
  contained in Exhibit (a) and/or the Survey, if the legal 
  description of the Land contained in the Survey differs from the 
  legal description contained in Exhibit (a).
  
                               1 ARTICLE 
   
                          DEFAULTS AND REMEDIES
  
  1.1 	  Damages Against Purchaser.  IF PURCHASER DEFAULTS 
  UNDER ANY PROVISION OF THIS AGREEMENT AND CLOSING DOES NOT 
  OCCUR, THEN SELLER SHALL BE RELEASED FROM ALL OBLIGATIONS IN LAW 
  OR EQUITY TO CONVEY THE PROJECT TO PURCHASER.  PURCHASER AND 
  SELLER AGREE THAT AS SELLER'S SOLE REMEDY FOR A DEFAULT 
  HEREUNDER, BY WRITTEN NOTICE TO PURCHASER AND TITLE COMPANY, 
  SELLER SHALL BE ENTITLED TO TERMINATE THIS AGREEMENT AND BE 
  ENTITLED TO RECEIVE THE ESCROW DEPOSIT, THE ADDITIONAL ESCROW 
  DEPOSIT, IF ANY, PLUS ACCRUED INTEREST THEREON AS LIQUIDATED 
  DAMAGES.  PURCHASER AND SELLER ACKNOWLEDGE AND AGREE THAT ACTUAL 
  DAMAGES WILL BE EXTREMELY DIFFICULT AND IMPRACTICAL TO 
  ASCERTAIN.  THEREFORE, THE SUM REPRESENTED BY THE ESCROW 
  DEPOSIT, THE ADDITIONAL ESCROW DEPOSIT, IF ANY, PLUS ANY ACCRUED 
  INTEREST THEREON SHALL BE DEEMED TO CONSTITUTE A REASONABLE 
  ESTIMATE AND AGREED STIPULATION OF SELLER'S DAMAGES AND SHALL 
  CONSTITUTE SELLER'S SOLE AND EXCLUSIVE REMEDY IN THE EVENT THIS 
  TRANSACTION FAILS TO CLOSE AS A RESULT OF PURCHASER'S   DEFAULT. 
   NOTWITHSTANDING THE FOREGOING, PURCHASER'S LIABILITY UNDER 
  SECTION 6.1 HEREOF AND SHALL REMAIN IN FULL FORCE AND EFFECT.
  
  
  	Initialed by:
  
  	________________				________________
  	Seller						        Purchaser
  
  1.1 	  DAMAGES AGAINST SELLER.  IN THE EVENT THAT SELLER 
  FAILS TO PERFORM ALL OF SELLER'S OBLIGATIONS UNDER THIS 
  AGREEMENT AND PURCHASER PERFORMS ALL OF ITS OBLIGATIONS OR 
  TENDERS PERFORMANCE, INCLUDING THE OBLIGATION TO CONSUMMATE THE 
  TRANSACTION, THEN PURCHASER MAY MAKE WRITTEN DEMAND TO SELLER 
  FOR PERFORMANCE OF THIS AGREEMENT.  IF SELLER FAILS TO COMPLY 
  WITH PURCHASER'S WRITTEN DEMAND WITHIN 30 DAYS AFTER RECEIPT OF 
  SUCH WRITTEN DEMAND FOR PERFORMANCE, PURCHASER SHALL HAVE THE 
  EXCLUSIVE RIGHT TO (I) WAIVE SUCH DEFAULT, (II) SEEK SPECIFIC 
  PERFORMANCE OF SELLER'S OBLIGATIONS UNDER THIS AGREEMENT, OR 
  (III) TERMINATE THIS AGREEMENT AND PROMPTLY RECEIVE A FULL 
  REFUND OF THE ESCROW DEPOSIT, THE ADDITIONAL ESCROW DEPOSIT, IF 
  ANY, AND ALL INTEREST THEREON AND PAYMENT BY SELLER OF AN AMOUNT 
  NOT TO EXCEED $25,000 IN ORDER TO REIMBURSE PURCHASER'S 
  REASONABLE OUT OF POCKET EXPENSES ASSOCIATED WITH THIS 
  TRANSACTION, BUT WITHOUT FURTHER LIABILITY ON SELLER'S PART.  
  SELLER AGREES THAT THE PROJECT IS UNIQUE AND THAT DAMAGES FOR 
  FAILURE BY SELLER TO CONSUMMATE THE TRANSACTION WILL BE 
  IMPRACTICABLE AND EXTREMELY DIFFICULT TO DETERMINE.  THEREFORE, 
  IN THE EVENT THAT SELLER FAILS OR REFUSES TO CONSUMMATE THE 
  TRANSACTION AND PURCHASER SEEKS SPECIFIC PERFORMANCE, SELLER 
  SPECIFICALLY AGREES THAT THE REMEDY OF SPECIFIC PERFORMANCE  IS 
  AN APPROPRIATE REMEDY FOR PURCHASER, AND SELLER WAIVES AND 
  AGREES NOT TO ASSERT ANY CLAIM OR DEFENSE THAT SPECIFIC 
  PERFORMANCE IS NOT AN APPROPRIATE REMEDY FOR PURCHASER.  
  
  	Initialed by:
  
  	________________				________________
  	Seller			        			Purchaser
  
  
                              1 ARTICLE 
  
                             RISK OF LOSS
  	
  1.1 	  Risk of Loss.  Prior to Closing, Seller shall have 
  full risk of loss or damage with respect to the Project.  Upon 
  Closing, full risk of loss or damage with respect to the Project 
  shall pass to Purchaser.  For purposes of this Article, "loss or 
  damage" shall mean the following:  (i) any loss, damage, 
  destruction or injury by fire, storm, accident, flood or other 
  casualty or hazard to the Project; and (ii) any condemnation, 
  eminent domain or other similar proceeding.
  
  1.1 	  Minor Damage.  In the event of loss or damage to the 
  Project or any portion thereof (the "premises in question") 
  which is not "major" (as hereinafter defined), this Agreement 
  shall remain in full and effect provided Seller performs any 
  necessary repairs or, at Seller's option, reduces the cash 
  portion of the Purchase Price in an amount equal to the cost of 
  such repairs, Seller thereby retaining all of the Seller's 
  right, title and interest to any claims and proceeds Seller may 
  have with respect to any casualty insurance policies or 
  condemnation awards relating to the premises in question.  In 
  the event Seller elects to perform repairs upon the Project, 
  Seller shall use reasonable efforts to complete such repairs 
  promptly and if necessary, the date of Closing shall be extended 
  a reasonable time in order to allow for the completion of such 
  repairs;  provided, however, Closing may not be extended for a 
  period of more than thirty (30) days without the prior consent 
  of Purchaser.
  
  1.1 	  Major Damage.  In the event of a "major" loss or 
  damage, Purchaser may either (i) terminate this Agreement and 
  immediately receive a refund of the Escrow Deposit and all 
  interest thereon, or (ii) it may proceed with this transaction 
  and receive Seller's insurance proceeds, if any, for such 
  damage, plus payment from Seller of the amount of the applicable 
  insurance deductible relating thereto not to exceed the actual 
  repair cost.  In such event, Seller shall execute all documents 
  reasonably requested by Purchaser to assign Seller's rights and 
  interest to such insurance proceeds.    
  
  1.1 	  Definition of Major Loss or Damage.  For purposes of 
  Sections  and , "major" loss or damage refers to the following: 
   (i) loss or damage to the Project or any portion thereof such 
  that the cost of repairing or restoring the premises in question 
  to a condition substantially identical to that of the premises 
  in question prior to the event of damage or loss would be, in 
  the certified opinion of a mutually acceptable architect, equal 
  to or greater than One Hundred Thousand Dollars ($100,000), and 
  (ii) any loss or damage due to a condemnation which permanently 
  and materially impairs the current use of the Project.
  
                              1 ARTICLE 
  
                         GENERAL PROVISIONS
  
  1.1 	  Brokerage Commission.  Seller and Purchaser 
  represent to each other that they have acted directly and 
  independently with the other as principals and that neither 
  Seller nor Purchaser have retained or authorized the services of 
  any broker or finder with respect to this Transaction.  Seller 
  agrees to indemnify and hold Purchaser harmless from and against 
  all claims, liabilities, and obligations for any commission, 
  finder's fee, or other compensation in connection with this 
  Agreement claimed by or through Seller.  Purchaser agrees to 
  indemnify and hold Seller harmless from and against all claims, 
  liabilities, and obligations for any commission, finder's fee, 
  or other compensation in connection with this Agreement claimed 
  by or through Purchaser.
  
  1.1 	  Confidentiality.  Unless Seller otherwise agrees in 
  writing, Purchaser agrees that all confidential proprietary 
  information regarding the Project of whatsoever nature made 
  available to it by Seller or Seller's agents or representatives 
  or developed by Purchaser ("Confidential Information"), is 
  confidential and shall not be disclosed to any other person 
  except those assisting Purchaser with this Transaction, or 
  Purchaser's lender, if any, except as required by law.  The 
  provisions of the foregoing sentence shall not apply to any 
  information which is otherwise available to the public or which 
  has been obtained from sources that are not subject to a similar 
  confidentiality restriction or to disclosures as required by 
  law.  Further, Purchaser agrees not to use any Confidential 
  Information for any purpose other than to determine whether to 
  proceed with the Transaction contemplated by this Agreement.  
  Upon Closing, all such Confidential Information shall be the 
  sole and exclusive property of Purchaser and not subject in any 
  manner to this confidentiality restriction.   Provided, however, 
  in the event the transaction contemplated by this Agreement does 
  not close for any reason other than a breach by Seller, the 
  provisions of this Section  shall survive the termination of 
  this Agreement.  This Section  is in addition to and not in 
  limitation of the Confidentiality Agreement executed by 
  Purchaser dated August 8, 1997 pertaining to the Project.
  
  1.1 	   Entire Agreement.  This Agreement, together with 
  all exhibits or schedules either attached or delivered pursuant 
  hereto and other agreements expressly referred to herein, 
  constitutes the entire agreement between the parties with 
  respect to the purchase and sale of the Project.  All prior to 
  or contemporaneous agreements, understandings, representations, 
  warranties and statements, oral or written, are superseded.
  
  1.1 	   Further Assurances.  The parties agree to take such 
  further action and execute such documents and instruments as may 
  be reasonably required in order to more effectively carry out 
  the terms of this Agreement and the intentions of the parties.
  
  1.1 	   Modification, Waiver.  Except as expressly 
  contemplated herein, no modification, waiver, supplement or 
  discharge of this Agreement shall be valid unless the same is in 
  writing and signed by the party against whom the enforcement 
  thereof is or may be sought.  No waiver of a breach of any of 
  the terms, covenants or conditions of this Agreement by either 
  party shall be construed or held to be a waiver of any 
  succeeding or preceding breach of the same or any other term, 
  covenant or condition herein contained.  No waiver of any 
  default by either party hereunder shall be implied from any 
  omissions by either party to take any action on account of such 
  default if such default persists or is repeated, and no express 
  waiver shall affect a default other than as specified in such 
  waiver.
  
  1.1 	   Severability.  If any term, provision, covenant or 
  condition of this Agreement is held to be invalid, void or 
  otherwise unenforceable to any extent by any court of competent 
  jurisdiction, the remainder of this Agreement shall not be 
  affected thereby, and each term, provision, covenant or 
  condition of this Agreement shall be valid and enforceable to 
  the fullest extent permitted by law.
  
  1.1 	  Successors.  Subject to the restriction on 
  assignment provided herein, all terms of this Agreement shall be 
  binding upon, inure to the benefit of, and be enforceable by the 
  parties hereto and their respective heirs, legal 
  representatives, successors and assigns.
  
  1.1 	  Assignment.  Purchaser may assign its rights under 
  this Agreement to a wholly owned subsidiary of Purchaser, or to 
  a limited partnership controlled by either Purchaser or its 
  wholly owned subsidiary without Seller's consent; provided, 
  however, no such assignment shall relieve Purchaser of its 
  obligations hereunder and the assignee must sign an assumption 
  agreement in form reasonably acceptable to Seller.  Except as 
  contemplated by the preceding sentence, Seller and Purchaser 
  shall not assign their respective rights, obligations or 
  interest under this Agreement without the prior written consent 
  of the other.
  
  1.1 	  Survival of Representations and Warranties.  All 
  obligations hereunder to be performed after Closing, and all 
  warranties and representations contained herein, shall survive 
  Closing and the delivery of the Limited Assignment of Leases to 
  Purchaser for a period of eighteen (18) months after the 
  Closing, at which time such warranties, representations and 
  covenants shall terminate in all respects unless written notice 
  of any such breach has been delivered to the breaching party 
  prior to such date.
  
  1.1 	  Attorneys' Fees.  If either party commences legal 
  proceedings for any relief against the other party arising out 
  of this Agreement, the losing party shall pay the prevailing 
  party's reasonable attorneys' fees.
  
  1.1 	  Time.  Time is of the essence with respect to this 
  Agreement.
  
  1.1 	  No Other Inducement.  The making, execution and 
  delivery of this Agreement by the parties hereto has been 
  induced by no representations, statements, warranties or 
  agreements other than those expressed herein.
  
  1.1 	  Computation of Time Periods.  All periods of the 
  time referred to in this Agreement shall include all Saturdays, 
  Sundays and state or national holidays, unless the period of 
  time specifies business days, provided that if the date or last 
  date to perform any act or give any notice or approval shall 
  fall on a Saturday, Sunday or state or national holiday, such 
  act or notice may be timely performed or given on the next 
  succeeding day which is not a Saturday, Sunday or state or 
  national holiday.
  
  1.1 	  Notices.  Any notice, request, instruction or other 
  document to be given or furnished under this Agreement by either 
  party to the other party or to the Title Company shall be in 
  writing and shall be delivered personally or shall be sent by 
  facsimile transmission (with a copy sent by regular U. S. mail) 
  or registered or certified mail, postage prepaid, or by prepaid 
  overnight delivery service, at the address or telecopy number in 
  this Section  or to such other address, telecopy number of 
  person as either party may designate by written notice to the 
  other party.  A notice, request, instruction or other documents 
  shall be deemed to be given (a) when delivered personally, (b) 
  sent by facsimile transmission (with a copy sent by regular U. 
  S. mail), or (c) if sent by certified mail or overnight delivery 
  service, at the time the delivery is indicated on the duly 
  completed United States Postal Service return receipt or the 
  time of package pick up as indicated on the records of or 
  certificates provided by the overnight delivery service.
  
  Seller:  			Morgan Properties, LLC
              Attention:  Joseph C. Weller
  			
  Office Address:	Morgan Keegan Tower
               			Fifty Front Street
               			Memphis, Tennessee  38103
  
  Telephone Number:	(901) 524-4165
  Telecopy Number: 	(901) 579-4443
  
  with a copy to:	David M. Minnick, Esq.
               			Morgan Properties, LLC
               			Morgan Keegan Tower
               			50 North Front Street
               			Memphis, Tennessee  38103
  
  Telephone Number:	(901) 524-4165
  Telecopy Number:	(901) 579-4443
  
  
  Purchaser:		Parkway Properties, L.P.
  Attention:  James M. Ingram
  
  Office Address:	Suite 1000, One Jackson Place
               			188 East Capitol Street
               			Jackson, Mississippi 39201
  
  Mailing Address:	Post Office Box 24647
                			Jackson, Mississippi 39225
  
  Telephone Number:	(601) 948-4091
  Telecopy Number: 	(601) 949-4077
  
  with a copy to:	Forman, Perry, Watkins, Krutz & Tardy, PLLC
               			Attention:  Steven M. Hendrix
  
  Office Address:	Suite 1200, One Jackson Place
               			188 East Capitol Street
               			Jackson, Mississippi  39201
  
  Telephone Number:	(601) 960-8603
  Telecopy Number: 	(601) 960-8609
  
  1.1 	  Headings.  The captions and paragraph headings used 
  in this Agreement are inserted for convenience of reference only 
  and are not intended to define, limit or affect the 
  interpretation or construction of any term or provision hereof.
  
  1.1 	  Exhibits.  All schedules or exhibits referred to 
  herein or attached hereto are incorporated herein by this 
  reference.
  
  1.1 	  Counterparts.  This Agreement may be executed in 
  multiple copies, each of which shall be deemed an original, but 
  all of which shall constitute one Agreement binding on all 
  parties.
  
  1.1 	  Governing Law.  This Agreement shall be governed, 
  construed and enforced in accordance with the laws of the State 
  of Tennessee.
  
  1.1 	  Effective Date.  The date of delivery to Title 
  Company of a fully executed counterpart of this Agreement, as 
  evidenced by Title Company's notation in the space set forth 
  below, shall be deemed the effective date of this Agreement (the 
  "Effective Date").
  
  1.1 	  Limitation on Liability.  Notwithstanding anything 
  contained herein to the contrary, Seller acknowledges and agrees 
  that no limited partner of Purchaser, nor any trustee, director, 
  holder of any beneficial interests, shareholder, officer or 
  employee of Purchaser or any affiliate of Purchaser (except an 
  affiliate to which this Agreement has been assigned) shall have 
  any personal liability, directly or indirectly, under this 
  Agreement, or under any certificate, representation, warranty or 
  other instrument delivered in connection herewith, and Seller 
  shall have recourse hereunder only against Purchaser's assets.  
  Each document to be executed by Purchaser at Closing shall 
  contain a similar exculpation.
  
  	IN WITNESS WHEREOF, Seller and Purchaser have executed this 
  Agreement as of the Effective Date.
  
  						SELLER:
  
  Morgan Properties, LLC
  
  Executed by Seller this
  ____ day of August, 1997		
  
  
  By:________________________________________
  							Joseph C. Weller, Chief 
  Manager
  
  
  						PURCHASER:
  
  Executed by Purchaser this		
  PARKWAY PROPERTIES, L.P.
  ____ day of August, 1997	
  
  By: 
  Parkway Properties General 
  Partners, Inc., its sole general partner
  			
  
  						
  By:___________________________________
  						
  Name:_________________________________
  						
  Title:________________________________
  
  						
  By:___________________________________
  						
  Name:_________________________________
  						
  Title:________________________________
  
  
                       ACKNOWLEDGMENT BY TITLE COMPANY
  
  
  	Title Company hereby agrees to perform its obligations 
  under this Agreement and acknowledge receipt of (a) the Escrow 
  Deposit from Purchaser in the amount of SEVENTY-FIVE THOUSAND 
  AND NO/100 DOLLARS ($75,000.00) on the _____ day of August, 1997 
  and (b) a fully executed counterpart of this Agreement on the 
  _____ day of August, 1997.
  
  
  Lawyers Title Insurance 
  Corporation
  
  
  By: 
  ____________________________
         Name: 
  ____________________________
         Title: 
  ____________________________
  
  
  
                              LIST OF EXHIBITS
  
  Exhibit (a)	1
  Exhibit  	2
  Exhibit 4.2(a)	7
  Exhibit 4.2(b)	7
  Exhibit 	14
  Exhibit 	14
  Exhibit 	15
  Exhibit 	17
  Exhibit .1	18
  Exhibit .2	18
  Exhibit .3	18
  Exhibit .4	18
  Exhibit 	19
  Exhibit (a)	20
  Exhibit (b)	20
  Exhibit (f)	21
  
  
  
  
                                  EXHIBIT (a)
  
                              Legal Description
  
                              [attached hereto]
  
  
  
  
  
                                    EXHIBIT 
  
                               Personal Property
  
                               [attached hereto]
  
  
  
                                  EXHIBIT (a)
  
                             SURVEY CERTIFICATION
  
  	The plat of survey must be accompanied by a certificate 
  meeting the following requirements:
  
  	1.	The certification should be by a registered land 
  surveyor.
  
  	2.	The certification should include the signature with 
  the seal and registration number of the certifying party.
  
  	3.	The certification should contain a jurat executed by a 
  notary public.
  
  	4.	If the surveyor finds that any easement furnished to 
  him which purports to affect the property does not, in fact, 
  affect the property, he should specifically certify that such 
  easement, identified by book and page of recording, does not 
  affect the property.
  
  	5.	The form of certificate should be substantially as 
  follows:  "I,_______________________a registered land surveyor 
  do hereby certify to______________________and____________________
  Title Company, that the accompanying plat of survey represents a 
  true and correct survey made by me and has: (i) been prepared in 
  accordance with the most current minimum standard detail 
  requirements for a Land Title Survey adopted by the American 
  Land Title Association and the American Congress on Surveying 
  and Mapping; (ii) includes optional items 2-11 of Table A 
  thereof; and (iii) has been prepared pursuant to the Accuracy 
  Standards (as adopted by ALTA and ACSM) in effect on the date of 
  this Certification of an Urban Survey of the following described 
  property (the "Project") on the______day of___________________, 199_:
  [Insert legal description]
  
  I further certify that:
  
  	(i) 	the accompanying plat of survey correctly shows the 
  location of all buildings, structures, and other improvements 
  situated on the Project,
  
  	(ii)	except as shown, there are no visible easements or 
  rights-of-way across the Property or other easements or rights-
  of-way affecting the Property of which the undersigned has been 
  advised,
  
  	(iii)	there are no party walls included in any 
  buildings, structures, or other improvements on the Property,
  	(iv)	except as shown, there are no encroachments on 
  adjoining premises, streets, or alleys by any of the buildings, 
  structures, or other improvements on the Property, and
  
  	(v)	except as shown, there are no encroachments on the 
  property by any buildings, structures, or other improvements 
  located on adjoining premises.                 
  
  
                                   EXHIBIT
  
                            OUTSTANDING COMMISSIONS
                           AND BROKERAGE AGREEMENTS
  
  
                                   EXHIBIT 
  
                            EXISTING INDEBTEDNESS
  
  
  	1.	Promissory Note, dated May 31, 1996.
  
  	2.	Fee Deed of Trust, Assignment of Leases and Security 
  Agreement dated May 31, 1996.
  
  	3.	Leasehold Deed of Trust, Assignment of Leases and 
  Security Agreement dated May 31, 1996.
  
  	4.	Assignment of Rents and Leases, dated May 31, 996.
  
  	5.	Certificate and Indemnity Regarding Hazardous 
  Substances dated May 31, 1996.
  
  	6.	Unlimited Guaranty - Morgan Keegan, Inc. dated May 31, 
  1996.
  
  	7.	UCC-1 financing statements filed with the Shelby 
  County Register and the Tennessee Secretary of State.
  
  
                                EXHIBIT .1
  
                    FORM OF TENANT ESTOPPEL CERTIFICATE
  
  
  Parkway Properties, L.P.
  300 One Jackson Place
  188 East Capitol Street
  Jackson, MS   39201
  
  	RE:	_______________________
  
  Gentlemen:
  
  	The undersigned as Tenant hereby certifies to Parkway 
  Properties, L.P., and its successors or assigns ("Purchaser"), 
  and any beneficiary under a deed of trust covering the above 
  captioned property ("Mortgagee") that:
  
  	(a)	It is a Tenant of a portion of the captioned 
  property under a certain lease (the "Lease") 
  as follows:
  
  		Landlord: _________________________________________
  
  		Tenant: ___________________________________________
  
  		Lease Dated: ______________________________________
  
  		Amendment(s) Dated (if any):_______________________
  
  		Current Annual Base Rent:__________________________
  
  		Current CAM or Operating Expense Charges:__________
  
  		Square Footage:____________________________________
  
  		Original term (or current option period,
  		if applicable) expires:____________________________
  
  		Security Deposit and/or
  		Lease Deposit:  $__________________________________
  
  		Outstanding Tenant Improvement Allowance (if any): 
  $_______________
  		
  
  		Outstanding Leasing Commission (if any): 
  $______________
  
   	(b)	All rentals payable under the Lease have been paid 
  through ______, 19___; and except for _________, no 
  rent has been paid more than one month in advance of 
  its due date.
  
   	(c)	That attached hereto as Exhibit A is a true 
  and complete copy of the Lease and all 
  amendments thereto.
  
   	(d)	Tenant has unconditionally accepted and 
  occupied the leased premises, is paying rent 
  under the Lease without claim or right of 
  set-off, or claim of any default by the 
  Landlord, and is now conducting business on 
  the premises;
  
   	(e)	The Lease sets forth the entire agreement 
  between the Landlord and Tenant, is in full 
  force and effect in accordance with its 
  terms and has not, in any way, been amended, 
  modified, assigned or sublet;
  
   	(f)	There exists no default by either party to 
  the Lease, or other grounds for ceasing or 
  reducing the payment of rental, or for 
  cancellation or termination of the Lease;
  
   	(g)	All requirements of the Lease have been 
  complied with and no charges, set-offs or 
  other credits exist against the rentals;
   
   	(h)	The Lease contains, and Tenant has, no outstanding 
  options or rights of first refusal to purchase the 
  Premises nor any part of the real property of which 
  the Premises are a part.
  
   	(i)	Tenant has not assigned, mortgaged, sublet, encumbered 
  or otherwise transferred any of its interest under the 
  Lease and has received no notice of any assignment, 
  mortgage or encumbrance of the Lease by Landlord.
  
  From and after the date that Purchaser acquires title to 
  the Project:
  
   	(j)	Tenant shall not agree to any alteration, 
  modification, amendment or termination of 
  its Lease, nor subordinate or permit 
  subordination of the Lease to any lien in 
  favor of anyone other than Purchaser or 
  Mortgagee, without first obtaining 
  Purchaser's or such Mortgagee's prior 
  written approval provided Tenant has been 
  provided the name and address of such 
  Mortgagee;
  	
    (k)	Tenant shall give any Mortgagee 30 days 
  notice of any default by the Landlord under 
  the Lease and a reasonable opportunity for 
  Mortgagee to cure any default upon 
  Borrower's failure to do so;
  
   	(l)	Tenant will not pay rent in advance for more 
  than the current month without Mortgagee's 
  prior written consent.  No concession or 
  allowance has been granted by Landlord which 
  permits Tenant to occupy the leased premises 
  without payment of Rent or any other 
  financial obligation contained in the Lease, 
  nor will Tenant accept such concession or 
  allowance or negotiate for the same without 
  the prior written consent of Purchaser or 
  Mortgagee;
  
   	(m)	Purchaser may subsequently execute and 
  deliver to Mortgagee an Assignment of Leases 
  and Rents conveying the rentals under the 
  Lease as additional security for a loan 
  secured by the Morgan Keegan Tower Building, 
  and Tenant hereby expressly consents to such 
  Assignment and has no notice of a prior 
  Assignment of the Lease or the rents 
  thereunder;
  
   	(n)	Tenant will not look to any mortgagee, or 
  its successors or assigns, for the return of 
  or credit for security deposit or prepaid 
  rent, if any, unless said sums have been 
  actually transferred to such mortgagee or 
  its successors or assigns.
  
  	Tenant understands that Purchaser is relying on the above 
  representations in connection with the purchase of the above 
  referenced building and does hereby warrant and affirm to and 
  for the benefit of Purchaser, its successors and assigns, that 
  each of the foregoing representations is true, correct and 
  complete as of the date hereof.
  
  
  		                                                    
  By:___________________________________________
  Name:_________________________________________
  Title:________________________________________
  Date:_________________________________________
  
  
  
  
                                  EXHIBIT .2
  
                      FORM OF SELLER ESTOPPEL CERTIFICATE
  
  
  Parkway Properties, L.P.
  300 One Jackson Place
  188 East Capitol Street
  Jackson, MS   39201
  
  	RE:	_____________
  
  Gentlemen:
  
  	The undersigned as Landlord hereby certifies to Parkway 
  Properties, L.P. and its successors and assigns ("Purchaser")  
  that:
  
  	(a)	It is a Landlord of a portion of the above 
  referenced property under a certain lease 
  (the "Lease") as follows:
  
  		Landlord:________________________________________
  
  		Tenant:__________________________________________
  
  		Lease Dated:_____________________________________
  
  		Amendment(s) Dated (if any):_____________________
  
  		Current Annual Base Rent:________________________
  
  		Current CAM or Operating Expense Charges:________
  
  		Square Footage:__________________________________
  
  		Original term (or current option period,
  		if applicable) expires:__________________________
  
  		Security Deposit and/or
  		Lease Deposit:  $_________________________________
  
  		Outstanding Tenant Improvement Allowance (if any): 
  $_______________
  		
  		Outstanding Leasing Commission (if any): 
  $______________
  
  	(b)	All rentals payable under the Lease have been paid 
  through ________, 19___.
  
   	(c)	That attached hereto as Exhibit A is a true 
  and complete copy of the Lease and all 
  amendments thereto.
  
  	(d)	Tenant has unconditionally accepted and 
  occupied the leased premises, commenced 
  payment of rent under the Lease without 
  claim or right of set-off, or claim of any 
  default by the Landlord, and is now 
  conducting business on the premises;
  
  	(e)	The Lease sets forth the entire agreement 
  between the Landlord and Tenant, is in full 
  force and effect in accordance with its 
  terms and has not, in any way, been amended, 
  modified, assigned or sublet;
  
  	(f)	There exists no default by either party to 
  the Lease, or other grounds for ceasing or 
  reducing the payment of rental, or for 
  cancellation or termination of the Lease;
  
  	(g)	All requirements of the Lease have been 
  complied with and no charges, set-offs or 
  other credits exist against the rentals;
  
  
  	Landlord understands that Purchaser is relying on the above 
  representations in consenting to purchase the above referenced 
  building and does hereby warrant and affirm to and for the 
  benefit of Purchaser, its successors and assigns, that each of 
  the foregoing representations is true, correct and complete as 
  of the date hereof.  Purchaser acknowledges that this Seller's 
  Estoppel Certificate shall terminate upon delivery of a Tenant's 
  Estoppel Certificate in a form reasonably acceptable to 
  Purchaser and containing information consistent with the 
  information set forth herein.
  
  		                                                    
  
  		By:___________________________________________
  		Name:_________________________________________
  		Title:________________________________________
  		Date:_________________________________________
  
  
  
                                EXHIBIT .3
  
                              MAJOR TENANTS
  
  1.	Morgan Keegan & Company, Inc.
  
  2.	King Cotton Cafe
  
  3.	Deloitte & Touche
  
  4.	KPMG/Peat Marwick
  
  5.	Waring Cox
  
  6.	Walker & Associates
  
  7.	Coopers & Lybrand
  
  8.	Birch, Porter & Johnson
  
  9.	Tennessee Valley Authority
  
  
  
                                 EXHIBIT .4
  
                  FORM OF GROUND LEASE ESTOPPEL CERTIFICATE
  
  
  Parkway Properties, L.P.
  300 One Jackson Place
  188 East Capitol Street
  Jackson, MS   39201
  
  	RE:	Morgan Keegan Tower, 50 Front Street, Memphis, Shelby 
  County, Tennessee
  
  Gentlemen:
  
  	The undersigned as Lessor hereby certifies to Parkway 
  Properties, L.P., and its successors or assigns ("Purchaser"), 
  and any beneficiary under a deed of trust covering the above 
  captioned property ("Mortgagee") that:
  
  	(a)	It is a Lessor of the captioned property 
  under a certain Ground Lease (the "Lease") 
  as follows:
  
  		Lessor:_____________________________________________________
  
  		Lessee:_____________________________________________________
  
  		Lease Dated:________________________________________________
  
  		Amendment(s) Dated (if any):________________________________
  
  		Current Annual Rent:________________________________________
  
  		Any Other Charges or Fees:__________________________________
  
  		Original term (or current option period,
  		if applicable) expires:_____________________________________
  
  		Security Deposit and/or
  		Lease Deposit:  $___________________________________________
  
  
  		
  		Outstanding Leasing Commission (if any): 
  $______________
  
  	(b)	Lessor is the sole current owner and holder 
  of lessor's interest in the Lease and the 
  fee title owner to the leased premises.
  
  	(c)	All rentals payable under the Lease have 
  been paid through ______, 19___; and except 
  for _________, no rent has been paid more 
  than one month in advance of its due date.
  
   	(d)	That attached hereto as Exhibit A is a true 
  and complete copy of the Lease and all 
  amendments thereto.
  
  	(e)	The Lease sets forth the entire agreement 
  between the Lessor and Lessee, is in full 
  force and effect in accordance with its 
  terms and except as set forth herein has 
  not, in any way, been amended, modified, 
  assigned or sublet;
  
  	(f)	There exists no default by either party to 
  the Lease, or other conditions which with 
  the giving of notice or passage of time, or 
  both, would constitute a default or create 
  other grounds for terminating Lessee's 
  rights thereunder or increasing the payment 
  of rent, or for cancellation or termination 
  of the Lease in any other manner;
  
  	(g)	All requirements of the Lease have been 
  complied with and no charges, expenses, 
  offsets or other credits exist thereunder;
  
  	(h)	The Lease contains, and Lessee has (and upon 
  closing Purchaser shall have) an option, 
  exercisable at any time, to purchase the 
  real property of which the Project is a part 
  for $___________ as more fully set forth in 
  Section 11.01 of the Lease.
  
  	(i)	Lessor has not assigned, mortgaged, 
  encumbered or otherwise transferred any of 
  its interest under the Lease and has 
  received no notice of any assignment, 
  mortgage, sublet or encumbrance of the Lease 
  by Lessee.
  
  	(j)	Lessor hereby consents to the assignment to 
  and assumption of the Lease by Purchaser.
  
  	Lessor understands that Purchaser is relying on the above 
  representations in connection with the purchase of the above 
  referenced building and does hereby warrant and affirm to and 
  for the benefit of Purchaser, its successors and assigns, that 
  each of the foregoing representations is true, correct and 
  complete as of the date hereof.
  
  
  		                                                    
  		By:________________________________________________
  		Name:______________________________________________
  		Title:_____________________________________________
  		Date:______________________________________________
  
  
  
  
  
                                EXHIBIT 
  
                         FORM LEASE AGREEMENT
  
  
                              EXHIBIT (c)
  
                       FORM OF LENDER'S ESTOPPEL
  
  Parkway Properties L.P.
  1000 One Jackson Place
  188 East Capitol Street
  Jackson, MS   39201
  
  RE:	Assignment to Parkway Properties L.P. ("Buyer") by Morgan 
  Keegan & Company, Inc. ("Seller"), of its obligations under 
  _____________________ ("Lender") loan #_____, in the 
  original principal amount of $______________ (the "Loan")
  
  Gentlemen:
  
  	Lender hereby certifies to Parkway Properties L.P., and its 
  successors or assigns that:
  	
  
  	(a)	All sums payable under the Loan have been paid through 
  ______, 19___;
  
  	(b)	The outstanding principal balance of the Loan as of   
                   , 1997 is     				. 
  
   	(c)	 Attached hereto as Exhibit A are true and complete 
  copies of the following 		documents (the "Loan Documents"):
  
  		1.	Promissory Note, dated May 31, 1996.
  
  		2.	Fee Deed of Trust, Assignment of Leases and 
  Security Agreement dated May 31, 1996.
  
  		3.	Leasehold Deed of Trust, Assignment of Leases and 
  Security Agreement dated May 31, 1996.
  
  		4.	Assignment of Rents and Leases, dated May 31, 
  1996.
  
  		5.	Certificate and Indemnity Regarding Hazardous 
  Substances dated May 31, 1996.
  
  		6.	Unlimited Guaranty - Morgan Keegan, Inc. dated 
  May 31, 1996.
  
  		7.	UCC-1 financing statements filed with the Shelby 
  County Register and the Tennessee Secretary of 
  State.
  
  	(d)	The Loan Documents set forth the entire agreement 
  between the Lender and Seller, are in full force and 
  effect in accordance with their terms and, to Lender's 
  knowledge, have not, in any way, been amended, 
  modified,  or assigned;
  
  	(e)	To Lender's knowledge, there exists no default by 
  either party to the Loan Documents, or other grounds 
  for declaring an event of default thereunder;
  
  	(f)	Lender has not assigned or otherwise transferred any 
  of its interest under the Loan Documents. 
  
   (g)	There are no escrow, improvement accounts maintained, 
  by Lender, or required to be maintained by Lender or 
  funded by Seller in connection with the Loan 
  Documents.  Seller has met all of its obligations to 
  fund any such accounts.
  
  	Lender understands that Purchaser is relying on the above 
  representations in connection with the purchase of the above 
  referenced property and assuming the Loan and does hereby 
  warrant and affirm to and for the benefit of Purchaser, its 
  successors and assigns, that each of the foregoing 
  representations is true, correct and complete as of the date 
  hereof.
  
  
  			NATIONAL BANK OF COMMERCE
  
  			By:____________________________
  			Name:__________________________
  			Title:_________________________
    	Date:__________________________
   
  
  
                                  EXHIBIT (a)
  
                  FORM OF LIMITED WARRANTY ASSIGNMENT OF LEASES
  
                           ASSIGNMENT AND ASSUMPTION
                     OF INTERESTS IN LEASES AND AGREEMENTS
  
  	THIS ASSIGNMENT AND ASSUMPTION OF INTERESTS IN LEASES AND 
  AGREEMENTS made and entered into this ____ day of _____________, 
  1997, by and between MORGAN PROPERTIES, LLC, a Tennessee limited 
  liability company with offices at 50 North Front Street, 21st 
  Floor, Memphis, Tennessee  38103 (herein "Assignor"); and 
  PARKWAY PROPERTIES, L.P., a Delaware limited partnership with 
  offices at 188 East Capitol Street, Suite 1000, Jackson, 
  Mississippi  39201 (herein "Assignee").
  
  WITNESSETH:
  
  	That each of the aforesaid parties acknowledges the receipt 
  and sufficiency of a valuable consideration from the other, 
  Assignor hereby grants, bargains, sells, transfers, conveys, 
  assigns and confirms to Assignee any and all of Assignor's 
  rights, titles, privileges, interests and obligations in those 
  certain Leases and other Agreements described on Schedule "1" 
  annexed hereto and incorporated herein by this reference 
  (collectively, herein the "Leases and Agreements"), together 
  with the buildings and improvements thereon and all 
  appurtenances thereto.  The Leases and Agreements lease and 
  otherwise pertain to the premises described on Exhibit "A" 
  annexed hereto and incorporated herein by this reference (the 
  "Premises"), such Premises being located in the City of Memphis, 
  County of Shelby, State of Tennessee.
  
  	TO HAVE AND TO HOLD the same unto the Assignee, its 
  successors and assigns, from the date hereof for the remainder 
  of the term set forth in the Leases and Agreements and any 
  extensions, options and otherwise contained therein, subject to 
  the rents, covenants, conditions, and provisions therein.
  
  	The Assignor covenants, represents and warrants that:
  
  	(a)	The Leases and Agreements are, on Assignor's part, in 
  full force and effect;
  
  	(b)	To the best knowledge of the Assignor, the Assignor is 
  not in default or breach of the Leases or Agreements;
  
  	(c)	The rents reserved in the Lease and Agreements have 
  been fully paid to the date hereof and, to the best 
  knowledge of the Assignor, all other terms, covenants, 
  and conditions reserved and contained in the Leases 
  and Agreements have, on the Assignor's part, been 
  fully paid, observed and performed up to the date 
  hereof.
  	(d)	 Assignor has the right and power to assign the Leases 
  and Agreements unto the Assignee;
  
  	(e)	The Premises at all times hereafter during the terms 
  of the Leases and Agreements may be entered into and 
  held, and the rents and profits thereof received 
  accordingly, without any lawful interruption by the 
  Assignor, or any person or persons claiming by, 
  through or under Assignor, but not further or 
  otherwise, free from all encumbrances, claims and 
  demands created or occasioned by the Assignor, or by 
  any person or persons claiming by through or under 
  Assignor, but not further or otherwise, except the 
  rent, covenants, and conditions reserved and contained 
  in the Leases and Agreements, and which on Assignee's 
  part are or ought to be paid, observed and performed; 
  and
  
  	(f)	Assignor, its successors and assigns, will at all 
  times during the term, at the request and expense of 
  the Assignee, its successors and assigns, execute and 
  do every such lawful assurance and thing for further 
  assuring the Leases and Agreements unto the Assignee, 
  its successors; and assigns, for the remainder of the 
  term of the Leases and Agreements, together with any 
  extensions, options and otherwise contained therein as 
  may be reasonably required by Assignee; and
  
  	(g)	Assignor hereby warrants that Assignor will defend 
  Assignee's title thereto against the lawful claims of 
  all persons claiming by, through or under Assignor but 
  not otherwise.
  
  	The Assignee hereby agrees to and does hereby assume the 
  Leases and Agreements and to perform each and every term, 
  condition and provision contained therein on the part of 
  Assignee to be performed from and after the date hereof.  The 
  Assignee covenants and agrees that Assignee will observe and 
  perform the covenants, provisions, and conditions contained in 
  the Leases and Agreements, and which, by or on the part of the 
  lessee or obligor therein, are henceforth to be observed and 
  performed; and will at all times hereafter, at its own cost or 
  expense, defend, save harmless and keep indemnified the 
  Assignor, its successors and assigns, against all payments, 
  costs, losses, damages, and expenses whatsoever, which Assignor 
  may make, pay, sustain, or be liable to, on account of the 
  aforedescribed Leases and Agreements which shall henceforth 
  become due and payable, or any part thereof, and on account of 
  the breach, non-performance, or nonobservance, by or on the part 
  of Assignee from and after the date hereof, of all and every or 
  any of the covenants, provisions, and conditions contained in 
  the Leases and Agreements, to be observed and/or performed by 
  the lessee or obligor therein, and against all actions and/or 
  suits at law, or in equity, which shall be commenced or 
  prosecuted against the Assignor, its successors or assigns, for 
  or on account of the rent, covenants, provisions, and 
  conditions, or any of them, and henceforth to be paid, observed 
  and performed by Assignee.
  
  	Assignor will at all times hereafter, at its own cost or 
  expense, defend, save harmless and keep indemnified the 
  Assignee, its successors and assigns, against all payments, 
  costs, losses, damages, and expenses whatsoever, which Assignee 
  may make, pay, sustain, or be liable to, on account of the 
  aforedescribed Leases and Agreements which became due and 
  payable prior to the date hereof, or any part thereof, and on 
  account of the breach, non-performance, or nonobservance, by or 
  on the part of Assignor prior to the date hereof, of all and 
  every or any of the covenants, provisions, and conditions 
  contained in the Leases and Agreements, to be observed and/or 
  performed by the lessee or obligor therein, and against all 
  actions and/or suits at law, or in equity, which shall be 
  commenced or prosecuted against the Assignee, its successors or 
  assigns, for or on account of the rent, covenants, provisions, 
  and conditions, or any of them, and to be paid, observed and 
  performed by Assignor prior to the date hereof.
  
  	This Assignment and Assumption of Lessee's interest in 
  Leases and Agreements is made, executed and delivered by and 
  between the parties hereto pursuant to that certain Purchase and 
  Sale Agreement dated August ___, 1997, by and between Morgan 
  Properties, LLC, as seller, and Parkway Properties, L.P., as 
  buyer.
  
  	IN WITNESS WHEREOF,  Assignor and Assignee have executed or 
  has caused this Assignment and Assumption of Interests in Leases 
  and Agreements to be executed by and through its duly authorized 
  officer(s) or employees the day and year first above mentioned.
  
  						ASSIGNOR:
  
  
  					
  	By:________________________________________
  							Joseph C. Weller, Chief 
  Manager
  
  
  						ASSIGNEE:
  
  						PARKWAY PROPERTIES, L.P.
  						By:  Parkway Properties General 
             Partners, Inc., its sole general partner
  			
  
  						
  	By:____________________________________
  						
  	Name:__________________________________
  						
  	Title:_________________________________
  
  						
  	By:____________________________________
  						
  	Name:__________________________________
  						
  	Title:_________________________________
  
  
       (Add applicable acknowledgements for Shelby County, Tennessee)
  
                              EXHIBIT (b)
  
                                FORM OF
                       BILL OF SALE AND ASSIGNMENT
  
                   ASSIGNMENT AND ASSUMPTION AGREEMENT
                            AND BILL OF SALE
  
  	This ASSIGNMENT AND ASSUMPTION AGREEMENT AND BILL OF SALE 
  ("Assignment"), is made by and between Morgan Properties, LLC, a 
  Tennessee limited liability company ("Assignor") and Parkway 
  Properties, L.P., a Delaware limited partnership  ("Assignee").
  
  W I T N E S S E T H:
  
  	WHEREAS, by Purchase and Sale Agreement ("Purchase 
  Agreement") dated as of August _____, 1997, by and between 
  Assignor and Assignee, Assignor agreed to sell to Assignee 
  certain real property, and the improvements located thereon 
  ("Project") as more particularly described in the Purchase 
  Agreement; and
  
  	WHEREAS, the Purchase Agreement provides, inter alia, that 
  Assignor shall assign to Assignee certain contractual and other 
  intangible rights, that Assignee shall assume all of the 
  obligations of Assignor with respect to the property so assigned 
  from and after the date of such assignment, and that Assignor 
  and Assignee shall enter into this Assignment.
  
  	NOW, THEREFORE, in consideration of the premises and the 
  mutual covenants herein contained, the parties hereto hereby 
  agree as follows:
  
  	1.	Assignment.  Assignor hereby assigns, sets over and 
  transfers to Assignee all tangible and intangible personal 
  property owned by Assignor, located on the real property 
  described on Exhibit A hereto, and used in the ownership, 
  operation and maintenance of such real property including, 
  without limitation, the following (collectively called the 
  "Personal Property"):
  
  			(i)	All right, title, interest, estate, claim or 
  demand in and to the buildings, structure, other 
  improvements, fixtures and landscaping relating to the 
  real property described on Exhibit A hereto;
  
  			(ii)	All rights (if any) to use the name "Morgan 
  Keegan Tower" to the extent such rights are assignable 
  without expense to Assignor and only as such rights 
  relate directly to the Project (but Assignor does not 
  represent that it has exclusive rights to use such 
  trade name and Assignor has not registered the same in 
  any manner); provided, however, such rights may be 
  used by Assignee only as long as Assignor is a tenant 
  in the Project;
  
  			(iii)	The items of personal property 
  described on Exhibit B hereto;
  
  			(iv)	The interest of Assignor under the contracts 
  and agreements described on Exhibit C hereto 
  (collectively, the "Contract");
  
  			(v)	The interest of the landlord under the 
  tenant leases encumbering the real property described 
  on Exhibit D hereto (collectively, the "Leases");
  
  			(vi)	To the extent assignable without expense to 
  Assignor, the interest of Assignor in and to tenant 
  lease files and correspondence relating to the Leases, 
  plans and specifications with respect to the Project, 
  promotional materials with respect to the leasing of 
  space within the Project, warranties and guaranties 
  relating to any of the other property to be conveyed 
  pursuant to the Purchase Agreement, licenses and 
  permits relating to the Project, and all other 
  property to be conveyed pursuant to the Purchase 
  Agreement.
  
  	2.	Assignee's Assumption and Indemnification.  Assignee 
  hereby assumes the obligation to pay any and all liabilities and 
  obligations arising or accruing under any of the Contracts and 
  Leases on or after the effective date hereof.  Assignee agrees 
  to indemnify, defend and hold harmless Assignor from any loss, 
  cost, claim, liability, expense or demand of whatever nature 
  under any of the Contracts and Leases above arising or accruing 
  on or after the effective date hereof.
  
  	3.	Assignor's Indemnification.  Assignor agrees to 
  indemnify, defend and hold harmless Assignee from any loss, 
  cost, claim, liability, expense or demand of whatever nature 
  under any of the property described in Paragraph 1 above arising 
  or accruing prior to the effective date hereof.  
  
  	4.	Special Warranty of Title.  Assignor does hereby bind 
  itself, its legal representatives, successors and assigns, to 
  SPECIALLY WARRANT, and FOREVER DEFEND title to the property 
  conveyed hereby unto Assignee, its legal representatives, 
  successors and assigns, against every person whomsoever lawfully 
  claiming or to claim same or any part thereof, by, through or 
  under Assignor, but not otherwise.
  
  	5.	Limitation on Liability.  Notwithstanding anything 
  contained herein to the contrary, Assignor acknowledges and 
  agrees that no limited partner of Assignee, nor any trustee, 
  director, holder of any beneficial interests, shareholder, 
  officer or employee of Assignee or any affiliate of Assignee 
  shall have any personal liability, directly or indirectly, under 
  this Assignment, and Assignor shall have recourse hereunder only 
  against Assignee's assets.
  
  	6.	Miscellaneous.  This Assignment and the obligations of 
  the parties hereunder shall survive the closing of the 
  transaction referred to in the Purchase Agreement, shall be 
  binding upon and inure to the benefit of the parties hereto, 
  their respective legal representatives, successors and assigns, 
  shall be governed by and construed in accordance with the laws 
  of the State of Tennessee applicable to agreements made and to 
  be wholly performed within said State, and may not be modified 
  or amended in any manner other than by a written agreement 
  signed by the party to be charged therewith.
  
  	EXECUTED TO BE EFFECTIVE as of the ______ day of 
  ________________, 1997.
  
  						ASSIGNOR:
  
  						MORGAN PROPERTIES, LLC
  
  
  					
  	By:__________________________________
  							Joseph C. Weller, Chief 
  Manager
  
  
  
  						ASSIGNEE:
  
  
  						PURCHASER:
  
  					PARKWAY PROPERTIES, L.P.
  By:  Parkway Properties General Partners, Inc.,
       its sole general partner
  			
  
  						
  	By:____________________________________
  						
  	Name:__________________________________
  						
  	Title:_________________________________
  
  						
  	By:____________________________________
  						
  	Name:__________________________________
  						
  	Title:_________________________________
  
  
  
                                  EXHIBIT (f)
  
                           FORM OF FIRPTA AFFIDAVIT
  
  
  STATE OF TENNESSEE			
  							KNOW ALL MEN BY THESE 
  PRESENTS:
  COUNTY OF SHELBY			
  
  
  	Section 1445 of the Internal Revenue Code provides that a 
  transferee of a U.S. real property interest must withhold tax if 
  the transferor is a foreign person.  To inform  Parkway 
  Properties, L.P., a Delaware limited partnership ("Transferee"), 
  that withholding of tax is not required upon the disposition of 
  a U.S. real property interest by Morgan Properties, LLC, a 
  Tennessee limited liability company ("Transferor"), the 
  undersigned hereby certifies as follows:
  
  1.	Transferor is not a foreign corporation, foreign 
  partnership, foreign trust or foreign estate (as those 
  terms are defined in the Internal Revenue Code and Income 
  Tax Regulations);
  
  2.	Transferor's U.S. employer identification number is: 
  #______________________;
  
  3.	Transferor's office address is 50 North Front Street, 21st 
  Floor, Memphis, Tennessee 38103;
  
  	Transferor understands that this certification may be 
  disclosed to the Internal Revenue Service by the Transferee and 
  that any false statement contained herein could be punished by 
  fine, imprisonment, or both.
  
  	Under penalties of perjury, the undersigned, in the 
  capacity set forth below, hereby declares that he has examined 
  this certification and to the best of his knowledge and belief 
  it is true, correct and complete, and the undersigned further 
  declares that he has authority to sign this document in such 
  capacity.
  
  	EXECUTED to be effective as of the ____ day of ___________, 
  1997.
  
  
  						TRANSFEROR:
  
  						MORGAN PROPERTIES, LLC
  
  
  					
  	By:__________________________________
  							Joseph C. Weller, Chief 
  Manager
  
  
  
  STATE OF TENNESSEE
  COUNTY OF SHELBY
  
  	I, ___________________, a Notary Public of the County and 
  State aforesaid, certify that Joseph C. Weller personally came 
  before me this day and acknowledged that he is the Chief Manager 
  of Morgan Properties, LLC, a Tennessee limited liability 
  company, and that by authority duly given and as the act of the 
  company the foregoing instrument was signed in its name by its 
  Chief Manager.
  
  	WITNESS MY HAND AND OFFICIAL SEAL, this the _____ day of 
  ________________, 1997. 
  					
  ____________________________________
       					NOTARY PUBLIC
  
  My Commission Expires:______________________                    
                  
  [AFFIX NOTARIAL SEAL]
  
  
  
                       Consent of Independent Auditors
  
  We consent to the incorporation by reference in the Registration Statement
  (Form S-3, No. 33329259) and related Prospectus and Prospectus Supplement
  of Parkway Properties, Inc. of our reports iwth respect to the statements
  of rental revenue and direct operating expenses fo rhte year ended December
  1, 1996 dated April 17, 1997 for Courtyard of Arapaho included in Parkway
  Properties, Inc.'s Form 8-K/A dated May 14, 1997; dated May 29, June 20 and 
  June 25, 1997 for Sugar Grove, Vestavia Centre and Meridian, respectively,
  including in Parkway Properties, Inc.'s Form 8-K dated June 27, 1997;
  dated August 8, August 15 and August 19, 1997 for Lakewood II, NationsBank
  Tower and Fairway Plaza, respectively, included in Parkway Properties,
  Inc.'s Form 8-K/A dated August 25, 1997; and dated August 27 and August 28,
  1997 for First Tennessee Plaza and Morgan Keegan Tower, respectively, 
  included in Parkway Properties, Inc.'s Form 8-K dated September 9, 1997,
  filed with the Securities and Exchange Commission.
  
  
  
                                             ERNST & YOUNG LLP
  Jackson, Mississippi
  September 9, 1997
metadata_documents: [{"type": "8-K", "sequence": "1", "secsgml_size_bytes": 231422}]
metadata_filer: {"company-data": {"conformed-name": "PARKWAY PROPERTIES INC", "cik": "0000729237", "assigned-sic": "6512", "irs-number": "742123597", "state-of-incorporation": "MD", "fiscal-year-end": "1231"}, "filing-values": {"form-type": "8-K", "file-number": "001-11533", "film-number": "97677484"}, "business-address": {"street1": "ONE JACKSON PL", "street2": "188 E CAPITOL ST STE 1000", "city": "JACKSON", "state": "MS", "zip": "39225-2728", "phone": "6019484091"}, "mail-address": {"street1": "P O BOX 22728", "street2": "P O BOX 22728", "city": "JACKSON", "state": "MS", "zip": "39201"}, "former-company": {"former-conformed-name": "PARKWAY CO", "date-changed": "19951018"}}
text: UNITED STATES	
   
                     SECURITIES AND EXCHANGE COMMISSION
  
                           WASHINGTON, DC  20549
  
                     ----------------------------------
  
                                  FORM 8-K
  
                               CURRENT REPORT
  
                        Pursuant to Section 13 or 15(d)
                                   of the
                        Securities Exchange Act of 1934
  
  Date of Report (Date of earliest event reported):September 9, 1997 
                                                   -----------------
  
                     	PARKWAY PROPERTIES, INC.
  - ------------------------------------------------------------------
       	(Exact name of Registrant as specified in its charter)
    
  
  Maryland                    1-11533	                 74-2123597 
  - ------------------------------------------------------------------
  (State or other     (Commission File Number)       	(IRS Employer
  jurisdiction of	                                   Identification
  incorporation)                                        	Number)   
  
  One Jackson Place Suite 1000
  188 East Capitol Street
  P. O. Box 24647
  Jackson, Mississippi                                 39225-4647
  - ------------------------------------------------------------------
  (Address of principal executive offices)            	(Zip Code)
  
  Registrant's telephone number, including area code (601) 948-4091
                                                     ---------------
  
  - ------------------------------------------------------------------
    (Former name or former address, if changed since last report)
  
                                FORM 8-K
  
                         PARKWAY PROPERTIES, INC.
  
  Item 5.  Other Events
  
  Proposed Acquisitions:
  
       (1)  A limited partnership in which Parkway Properties, Inc. 
  is a 99% limited partner and a wholly-owned subsidiary is a 1% 
  general partner, has a contract to purchase First Tennessee Plaza 
  for $29,200,000 from an unrelated party. The Company also expects to 
  pay approximately $786,000 in fees to pay off the existing first
  mortgage.  First Tennessee Plaza is a 419,809 rentable square foot, 
  27 floor office building with a four-level, 390 space parking garage
  located in Knoxville, Tennessee.  This acquisition is still subject
  to Parkway's due diligence review and the negotiation of definitive
  documentation. Therefore, there can be no assurance that the purchase
  of this office property will be completed.
  
       (2)  A limited partnership in which Parkway Properties, Inc. 
  is a 99% limited partner and a wholly-owned subsidiary is a 1% 
  general partner, has a contract to purchase Morgan Keegan Tower 
  for $36,000,000 from Morgan Properties, LLC. The Company
  also expects to pay approximately $591,000 in fees to pay off the 
  existing first mortgage.  Morgan Keegan Tower is a 334,668 rentable
  square foot, 21 floor office building located in Memphis, Tennessee.
  This acquisition is still subject to Parkway's due diligence review
  and the negotiation of definitive documentation.  Therefore, there can 
  be no assurance that the purchase of this office property will be completed.
  
       (3) 	A limited partnership in which Parkway Properties, Inc. is a 
  99% limited partner and a wholly-owned subsidiary is a 1% general 
  partner, has a contract to purchase Hightower Centre for 
  $6,750,000 from an unrelated party.  Hightower Centre consists of 
  two multi-story buildings containing 78,199 rentable square feet 
  with 332 parking spaces in Atlanta, Georgia.  This acquisition is 
  still subject to Parkway's due diligence review and the 
  negotiation of definitive documentation.  Therefore, there can be 
  no assurance that the purchase of this office property will be 
  completed.
  
  Item 7.   Financial Statements and Exhibits.
  
  	(a)  Financial Statements
  
  		(1) The following audited financial statement of First 
  Tennessee Plaza for the year ended December 31, 1996 is attached 
  hereto. Also included is the unaudited financial statement for the 
  six months ended June 30, 1997.
  
                                                           			Page
                                                           			----
  	Report of Independent Auditors                              	5
  	Statement of Rental Revenue and          
  	  Direct Operating Expenses	                                 6
  	Notes to Statement of Rental Revenue           
  	  and Direct Operating Expenses                              7
  
  		(2)	The following audited financial statement of Morgan 
  Keegan Tower for the year ended December 31, 1996 is attached 
  hereto. Also included is the unaudited financial statement for the 
  six months ended June 30, 1997.
  
                                                              	Page
                                                              	----
  	Report of Independent Auditors                                9
  	Statement of Rental Revenue and          
  	  Direct Operating Expenses                                  10
  	Notes to Statement of Rental Revenue           
  	  and Direct Operating Expenses                              11
  
  	(b)  Pro Forma Consolidated Financial Statements
  
  	The following unaudited Pro Forma Consolidated Financial 
  Statements are attached hereto.
  
  PARKWAY PROPERTIES, INC.
  
                                                              		Page
                                                              		----
  Pro Forma Consolidated Financial Statements (Unaudited)       	13
  Pro Forma Consolidated Balance Sheet (Unaudited) -
    As of June 30, 1997                                          15
  Pro Forma Consolidated Statement of Income (Unaudited) -
    For the Year Ended December 31, 1996                         16
  Pro Forma Consolidated Statement of Income (Unaudited) -
    For the Six Months Ended June 30, 1997                       17
  Notes to Pro Forma Consolidated Financial
    Statements (Unaudited)                                       18
  
  	(c)	Exhibits.
  
  		(10)(a)	Purchase and Sale Agreement between Carlyle 
  Real Estate Limited Partnership - XIII and Parkway Properties, 
  L. P. dated August 20, 1997.  Parkway agrees to furnish 
  supplementally to the Securities and Exchange Commission on 
  request a copy of any omitted schedule or exhibit to this 
  agreement.
  
  		(10)(b)  Purchase and Sale Agreement between Morgan 
  Properties, LLC and Parkway Properties, L. P. dated August 28, 
  1997.  Parkway agrees to furnish supplementally to the Securities 
  and Exchange Commission on request a copy of any omitted schedule 
  or exhibit to this agreement.
  
    (23)  Consent of Ernst & Young LLP.
  
                        Report of Independent Auditors
  
  The Board of Directors
  Parkway Properties, Inc.
  
  We have audited the accompanying statement of rental revenue and 
  direct operating expenses of First Tennessee Plaza for the year 
  ended December 31, 1996. This statement is the responsibility of 
  management.  Our responsibility is to express an opinion on this 
  statement based on our audit.
  
  We conducted our audit in accordance with generally accepted 
  auditing standards.  Those standards require that we plan and 
  perform the audit to obtain reasonable assurance about whether the 
  statement of rental revenue and direct operating expenses is free 
  of material misstatement.  An audit includes examining, on a test 
  basis, evidence supporting the amounts and disclosures in the 
  statement.  An audit also includes assessing the accounting 
  principles used and significant estimates made by management, as 
  well as evaluating the overall statement presentation.  We believe 
  that our audit provides a reasonable basis for our opinion.
  
  The accompanying statement was prepared for the purpose of 
  complying with the rules and regulations of the Securities and 
  Exchange Commission for inclusion in Form 8-K of Parkway 
  Properties, Inc., as described in Note 2, and is not intended to 
  be a complete presentation of First Tennessee Plaza's revenue and 
  expenses. 
  
  In our opinion, the statement of rental revenue and direct 
  operating expenses referred to above presents fairly, in all 
  material respects, the rental revenue and direct operating 
  expenses described in Note 2 of First Tennessee Plaza for the year 
  ended December 31, 1996, in conformity with generally accepted 
  accounting principles.
  
  We have compiled the accompanying statement of rental revenue and 
  direct operating expenses of First Tennessee Plaza for the six 
  months ended June 30, 1997 in accordance with the Statement on 
  Standards for Accounting and Review Services issued by the 
  American Institute of Certified Public Accountants. A compilation 
  is limited to presenting in the form of a financial statement 
  information that is the representation of management.  We have not 
  audited or reviewed the statement of rental revenue and direct 
  operating expenses of First Tennessee Plaza for the six months 
  ended June 30, 1997 and, accordingly, do not express an opinion or 
  any other form of assurance on the statement.
  
  Jackson, Mississippi                			/s/ Ernst & Young LLP
  August 27, 1997
  
                          First Tennessee Plaza
  
                       Statement of Rental Revenue
                      and Direct Operating Expenses
  
                                 Year Ended        Six Months Ended
                              December 31, 1996      June 30, 1997 
                             ------------------    ----------------
                                                      (unaudited)
  
  Rental revenue:
   Minimum rents ...............	$5,041,584          	$2,561,797
   Parking fee income...........    428,889             	203,363
   Reimbursed charges and
     other income...............   	487,591             	237,112
                                	----------          	----------
                                	 5,958,064          	 3,002,272
                                	----------          	----------
  
  Direct operating expenses
   (Note 2):
    Utilities...................   	931,191            	 423,338
    Real estate taxes...........   	641,403             	320,702
    Maintenance services
      and supplies..............   	572,238             	267,843
    Janitorial services
      and supplies..............   	273,226             	155,174
    Management fees (Note 3)....	   177,246              	89,597
    Salaries....................   	200,591              	87,348
    Insurance...................    	72,038              	36,019
    Security service............   	102,183	              48,900
    Administrative and
     miscellaneous expenses.....    112,688              	38,744
                                	----------          	----------
                                 	3,082,804           	1,467,665
                                	----------          	----------
  Excess of rental revenue over
    direct operating expenses...	$2,875,260          	$1,534,607
                                	==========          	==========
  
                           See accompanying notes.
  
                            First Tennessee Plaza
  
                    Notes to Statement of Rental Revenue
                     and Direct Operating Expenses
  
  1.  Organization and Significant Accounting Policies
  
  Description of Property
  
  Parkway Properties, Inc. (the "Company") expects to complete the 
  acquisition of First Tennessee Plaza (the "Building") effective 
  September 30, 1997 from an unrelated party.  The twenty-seven 
  story building is located in Knoxville, Tennessee and contains 
  approximately 419,809 (unaudited) rentable square feet.
  
  Rental Income
  
  Minimum rents from leases are accounted for ratably over the term 
  of each lease.  Tenant reimbursements are recognized as income as 
  the applicable services are rendered or expenses incurred.
  
  The future minimum rents and noncancelable operating leases at 
  December 31, 1996 are as follows:
  
                          Year            Amount
                     --------------------------------
                          1997         $ 5,047,000
                          1998           4,867,000
                          1999           4,256,000
                          2000           3,519,000
                          2001           3,228,000   
                       Thereafter        9,075,000
                                       -----------
                                       $29,992,000
                                       ===========
  
  The above amounts do not include tenant reimbursements for 
  utilities, taxes, insurance and common area maintenance.
  
  One tenant, whose lease expires September 30, 2004, accounted for 
  approximately 27% of the Building's 1996 rental revenue. 
  
                           First Tennessee Plaza
  
                   Notes to Statement of Rental Revenue
                 and Direct Operating Expenses (continued)
  
  2.  Basis of Accounting
  
  The accompanying statement of rental revenue and direct operating 
  expenses is presented on the accrual basis.  The statement has 
  been prepared in accordance with the applicable rules and 
  regulations of the Securities and Exchange Commission for real 
  estate properties acquired.  Accordingly, the statement excludes 
  certain expenses not comparable to the proposed future operations 
  of the Building such as depreciation and mortgage interest 
  expense.  Management is not aware of any material factors relating 
  to the Building that would cause the reported financial 
  information not to be necessarily indicative of future operating 
  results.
  
  3.  Management Fees
  
  Management fees of approximately 3% of revenues received from the 
  operations of the Building were paid to an unrelated management 
  company.
  
       
  
                       Report of Independent Auditors
  
  The Board of Directors
  Parkway Properties, Inc.
  
  We have audited the accompanying statement of rental revenue and 
  direct operating expenses of Morgan Keegan Tower for the year 
  ended December 31, 1996. This statement is the responsibility of 
  management.  Our responsibility is to express an opinion on this 
  statement based on our audit.
  
  We conducted our audit in accordance with generally accepted 
  auditing standards.  Those standards require that we plan and 
  perform the audit to obtain reasonable assurance about whether the 
  statement of rental revenue and direct operating expenses is free 
  of material misstatement.  An audit includes examining, on a test 
  basis, evidence supporting the amounts and disclosures in the 
  statement.  An audit also includes assessing the accounting 
  principles used and significant estimates made by management, as 
  well as evaluating the overall statement presentation.  We believe 
  that our audit provides a reasonable basis for our opinion.
  
  The accompanying statement was prepared for the purpose of 
  complying with the rules and regulations of the Securities and 
  Exchange Commission for inclusion in Form 8-K of Parkway 
  Properties, Inc. as described in Note 2, and is not intended to be 
  a complete presentation of Morgan Keegan Tower's revenue and 
  expenses. 
  
  In our opinion, the statement of rental revenue and direct 
  operating expenses referred to above presents fairly, in all 
  material respects, the rental revenue and direct operating 
  expenses described in Note 2 of Morgan Keegan Tower for the year 
  ended December 31, 1996, in conformity with generally accepted 
  accounting principles.
  
  We have compiled the accompanying statement of rental revenue and 
  direct operating expenses of Morgan Keegan Tower for the six 
  months ended June 30, 1997 in accordance with the Statement on 
  Standards for Accounting and Review Services issued by the 
  American Institute of Certified Public Accountants. A compilation 
  is limited to presenting in the form of a financial statement 
  information that is the representation of management.  We have not 
  audited or reviewed the statement of rental revenue and direct 
  operating expenses of Morgan Keegan Tower for the six months ended 
  June 30, 1997 and, accordingly, do not express an opinion or any 
  other form of assurance on the statement.
  
  Jackson, Mississippi	                  		/s/ Ernst & Young LLP
  August 28, 1997
  
                           Morgan Keegan Tower
  
                       Statement of Rental Revenue
                      and Direct Operating Expenses
  
                                 Year Ended 	     Six Months Ended
                              December 31, 1996     June 30, 1997
                              -----------------   ----------------
                                                    (unaudited)
  
  Rental revenue:
   Minimum rents ...............	$4,166,546        	$  2,014,271
   Parking fee income...........   	191,871              	77,777
   Reimbursed charges and
     other income...............   	274,679             	126,199
                                	----------	          ----------
                                	 4,633,096           	2,218,247
                                	----------          	----------
  
  Direct operating expenses
   (Note 2):
    Utilities...................   	572,971	             287,120
    Real estate taxes...........     88,196              644,098
    Garage expenses.............   	407,321             	166,800
    Maintenance services
     and supplies...............  	 362,798             	260,119
    Janitorial services
     and supplies...............  	 232,079             	128,218
    Management fees (Note 3)....  	 149,440              	61,724
    Salaries....................    	93,379              	46,129
    Insurance...................    	25,158              815,769
    Security service............    	73,649              	41,871
    Administrative and
      miscellaneous expenses....    	87,828              858,383
                                	----------          	----------
  	                               2,092,819           91,110,231
                     	           ----------          	----------
  Excess of rental revenue over
   direct operating expenses....	$2,540,277          	$1,108,016
                                	==========	          ==========
  
  See accompanying notes.
  
                             Morgan Keegan Tower
  
                     Notes to Statement of Rental Revenue
                       and Direct Operating Expenses
  
  1.  Organization and Significant Accounting Policies
  
  Description of Property
  
  Parkway Properties, Inc. (the "Company") expects to complete the 
  acquisition of the Morgan Keegan Tower (the "Building") 
  effective September 30, 1997 from Morgan Properties, LLC, an 
  unrelated party.  The twenty-one story building is located in 
  Memphis, Tennessee and contains approximately 334,668 
  (unaudited) square feet of leasable area.
  
  Rental Income
  
  Minimum rents from leases are accounted for ratably over the term 
  of each lease.  Tenant reimbursements are recognized as income as 
  the applicable services are rendered or expenses incurred.
  
  The future minimum rents on non-cancelable operating leases at 
  December 31, 1996 are as follows:
  
                          Year            Amount
                     --------------------------------
                          1997         $ 4,127,000
                          1998           4,071,000
                          1999           3,905,000
                          2000           3,771,000
                          2001           3,214,000
                       Thereafter        5,999,000
                                       -----------
                                       $25,087,000                  
                                       ===========
  
  The above amounts do not include tenant reimbursements for 
  utilities, taxes, insurance and common area maintenance.
  
  Two tenants, whose leases expire January 31, 2002 and November 30, 
  2003, accounted for approximately 56% of the Building's 1996 
  rental revenue.
  
                             Morgan Keegan Tower
   
                     Notes to Statement of Rental Revenue
                   and Direct Operating Expenses (continued)
  
  2.  Basis of Accounting
  
  The accompanying statement of rental revenue and direct operating 
  expenses is presented on the accrual basis.  The statement has 
  been prepared in accordance with the applicable rules and 
  regulations of the Securities and Exchange Commission for real 
  estate properties acquired.  Accordingly, the statement excludes 
  certain expenses not comparable to the proposed future operations 
  of the Building such as depreciation and mortgage interest 
  expense.  Management is not aware of any material factors relating 
  to the Building that would cause the reported financial 
  information not to be necessarily indicative of future operating 
  results.
  
  3.  Management Fees
  
  Management fees of approximately 3% of revenues received from the 
  operations of the Building were paid to an unrelated management 
  company.
  
                       PARKWAY PROPERTIES, INC.
  
              Pro Forma Consolidated Financial Statements
                             (Unaudited)
  
  The following unaudited pro forma consolidated balance sheet as of 
  June 30, 1997 and pro forma consolidated statements of income of 
  Parkway Properties, Inc. ("Parkway") for the year ended December 
  31, 1996 and six months ended June 30, 1997 give effect to the 
  recent purchases of Parkway for the periods stated and the 
  proposed purchases of First Tennessee Plaza, Morgan Keegan Tower 
  and Hightower Centre.  The pro forma consolidated financial 
  statements have been prepared by management of Parkway based upon 
  the historical financial statements of Parkway and the adjustments 
  and assumptions in the accompanying notes to the pro forma 
  consolidated financial statements.
  
  The pro forma consolidated balance sheet sets forth the effect of 
  Parkway's purchases of Lakewood II, NationsBank Tower and Fairway 
  Plaza as well as the proposed purchases of First Tennessee Plaza, 
  Morgan Keegan Tower and Hightower Centre, as if they had been 
  consummated on June 30, 1997.
  
  The pro forma consolidated statements of income sets forth the 
  effects of Parkway's purchases of the following buildings as well 
  as the proposed purchases of First Tennessee Plaza, Morgan Keegan 
  Tower and Hightower Centre. as if they had been consummated on 
  January 1, 1996.  
  
  BUILDING                            DATE OF PURCHASE
  
  Fairway Plaza                           08/12/97
  NationsBank Tower                       07/31/97
  Lakewood II                             07/10/97
  Sugar Grove                             05/01/97
  Vestavia Centre                         04/04/97
  Meridian                                03/31/97
  Charlotte Park Executive Center         03/18/97
  Courtyard at Arapaho                    03/06/97
  Ashford II                              01/28/97          
  Forum II & III                          01/07/97
  Tensor                                  10/31/96   
  BB&T Financial Center                   09/30/96
  Falls Pointe                            08/09/96 
  Roswell North                           08/09/96
  Cherokee                                07/09/96
  Courthouse                              07/09/96
  400 Northbelt                           04/15/96
  Woodbranch                              04/15/96
  One Park 10 Plaza                       03/07/96
  
  In addition to the purchases listed above, the pro forma 
  consolidated statements of income set forth the effect of the May 
  31, 1996 sale of 157 mortgage loans, the placement of non-recourse
  mortgage debt on certain properties acquired during 1995 and 1996 
  or assumed in the purchases, the December 24, 1996 sale of the 
  Virginia Beach mortgage loan and the sale of 2,012,500 shares of 
  common stock on January 22, 1997 as if all the transactions had
  occurred January 1, 1996.
  
  These pro forma consolidated financial statements may not be 
  indicative of the results that actually would have occurred if the 
  purchases, sales and/or financings had been in effect on the dates 
  indicated or which may be obtained in the future.  The pro forma 
  consolidated financial statements should be read in conjunction 
  with the consolidated financial statements and notes of Parkway 
  included in its annual report on Form 1O-KSB for the year ended 
  December 31, 1996.
  
                	PARKWAY PROPERTIES, INC. AND SUBSIDIARIES
                  	PRO FORMA CONSOLIDATED BALANCE SHEET
                             	June 30, 1997
                              	(Unaudited)
  
                                  Parkway    Pro Forma     Parkway
                                 Historical  Adjustments  Pro Forma
                                 ----------  -----------  ---------
                                            (In thousands)
   Assets
   Real estate related investments:
     Office buildings.............$204,510  $ 112,132(1-6)$316,642
     Land held for development....   1,721          -        1,721
     Accumulated depreciation..... (10,749)         -      (10,749)
                                  --------   --------     --------
                                  	 195,482    112,132      307,614
     Real estate held for sale:
       Land.......................   5,187          -        5,187
       Operating properties.......   1,492          -        1,492
       Other non-core 
       real estate assets.........     253          -          253
     Mortgage loans...............     326          -          326
     Real estate partnership......     311          -          311
                                  --------   --------     --------
                                   203,051    112,132      315,183
   Interest, rents receivable 
     and other assets.............   6,343          -        6,343
   Cash and cash equivalents......     480       (480)           -
                                  --------   --------     --------
                                  $209,874   $111,652		$321,526
                                  ========   ========     ========
  Liabilities
  Notes payable to banks..........$  8,200	   $104,742     $112,942
  Mortgage notes payable
    without recourse..............  61,681      6,910(1)    68,591
  Accounts payable and other 
    liabilities...................   7,644          -        7,644
                                  --------   --------     --------
                                    77,525    111,652		 189,177
                                  --------   --------     --------
  Stockholders' Equity
  Common stock, $.001 par value, 
    70,000,000 shares authorized, 
    6,289,230 shares issued in
    1997..........................       6          -            6
  Additional paid-in capital...... 103,719          -      103,719
  Retained earnings...............  28,624          -       28,624
                                  --------   --------     --------
                                   132,349          -      132,349
                                  --------   --------     --------
                                  $209,874   $111,652		$321,526
                                  ========   ========     ========
                                
                              See accompanying notes
  
                      PARKWAY PROPERTIES, INC. AND SUBSIDIARIES
                     	PRO FORMA CONSOLIDATED STATEMENT OF INCOME
                       	FOR THE YEAR ENDED DECEMBER 31, 1996
                                    (Unaudited)
  
                                  Parkway    Pro Forma    Parkway
                                Historical Adjustments(7) Pro Forma
                                ---------- -------------- ---------
                              (In thousands, except per share data)
  Revenues 
  Income from office properties...$18,840    $37,297 (a)  $56,137
  Income from other real estate 
    properties....................  1,773          -        1,773
  Interest on mortgage loans......  1,740     (1,384)(d)      356
  Management company income.......    784          -          784
  Interest on investments.........    500          -          500
  Dividend income.................    118          -          118
  Deferred gains and other income.    324          -          324
  Gains on real estate held 
    for sale and mortgage loans...  9,909          -        9,909
  Gain on securities..............    549          -          549
                                  -------    -------      -------
                                   34,537     35,913       70,450
                                  -------    -------      -------
  Expenses
  Office properties                                  
    Operating expense.............  8,466     17,564 (a)   26,030
    Interest expense..............  3,526      2,158 (c)    5,684
    Depreciation and amortization.  2,444      5,041 (a)    7,485
    Minority interest.............    (28)         -          (28)
  Other real estate properties
    Operating expense.............  1,379          -        1,379
  Interest expense
    Notes payable to banks........    281      7,921 (e)    8,202
    Notes payable on wrap 
      mortgages...................    340       (340)(f)        -
  Management company expense......    673          -          673
  General and administrative......  2,982          -        2,982
                                  -------    -------      -------
                                   20,063     32,344       52,407 
                                  -------    -------      -------
  Income before income taxes...... 14,474      3,569       18,043
  Income tax expense..............    103          -          103
                                  -------    -------      -------
  Net income......................$14,371    $ 3,569      $17,940
                                  =======    =======      =======
  Net income per share............$  3.92                 $  3.16(8)
                                  =======                 =======
  Weighted average shares 
    outstanding...................  3,662                   5,674
                                  =======                 =======
  
                            See accompanying notes
  
                  PARKWAY PROPERTIES, INC. AND SUBSIDIARIES
                 	PRO FORMA CONSOLIDATED STATEMENT OF INCOME
                  	FOR THE SIX MONTHS ENDED JUNE 30, 1997
                                (Unaudited)
  
                                  Parkway    Pro Forma    Parkway
                                Historical Adjustments(7) Pro Forma
                                ---------- -------------- ---------
                               (In thousands, except per share data)
  Revenues 
  Income from office properties...$18,065    $11,317 (b)   $29,382
  Income from other real estate 
    properties....................    440          -           440
  Interest on mortgage loans......     32          -            32
  Management company income.......    251          -           251
  Interest on investments.........    330          -           330
  Dividend income.................    128          -           128
  Deferred gains and other income.     64          -            64
                                  -------    -------       -------
                                   19,310	   11,317         30,627
                                  -------    -------       -------
  Expenses
  Office properties                                  
    Operating expense.............  7,459      5,198 (b)    12,657
    Interest expense:
      Contractual.................  2,499        279 (c)     2,778
      Amortization of loan cost...     43          -            43
    Depreciation and amortization.  2,255      1,520 (b)     3,775
    Minority interest.............     59          -            59 
  Other real estate properties
    Operating expense.............    293          -           293
  Interest expense on bank notes:
    Contractual...................    130      3,960 (e)     4,090
    Amortization of loan costs....     77          -            77
  Management company expense......    172          -           172
  General and administrative......  1,677          -         1,677
                                  -------    -------       -------
                                   14,664     10,957        25,621 
                                  -------    -------       -------
  Income before gains.............  4,646        360         5,006
                                  -------    -------       -------
  Gain on sales
  Gain on real estate held for 
    sale..........................  1,574          -         1,574
                                  -------    -------       -------
  Net income......................$ 6,220    $   360       $ 6,580
                                  =======    =======       =======
  Net income per share............$  1.04                  $  1.10
                                  =======                  =======
  Weighted average shares 
    outstanding...................  6,004                    6,004
                                  =======                  =======
  
                            See accompanying notes
  
                           PARKWAY PROPERTIES, INC.
  
              Notes to Pro Forma Consolidated Financial Statements
                                  (Unaudited)
  
  1. 	On July 10, 1997, the Company purchased the 118,750 square 
      foot Lakewood II office building in Atlanta, Georgia for 
      $11,500,000 from an unrelated party.  This five-story 
      office building was constructed in 1988.  The Company 
      assumed a $6,910,000 first mortgage on the property with an 
      8.08% interest rate as part of the purchase.  The remaining 
      balance was funded with advances under bank lines of 
      credit.
  
  2. 	On July 31, 1997, the Company purchased the 296,797 square 
      foot NationsBank Tower in Columbia, South Carolina for 
      $20,600,000 from an unrelated party. NationsBank Tower is a 
      twenty-story office building with an attached 565 space, 
      eight-level parking deck.  The building was constructed in 
      1973 and is located on Gervais Street in the Central 
      Business District (CBD). The purchase was funded with 
      advances under bank lines of credit.
  
  3. 	On August 12, 1997, the Company purchased Fairway Plaza in 
      Los Colinas, Texas for $6,705,000 from an unrelated party. 
      Fairway Plaza consists of two multi-story office buildings 
      containing 82,268 net rentable square feet with 321 surface 
      parking spaces situated on 6.31 acres.  The purchase was 
      funded with advances under bank lines of credit
      
  4.  The Company has a contract to purchase First Tennessee Plaza 
      in Knoxville, Tennessee for $29,200,000 from an unrelated party.
      The Company also expects to pay approximately $786,000 in fees
      to pay off the existing first mortgage.  First Tennessee Plaza
      is a 27 story office building containing 419,809 net rentable
      square feet with a four level 390 space parking garage.
  
  5.  The Company has a contract to purchase Morgan Keegan Tower in 
      Memphis, Tennessee for $36,000,000 from Morgan Properties, LLC,
      an unrelated party.  The Company also expects to pay approximately 
      $591,000 in fees to pay off the existing first mortgage.  Morgan 
      Keegan Tower is a 21 story office building containing 334,668 net
      rentable square feet.
  
  6.  The Company has a contract to purchase Hightower Centre in 
      Atlanta, Georgia for $6,750,000 from an unrelated party.  
      Hightower Centre consists of two multi-story buildings 
      containing 78,199 rentable square feet with 332 parking 
      spaces.
  
  7. 	The pro forma adjustments to the Consolidated Statement of 
      Income for the year ended December 31, 1996 and six months 
      ended June 30, 1997 set forth the effects of Parkway's 
      purchase of the following buildings as well as the proposed 
      purchase of First Tennessee Plaza, Morgan Keegan Tower and 
      Hightower Centre as if they had been consummated on January 
      1, 1996.  
  
  BUILDING                            DATE OF PURCHASE
  
  Fairway Plaza                           08/12/97
  NationsBank Tower                       07/31/97
  Lakewood II                             07/10/97
  Sugar Grove                             05/01/97
  Vestavia Centre                         04/04/97
  Meridian                                03/31/97
  Charlotte Park Executive Center         03/18/97
  Courtyard at Arapaho                    03/06/97
  Ashford II                              01/28/97
  Forum II & III                          01/07/97
  Tensor                                  10/31/96
  BB&T Financial Center                   09/30/96
  Falls Pointe                            08/09/96
  Roswell North                           08/09/96
  Cherokee                                07/09/96
  Courthouse                              07/09/96
  400 Northbelt                           04/15/96
  Woodbranch                              04/15/96
  One Park 10 Plaza                       03/07/96
  
  In addition to the purchases listed above, the adjustments on 
  the pro forma consolidated statements of income set forth the 
  effect of the May 31, 1996 sale of 157 mortgage loans, the 
  December 24, 1996 sale of the Virginia Beach mortgage loan 
  and the placement of non-recourse mortgage debt on certain 
  properties acquired during 1995 and 1996 or assumed in the 
  purchases as if the transactions occurred January 1, 1996. 
  These pro forma adjustments are detailed below by property 
  for the year ended December 31, 1996 and six months ended 
  June 30, 1997.
  
  The effect on income and expenses from real estate properties 
  due to the above purchases are as follows:
  
  	(a)  For the year ended December 31, 1996:
  
                           Revenue              Expenses
                         -----------   ---------------------------
                         Income From         Real Estate Owned
                         Real Estate     Operating     Depreciation
                         Properties       Expense         Expense
                         -----------   -------------   ------------
  	One Park 10          $    299,000   $     160,000    $    25,000
       400 North Belt
        & Woodbranch       1,036,000         551,000         92,000
  	Cherokee &
  	  Courthouse
  	  Road Bldgs.             917,000         480,000        124,000
  	Falls Pointe &
  	  Roswell North         1,161,000         439,000        191,000
  	BB&T Financial
  	  Center                3,072,000       1,055,000        413,000
       Tensor                810,000         530,000         64,000
       Forum II & III      2,749,000       1,331,000        370,000
       Charlotte Park      2,616,000       1,180,000        333,000
       Ashford II            649,000         441,000         50,000
  	Courtyard at
  	  Arapaho               2,196,000         948,000        340,000
    	Meridian                843,000         503,000        236,000
       Vestavia              878,000         394,000        105,000
       Sugar Grove         1,082,000         643,000        174,000
  	Lakewood II             1,915,000         839,000        259,000
  	NationsBank Tower       4,094,000       1,782,000        464,000
  	Fairway Plaza           1,408,000         682,000        151,000
  	First Tennessee
  	  Plaza                 5,958,000       3,083,000        675,000
  	Morgan Keegan
  	  Tower                 4,633,000       2,093,000        823,000
  	Hightower Centre          981,000		       430,000	    	  152,000
                         -----------     -----------     ----------
                         $37,297,000     $17,564,000     $5,041,000
      	                  ===========     ===========     ==========
  
  	Depreciation is provided by the straight-line method over the 
  estimated useful lives of the buildings (40 years).
  	 
  	(b)  For the six months ended June 30, 1997:
  
                           Revenue              Expenses
                         -----------   ---------------------------
                         Income From         Real Estate Owned
                         Real Estate    Operating     Depreciation
                         Properties      Expense        Expense
                         -----------   ------------   ------------
  	Charlotte Park        $   505,000    $   208,000    $    69,000
       Ashford II             54,000         37,000          4,000
  	Courtyard at
  	  Arapaho                 366,000        164,000         58,000
    	Meridian                354,000        123,000         59,000
       Vestavia              240,000         91,000         26,000
       Sugar Grove           309,000        165,000         43,000
  	Lakewood II               977,000        447,000        129,000
  	NationsBank Tower       2,050,000        860,000        232,000
  	Fairway Plaza             687,000        303,000         75,000
  	First Tennessee
  	  Plaza                 3,002,000      1,468,000        337,000
  	Morgan Keegan
  	  Tower                 2,218,000      1,110,000        412,000
  	Hightower Centre	         555,000	     	 222,000	     	  76,000
                         -----------    -----------    -----------
      	                  $11,317,000    $ 5,198,000    $ 1,520,000
  	                      ===========    ===========    ===========
  
  Depreciation is provided by the straight-line method over the 
  estimated useful lives of the buildings (40 years).
  
  (c)	 Pro forma interest expense on real estate owned reflects 
       the non-recourse debt placed on certain buildings 
       acquired during 1995 and 1996 and debt assumed upon 
       purchase at the actual amounts and rates by property as 
       if placed January 1, 1996 and is detailed below.
   
  	Property/Placement                 Year Ended
  	    Date/Rate           Debt        12/31/96
  	------------------  -----------    ----------
  	IBM Building
  	  2/96 7.78%        $ 4,800,000    $   41,000
  
  	Waterstone
  	  6/96 8.00%          5,620,000       185,000
  
   One Park 10
  	  7/96 8.35%          4,700,000       196,000
  
  	400 North Belt &
  	  Woodbranch
  	  7/96 8.25%         10,000,000       412,000
       
   Falls Pointe & 
     Roswell North
     12/96 8.375%        9,850,000       766,000
  
  	Lakewood II*
  	  7/97 8.08%          6,910,000       558,000
                                      ----------
                                      $2,158,000
                                      ==========
  
  	*The only pro forma adjustment to interest expense on 
  real estate owned for the six months ended June 30, 1997 
  is due to the debt assumed in the purchase of Lakewood 
  II in the amount of $279,000.
  
  (d)	 The January 1, 1996 pro forma effect of the sale of 157 
       mortgage loans on May 31, 1996 and the December 24, 1996 
       sale of the Virginia Beach mortgage loan is as follows:
  
                                        Year Ended
                                         12/31/96
                                       ------------
       	Interest Income:
        		Mortgage loans               $(1,384,000)
  
  (e) 	The pro forma effect of the building purchases as well 
       as the stock offering of 2,012,500 shares on interest 
       expense on notes payable to banks for the year ended 
       December 31, 1996 and six months ended June 30, 1997 is 
       an increase of $7,921,000 and $3,960,000, respectively.
  
  (f) 	The pro forma effect of the sale of the Virginia Beach 
       mortgage loan on interest expense on notes payable on 
       wrap mortgages for the year ended December 31, 1996 is 
       a decrease of $340,000.
  
  8.  The pro forma earnings per share for the year ended December 
      31, 1996 reflect the sale of 2,012,500 shares of common stock 
      under its existing shelf registration on January 22, 1997.
  
  9. 	No additional income tax expenses were provided because of 
      the Company's net operating loss carryover and status as a 
      REIT.
  
  10.	All per share information for the year ended December 31, 
      1996 has been restated to reflect a 3 for 2 common stock 
      split effected as a dividend of one share for every two 
      shares outstanding on April 30, 1996 as well as the June 14, 
      1996 private placement of 1,140,000 shares as if both 
      transactions had occurred January 1, 1996.
  
                              FORM 8-K
  
                       PARKWAY PROPERTIES, INC.
  
                             SIGNATURES
  
  Pursuant to the requirements of the Securities Exchange Act of 
  1934, the Registrant has duly caused this report to be signed on 
  its behalf by the undersigned hereunto duly authorized.
  
  DATE:  September 9, 1997		   	PARKWAY PROPERTIES, INC.
  	
                         							BY:	/s/Sarah P. Clark
                                    Sarah P. Clark			
                                    Senior Vice President,
                                    Chief Financial Officer, 
                                    Treasurer and Secretary	
  		
  
                              PURCHASE AGREEMENT
                  (First Tennessee Plaza; Knoxville, Texas)
  
  THIS AGREEMENT is made and entered into as of August 
  _______, 1997 (the "Effective Date") by and between CARLYLE REAL 
  ESTATE LIMITED PARTNERSHIP-XIII, an Illinois limited partnership 
  (hereinafter called "Seller"), and PARKWAY PROPERTIES, L.P., a 
  Delaware limited partnership (hereinafter called "Buyer").
  
                      R E C I T A L S
  
  	A.	Seller is the owner of that certain real property 
  located in the City of Knoxville, County of Knox, State of 
  Tennessee, consisting primarily of an office building (the 
  "Building") sometimes known as "First Tennessee Plaza".
  
  	B.	Buyer desires to purchase such premises on the terms 
  and conditions hereinafter documented.
  
  	NOW, THEREFORE, in consideration of the mutual undertakings 
  of the parties hereto, it is hereby agreed as follows:
  
  	1.	Purchase and Sale.  Seller shall sell to Buyer, and 
  Buyer shall purchase from Seller, the land (the "Land") 
  described in Exhibit "A" attached hereto and made a part hereof, 
  together with all right, title and interest of Seller in and to 
  all improvements, structures and fixtures located upon the Land, 
  all right, title and interest of Seller in and to those items of 
  personal property described in Exhibit "B" attached hereto and 
  made a part hereof, all right, title and interest of Seller in 
  and to the name "First Tennessee Plaza", to the extent 
  assignable, all right, title and and interest of Seller in and 
  to all contract rights and agreements, and all right, title and 
  interest of Seller in and to all leases, tenant lists, 
  advertising material and telephone exchange numbers relating 
  solely to the Property (hereinafter, collectively, the 
  "Property"), all upon the terms, covenants and conditions 
  hereinafter set forth.
  
  	2.	Purchase Price.
  
  		A.	The purchase price (the "Purchase Price") for the 
  Property shall be the sum of Twenty-Nine Million Two Hundred 
  Thousand and No/100 Dollars ($29,200,000.00).
  
  	3.	Payment of Purchase Price.  The Purchase Price shall 
  be paid to Seller by Buyer as follows:
  
  		A.	Escrow Deposit.  Concurrently herewith, Buyer 
  shall deliver $100,000 (together with all interest thereon, the 
  "Initial Escrow Deposit") to Ticor Title Insurance Company, 201 
  North LaSalle Street, Suite 1400, Chicago, Illinois, 60601, 
  Attention:  Rick Lucchesi (which company, in its capacity as 
  escrow holder hereunder, is called "Escrow Holder").  In 
  addition, if Buyer shall deliver the "Approval Notice" prior to 
  the expiration of the "Due Diligence Period", as provided (and 
  defined) in paragraph 4B hereof, Seller shall concurrently 
  therewith deliver an additional deposit of $150,000 (the 
  "Additional Escrow Deposit") to Escrow Holder.  Each deposit to 
  be made hereunder shall be made by a bank or cashier's check 
  drawn on a major national money center banking institution 
  reasonably acceptable to Seller (or by other delivery of good 
  funds reasonably acceptable to Seller), and the amounts so 
  deposited shall be held by Escrow Holder as a deposit against 
  the Purchase Price in accordance with the terms and provisions 
  of this Agreement.  As used herein, the term "Escrow Deposit" 
  means the Initial Escrow Deposit and, from and after the deposit 
  thereof, the Additional Escrow Deposit, together  with all 
  interest earned on such deposits while the same are held in 
  escrow hereunder.  At all times in which the Escrow Deposit is 
  being held by the Escrow Holder, the Escrow Deposit shall be 
  invested by Escrow Holder in the following investments 
  ("Approved Investments"):  (i) an insured interest bearing 
  account of a financial institution reasonably acceptable to 
  Buyer and Seller, or (ii) such other manner as may be reasonably 
  approved by Seller and Buyer.  The Escrow Deposit shall be 
  disposed of by Escrow Holder only as provided in this Agreement.
  
  		B.	Independent Consideration.  Seller and Buyer 
  acknowledge and agree that One Hundred and No/100 Dollars 
  ($100.00) of the Escrow Deposit (the "Independent Contract 
  Consideration") shall be paid to Seller is terminated for any 
  reason.  Seller and Buyer acknowledge and agree that the 
  Independent Contract Consideration has been bargained for and 
  agreed to as additional consideration for Seller's execution and 
  delivery of this Agreement.  At "Closing" (as hereinafter 
  defined), the Independent Contract Consideration shall be 
  applied to the Purchase Price.  Notwithstanding the foregoing to 
  the contrary, the payment to Seller of such Independent Contract 
  Consideration shall in no way limit, and are in addition to, any 
  other rights or remedies of Seller hereunder (including, without 
  limitation, disposition of the Escrow Deposit in accordance with 
  paragraph 9 below). 
  
  		C.	Existing Debt.  Subject to the provisions of 
  paragraph 4C below, payment of a portion of the Purchase Price 
  shall be evidenced by Buyer taking title to the Property subject 
  to the "Existing Encumbrance" and the "Loan Documents" 
  (including, the "Existing Note") secured thereby (as such terms 
  are defined in Exhibit "C" attached hereto and made a part 
  hereof), such payment being in an amount equal to the 
  outstanding principal balance of the Existing Note as of the 
  "Closing Date" (as hereinafter defined).  Assuming the Closing 
  Date occurs on September 4, 1997, the outstanding principal 
  balance of the Existing Note is anticipated to be approximately 
  $14,900,000.  
  
  		D.	Closing Payment.  The balance of the Purchase 
  Price (i.e., the Purchase Price less the sum of the Deposit and 
  the amounts, if any, deemed paid pursuant to paragraph 3B above, 
  as such amounts shall be adjusted by the prorations and credits 
  specified herein) shall be paid by wire transfer of immediately 
  available federal funds on the Closing Date as directed by 
  Seller (the amount to be paid under this subparagraph D being 
  herein called the "Closing Payment").  Assuming the Closing Date 
  occurs in September, 1997, the
  Closing Payment is anticipated to be approximately $29,200,000, 
  less the Deposit and adjusted by the prorations and credits 
  specified herein (i.e., $26,700,000, less the anticipated 
  principal balance of the Existing Note of approximately 
  $14,900,000).
  
  	4.	Conditions Precedent. 
  
  		A.	Title Matters.
  
  			(1)	Title Report.  Seller has delivered a 
  commitment for title insurance ("Title Commitment") covering the 
  Property from Ticor Title Insurance Company dated June 16, 1997 
  (which company, in its capacity as title insurer hereunder, is 
  herein called the "Title Company").  In addition, Seller has 
  delivered to Buyer an update of that certain survey of the 
  Property dated February 23, 1995, and last revised July 25, 
  1997, prepared by Barge, Waggoner, Sumner & Cannon, Inc., which 
  survey shall be certified to Buyer and the "Lender" (as 
  hereinafter defined) and Title Company ("Survey").  If Buyer 
  shall deliver the Approval Notice on or before the end of the 
  Due Diligence Period, Buyer shall be deemed to have approved the 
  exceptions to title shown on the Title Commitment and the 
  matters disclosed on the Survey so long as the Title Commitment 
  and Survey have been previously delivered to Buyer.  Approval by 
  Buyer of any additional exceptions to title or survey matters 
  disclosed after the end of the Due Diligence Period shall be a 
  condition precedent to Buyer's obligation to purchase the 
  Property (Buyer hereby agreeing that its approval of such 
  additional exceptions to title or survey matters shall not be 
  unreasonably withheld).  Unless Buyer gives written notice that 
  it disapproves any such additional exceptions to title or survey 
  matters, stating the exceptions so disapproved, on or before the 
  sooner to occur of 5 days after receipt of written notice 
  thereof or the Closing Date, Buyer shall be deemed to have 
  approved said exceptions.  If, for any reason, on or before the 
  Closing Date, Seller does not cause any exceptions to title or 
  survey matters which Buyer disapproves (to the extent Buyer is 
  permitted hereunder to so disapprove) either to be removed or to 
  obtain a title endorsement (if available) insuring over such 
  disapproved matter on or before the Closing Date at no cost or 
  expense to Buyer (Seller having the right but not the obligation 
  to do so), the obligation of Seller to sell, and Buyer to buy, 
  the Property as herein provided shall terminate (and Seller and 
  Buyer shall have no further obligations in connection herewith). 
   Buyer shall have the option to waive the condition precedent 
  set forth in this Paragraph 4A(1) by notice to Seller.  In the 
  event of such waiver, such condition shall be deemed satisfied.
  
   			(2)	Exceptions to Title.  Buyer shall be 
  obligated to accept title to the Property, subject to the 
  following exceptions to title:
  
  				(a)	Real estate taxes and assessments not 
  yet due and payable;
  
  				(b)	The Loan Documents; and
  
  				(c)	Such exceptions to title as may be 
  approved or deemed approval by Buyer pursuant to the provisions 
  of subparagraph A(1) above.
  
  Conclusive evidence of the availability of such title shall be 
  the willingness of Title Company to issue to Buyer on the 
  Closing Date an owner's title insurance policy in the standard 
  form issued in the State of Tennessee ("Owner's Policy"), in the 
  face amount of the Purchase Price, which policy shows (i) title 
  to the Property to be vested of record in Buyer, and (ii) the 
  above exceptions to be the only exceptions to title.
  
  		B.	Due Diligence Reviews.  Buyer shall have until 
  5:00 p.m. (Central time) on August 22, 1997 (the "Due Diligence 
  Period") within which to perform and complete all of Buyer's due 
  diligence examinations, reviews and inspections of all matters 
  pertaining to the purchase of the Property, including all 
  leases, documents relating to the existing financing (including 
  Loan Documents), service contracts, survey and title matters, 
  and all physical, environmental and compliance matters and 
  conditions respecting the Property.  During the Due Diligence 
  Period, Seller shall provide Buyer with reasonable access to the 
  Property upon reasonable advance notice and shall also make 
  available to Buyer, upon reasonable advance notice, such leases, 
  service contracts and other contracts respecting the Property as 
  Buyer shall reasonably request (to the extent the same are in 
  Seller's possession).  Buyer shall promptly commence, and shall 
  diligently and in good faith pursue, its due diligence review 
  hereunder.  Buyer shall at all times conduct its due diligence 
  review, inspections and examinations in a manner so as to not 
  cause damage, loss, cost or expense to Seller or the Property 
  and so as to not interfere with or disturb any tenant at the 
  Property, and Buyer will indemnify, defend, and hold Seller and 
  the Property harmless from and against any such damage, loss, 
  cost or expense (the foregoing obligation surviving any 
  termination of this Agreement).  Without limitation on the 
  foregoing, in no event shall Buyer (a) make any intrusive 
  physical testing (environmental, structural or otherwise) at the 
  Property (such as soil borings, water samplings or the like) 
  without Seller's express written consent; (b) contact any tenant 
  of the Property without Seller's express written consent; and 
  (c) contact any governmental authority having jurisdiction over 
  the Property without Seller's express written consent (which 
  consent as to tenants and governmental authorities shall not be 
  unreasonably withheld).  Seller shall have the right, at its 
  option, to cause a representative of Seller to be present at all 
  inspections, reviews and examinations conducted hereunder.  
  Buyer shall promptly deliver to Seller true, accurate and 
  complete copies of any written reports relating to the Property 
  prepared for or on behalf of Buyer by any third party and in the 
  event of termination hereunder, shall return all documents and 
  other materials furnished by Seller hereunder.  Buyer shall keep 
  all information or data received or discovered in connection 
  with any of the inspections, reviews or examinations strictly 
  confidential.  If, on or before the expiration of the Due 
  Diligence Period, based upon such review, examination or 
  inspection, Buyer shall determine that it intends to proceed 
  with the acquisition of the Property, then Buyer shall promptly 
  notify Seller and Escrow Holder of such determination in writing 
  (such notice being herein called the "Approval Notice") and 
  concurrently therewith Buyer shall deliver the Additional Escrow 
  Deposit to Escrow Holder (and thereafter, Buyer shall have no 
  further right to terminate this Agreement pursuant to this 
  paragraph 4B).  If, however, on or before the expiration of the 
  Due Diligence Period, based upon such review, examination or 
  inspection, Buyer shall determine in its sole and absolute 
  discretion that it no longer intends to acquire the Property, 
  then Buyer shall promptly notify Seller of such determination in 
  writing (such notice being herein called the "Termination 
  Notice"), whereupon the Escrow Deposit shall be returned to 
  Buyer and this Agreement, and the obligations of the parties 
  hereunder, shall terminate.  In the event that, on or before the 
  expiration of the Due Diligence Period, Buyer shall fail to have 
  delivered the Approval Notice to Seller (and concurrently 
  therewith deposit the Additional Escrow Deposit with Escrow 
  Holder as provided for in this Agreement), Buyer shall be deemed 
  to have elected not to proceed with the acquisition of the 
  Property whereupon the Escrow Deposit shall be returned to Buyer 
  and this Agreement, and the obligations of the parties 
  hereunder, shall terminate.
  
  		C.	Existing Loan Matters.  Receipt of the written 
  consent to the transactions contemplated herein from all parties 
  whose consent to the assumption by Buyer of such Loan Documents 
  is required thereunder, together with a release of Seller from 
  any liability under the Loan Documents, and an "estoppel 
  certificate" executed by The Prudential Insurance Company of 
  America (the "Existing Lender") certifying that the Loan 
  Documents are in full force and effect and that no default 
  exists thereunder, shall be conditions precedent to Seller's 
  obligation to sell, and Buyer's obligation to purchase, the 
  Property.  To the extent required by the Existing Lender, Seller 
  shall pay to the Existing Lender up to 1% of the outstanding 
  principal balance of the Existing Note as a loan transfer fee or 
  prepayment premium or fee.  Seller shall pay any other transfer, 
  assumption or other fees and costs (including reasonable 
  attorneys' fees, but not attorneys' fees of Buyer's counsel) 
  imposed by any of such parties with respect to such consent and 
  assumption (including any loan transfer, assumption fee or 
  prepayment premium in excess of 1% of the outstanding principal 
  balance of the Existing Note) up to a maximum of $15,000.   
  Buyer shall reasonably cooperate with Seller in connection with 
  such consent and assumption (and shall promptly deliver such 
  information, including financial information, respecting Buyer 
  or its principals as any of such parties may request).  Seller's 
  sole obligations in connection with the consent matters herein 
  contemplated (unless Buyer agrees otherwise) shall be to utilize 
  reasonable efforts to obtain such consents, and to reasonably 
  cooperate with Buyer to the extent necessary, including, but not 
  limited to, with respect to its efforts in connection with 
  substitution of the letter of credit.  If such consents are not 
  obtained on or before the Closing Date, the obligation of Seller 
  to sell, and Buyer to purchase, the Property shall terminate.  
  Seller's sole obligation hereunder with respect to obtaining an 
  "estoppel certificate" from the Existing Lender shall be to 
  utilize reasonable efforts to obtain such "estoppel certificate" 
  (such reasonable efforts not including any obligation to 
  institute legal proceedings or to expend any additional monies 
  therefor, other than for minor administrative charges). 
  
  		D.	Estoppel Certificates.  Receipt of estoppel 
  certificates ("Tenant Estoppel Certificates"), from (i) each 
  tenant listed on Exhibit "D-1" attached hereto and made a part 
  hereof, and (ii) from a sufficient number of the balance of the 
  tenants at the Property so that Tenant Estoppel Certificates 
  shall be received under clauses (i) and (ii) hereof with respect 
  to not less than 80% of the net rentable square feet of space 
  covered by leases in effect as of the Closing Date, shall be a 
  condition precedent to Buyer's obligation to purchase the 
  Property hereunder.  Each Tenant Estoppel Certificate shall 
  either be substantially in the form provided in Exhibit "D-2" 
  attached hereto and made a part hereof or in the form, if any, 
  prescribed in the applicable tenant lease.  Seller's sole 
  obligation hereunder shall be to utilize commercially reasonable 
  efforts to obtain a Tenant Estoppel Certificate from each tenant 
  at the Property (such reasonable efforts obligations not 
  including any obligation to institute legal proceedings or to 
  expend monies therefor), but such obligation shall not affect 
  the provision of such Tenant Estoppel Certificates as a 
  condition precedent to closing.  In addition, it shall be a 
  condition precedent to Buyer's obligation to close hereunder 
  that, as of the Closing Date, Buyer shall have received an 
  estoppel certificate addressed to Buyer from Seller with respect 
  to those tenants which fail to deliver tenant estoppel 
  certificates ("Seller's Estoppel Certificates") certifying the 
  following:  that the applicable lease is in full force and 
  effect, that a true and complete copy of the applicable lease is 
  attached to the applicable Seller's Estoppel Certificate; that 
  neither the tenant nor the landlord under the applicable lease 
  is in default thereunder; that the Seller's Estoppel Certificate 
  states the present amount of annual base rent being paid by the 
  tenant under the applicable lease and the commencement and 
  termination dates under the applicable lease.  A Seller's 
  Estoppel Certificate shall be of no further force and effect as 
  to any tenant which delivers an Tenant Estoppel Certificate 
  subsequent to Seller's delivery of the Seller's Estoppel 
  Certificates to Buyer, provided such Tenant Estoppel Certificate 
  is consistent in all material respects with the information with 
  respect to such tenant contained in the applicable Seller's 
  Estoppel Certificate previously delivered to Buyer.
  
  		E.	Removal of Stained Soil.  The removal of certain 
  black stained soil located in the sump pits of the garage 
  elevators at the Property, as the same was disclosed in a phase 
  I environmental report prepared by PSI for Buyer as project 
  number 360-7E015 ("Buyer's Phase I"), shall be a condition 
  precedent to Buyer's obligation to purchase the Property 
  hereunder. 	
  
  	5.	Closing Procedure.  The closing of the sale and 
  purchase herein provided (the "Closing") shall be consummated at 
  a closing conference ("Closing Conference"), which shall be held 
  on the Closing Date at Seller's offices at 900 North Michigan 
  Avenue, Chicago, Illinois or through escrow through the mail.  
  As used herein, "Closing Date" means the date which is 15 days 
  after the end of the Due Diligence Period, or such earlier date 
  as may be agreed upon by Buyer and Seller; provided, however, if 
  any of the conditions to closing set forth in paragraph 4C above 
  are not satisfied on or before the Closing Date, and so long as 
  Buyer shall not then be in default or have otherwise breached 
  its obligations under this Agreement, Buyer and/or Seller shall 
  have the right to extend the Closing Date for up to forty-five 
  (45) days in order to attempt to satisfy such conditions.
  
  		A.	Escrow.  On or before the Closing Date, the 
  parties shall deliver to Title Company the following:  (1) by 
  Seller, a duly executed and acknowledged original limited 
  warranty deed ("Deed") in the form of Exhibit "E" attached 
  hereto and made a part hereof, and (2) by Buyer, the Closing 
  Payment in immediately available federal funds.  Such deliveries 
  shall be made pursuant to escrow instructions ("Escrow 
  Instructions") to be executed among Buyer, Seller and Title 
  Company in form reasonably acceptable to such parties in order 
  to effectuate the intent hereof.  The conditions to the closing 
  of such escrow shall include the Title Company's receipt of the 
  Deed, the Closing Payment and a notice from each of Buyer and 
  Seller authorizing Title Company to close the transactions as 
  contemplated herein (each of Buyer and Seller being obligated to 
  deliver such authorization notice at the Closing Conference as 
  soon as it is reasonably satisfied that the other party is in a 
  position to deliver the items to be delivered by such other 
  party under subparagraph B below).
  
  		B.	Delivery to Parties.  Upon the satisfaction of 
  the conditions set forth in the Escrow Instructions, then 
  (x) the Deed shall be delivered to Buyer by Title Company's 
  depositing the same for recordation, (y) the Closing Payment 
  (and the Escrow Deposit) shall be delivered by Title Company to 
  Seller and (z) at the Closing Conference, the following items 
  shall be delivered:
  
  			(1)	Seller Deliveries.  Seller shall deliver to 
  Buyer the following:
  
  				(a)	A duly executed and acknowledged bill 
  of sale, assignment and assumption agreement ("Assignment and 
  Assumption Agreement") in the form of Exhibit "F" attached 
  hereto and made a part hereof;
  
  				(b)	Duly executed and acknowledged 
  certificates regarding the "non-foreign" status of Seller;
  
  				(c)	Evidence reasonably satisfactory to 
  Buyer and Title Company respecting the due organization of 
  Seller and the due authorization and execution of this Agreement 
  and the documents required to be delivered hereunder; 
  
  				(d)	Appropriate documentation to evidence 
  the assignment and assumption of the Loan Documents as may be 
  reasonably required in order to effectuate the release, 
  assignment and assumption transactions respecting the Loan 
  Documents as contemplated in this Agreement; 
  
  				(e)	A certificate of Seller ("Seller 
  Closing Certificate") updating the representations and 
  warranties contained in paragraph 7A hereof to the Closing Date, 
  and noting any changes thereto;and
  
  				(f)	Such additional documents as may be 
  reasonably required by Buyer and Title Company in order to 
  consummate the transactions hereunder (provided the same do not 
  materially increase the costs to, or liability or obligations 
  of, Seller in a manner not otherwise provided for herein).
  
  			(2)	Buyer Deliveries.  Buyer shall deliver to 
  Seller the following:
  
  				(a)	A duly executed and acknowledged 
  Assignment and Assumption Agreement;
  
  				(b)	Evidence reasonably satisfactory to 
  Seller and Title Company respecting the due organization of 
  Buyer and the due authorization and execution of this Agreement 
  and the documents required to be delivered hereunder;
  
  				(c)	Appropriate documentation to evidence 
  the assignment and assumption of the Loan Documents as may be 
  reasonably required in order to effectuate the release, 
  assignment and assumption transactions respecting the Loan 
  Documents as contemplated in this Agreement; 
  
  				(d)	A certificate of Buyer ("Buyer's 
  Closing Certificate") updating the representations and 
  warranties contained in paragraph 7B hereof to the Closing Date, 
  and noting any changes thereto;and
  
  				(e)	Such additional documents as may be 
  reasonably required by Seller and Title Company in or to 
  consummate the transactions hereunder (provided the same do not 
  materially increase the costs to, or liability or obligations 
  of, Buyer in a manner not otherwise provided for herein).
  
  		C.	Closing Costs.  Seller shall pay (i) all of any 
  deed or other transfer taxes, mortgage taxes and sales or use 
  taxes applicable to the transactions hereunder, (ii) the costs 
  to update the Survey and (iii) one-half of any escrow or 
  recording charges attributable to the Deed.  Buyer shall pay (i) 
  the title insurance premium for the Owner's Policy, as well as 
  any portion of the title insurance premium attributable to any 
  additional or extended coverage or endorsements requested by 
  Buyer, (ii) one-half of any escrow or recording charges and 
  (iii) all fees, costs or expenses incurred by Buyer in 
  connection with Buyer's due diligence reviews hereunder.  Each 
  of Seller and Buyer shall pay its own attorneys' fees and its 
  respective share of prorations as hereinafter provided.  
  Notwithstanding the foregoing, in the event the sale 
  contemplated hereby does not close on the Closing Date, then 
  each party shall pay all costs incurred by it.
  
  		D.	Prorations.
  
  			(1)	Items to be Prorated.  The following shall 
  be prorated between Seller and Buyer as of the Closing Date:
  
  				(a)	All real estate taxes and assessments 
  on the Property for the current year on a per diem basis.  In no 
  event shall Seller be charged with or be responsible for any 
  increase in the taxes on the Property resulting from the sale of 
  the Property or from any improvements made or leases entered 
  into on or after the Closing Date.  If any assessments on the 
  Property are payable in installments, then the installment for 
  the current period shall be prorated (with Buyer assuming the 
  obligation to pay any installments due after the Closing Date).
  
  				(b)	All fixed and additional rentals under 
  the leases, security deposits and other tenant charges.  Seller 
  shall deliver or provide a credit in an amount equal to all 
  prepaid rentals for periods after the Closing Date and all 
  refundable security deposits (to the extent the foregoing are 
  not applied or forfeited prior to the Closing Date) to Buyer on 
  the Closing Date.  Rents which are delinquent as of the Closing 
  Date shall not be prorated on the Closing Date.  Buyer shall 
  include such delinquencies in its normal billing and shall 
  diligently pursue the collection thereof in good faith after the 
  Closing Date (but Buyer shall not be required to litigate or 
  declare a default in any lease).  To the extent Buyer receives 
  rents on or after the Closing Date, such payments shall be 
  applied first toward then current rent owed to Buyer in 
  connection with the applicable lease for which such payments are 
  received, and any excess monies received shall be applied toward 
  the payment of any delinquent rents, with Seller's share thereof 
  being promptly delivered to Seller.  Buyer may not waive any 
  delinquent rents nor modify a lease so as to reduce or otherwise 
  affect amounts owed thereunder for any period in which Seller is 
  entitled to receive a share of charges or amounts without first 
  obtaining Seller's written consent.  Seller hereby reserves the 
  right to pursue any monetary remedy against any tenant owing 
  delinquent rents and any other amounts to Seller.  Buyer shall 
  reasonably cooperate with Seller in any collection efforts 
  hereunder (but shall not be required to litigate or declare a 
  default in any lease).  With respect to delinquent rents and any 
  other amounts or other rights of any kind respecting tenants who 
  are no longer tenants of the Property as of the Closing Date, 
  Seller shall retain all rights relating thereto.
  
  				(c)	Interest and any other payments, fees 
  and charges owed under the Loan Documents, including, but not 
  limited to, any amounts owed to the Existing Lender, loan 
  administrator or any other party thereunder.
  
  				(d)	On or before the Closing Date, Seller 
  shall pay or cause to be paid (or there shall be escrowed for 
  payment at closing) all tenant improvement costs and leasing and 
  brokerage commissions which are payable with respect to Tenant 
  Leases affecting such Property executed prior to the date hereof 
  (including those costs and commissions set forth on Exhibit "H-
  2" hereto, but excluding the tenant improvement costs due with 
  respect to the GSA-OHA lease), whether the same are due on or 
  prior to the Closing Date or payable in installments subsequent 
  thereto and including any portion thereof due upon any renewals 
  of any such Tenant Lease or options to lease additional space 
  but only if such renewal or additional space option commences 
  prior to the date of this Agreement.  Buyer shall assume the 
  payment of all tenant improvement costs and leasing and 
  brokerage commissions which are or may hereafter become due with 
  respect to (i) any renewals of any Tenant Leases or options to 
  lease additional space under any Tenant Leases if such renewals 
  or additional space options are exercised and commence or arise 
  after the date of this Agreement so long as Buyer has received 
  copies of all commission agreements for such renewals or 
  additional space options prior to the date of this Agreement, 
  (ii) the GSA-OHA lease, and (iii) any Tenant Leases hereinafter 
  executed prior to the closing with Buyer's written consent.
  
  				(e)	All operating expenses.
  
  			(2)	Calculation.  The prorations and payments 
  shall be made on the basis of a written statement submitted to 
  Buyer and Seller by Escrow Holder prior to the Close of Escrow 
  and approved by Buyer and Seller.  In the event any prorations 
  or apportionments made under this subparagraph D shall prove to 
  be incorrect for any reason, then any party shall be entitled to 
  an adjustment to correct the same provided written notice of 
  such inaccuracy and request for correction is given within six 
  months after the date hereof.  Any item which cannot be finally 
  prorated because of the unavailability of information shall be 
  tentatively prorated on the basis of the best data then 
  available and reprorated when the information is available, but 
  not later than six months after the date hereof.
  
  			(3)	Reimbursement of Tenant Improvement and 
  Leasing Costs.  Buyer agrees that it will pay or reimburse 
  Seller or the tenant, as applicable, for all tenant improvement 
  and leasing commission obligations of the landlord under any 
  leases entered into after the date hereof in accordance with 
  paragraph 7D(3) below, and the GSA/OHA lease (with any amounts 
  due to Seller being credited on the Closing Date).
  
  	6.	Condemnation or Destruction of Property.  In the event 
  that, after the date hereof but prior to the Closing Date, 
  either any portion of the Property is taken pursuant to eminent 
  domain proceedings or any of the improvements on the Property 
  are damaged or destroyed by any casualty, Seller shall have no 
  obligation to repair or replace any such damage or destruction. 
   Seller shall, upon consummation of the transaction herein 
  provided, assign to Buyer all claims of Seller respecting any 
  condemnation or casualty insurance coverage, as applicable, and 
  all condemnation proceeds or proceeds from any such casualty 
  insurance received by Seller on account of any casualty (the 
  damage from which shall not have been repaired by Seller prior 
  to the Closing Date), and shall credit the Purchase Price for 
  any applicable deductible relating thereto, as applicable; 
  provided, however, that Seller shall retain any proceeds 
  received (and the right to receive any proceeds) of rental 
  income insurance or a temporary taking award that are 
  attributable to a period prior to the Closing Date.  In the 
  event the condemnation award or the cost of repair of damage to 
  the Property on account of a casualty, as applicable, shall 
  exceed $100,000, Buyer may, at its option, terminate this 
  Agreement by notice to Seller, given on or before the Closing 
  Date.
  
  	7.	Representations, Warranties and Covenants.
  
  		A.	Representations, Warranties and Covenants of 
  Seller.
  
  			(1)	General Disclaimer.  Except as specifically 
  set forth in Paragraph 7A(2) below, the sale of the Property 
  hereunder is and will be made on an "as is" basis, without 
  representations and warranties of any kind or nature, express, 
  implied or otherwise, including, but not limited to, any 
  representation or warranty concerning title to the Property 
  (except to the extent any warranties of title are specifically 
  contained in the Deed), the physical condition of the Property 
  (including, but not limited to, the condition of the soil or the 
  Improvements), the environmental condition of the Property 
  (including, but not limited to, the presence or absence of 
  hazardous substances on or respecting the Property), the 
  compliance of the Property with applicable laws and regulations 
  (including, but not limited to, zoning and building codes or the 
  status of development or use rights respecting the Property), 
  the financial condition of the Property or any other 
  representation or warranty respecting any income, expenses, 
  charges, liens or encumbrances, rights or claims on, affecting 
  or pertaining to the Property or any part thereof.  Buyer 
  acknowledges that, during the Due Diligence Period, Buyer will 
  examine, review and inspect all matters which in Buyer's 
  judgment bear upon the Property and its value and suitability 
  for Buyer's purposes.  Except as to matters specifically set 
  forth in Paragraph 7A(2) below, Buyer will acquire the Property 
  solely on the basis of its own physical and financial 
  examinations, reviews and inspections and the title insurance 
  protection afforded by the Owner's Policy; provided, however, 
  that the foregoing shall in no way affect or limit those 
  warranties of title specifically contained in the Deed.  Without 
  limitation thereon, Buyer hereby waives any and all rights of 
  contribution or other rights or remedies against Seller under 
  the Commercial Environmental Responsibility Compensation and 
  Liability Act or any other applicable environmental laws, rules 
  or regulations.
  
  			(2)	Limited Representations and Warranties of 
  Seller.  Subject to the provisions of Paragraph 7A(1) above, 
  Seller hereby represents and warrants that, except as set forth 
  in Exhibit "G" attached hereto and made a part hereof, Seller 
  has no knowledge that any of the following statements is untrue 
  (and, for this purpose, Seller's knowledge shall mean only the 
  present actual knowledge of Brian K. Ellison, Vice President of 
  JMB Realty Corporation and portfolio manager overseeing the 
  investment of Seller in the Property (after having made inquiry 
  of Seller's third party property manager with respect to the 
  representations and warranties contained in this Agreement):
  
  				(a)	Rent Roll.  Attached as Exhibit "H-1" 
  and made a part hereof is a true, complete and accurate list, as 
  of the date thereof, of all tenant leases respecting the 
  Property ("Rent Roll"), and Seller has not received any written 
  notice of a material default under any of such tenant leases 
  that remains uncured.  Except as disclosed in the Rent Roll, no 
  Tenant Lease has been modified, altered or amended in any 
  respect.  There are no leases, tenancies or other rights of 
  occupancy or use for any portion of the Property other than as 
  set forth in the Rent Roll.  Except as set forth in Exhibit "H-
  2" attached hereto and made a part hereof (the "Additional 
  Tenant Information List"), there are no outstanding tenant 
  improvement or leasing commission obligations of the landlord 
  under the Tenant Leases.   In addition, the Additional Tenant 
  Matter List accurately sets forth amount of any security deposit 
  paid by the tenant under each Tenant Lease.  Notwithstanding 
  anything to the contrary contained herein, Seller shall have no 
  obligation or liability to Buyer with respect to any of the 
  foregoing matters which shall be confirmed as correct in any 
  Tenant Estoppel Certificate which may be delivered hereunder.
  
  				(b)	Litigation.  There is no pending 
  action, litigation, condemnation or other proceeding against the 
  Property or against Seller with respect to the Property.
  
  				(c)	Compliance.  Seller has received no 
  written notice from any insurance company, governmental 
  authority or agency having jurisdiction over the Property (i) 
  regarding any violation of any restrictive covenant or deed 
  restriction affecting the Property and/or to the effect that the 
  Property is not in compliance with applicable laws or 
  ordinances, or (ii) regarding any pending or threatened 
  condemnation proceedings.  
  
  				(d)	Service Agreements.  Other than those 
  which are cancelable on 30 days' notice, Seller has not entered 
  into any service agreements or contracts ("Service Agreements") 
  or other agreements (other than as set forth in this Agreement) 
  relating to the Property which will be in force on the Closing 
  Date, except as described in Exhibit "I" attached hereto, and 
  Seller has not received any written notice of any material 
  default thereunder that remains uncured.  If Buyer requests 
  during the Due Diligence Period, any such Service Agreements 
  will be terminated at Closing; provided, however, that Buyer 
  shall be responsible for paying any termination fees or costs 
  associated therewith.
  
  				(e)	Due Authority.  This Agreement and all 
  agreements, instruments and documents herein provided to be 
  executed or to be caused to be executed by Seller are and on the 
  Closing Date will be duly authorized, executed and delivered by 
  and are binding upon Seller.  Seller is a partnership, duly 
  organized and validly existing under the laws of the State of 
  Illinois, and is duly authorized and qualified to do all things 
  required of it under this Agreement.  Seller has the capacity 
  and authority to enter into this Agreement and consummate the 
  transactions herein provided.
  
  				(f)	Environmental Matters.  Except as set 
  forth in the reports described in Exhibit "J" attached hereto 
  and made a part hereof (the "Environmental Reports"), and in 
  Buyer's Phase I, there has been no release of any material known 
  to Seller to be a "Hazardous Material" at, upon, under or within 
  the Property, in an amount which would, as of the date hereof, 
  give rise to an "Environmental Compliance Cost".  The term 
  "Hazardous Material" shall mean asbestos, petroleum products, 
  and any other hazardous waste or substance which has, as of the 
  date hereof, been determined to be hazardous or a pollutant by 
  the U.S. Environmental Protection Agency, the U.S. Department of 
  Transportation, or any instrumentality authorized to regulate 
  substances in the environment which has jurisdiction over the 
  Property ("Environmental Agency") which substance causes the 
  Property (or any part thereof) to be in material violation of 
  any applicable environmental laws; provided, however, that the 
  term "Hazardous Material" shall not include (x) motor oil and 
  gasoline contained in or discharged from vehicles not used 
  primarily for the transport of motor oil or gasoline, or 
  (y) materials which are stored or used in the ordinary course of 
  a tenant's occupancy at (or the Company's, or the Company's 
  managing agents' operation of) the Property, and which are 
  stored, used, held, or disposed of in compliance with all 
  applicable environmental laws.  The term "Environmental 
  Compliance Cost" means any reasonable out-of-pocket cost, fee or 
  expense exceeding $2,500 and incurred directly to satisfy any 
  requirement imposed by an Environmental Agency to bring the 
  Property into compliance with applicable Federal, State and 
  local laws and regulations directly relating to the existence on 
  the Property of any Hazardous Material.   
  	
  				(g)	Loan Documents.  The loan documents 
  described in Exhibit "K" attached hereto and made a part hereof 
  constitute all of the documents which relate to the Existing 
  Encumbrance.  Seller has not received any written notice of a 
  material default under the Loan Documents that remains uncured.
  
  				(h)	Operating Statements.  The operating 
  statements delivered to Buyer have been prepared by or on behalf 
  of Seller in the ordinary course of business.
  
  		B.	Representations and Warranties of Buyer.  Buyer 
  hereby represents and warrants that this Agreement and all 
  agreements, instruments and documents herein provided to be 
  executed or to be caused to be executed by Buyer are and on the 
  Closing Date will be duly authorized, executed and delivered by 
  and are binding upon Buyer; Buyer is a limited partnership, duly 
  organized and validly existing and in good standing under the 
  laws of the State of Delaware, and is duly authorized and 
  qualified to do all things required of it under this Agreement; 
  and Buyer has the capacity and authority to enter into this 
  Agreement and consummate the transactions herein provided.
  
  		C.	Survival.  Any cause of action of a party for a 
  breach of the foregoing representations and warranties shall 
  survive until December 15, 1997, at which time such 
  representations and warranties (and any cause of action 
  resulting from a breach thereof not then in litigation) shall 
  terminate.  Notwithstanding the foregoing, if Buyer shall have 
  actual knowledge as of the Closing Date that any of the 
  representations or warranties of Seller contained herein are 
  false or inaccurate or that Seller is in breach or default of 
  any of its obligations under this Agreement, and Buyer 
  nonetheless closes the transactions hereunder and acquires the 
  Property, then Seller shall have no liability or obligation 
  respecting such false or inaccurate representations or 
  warranties or other breach or default (and any cause of action 
  resulting therefrom shall terminate upon such closing 
  hereunder).
  
  		D.	Interim Covenants of Seller.  Until the Closing 
  Date or the sooner termination of this Agreement:
  
  			(1)	Seller shall maintain the Property in the 
  same manner as prior hereto pursuant to its normal course of 
  business (such maintenance obligations not including 
  extraordinary capital expenditures or expenditures not incurred 
  in such normal course of business), subject to reasonable wear 
  and tear and further subject to destruction by casualty or other 
  events beyond the control of Seller.  Seller shall maintain 
  current insurance coverage (or substantially equivalent 
  coverage) in place at the Property.  Seller will not initiate or 
  knowingly permit (unless required by applicable law or an 
  existing agreement affecting the Property) any zoning 
  reclassification of the Property or seek any variance under 
  existing zoning ordinances applicable to the Property to use or 
  permit the use of the Property in such a manner which would 
  result in such use becoming a nonconforming use under applicable 
  zoning ordinances.  Seller will not impose any restrictive 
  covenants on the Property or execute or file any subdivision 
  plat affecting the Property.
  
  			(2)	Seller shall not enter into any additional 
  service contracts or other similar agreements without the prior 
  consent of Buyer, except those deemed reasonably necessary by 
  Seller which are cancelable on 30 days' notice without premium 
  or penalty.
  
  			(3)	Seller shall have the right to continue to 
  offer the Property for lease in the same manner as prior hereto 
  pursuant to its normal course of business and, upon request, 
  shall keep Buyer reasonably informed as to the status of leasing 
  prior to the Closing Date.  After the Effective Date (unless 
  Buyer shall have theretofor delivered a termination notice 
  hereunder), Seller shall not enter into any new leases or 
  material modifications of existing leases thereafter without the 
  consent of Buyer (which consent will not be unreasonably 
  withheld or materially delayed).  In no event shall Seller have 
  any obligation to enter into any new lease or modify any 
  existing lease unless Buyer shall agree to pay or reimburse 
  Seller on the Closing Date for all tenant improvement costs and 
  leasing commissions incurred by Seller under or in connection 
  therewith (Buyer's agreement to pay or reimburse for such 
  amounts not to be unreasonably withheld).
  
  			(4)	Subject to the terms and conditions of 
  paragraph 4B above, during normal business hours with 24 hours 
  prior notice to Seller, prior to Closing, Seller agrees to give 
  Buyer and its agents and representatives reasonable access to 
  the Property and the books and records directly relating to the 
  ownership, management, maintenance and operations of the 
  Property and all documents (other than those containing 
  proprietary information) in the possession or control of Seller. 
   
  	9.	DISPOSITION OF DEPOSIT.  IF THE TRANSACTION HEREIN 
  PROVIDED SHALL NOT BE CLOSED BY REASON OF SELLER'S DEFAULT UNDER 
  THIS AGREEMENT OR THE FAILURE OF SATISFACTION OF THE CONDITIONS 
  DESCRIBED IN PARAGRAPH 4 HEREOF OR THE TERMINATION OF THIS 
  AGREEMENT IN ACCORDANCE WITH PARAGRAPH 6 HEREOF, AND BUYER SHALL 
  NOT HAVE DEFAULTED UNDER THIS AGREEMENT, THEN THE ESCROW DEPOSIT 
  SHALL BE RETURNED TO BUYER, AND NEITHER PARTY SHALL HAVE ANY 
  FURTHER OBLIGATION OR LIABILITY TO THE OTHER; PROVIDED, HOWEVER, 
  IF THE TRANSACTIONS HEREUNDER SHALL FAIL TO CLOSE SOLELY BY 
  REASON OF A MATERIAL DEFAULT BY SELLER, AND BUYER SHALL HAVE 
  FULLY PERFORMED ITS OBLIGATIONS HEREUNDER AND SHALL BE READY, 
  WILLING AND ABLE TO CLOSE, THEN BUYER SHALL BE ENTITLED TO 
  EITHER (1) TERMINATE THIS AGREEMENT, RECEIVE A RETURN OF THE 
  ESCROW DEPOSIT AND TO OBTAIN REIMBURSEMENT FROM SELLER FOR 
  BUYER'S ACTUAL OUT-OF-POCKET EXPENSES PAID TO UNAFFILIATED THIRD 
  PARTIES IN CONNECTION WITH ITS DUE DILIGENCE REVIEWS HEREUNDER 
  (SUCH REIMBURSEMENT OBLIGATION NOT TO EXCEED $20,000 IN THE 
  AGGREGATE), OR (2) SPECIFICALLY ENFORCE THIS AGREEMENT (BUT NO 
  OTHER ACTION, FOR DAMAGES OR OTHERWISE, SHALL BE PERMITTED).  IN 
  THE EVENT THE TRANSACTION HEREIN PROVIDED SHALL NOT CLOSE FOR 
  ANY REASON OTHER THAN THE FAILURE OF SATISFACTION OF THE 
  CONDITIONS DESCRIBED IN PARAGRAPH 4 HEREOF OR THE TERMINATION OF 
  THIS AGREEMENT IN ACCORDANCE WITH PARAGRAPH 6 HEREOF OR THE 
  DEFAULT OF SELLER, THEN THE ESCROW DEPOSIT SHALL BE DELIVERED TO 
  SELLER AS FULL COMPENSATION AND LIQUIDATED DAMAGES UNDER AND IN 
  CONNECTION WITH THIS AGREEMENT.  IN THE EVENT THE TRANSACTION 
  HEREIN PROVIDED SHALL CLOSE, THE ESCROW DEPOSIT SHALL BE APPLIED 
  AS A PARTIAL PAYMENT OF THE PURCHASE PRICE.  IN CONNECTION WITH 
  THE FOREGOING, THE PARTIES RECOGNIZE THAT SELLER WILL INCUR 
  EXPENSE IN CONNECTION WITH THE TRANSACTION CONTEMPLATED BY THIS 
  AGREEMENT AND THAT THE PROPERTY WILL BE REMOVED FROM THE MARKET; 
  FURTHER, THAT IT IS EXTREMELY DIFFICULT AND IMPRACTICABLE TO 
  ASCERTAIN THE EXTENT OF DETRIMENT TO SELLER CAUSED BY THE BREACH 
  BY BUYER UNDER THIS AGREEMENT AND THE FAILURE OF THE 
  CONSUMMATION OF THE TRANSACTION CONTEMPLATED BY THIS AGREEMENT 
  OR THE AMOUNT OF COMPENSATION SELLER SHOULD RECEIVE AS A RESULT 
  OF BUYER'S BREACH OR DEFAULT.  IN THE EVENT THE SALE OF THE 
  PROPERTY SHALL NOT BE CONSUMMATED ON ACCOUNT OF BUYER'S DEFAULT, 
  THEN THE RETENTION OF THE ESCROW DEPOSIT SHALL BE SELLER'S SOLE 
  AND EXCLUSIVE REMEDY UNDER THIS AGREEMENT BY REASON OF SUCH 
  DEFAULT, SUBJECT TO THE PROVISIONS OF PARAGRAPH 9I HEREOF.
  
  		                   			                   
  		Seller's Initials			Buyer's Initials
  
  	9.	Miscellaneous.
  
  		A.	Brokers.  
  
  		(1)	Except as provided in subparagraph (2) below, 
  Seller represents and warrants to Buyer, and Buyer represents 
  and warrants to Seller, that no broker or finder has been 
  engaged by it, respectively, in connection with any of the 
  transactions contemplated by this Agreement or to its knowledge 
  is in any way connected with any of such transactions.  In the 
  event of a claim for broker's or finder's fee or commissions in 
  connection herewith, then Seller shall indemnify and defend 
  Buyer from the same if it shall be based upon any statement or 
  agreement alleged to have been made by Seller, and Buyer shall 
  indemnify and defend Seller from the same if it shall be based 
  upon any statement or agreement alleged to have been made by 
  Buyer.  The indemnification obligations under this Paragraph 
  9A(1) shall survive the closing of the transactions hereunder or 
  the earlier termination of this Agreement.
  
  		(2)	If and only if the sale contemplated herein 
  closes, Seller agrees to pay a brokerage commission to Richard 
  Ellis, LLC (the "Broker") pursuant to a separate written 
  agreement.  The foregoing payment shall be the sole commission, 
  fee or payment payable to Broker in connection with the 
  transactions hereunder.
  
  		B.	Limitation of Liability.
  
  			(1)	Notwithstanding anything to the contrary 
  contained herein, if the closing of the transactions hereunder 
  shall have occurred (and Buyer shall not have waived, 
  relinquished or released any applicable rights in further 
  limitation), the aggregate liability of Seller arising pursuant 
  to or in connection with the representations, warranties, 
  indemnifications, covenants or other obligations (whether 
  express or implied) of Seller under this Agreement (or any 
  document executed or delivered in connection herewith) shall not 
  exceed $750,000; provided that, the foregoing shall not limit 
  the liability of Seller arising from or out of Seller's 
  affirmative fraud in connection with the representations, 
  warranties, indemnifications, covenants or other obligations of 
  Seller under this Agreement (or any document executed or 
  delivered in connection herewith).
  
  			(2)	No constituent partner in or agent of 
  Seller, nor any advisor, trustee, director, officer, employee, 
  beneficiary, shareholder, participant, representative or agent 
  of any corporation or trust that is or becomes a constituent 
  partner in Seller (including, but not limited to, JMB Realty 
  Corporation) shall have any personal liability, directly or 
  indirectly, under or in connection with this Agreement or any 
  agreement made or entered into under or pursuant to the 
  provisions of this Agreement, or any amendment or amendments to 
  any of the foregoing made at any time or times, heretofore or 
  hereafter, and Buyer and its successors and assigns and, without 
  limitation, all other persons and entities, shall look solely to 
  Seller's assets for the payment of any claim or for any 
  performance, and Buyer, on behalf of itself and its successors 
  and assigns, hereby waives any and all such personal liability. 
   Notwithstanding anything to the contrary contained in this 
  Agreement, neither the negative capital account of any 
  constituent partner in Seller (or in any other constituent 
  partner of Seller), nor any obligation of any constituent 
  partner in Seller (or in any other constituent partner of 
  Seller) to restore a negative capital account or to contribute 
  capital to Seller (or to any other constituent partner of 
  Seller), shall at any time be deemed to be the property or an 
  asset of Seller or any such other constituent partner (and 
  neither Buyer nor any of its successors or assigns shall have 
  any right to collect, enforce or proceed against or with respect 
  to any such negative capital account of partner's obligation to 
  restore or contribute).
  	
  			(3)	No constituent partner in or agent of Buyer, 
  nor any advisor, trustee, director, officer, employee, 
  beneficiary, shareholder, participant, representative or agent 
  of any corporation or trust that is or becomes a constituent 
  partner in Buyer shall have any personal liability, directly or 
  indirectly, under or in connection with this Agreement or any 
  agreement made or entered into under or pursuant to the 
  provisions of this Agreement, or any amendment or amendments to 
  any of the foregoing made at any time or times, heretofore or 
  hereafter, and Seller and its successors and assigns and, 
  without limitation, all other persons and entities, shall look 
  solely to Buyer's assets for the payment of any claim or for any 
  performance, and Seller, on behalf of itself and its successors 
  and assigns, hereby waives any and all such personal liability. 
   Notwithstanding anything to the contrary contained in this 
  Agreement, neither the negative capital account of any 
  constituent partner in Buyer (or in any other constituent 
  partner of Buyer), nor any obligation of any constituent partner 
  in Buyer (or in any other constituent partner of Buyer) to 
  restore a negative capital account or to contribute capital to 
  Buyer (or to any other constituent partner of Buyer), shall at 
  any time be deemed to be the property or an asset of Buyer or 
  any such other constituent partner (and neither Seller nor any 
  of its successors or assigns shall have any right to collect, 
  enforce or proceed against or with respect to any such negative 
  capital account of partner's obligation to restore or 
  contribute).
  
  			(4)	Notwithstanding the foregoing, (i) if Seller 
  or its successor-in-interest shall fail to retain reserves of at 
  least $850,000 at the time of closing hereunder or (ii) if 
  during the period commencing on the Closing Date and ending on 
  December 15, 1997 (the "Survival Period"), Seller or its 
  successor-in-interest shall utilize such reserves for any 
  purpose other than the payment of claims, expenses, liabilities 
  or attorneys' fees of Seller or such successor-in-interest 
  (including any amounts incurred in connection with resolving or 
  defending any claim of liability hereunder) with respect to a 
  breach or alleged breach of the representations, warranties, 
  indemnifications, covenants or other obligations (whether 
  express or implied) of Seller under this Agreement (or any 
  document executed or delivered in connection herewith), or is 
  otherwise related to, connected with or concerns the Property in 
  any manner (collectively, the "Specified Liabilities"), then 
  subject to the terms and conditions of this Agreement, Buyer 
  may, during the Survival Period, look to the assets of JMB 
  Realty Corporation, as the general partner of Seller, for the 
  payment of any Specified Liabilities; provided, however, the 
  aggregate liability of JMB Realty Corporation in connection 
  therewith shall not exceed $750,000 in the aggregate and shall 
  be further limited as follows:
  			(x)	with respect to the initial reserve amount, 
  such liability shall be limited to the lesser of the amount by 
  which $850,000 exceeds the amount actually reserved by Seller or 
  its successor-in-interest in closing hereunder, and $750,000; or 
  
  			(y)	during the Survival Period, such liability 
  shall be limited to the lesser of the amount of such reserves 
  which, during the Survival Period, are utilized for purposes 
  other than the payment of the Specified Liabilities, and 
  $750,000.
  
  		C.	Entire Agreement.  This Agreement contains the 
  entire agreement between the parties respecting the matters 
  herein set forth and supersedes all prior agreements between the 
  parties hereto respecting such matters.  This Agreement may not 
  be modified or amended except by written agreement signed by 
  both parties.
  
  		D.	Time of the Essence.  Time is of the essence of 
  this Agreement.
  
  		E.	Interpretation.  Paragraph headings shall not be 
  used in construing this Agreement.  Each party acknowledges that 
  such party and its counsel, after negotiation and consultation, 
  have reviewed and revised this Agreement.  As such, the terms of 
  this Agreement shall be fairly construed and the usual rule of 
  construction, to the effect that any ambiguities herein should 
  be resolved against the drafting party, shall not be employed in 
  the interpretation of this Agreement or any amendments, 
  modifications or exhibits hereto or thereto.
  
  		F.	Governing Law.  This Agreement shall be construed 
  and enforced in accordance with the laws of the State of 
  Illinois.
  
  		G.	Successors and Assigns.  Buyer may not assign or 
  transfer its rights or obligations under this Agreement without 
  the prior written consent of Seller (in which event such 
  transferee shall assume in writing all of the transferor's 
  obligations hereunder, but such transferor shall not be released 
  from its obligations hereunder); provided, however, Buyer may 
  assign its interest in this Agreement to a limited partnership 
  in which Buyer is the managing general partner and has not less 
  than a 51% interest in capital and profits in such limited 
  partnership.  No consent given by Seller to any transfer or 
  assignment of Buyer's rights or obligations hereunder shall be 
  construed as a consent to any other transfer or assignment of 
  Buyer's rights or obligations hereunder.  No transfer or 
  assignment in violation of the provisions hereof shall be valid 
  or enforceable.  Subject to the foregoing, this Agreement and 
  the terms and provisions hereof shall inure to the benefit of 
  and be binding upon the successors and assigns of the parties.
  
  		H.	Notices.  Any notice which a party is required or 
  may desire to give the other shall be in writing and shall be 
  sent by personal delivery or by mail (either [i] by United 
  States registered or certified mail, return receipt requested, 
  postage prepaid, or [ii] by Federal Express or similar generally 
  recognized overnight carrier regularly providing proof of 
  delivery), addressed as follows (subject to the right of a party 
  to designate a different address for itself by notice similarly 
  given):
  
  			To Buyer:
  
  			Parkway Properties, L.P.
  			One Jackson Place
  			188 East Capitol Street, Ste. 1000
  			Jackson, MS  39201-2195
  			Attention:	David Fowler
  			Facsimile:	(601) 352-1441
  	
  
  			With Copy To:
  
  			Forman, Perry, Watkins, Krutz & Tardy
  			1200 One Jackson Place
  			188 E. Capitol Street
  			Jackson, Mississippi 39201
  			Attention:	Steven Hendrix, Esq.
  			Facsimile:	(601) 960-8609
  			Telephone:	(601) 960-8600
  
  			To Seller:
  
  			c/o JMB Realty Corporation
  			900 North Michigan Avenue
  			12th Floor
  			Chicago, Illinois 60611
  			Attention: 	Mr. Brian Ellison
  			Facsimile:	(312) 915-2343
  			Telephone:	(312) 915-2399
  
  			With Copy To:
  
  			Pircher, Nichols & Meeks
  			1999 Avenue of the Stars
  			Suite 2600
  			Los Angeles, California 90067
  			Attention: 	Real Estate Notices (GML)
  			Facsimile:	(310) 201-8922
  			Telephone:	(310) 201-8900
  
  			And To:
  
  			Richard Ellis, LLC
  			Three First National Plaza
  			Chicago, Illinois  60602
  			Attention:	Mr. Jeffrey Bramson
  			Facsimile:	(312) 899-8923
  			Telephone:	(312) 899-1900
  			
  
  Any notice so given by mail shall be deemed to have been given 
  as of the date of delivery (whether accepted or refused) 
  established by U.S. Post Office return receipt or the overnight 
  carrier's proof of delivery, as the case may be.  Any such 
  notice not so given shall be deemed given upon receipt of the 
  same by the party to whom the same is to be given.
  
  		I.	Legal Costs.  The parties hereto agree that they 
  shall pay directly any and all legal costs which they have 
  incurred on their own behalf in the preparation of this 
  Agreement, all deeds and other agreements pertaining to this 
  transaction and that such legal costs shall not be part of the 
  closing costs.  In addition, if either Buyer or Seller brings 
  any suit or other proceeding with respect to the subject matter 
  or the enforcement of this Agreement, the prevailing party (as 
  determined by the court, agency or other authority before which 
  such suit or proceeding is commenced), in addition to such other 
  relief as may be awarded, shall be entitled to recover 
  reasonable attorneys' fees, expenses and costs of investigation 
  actually incurred.  The foregoing includes, but is not limited 
  to, attorneys' fees, expenses and costs of investigation 
  (including, without limitation, those incurred in appellate 
  proceedings), costs incurred in establishing the right to 
  indemnification, or in any action or participation in, or in 
  connection with, any case or proceeding under Chapter 7, 11 or 
  13 of the Bankruptcy Code (11 United States Code Sections 101 
  et seq.), or any successor statutes.
  
  		J.	Counterparts.  This Agreement may be executed in 
  one or more counterparts, each of which shall be deemed an 
  original, but all of which shall constitute one and the same 
  document. 
  
  		K.	SEC Requirements.  If required by rules of the 
  Securities and Exchange Commission, Seller grants Buyer the 
  right, at Buyer's sole expense, to prepare an audited income 
  statement of the Property for the most recent fiscal year(s) as 
  specified by Rule 3-14 of Regulation S-X under the Securities 
  Act of 1933 and the Securities Exchange Act of 1934, and Seller 
  shall reasonably cooperate, at Buyer's expense, in making 
  available any and all such other data and financial information 
  which shall be available to Seller (including, without 
  limitation, data and information obtainable from Seller's 
  management agent for the Property) in connection with Buyer's 
  disclosure obligations as a public company subject to the rules 
  and regulations of the Securities and Exchange Commission.
  
  	10.	Indemnification.
  
  	A.	By Buyer.  Buyer shall hold harmless, indemnify and 
  defend Seller and its constituent partners from and against:  
  (1) any and all third party claims for Buyer's torts or breaches 
  of contract related to the Property and occurring on or after 
  the Closing Date, 
  (2) any and all loss, damage and third party claims in any way 
  arising from Buyer's inspections or examinations of the Property 
  prior to the Closing Date, and (3) all costs and expenses, 
  including reasonable attorney's fees incurred by Seller as a 
  result of the foregoing.
  
  		B.	By Seller.  Seller shall hold harmless, indemnify and 
  defend Buyer and its constituent partners from and against:  (1) 
  any and all third party claims for Seller's torts or breaches of 
  contract related to the Property and occurring prior to the 
  Closing Date, and 
  (2) all costs and expenses, including reasonable attorney's fees 
  incurred by Buyer as a result of the foregoing.  The foregoing 
  indemnity shall not cover any matters relating to title or 
  marketability of the Property (Buyer relying on the coverage 
  provided by the Owner's Policy as to such matters.)
  
  	C.	Generally.  Each indemnification under this Agreement 
  shall be subject to the following provisions:  The indemnitee 
  shall notify indemnitor of any such claim against indemnitee 
  within thirty (30) days after it has notice of such claim, but 
  failure to notify indemnitor shall in no case prejudice the 
  rights of indemnitee under this Agreement unless indemnitor 
  shall be prejudiced by such failure and then only to the extent 
  of such prejudice.  Should indemnitor fail to discharge or 
  undertake to defend indemnitee against such liability within 10 
  days after the indemnitee gives the indemnitor written notice of 
  the same, then indemnitee may settle such liability, and 
  indemnitor's liability to indemnitee shall be conclusively 
  established by such settlement, the amount of such liability to 
  include both the settlement consideration and the reasonable 
  costs and expenses, including attorneys' fees, incurred by 
  indemnitee in effecting such settlement.
  
  THE SUBMISSION OF THIS AGREEMENT FOR EXAMINATION IS NOT 
  INTENDED TO NOR SHALL CONSTITUTE AN OFFER TO SELL, OR A 
  RESERVATION OF, OR OPTION OR PROPOSAL OF ANY KIND FOR THE 
  PURCHASE OF THE PROPERTY.  IN NO EVENT SHALL ANY DRAFT OF THIS 
  AGREEMENT CREATE ANY OBLIGATION OR LIABILITY, IT BEING 
  UNDERSTOOD THAT THIS AGREEMENT SHALL BE EFFECTIVE AND BINDING 
  ONLY WHEN A COUNTERPART HEREOF HAS BEEN EXECUTED AND DELIVERED 
  BY EACH PARTY HERETO TO ESCROW HOLDER.  ESCROW HOLDER SHALL DATE 
  THIS AGREEMENT WITH THE DATE ON WHICH ESCROW HOLDER SHALL HAVE 
  RECEIVED THIS AGREEMENT EXECUTED BY 
  
  BOTH BUYER AND SELLER (AND SUCH DATE SHALL BE THE "EFFECTIVE 
  DATE" FOR PURPOSES HEREOF).
  
  	IN WITNESS WHEREOF, the parties hereto have executed this 
  Agreement as of the Effective Date.
  
  				SELLER:
  
  				CARLYLE REAL ESTATE LIMITED PARTNERSHIP-XIII,
  				an Illinois limited partnership
  
  				By:	JMB REALTY CORPORATION,
     					a Delaware corporation,
  			   		General Partner
  
  				By:   ________________________
  				Name:  _______________________
  				Title: _______________________
  
  					BUYER:
  
  					PARKWAY PROPERTIES, L.P.,
  					a Delaware limited partnership
  
  					By:	PARKWAY PROPERTIES GENERAL 		
       				PARTNERS, INC.,
  					   	a Delaware corporation
  
  						By:	   _________________________
  						Name:  _________________________                           
  						Title: _________________________  
                                                       	
  						By:	   _________________________
  						Name:  _________________________
  						Title: _________________________
                                                        
  
                       ESCROW HOLDER'S ACKNOWLEDGEMENT
  
  	The undersigned hereby executes this Agreement to evidence 
  its agreement to act as Escrow Holder in accordance with the 
  terms of this Agreement.
  
  Effective Date: ________, 1997		TICOR TITLE INSURANCE 
  COMPANY,
  						a _______________________________
  
  						By:______________________________	
  	
  						Name:____________________________ 	
  					
       	Title:___________________________
  					       				"Escrow Holder"
  
                                     EXHIBIT LIST
  
  	"A" - Property Description
  
  	"B" - Personal Property
  
  	"C" - Description of Loan Documents
  
  	"D-1" - List of Required Tenants
  
  	"D-2" - Form of Tenant Estoppel Certificate
  
  	"E" - Deed
  
  	"F" - Assignment and Assumption Agreement
  
  	"G" - Exceptions to Seller's Representations
  		and Warranties
  
  	"H-1" - Rent Roll
  
  	"H-2" - Additional Tenant Information List
  
  	"I" - Service Agreements
  
  	"J" - Environmental Reports
  
                                EXHIBIT "B"
  
                        LIST OF PERSONAL PROPERTY
  
  	
                              (SEE ATTACHED)
  
                                 EXHIBIT "C"
  
                       DESCRIPTION OF LOAN DOCUMENTS
  
  1.	Promissory Note dated April 28, 1995 from Seller to Lender.
  
  2.	Deed of Trust and Security Agreement dated as of April 28, 
  1995 by Seller in 		favor of Lender.
  
  3.	Assignment of Leases and Rents dated as of April 28, 1995, 
  from Seller to			Lender.
  
  4.	Affidavit of Title dated April 28, 1995, from Seller to 
  Lender.
  
  5.	Closing Certification dated April 28, 1995, from Seller to 
  Lender.
  
  6.	Uniform Commercial Code Financing Statement by Seller in 
  favor of Lender and filed 	with the Secretary of State of the 
  State of Tennessee.
  
  7.	Uniform Commercial Code Financing Statement by Seller in 
  favor of Lender and 	recorded with the Knox County 
  Registrar's Office.
  
  8.	ERISA Certification dated as of April 28, 1995, from Seller 
  to Lender.
  
  9.	Escrow Agreement dated as of April 28, 1995, among Seller, 
  Lender and LaSalle 	National Trust, N.A.
  
                               EXHIBIT "D-1"
  
                         LIST OF REQUIRED TENANTS
  
  1.	First Tennessee
  2.	Lacy & Winchester
  3.	Paine, Swiney & Tarwater
  4.	GSA-OHA
  5.	GSA-Bankruptcy
  6.	Coopers & Lybrand
  7.	Watson, Hollan & Reeves
  8.	Wagner, Myers & Sanders
  9.	FIS Associates
  10.	Barger, Wagoner & Sumner
  11.	McCambell & Young
  12.	Jenkins & Jenkins
  13.	Merrill Lynch
  14.	Tennessee Valley Title Insurance
  15.	Arnett, Draper & Hagood
  16.	Kramer, Rayson & McVeigh
  17.	Prudential Securities
  18.	Club LeConte
  19.	Sir Speedy
  20.	J.C. Bradford
  21.	Lunchbox
  22.	Rainwater, Humble & Vowell
  23.	Emporium
  24.	McCord & Troutman, P.C.
  
                                EXHIBIT "D-2"
  
                    FORM OF TENANT ESTOPPEL CERTIFICATE
  
                             (SEE ATTACHED)
  
                              EXHIBIT "E"
  
                             FORM OF DEED
  
                            (SEE ATTACHED)
  
                              EXHIBIT "F"
  
                    FORM OF ASSIGNMENT AND ASSUMPTION
   
                              (SEE ATTACHED)
  
                               EXHIBIT "G"
  
            EXCEPTIONS TO SELLER'S REPRESENATIONS AND WARRANTIES
  
                                  None.
  
                               EXHIBIT "H-1"
  
                                RENT ROLL
  
                              (SEE ATTACHED)
  
                               EXHIBIT "H-2"
  
                       ADDITIONAL TENANT INFORMATION
  
                              (SEE ATTACHED)
  
                           FIRST TENNESSEE PLAZA
  
               OUTSTANDING TENANT IMPROVEMENT OBLIGATIONS
  
  First Tennessee Bank		$500,000	       		1999
  
  Merrill Lynch		      	$70,500		        	Processed
  
  Merrill Lynch		      	$44,220	        		2001
  
  GSA/OHA		           		$500,000 (est.) 		November 1997/January 1998
  
  Emporium			          	$5,218	         		By lease end
  
  First Tennessee Bank		$8,762.74	      		August 1997-Window	Blinds
  
  Sir Speedy	        			$36,000        			Sept./Oct. 1997
  
  Sir Speedy        				$7,500         			New Wall
  
  Rainwater         				$10,912        			By lease end
  
  Barge Waggoner     			$80,455        			Aug./Oct. 1997
  				                 	$22,000	        		January 1999
  
  J.C. Bradford	      		$123,784        		Sept./Oct. 1997
  
  Club LeConte	       		$40,000        			Sept./Oct. 1997
  
                                 EXHIBIT "I"
  
                          LIST OF SERVICE AGREEMENTS
  
                               (SEE ATTACHED)
  
                                EXHIBIT "J"
  
                       LIST OF ENVIRONMENTAL REPORTS
  
  1.	Phase I Environmental Assessment dated December 14, 1994 
  and prepared by Versar.
  
                           PURCHASE AND SALE AGREEMENT
  
                                     between
  
                              MORGAN PROPERTIES, LLC
  
                                       and
  
                            PARKWAY PROPERTIES, L.P.
  
                                  AUGUST 28, 1997
  
                 PURCHASE AND SALE AGREEMENT
  
   This Purchase and Sale Agreement ("Agreement") is made and 
  entered into on or as of the Effective Date (as defined in 
  Section ), by and between Morgan Properties, LLC, a Tennessee 
  limited liability company ("Seller") and Parkway Properties, 
  L.P., a Delaware limited partnership ("Purchaser").
  
  	WHEREAS, Seller is the lessee of a parcel of land located 
  at Fifty Front Street, Memphis, Shelby County, Tennessee, as 
  more specifically described on Exhibit (a) attached hereto (the 
  "Land"); and 
  
  	WHEREAS, there are certain real property improvements in, 
  on or under the Land consisting principally, but not 
  exclusively, of an office building known as "Morgan Keegan 
  Tower" (collectively, the "Improvements"); and
  
  	WHEREAS, Seller is the owner of the Improvements; and
  
  	WHEREAS, Seller desires to sell, transfer, assign and 
  convey to Purchaser, and Purchaser desires to purchase and 
  acquire from Seller all of Seller's right, title and interest in 
  and to the Land, Improvements, and the Personal Property (as 
  defined below) pursuant to the terms and conditions set forth 
  herein.
  
  	NOW, THEREFORE, in consideration of the premises, and the 
  mutual covenants, agreements, representations and warranties 
  contained in this Agreement, and intending to be legally 
  obligated, Purchaser and Seller agree as follows:
  
                              I. 	ARTICLE 
  
                           PURCHASE AND SALE
  
  1.1 	  Purchase and Sale.  Subject to the provisions of, 
  and on the basis of the covenants, agreements, representations 
  and warranties contained in this Agreement, Seller agrees to 
  sell, transfer, assign and convey all of its right, title and 
  interest in and to the Real Property and the Personal Property, 
  as each are defined below (collectively referred to as the 
  "Project") to Purchaser, and Purchaser agrees to purchase and 
  acquire the Project from Seller (this "Transaction").
  
  1.1  	  Real Property Identified.  As used herein, the "Real 
  Property" shall mean:
  
  (a) 	  Description of Land.  The real estate described in 
  Exhibit (a) attached hereto (the "Land").
  
  (a) 	  Description of Improvements.  The Improvements, 
  including Morgan Keegan Tower, Memphis, Tennessee containing 
  approximately 334,668 rentable square feet and Seller's rights 
  as lessee of 350 parking spaces within Tower Place Parking 
  Garage, together with all building materials, fixtures, heating, 
  ventilation and air conditioning systems, canopies, sidewalks, 
  walkways, planters and landscape materials, and all other real 
  property improvements owned or leased by Seller and located in, 
  on or under the Land or related to, used or available for use in 
  the ownership, conduct, operation or maintenance of the Real 
  Property.  
  
  (a) 	  Rights and Appurtenances.  All and singular, the 
  rights and appurtenances pertaining to the Real Property, 
  including, but not limited to, any right, title and interest of 
  Seller in and to adjacent streets, roads, alleys, easements and 
  rights-of-way.  
  
  1.1 	  Personal Property Identified.  As used herein, the 
  "Personal Property" shall mean:
  
  (a) 	  Description of Tangible Personal Property.  The 
  tangible Personal Property consists of all material tangible 
  personal property located on or attached to the Real Property 
  and owned by Seller and used or available for use by Seller in 
  the ownership, operation and/or management of the Real Property 
  and in the repair, operation and maintenance of the Project, 
  including, without limitation, all of Seller's right, title and 
  interest in all equipment, tools, machinery, furniture, 
  furnishings, office and other supplies, inventories, spare parts 
  and other tangible personal property located on or attached to 
  the Real Property.  The tangible Personal Property specifically 
  includes all tangible personal property located in any 
  management office at the Real Property owned or leased by 
  Seller.  The tangible Personal Property is generally described 
  on Exhibit   attached hereto.
  
  (a) 	  Description of Intangible Personal Property.  The 
  intangible Personal Property consists of all material intangible 
  personal property owned by Seller and used by Seller in 
  connection with the operation and/or management of the Real 
  Property and in the repair, operation and maintenance of the 
  Project and includes, without limitation, (i) all assignable 
  guarantees and warranties (including those pertaining to 
  construction of the Project, if any); (ii) all assignable 
  licenses and other permits relating to the Project or the 
  operation thereof; (iii) all assignable contracts, agreements 
  and contract rights; (iv) rights, if any, to use the name 
  "Morgan Keegan Tower" on a non-exclusive basis with respect to 
  the Project only and only for the period Seller is a tenant in 
  the Project; and (v) all leases, tenancies and rental agreements 
  or arrangements with tenants (collectively "Leases" or any one 
  individually "Lease") and security, damage and other deposits 
  and payments which have been collected by Seller with respect to 
  the Leases and not retained by Seller in accordance with the 
  terms of the Leases (collectively "Deposits").  
  
                                1 ARTICLE 
  
                             PURCHASE PRICE
  
  1.1 	  Escrow Deposit.  
  
  	(a) Purchaser shall within two (2) business days following 
  the Effective Date deliver to Lawyer's Title Insurance 
  Corporation-Memphis Branch Office ("Title Company") the sum of 
  NINETY THOUSAND AND NO/100 DOLLARS ($90,000.00) ("Escrow 
  Deposit") in lawful funds of the United States of America.  If 
  Purchaser elects in writing not to proceed with this Transaction 
  prior to the conclusion of the Inspection Period or elects to 
  terminate this Agreement pursuant to the express provisions 
  hereof, then Title Company shall refund to Purchaser the Escrow 
  Deposit and all interest accrued thereon.  Unless this Agreement 
  has been terminated by Purchaser as above provided, Purchaser 
  shall within two (2) business days following expiration of the 
  Inspection Date deliver to Title Company the sum of TWO HUNDRED 
  SIXTY THOUSAND AND NO/100 DOLLARS ($260,000.00) (the "Additional 
  Escrow Deposit").  If Purchaser shall fail to terminate this 
  transaction prior to the conclusion of the Inspection Period or 
  to deliver to the Title Company the Additional Escrow Deposit as 
  herein required, the Escrow Deposit and all interest thereon, 
  shall become non-refundable to Purchaser except in the case:  
  (i)  Seller's default; (ii) the non-satisfaction of the 
  conditions set forth in Section ; or (iii)  except as otherwise 
  set forth herein, but shall be credited toward the Purchase 
  Price upon Closing.  Title Company is hereby instructed to 
  invest the Escrow Deposit and, if received, the Additional 
  Escrow Deposit in an FDIC insured interest bearing account in 
  the name of Purchaser.  Purchaser's taxpayer identification 
  number is 72-1344324.  Purchaser and Seller hereby acknowledge 
  and agree that all accrued interest on the Escrow Deposit and 
  Additional Escrow Deposit shall be credited to Purchaser, 
  provided, however, in the event that this transaction does not 
  Close due to an event of default by Purchaser and through no 
  event of default of Seller unless Seller's performance is 
  excused due to a prior default of Purchaser, the Escrow Deposit, 
  the Additional Escrow Deposit and all accrued interest thereon 
  shall be delivered to Seller as herein set forth.
  
  	(b)  The sole responsibility of Title Company shall be to 
  hold and disburse the Escrow Deposit, the Additional Escrow 
  Deposit and accrued interest in accordance with the terms of 
  this Agreement and, if a dispute shall arise with respect to the 
  disposition of such funds, the Title Company may continue to 
  hold such funds until receipt of written instructions 
  acknowledged and agreed to by Purchaser and Seller or may 
  deposit such funds with the Circuit Court of Shelby County, 
  Tennessee and interplead the Purchaser and Seller in connection 
  therewith.
  
  1.1 	  Purchase Price.  Seller agrees to sell, and 
  Purchaser agrees to purchase, the Project for a total purchase 
  price equal to THIRTY-SIX MILLION AND  NO/100 DOLLARS 
  ($36,000,000.00) ("Purchase Price"), plus or minus prorations 
  and other adjustments provided by this Agreement, upon and in 
  accordance with the terms and conditions of this Agreement.  
  Subject to the provisions hereof.  At Buyer's sole option, with 
  the concurrence of Lender (as defined below) payment of a 
  portion of the Purchase Price may be evidenced by assumption of 
  the "Existing Indebtedness" (as defined below), such payment 
  shall equal the amount of the outstanding principal balance of 
  the existing note. The balance of the Purchase Price, plus or 
  minus prorations, shall be paid in immediately available funds 
  at Closing.
  
  	Subject to Purchaser's review of all loan documents 
  relating to the Existing Indebtedness and of any required 
  assumption documents, Purchaser may at its election assume 
  Seller's obligations under the Loan Documents at Closing.  
  Purchaser agrees to use reasonable efforts to cooperate with 
  Lender in the assumption of the Existing Indebtedness.  Seller 
  acknowledges that Purchaser retains the right to request certain 
  reasonable modifications and/or alterations to the Loan 
  Documents (and to any assumption documents required by Lender) 
  prior to its assumption thereof.   In the event Lender is 
  unwilling to allow Purchaser to assume the Existing Indebtedness 
  on terms consistent with this Agreement, then Purchaser shall 
  pay the Purchase Price in immediately available funds at 
  Closing.
  
  1.1 	  Independent Consideration.  Seller and Purchaser 
  acknowledge and agree that Ten Thousand and No/100 ($10,000.00) 
  of the Escrow Deposit shall be paid to Seller if this Agreement 
  is terminated for any reason (the "Independent Contract 
  Consideration") in lawful funds of the United States of America. 
   Seller and Purchaser acknowledge and agree that the Independent 
  Contract Consideration has been bargained for and agreed to as 
  additional consideration for Seller's execution and delivery of 
  this Agreement.  At Closing (defined below) the Independent 
  Contract Consideration shall be applied to the Purchase Price.  
  In the event this Agreement is terminated for any reason, Seller 
  shall be entitled to the Independent Contract Consideration.
  
                             1 ARTICLE 
  
                          ESCROW; CLOSING
  
  1.1 	  Escrow Agent.  Title Company is authorized and 
  instructed to act as escrow agent pursuant to the terms of this 
  Agreement.  By execution of the acknowledgment attached hereto, 
  Title Company acknowledges receipt of the Escrow Deposit.  
  Purchaser and Seller shall execute any additional escrow 
  instructions reasonably required by Title Company to complete 
  the transactions provided for herein provided that such 
  instructions are not inconsistent with the terms of this 
  Agreement.
  
  1.1 	  Closing.  Closing shall be on such date and location 
  as mutually agreed to by Purchaser and Seller (hereafter 
  referred to as "Closing Date" or "Closing") provided, however, 
  in no event shall the Closing Date be more than fifteen (15) 
  calendar days after the end of the Inspection Period.  
  
  1.1 	  Closing Costs.  
  
  (a) 	  Seller's Payments.  Seller shall pay the cost and 
  expenses, if any, of (i) the title search and title insurance 
  commitment for the owner's title insurance policy; (ii) the fees 
  for recording the assignment of that certain Lease Agreement 
  dated December 27, 1984, by and between Memphis Center City 
  Revenue Finance Corporation, a public not for profit corporation 
  of the State of Tennessee, lessor and One Court Square Investors 
  Limited Partnership, a Tennessee limited partnership, lessee, 
  and all amendments thereto ("Ground Lease"), and for recording 
  the bill of sale if Purchaser requests its recording; and (iii) 
  one-half of any escrow fees charged by Title Company, if any.
   
  (a) 	  Purchaser's Payments.  Purchaser shall pay the cost 
  and expenses, if any, of  (i) the cost of the premium for the 
  owner's extended coverage title policy and all endorsements 
  which Purchaser may obtain to the title insurance policy; (ii) 
  the survey update; and (iii) one-half of any escrow fees charged 
  by Title Company, if any.
  
  (a) 	  Other Costs.  Each party will pay all its own 
  expenses incurred in connection with this Agreement and this 
  Transaction contemplated hereby, including, without limitation 
  (i) all costs and expenses stated herein to be borne by a party, 
  and (ii) all of their respective consulting, accounting, 
  investigation, legal and appraisal fees.  Each party understands 
  that no transfer tax or other documentary stamp or similar tax 
  will be payable in connection with the Transaction contemplated 
  hereby based on the legal opinion of Wyatt, Tarrant & Combs.
  
  1.1 	  Prorations.  The following prorations shall be made 
  effective as of the Closing Date and, to the extent possible, 
  shall be made tentatively at Closing:
  
  (a) 	  Proration Date.  All prorations shall be made as of 
  12:01 a.m., according to the time zone in which the Project is 
  located, on the Closing Date, as if Purchaser were vested with 
  title to the Project during the entire Closing Date.
  
  (a) 	  Rents.  All rents under the Leases for the month in 
  which Closing occurs which are actually received by Seller shall 
  be prorated as of the Closing Date.  All advance payments of 
  rents, other than for the month in which Closing occurs, and all 
  Deposits shall be paid by Seller to Purchaser at Closing.  
  Delinquent rents and additional rents owed for the month during 
  which Closing occurs (for the pro rata period of Seller's 
  ownership of such Project) or prior to the month during which 
  the Closing takes place shall remain the property of Seller, and 
  Purchaser shall use reasonable efforts (not to include 
  commencing any eviction action or other litigation to collect 
  such delinquency) to collect such delinquent rents and 
  additional rents for the benefit of Seller and shall cooperate 
  with Seller in the collection of any such delinquent rents and 
  additional rents.  Seller shall retain the right to pursue all 
  remedies (excluding eviction of tenants) against tenants from 
  whom Purchaser is unable to collect such delinquent rents and 
  additional rents despite reasonable efforts.  All rent received 
  by Purchaser after the Closing Date shall be applied first to 
  current rentals and then to delinquent rentals, if any, in the 
  inverse order of maturity.
  
  (a) 	  Additional Rents.  Seller and Purchaser acknowledge 
  and agree that certain additional rents are collected on an 
  estimated basis and are attributable to percentage rents, 
  expense escalation reimbursements, operating expense pass 
  throughs and/or common area maintenance reimbursements.  The 
  parties further agree to credit any difference in the amounts 
  collected as compared to the actual expenses associated 
  therewith to the applicable party effective as of the Closing 
  Date.
  
  (a) 	  Taxes.  Ad valorem and personal property taxes and 
  assessments against the Project for the year of Closing shall be 
  prorated between Seller and Purchaser as of the Closing Date.  
  If actual taxes are unknown, they shall be prorated based upon 
  the best available information from the local taxing authority. 
   To the extent that the actual taxes for the current year differ 
  from the amounts so apportioned at Closing, Seller and Purchaser 
  shall make all necessary adjustments by appropriate payments 
  between themselves following Closing.
  
  (a) 	  Utilities.  Charges for utilities serving the 
  Project shall be determined as of the day preceding the Closing 
  Date, and Seller shall pay the amount of the utility charges to 
  such date to the utility companies involved or to Purchaser in 
  the event Purchaser is responsible for the payment of such 
  utility charges.  All utility deposits of Seller shall belong to 
  Seller.
  
  (a) 	  Contract Charges.  Charges with respect to Contracts 
  (as defined below) transferred and assigned to Purchaser shall 
  be prorated as of the Closing Date, including, without 
  limitation, the Ground Lease.  Payments for obligations under 
  leases of tangible Personal Property transferred and assigned to 
  Purchaser will be prorated as of the Closing Date.  To the 
  extent not reflected in the closing statements evidencing the 
  Transaction contemplated by this Agreement, Purchaser and Seller 
  agree to adjust between themselves outside of Closing any 
  amounts which are the responsibility of the other party pursuant 
  to this subsection.
  
  (a) 	  Operating Expenses.  Except as otherwise provided 
  herein, any and all expenses and payables relating to the 
  operation, management or ownership of the Project arising or 
  accruing prior to the Closing Date in the ordinary course of 
  business are the responsibility of the Seller and will be paid 
  by Seller promptly upon receipt of billing therefor.
  
  	(h)  Leasing Costs.  Seller shall be responsible for 
  paying all costs, including, without limitation, tenant 
  improvements and leasing commissions, associated with any 
  existing or new lease executed by Seller prior to the 
  expiration of the Inspection Period.  If Purchaser acquires 
  the Project, Purchaser shall be responsible for paying the 
  costs, including without limitation, tenant improvements 
  and leasing commissions, associated with all leases or any 
  lease renewal, expansion or other modification executed 
  after the Inspection Period which have been approved by 
  Purchaser.  If, for any reason, Purchaser does not purchase 
  the Project, Purchaser shall not be responsible or liable 
  to any entity with respect to any such costs or leasing 
  commissions.
  
  	The agreements with respect to prorations in this Section  
  shall survive Closing.  Final settlement of all prorated items 
  shall occur on or before 90 days after the Closing Date, or on 
  the next business day if the 90th day is a Saturday, Sunday or 
  legal holiday, except property taxes and delinquent and pass 
  through rentals which shall be determined upon collection or the 
  date upon which any such amounts shall become ascertainable.  
  Contractual and tort liabilities accruing, or relating to events 
  that occurred, prior to the Closing Date shall remain the 
  responsibility of Seller.  Tort liabilities relating to events 
  that occurred on or after the Closing Date, and contractual 
  liabilities relating to contracts expressly assumed by Purchaser 
  and accruing from and after the Closing Date, shall be the 
  responsibility of Purchaser.
  
                               1 ARTICLE 
  
                             TITLE MATTERS
  
  1.1 	  Title Report/Commitment for Title Insurance.  Seller 
  hereby instructs Title Company to prepare and deliver to 
  Purchaser, Seller and the surveyor described below, at Seller's 
  expense, within five business (5) days after the Effective Date 
  a commitment to issue an owner's title insurance policy to be 
  issued by a title company reasonably acceptable to Purchaser 
  (the "Title Commitment") covering the Real Property, showing all 
  matters affecting title to the Real Property and binding Title 
  Company to issue to Purchaser at Closing an owner's policy of 
  title insurance on an ALTA (1970 form) Extended Form of policy 
  in the full amount of the Purchase Price pursuant to Section 4.4 
  hereof.  Seller and Purchaser further instruct Title Company to 
  deliver to such parties copies of all instruments referenced in 
  Schedule B, Section II of the Title Commitment.
  
  1.1 	  Survey.  Seller shall provide Purchaser with a copy 
  of all existing surveys of the Project which are in Seller's 
  possession or control.  Within five (5) days after the Effective 
  Date, Purchaser shall order an update to Seller's existing 
  survey and shall use reasonable efforts to cause such survey to 
  be delivered to Purchaser and Title Company within ten (10) 
  business days after the Effective Date.  Such survey shall be a 
  currently dated ALTA/ASCM land title survey of the Land and of 
  the Improvements situated thereon (the "Survey"), prepared by a 
  surveyor licensed by the State of Tennessee and certified to 
  Purchaser and Title Company by such surveyors in conformity to 
  the Certificate attached hereto as Exhibit 4.2(a).  In addition 
  to the requirements set forth in attached Exhibit 4.2(b), the 
  Survey shall reflect the total area of the Real Property, the 
  location of all improvements, recorded easements and 
  encroachments, if any, located thereon and all building and set 
  back lines and other matters of record with respect thereto.  
  Said Survey shall also certify that the Land is not in an area 
  identified by FEMA as having special flood or mudslide hazards 
  which require flood insurance under the Flood Insurance Act of 
  1968.  Seller shall provide at Closing a certificate to 
  Purchaser and Title Company if requested, that there have been 
  no improvements made to the Real Property since the date of the 
  Survey which would materially alter the depictions on the 
  Survey.
  
  1.1 	  Title Defects.  Within seven (7) days after receipt 
  of the later of the Title Commitment and the Survey, Purchaser 
  shall notify Seller of any title matters to which Purchaser 
  objects (the "Title Defects") ("Purchaser's Notice").  Any 
  matter disclosed in a Title Commitment or Survey and not 
  objected to by Purchaser or subsequently waived by Purchaser 
  shall be deemed a permitted exception  ("Permitted Exception"). 
   Seller shall notify Purchaser of Seller's decision not to cure 
  any Title Defect within three (3) days after receipt of 
  Purchaser's Notice; provided, however, Seller shall remove 
  monetary liens relating to borrowed funds or other liens 
  securing indebtedness of an ascertainable amount and mechanic or 
  materialmen's liens, if any, except for the Existing 
  Indebtedness if assumed by Purchaser.  Seller's failure to 
  respond shall be deemed a decision by Seller not to cure any 
  Title Defect except for the Existing Indebtedness if assumed by 
  Purchaser.   Within three (3) days of Seller's election not to 
  cure certain Title Defects, Purchaser may elect to waive such 
  Title Defects or terminate this Agreement in which event 
  Purchaser shall receive a return of the Escrow Deposit, the 
  Additional Escrow Deposit, if any, and all interest accrued 
  thereon.  Purchaser's failure to respond shall be deemed a 
  decision by Purchaser to waive the Title Defects to which Seller 
  decides not to cure.  If the Title Defects, that Seller elected 
  to cure, are not cured by Seller or waived by Purchaser  on or 
  before the Closing Date then Purchaser may (i) elect to waive 
  the uncured Title Defects, or (ii) terminate this Agreement in 
  which event Purchaser shall receive a return of the Escrow 
  Deposit, the Additional Escrow Deposit, if any, and all interest 
  accrued thereon.
  
  1.1 	  Title Insurance.  At Closing, Seller and Purchaser 
  shall instruct Title Company to issue a final update to the 
  Title Commitment in which the "GAP" exception has been deleted, 
  binding Title Company to issue to Purchaser an owner policy of 
  title insurance (the "Title Policy") covering the Real Property 
  in the full amount of the Purchase Price.  The Title Policy 
  shall be an ALTA Form 1970-B owner's policy of extended coverage 
  title insurance containing such endorsements as may be 
  reasonably requested by Purchaser and agreed to by Title Company 
  subject only to: (a) current non-delinquent real estate taxes 
  and assessments; (b) matters set forth in the Title Commitment 
  and approved or waived by Purchaser; (c) any other matters 
  approved in writing by Purchaser; (d) title exceptions caused by 
  acts or omissions of Purchaser; and (e) matters excepted or 
  excluded from coverage by the printed terms of the title 
  insurance policy standard form (except for survey (if requested 
  by Purchaser) and mechanics and materialmen's lien exceptions 
  which shall be deleted).  Purchaser shall use reasonable efforts 
  to reach agreement with Title Company regarding any applicable 
  endorsements during the Inspection Period.
  
                              1 ARTICLE 
  
                        INFORMATION SCHEDULES
  
  1.1 	  Information Schedules.  Seller will deliver or cause 
  to be delivered to Purchaser within ten (10) days after the 
  Effective Date, copies of all schedules and documents referred 
  to in this Agreement ("Information Schedules"), including the 
  following schedules and other information described below:
  
  (a) 	  Rent Roll.  A complete list and description, 
  including all Deposits ("Rent Roll"), and true and complete 
  copies, of all Leases.
  
  (a) 	  Delinquency Report.  A complete list and description 
  of any and all delinquencies or defaults under any of the Leases 
  ("Delinquency Report").
  
  (a) 	  Contracts.  An itemized schedule ("Contracts 
  Schedule") of all written and oral service, maintenance, 
  management, leasing, brokerage, and other agreements, equipment 
  or appliance leases, non-governmental franchises, contracts and 
  arrangements relating or pertaining to the Project (collectively 
  "Contracts").  Unless Purchaser makes written request to cancel 
  any Contract contained in the Contracts Schedule prior to the 
  end of the Inspection Period, the Contracts contained in the 
  Contracts Schedule shall be transferred and assigned by Seller 
  to Purchaser at Closing, to the extent assignable.  The 
  Contracts Schedule shall note any Contracts which are not 
  assignable or cancelable at Closing.
  
  (a) 	  Personal Property.  A true and complete schedule and 
  description ("Personal Property Schedule") of all material 
  tangible Personal Property.
  
  (a) 	  Permits.  A list ("Permits Schedule") of all current 
  franchises, business or other licenses, bonds, permits, 
  certificates of occupancy, authorizations and other evidences of 
  consent, approval, authorization or permission relating to or 
  affecting the Project (collectively "Permits") of or from any 
  person, including any governmental authority, held by Seller 
  including any pending applications, but only to the extent that 
  Purchaser may obtain or derive a benefit from such Permits after 
  Closing.  In lieu of providing a detailed Permits Schedule, 
  Seller may provide to Purchaser copies of all Permits in its 
  possession or control.
  
  (a) 	  Property Taxes.  Copies of the two most recent tax 
  statements with respect to the Project, including, without 
  limitation, real and personal property taxes and any special 
  assessments.
  
  (a) 	  Warranties.  A list and description ("Warranty 
  Schedule") of all material third party bonds, warranties and 
  guaranties, including any warranties relating to equipment, 
  structures, roof, landscaping, parking lot or parking lot 
  surfaces, if any, which are in effect with respect to or which 
  benefit any portion of the Project.  
  
  (a) 	  Repair History.  A true and complete list of all 
  major (i.e., costing more than $5,000) repairs of a capital 
  nature which Seller has undertaken with respect to the  Project 
  during its ownership thereof.
  
  (a) 	  Operating Statements.  Materially true and complete 
  copies of all operating statements for the Project for the last 
  two calendar years and for each calendar month of 1997 through 
  the month ending July 31.
  
  (a) 	  Prior Studies.  True and complete copies of any 
  prior third party studies and reports, in the possession of 
  Seller or Seller's agents, affiliates or management companies 
  relating in any manner to the environmental, structural, 
  mechanical, or engineering status of any portion of the Project.
  
  (a) 	  Plans.  Copies of all construction plans, diagrams 
  and schematics of the Real Property and Improvements in Seller's 
  possession or control made available to Purchaser at the 
  Project.  Copies of all existing surveys of the Project.
  
  (a) 	 Operating Agreements.  A list ("Operating Agreements 
  Schedule") of all Ground Leases, skywalk agreements, parking 
  garage agreements and other similar agreements material to the 
  operation of the Project, together with true and complete copies 
  of all such Ground Leases, including, without limitation, any 
  and all amendments or modifications thereto.
  
                             1 ARTICLE 
  
                            INSPECTION
  
  1.1 	  Inspection Period.  During the period beginning upon 
  the Effective Date and ending at 5:00 p.m., local time, on the 
  thirtieth (30th) day after the Effective Date (such period of 
  time hereinafter referred to as the "Inspection Period"), 
  Purchaser and/or its attorneys, consultants or employees 
  ("Authorized Representatives") shall have the right to: (i) make 
  a physical inspection of the Project subject to the rights of 
  tenants, (ii) examine the financial and operating books and 
  records relating to the Project maintained by or for the benefit 
  of Seller, (iii) interview tenants of the Project, and (iv) 
  conduct such non-destructive physical engineering, feasibility 
  and other studies and tests on or of the Project as Purchaser 
  considers to be appropriate.  Purchaser and/or Purchaser's 
  Authorized Representatives may also copy any documents referred 
  to or described in the Information Schedules but not required to 
  be provided to Purchaser as part of any such schedule.  
  Notwithstanding the foregoing, Purchaser shall not be permitted 
  to interfere unreasonably with Seller's operations at the 
  Project or interfere with any tenant's operations at the 
  Project, and the scheduling of any inspections, interviews, 
  and/or testing shall take into account the timing and 
  availability of access to tenant's premises, subject to and in 
  accordance with tenants' rights under the Leases or as tenants 
  may otherwise agree.  Purchaser shall at all times conduct such 
  due diligence in  compliance with applicable laws and the terms 
  of any leases of the Project, and in a manner so as to not cause 
  undue damage, loss, cost or expense to Seller, the Project or 
  the tenants of the Project, and Purchaser shall promptly restore 
  the Project to its condition immediately preceding such 
  inspections and examinations and shall keep the Project free and 
  clear of any mechanic's liens or materialmen's liens in 
  connection with such inspections and investigations.  Seller 
  shall have the right, at its option, to cause a representative 
  of Seller to be present at all such inspections, reviews and 
  examinations.  Purchaser shall keep all information or data 
  received or discovered in connection with such due diligence 
  strictly confidential.  Purchaser shall indemnify, protect, 
  defend and hold Seller harmless from and against any obligation, 
  liability, claim (including any claim for damage to property or 
  injury to or death of any persons), lien or encumbrance, loss, 
  damage, cost or expense, including attorney's fees 
  (collectively, the "Loss"), in any way caused by the inspections 
  or examinations of the Project by Purchaser or its agents or 
  contractors.  The foregoing indemnification shall survive the 
  Closing or the termination of this Agreement for any reason.
  
  1.1 	  Right of Termination.  Notwithstanding anything in 
  this Agreement to the contrary, Purchaser shall have the right, 
  for any reason in Purchaser's sole and absolute discretion, to 
  terminate this Agreement by written notice to Seller on or 
  before the expiration of the Inspection Period and Title Company 
  shall immediately refund to Purchaser the Escrow Deposit and any 
  interest thereon.  In the event the transaction does not close 
  for any reason other than a default by Seller, Purchaser shall 
  deliver to Seller all materials, studies or documents received 
  from third parties or Seller relating to the Project.  On or 
  about August 8, 1997, Purchaser executed and delivered to Seller 
  a Confidentiality Agreement pertaining to Confidential 
  Information as therein defined.  The Confidentiality Agreement, 
  by its terms, shall survive any termination of this Agreement.
  
                               1 ARTICLE 
  
              REPRESENTATIONS AND WARRANTIES OF PURCHASER
  
  	Purchaser's Representations and Warranties.  Purchaser 
  makes the following representations and warranties, as of the 
  date of execution of this Agreement, which shall survive Closing 
  and conveyance of the Project to Purchaser:
  
  1.1 		Authority.  Purchaser is a limited partnership, 
  duly formed,  existing and in good standing under the laws of 
  the State of Delaware; Purchaser has full legal right, power and 
  authority to execute and fully perform its obligations under 
  this Agreement, without the need for any further action under 
  its governing instruments; and the persons executing this 
  Agreement and the other documents required hereunder are the 
  duly designated officers of the sole general partner of 
  Purchaser and are authorized to do so.
  
  1.1 		Inspection.  Purchaser has made, or will make 
  prior to expiration of the Inspection Period, an independent 
  investigation, to the extent Purchaser deems necessary or 
  appropriate, concerning the physical condition, value, 
  development, use, marketability, feasibility and suitability of 
  the Project, including, without limitation, land use, zoning and 
  other governmental restrictions.
  
  1.1 		No Other Seller Representations.  Except as 
  expressly set forth herein, Purchaser acknowledges that no 
  representations or warranties, express or implied, have been 
  made by Seller or Seller's representatives.
  
  1.1 		"AS IS, WHERE IS".  PURCHASER HEREBY EXPRESSLY 
  ACKNOWLEDGES THAT IT HAS INSPECTED AND EXAMINED OR WILL INSPECT 
  AND EXAMINE THE PROJECT TO THE EXTENT DEEMED NECESSARY BY 
  PURCHASER IN ORDER TO ENABLE PURCHASER TO EVALUATE THE PURCHASE 
  OF THE PROJECT.  PURCHASER REPRESENTS THAT IT IS A KNOWLEDGEABLE 
  PURCHASER OF REAL ESTATE AND  RETAIL OFFICE PROPERTIES AND THAT, 
  EXCEPT AS SET FORTH IN ARTICLE , IT IS RELYING SOLELY ON ITS OWN 
  EXPERTISE AND THAT OF PURCHASER'S CONSULTANTS, AND THAT 
  PURCHASER HAS CONDUCTED OR WILL CONDUCT SUCH INSPECTIONS AND 
  INVESTIGATIONS OF THE PROJECT, INCLUDING, BUT NOT LIMITED TO, 
  THE PHYSICAL AND ENVIRONMENTAL CONDITIONS THEREOF.  PURCHASER 
  FURTHER ACKNOWLEDGES AND AGREES THAT PURCHASER IS ACQUIRING THE 
  PROJECT ON AN "AS IS, WHERE IS" BASIS WITHOUT REPRESENTATIONS OR 
  WARRANTIES OTHER THAN THOSE SET FORTH HEREIN AND IN THE 
  DOCUMENTS OF TRANSFER RELATING TO THIS TRANSACTION.
  
  	Initialed by:
  
  	________________			            	________________
  	Seller				                    		Purchaser
  
                               1 ARTICLE 
  
                 REPRESENTATIONS AND WARRANTIES OF SELLER
  
  	Seller's Representations and Warranties.  Seller makes the 
  following representations and warranties as of the date of 
  execution of this Agreement, which shall survive conveyance of 
  the Project to Purchaser:
  
  1.1 		Authority.  Seller is a limited liability 
  company, duly formed, organized, existing and in good standing 
  under the laws of the State of Tennessee.  Seller has full legal 
  right, power and authority to execute and fully perform its 
  obligations under this Agreement, without the need for any 
  further action under its governing instruments; and the persons 
  executing this Agreement and the other documents required 
  hereunder are the duly designated members or officers of Seller 
  and are authorized to do so.
  
  1.1 		Marketable Title.  At the Effective Date and as 
  of Closing, Seller will own the Personal Property free and clear 
  of all liens, claims, encumbrances, and rights of others, except 
  the leased or financed equipment disclosed pursuant to Exhibit 
  1.3, and will convey same to Purchaser.  Seller is not a party 
  to any contract agreement, or commitment to sell, convey, 
  assign, transfer or otherwise dispose of any portion or portions 
  of the Project.
  
  1.1 		Liabilities.  Except as created by this Agreement 
  or disclosed in the Information Schedules or the documents 
  referenced therein, there are no contractual obligations or to 
  Seller's knowledge, any other liabilities of any type which 
  might, with notice, passage of time or both, have a material 
  adverse effect on the Project.
  
  1.1 		Contracts.  Except as disclosed in the 
  Information Schedules, there are no other management, leasing, 
  brokerage, maintenance, service or other contracts relating to 
  the Project.  If Purchaser requests during the Inspection 
  Period, any such existing contracts which permit Seller's 
  unilateral termination, without monetary penalty, will be 
  terminated at Closing.
  
  1.1 		No Undisclosed Matters.  To Seller's knowledge, 
  there are no unsatisfied written requests for material repairs, 
  restorations or improvements from any insurance carrier or 
  governmental authority.  Seller has not received any written 
  notice from any insurer of any defects or inadequacies in any 
  part of the Project which would adversely affect its 
  insurability, or written notice of any claims of any 
  governmental agency to the effect that the construction, 
  operation or use of any of the Project is in violation of any 
  applicable law, ordinance, rule, regulation or order.  
  
  1.1 		No Defaults.  Seller is not in default in respect 
  of any of its material obligations or liabilities pertaining to 
  the Project (including, but not limited to, such obligations and 
  liabilities under the Contracts or Leases).  To Seller's 
  knowledge, no present dispute or fact exists which might with 
  notice, passage of time or both, give rise to a dispute under 
  any Contracts or Leases.
  
  1.1 		Litigation.  There is no litigation pending or to 
  Seller's knowledge, threatened against Seller or the Project 
  which relates to, or if decided adversely, could have a material 
  adverse effect upon, the Project (including condemnation or 
  similar proceeding).
  
  1.1 		Environmental Matters.  For the purpose of this 
  Agreement, the term "Hazardous Materials" shall mean (i) each 
  and every substance included within the term "hazardous 
  substance" or "hazardous waste" as defined in any one or more of 
  the Comprehensive Environmental Response, Compensation, and 
  Liability Act of 1980, 42 U.S.C.A. Section 9601 et seq. (as 
  heretofore amended), the Hazardous Materials Transportation Act 
  of 1975, 49 U.S.C.A. Section 1801 et seq. (as heretofore 
  amended), the Resource Conservation and Recovery Act of 1976, 42 
  U.S.C.A. Section 6901 et seq. (as heretofore amended) and any 
  other federal, state or local environmental laws or regulations 
  now or hereafter enacted; (ii) all substances to which the rules 
  and regulations promulgated by any Federal or state agency 
  pursuant to any one or more of said statutes applies; and (iii) 
  any and all petroleum products and petroleum derivatives.  
  Seller represents unto Purchaser that the following  matters are 
  true as of the date of execution of this Agreement by Seller, 
  and shall survive Closing and not merge into any documents 
  delivered at Closing:
  
  (i) 	  Seller has no notice or knowledge of any (i) 
  currently existing violations of federal, state, county or 
  municipal environmental laws in respect to the Project, or (ii) 
  past, pending or threatened administrative or judicial 
  litigation or other legal proceedings including, without 
  limitation, any enforcement proceeding under any federal, state, 
  county or municipal statute, ordinance, rule or regulation 
  concerning Hazardous Materials, relating to the Project, or of 
  any settlement thereof; and  
  
  (i) 	  to Seller's knowledge and except for emergency 
  generator purposes, there are no underground storage tanks 
  ("USTs") located on or below the Land.
  
  1.1 		Certification of Rent Roll.  No person has any 
  title, interest or right to possession of any portion of the 
  Project as a lessee, tenant or concessionaire of Seller except 
  as shown on the Rent Roll.  Except as disclosed in writing to 
  Purchaser, the Rent Roll lists all Leases, amendments and 
  modifications thereof.  Seller is not, and to Seller's knowledge 
  no tenant is, in default in the performance of or under any such 
  Lease in any material respect except as disclosed in the 
  Delinquency Report.  The Rent Roll states all Deposits, prepaid 
  rents and other deposits or prepayments for each Lease and 
  Seller or Seller's agent are currently in possession of all such 
  deposits.  No tenant is entitled to any rebate, concession, 
  special allowance or other benefits, except as stated in the 
  Leases.  To Seller's knowledge, no tenant has any counterclaim, 
  defense or offset to any action for collection of rents or other 
  amounts accruing after the Closing Date under any Lease.  The 
  rents and other sums due or to become due under each Lease have 
  not been and will not be assigned, encumbered or subjected to 
  any liens by Seller, except to lenders whose liens shall be 
  released at Closing.  Except as disclosed in the Rent Roll, 
  there has been no waiver of Seller's rights under or 
  modification of any Lease or other documents executed by tenants 
  in connection with the Leases which could have a material 
  adverse affect thereon.  To Seller's knowledge, except for the 
  right of the tenants in possession under the Leases and 
  permitted sublessees, there are no parties in possession of, or 
  claiming any possession to any portion of the Project as 
  lessees, tenants at sufferance, trespassers or otherwise.  To 
  Seller's knowledge, there has been no material, adverse change 
  with respect to the information set forth in the Rent Roll or 
  Delinquency Report.  Except as disclosed in Exhibit , all 
  leasing commissions payable in connection with the Leases have 
  been paid in full.  Exhibit  lists any and all leasing 
  commissions and brokerage agreements which may be due and 
  payable in connection with the Leases upon a subsequent renewal, 
  expansion, modification or waiver of any rights by a tenant 
  under the terms of the Leases.  Seller has paid in full all 
  leasing or similar commissions or payment obligations, if any, 
  relating to any Lease.  Purchaser is not assuming any 
  obligations for tenant improvements or purported leasing 
  commissions except for tenant improvements and leasing 
  commissions set forth on Exhibit  and which relate to renewals, 
  extensions, expansions or modifications occurring after the 
  expiration of the Inspection Period.  Seller shall indemnify and 
  hold Purchaser harmless for any Loss with respect to any claims 
  by tenants or third party brokers for tenant improvements or 
  leasing commissions not expressly assumed by Purchaser.
  
  1.1 		Existing Indebtedness.  The "Loan Documents" 
  described on Exhibit  constitute all of the loan documents 
  relating in any manner to Seller's "Existing Indebtedness" to 
  National Bank of Commerce ("Lender") which relates to the 
  Project.  The outstanding principal balance of the Existing 
  Indebtedness as of the Effective Date is approximately 
  $20,000,000.  The Loan Documents correctly and accurately state 
  the terms and condition of the Existing Indebtedness.  Except as 
  disclosed in writing to Purchaser prior to the expiration of the 
  Inspection Period, the Loan Documents contain the entire 
  agreement between Seller, any guarantors and any lenders; are in 
  full force and effect in accordance with their written terms; 
  and, are valid obligations of the Seller, any guarantors and 
  Lender.  Seller is not,  and to Seller's knowledge any 
  guarantors and Lender are not in default in the performance of 
  or under any of the Loan Documents in any material respect 
  except as disclosed on Exhibit .  Lender is not entitled to any 
  payments, offsets or remuneration of any kind except as set 
  forth in the Loan Documents. As of the Effective Date, and as of 
  the Closing Date, Seller has complied with all requirements of 
  the Loan Documents and is not in default thereunder.
  
  1.1 		Certification of Operating Agreements.  Exhibit  
  lists all Ground Leases, skywalk agreements, parking garage 
  agreements and all amendments and modifications thereof relating 
  to the Project (collectively, "Operating Agreements").  Seller 
  is not, and to Seller's knowledge ground lessor is not, in 
  default in the performance of or under any such Operating 
  Agreements in any material respect.  To Seller's knowledge, no 
  counterclaim, defense or offset exists with respect to any of 
  the Operating Agreements.  Except as disclosed in Exhibit , 
  there has been no waiver of any rights under or modification of 
  any Operating Agreements or other documents executed in 
  connection with the Operating Agreements which could have a 
  material adverse affect thereon. 
  
  1.1 		Operating Statements.  To Seller's knowledge, the 
  Operating Statements are true, accurate and complete in all 
  material respects and present fairly the results of operations 
  for the periods indicated on a consistent basis.
  
  1.1 		Use of Project.  To Seller's knowledge, (i) no 
  governmental, public or private authority intends or desires to 
  appropriate the use of or limit the use of any of the Project 
  pursuant to any condemnation, eminent domain or similar 
  proceeding; (ii) no fact or condition exists which will result 
  in the termination of the Project's current access to and from 
  existing streets and utilities.
  
  1.1 		Documentation.  To Seller's knowledge, all 
  documents which shall be delivered to Purchaser by or on behalf 
  of Seller under this Agreement shall be accurate and complete in 
  all material respects, including, without limitation, the 
  Information Schedules.
  1.2 		FIRPTA.  Seller is not a "foreign person" (as 
  defined in the Internal Revenue Code and Income Tax 
  Regulations).  The provisions of the Foreign Investment in Real 
  Property Tax Act of 1980, as amended, are not applicable to the 
  Transaction.
  
                               1 ARTICLE 
   
                               COVENANTS
  
  	Covenants of Seller.  Seller covenants and agrees with 
  Purchaser as follows:
  
  1.1 		Access.  Subject to the terms and conditions of 
  Section 6.1, during normal business hours prior to Closing, 
  Seller agrees to give to Purchaser and its agents and 
  representatives reasonable access to the Project and the books 
  and records directly relating to the ownership, management, 
  maintenance and operation of the Project, and all documents 
  directly pertaining to the Project that are in the possession of 
  Seller, or any of Seller's agents or representatives.  Prior to 
  Closing, Seller will furnish Purchaser with such additional 
  financial and operating data and other information reasonably 
  available to Seller as may be reasonably necessary for Purchaser 
  to thoroughly evaluate the Project.    
  
  1.1 		Additional Audits.  Purchaser shall have, in 
  addition to any inspection or audit rights contained elsewhere 
  in this Agreement, the right to conduct a full audit of the 
  books and records of Seller relating to the operations and 
  financial results of the Property, in such form and at such 
  time, including up to 270 days after Closing, as Purchaser may 
  reasonably determine is necessary to comply with applicable 
  securities laws requirements, including, without limitation, 
  Regulation 210.3-14 promulgated under the Securities Exchange 
  Act of 1934, as amended.  All costs incurred as a result of a 
  Purchaser's undertaking such audit shall be borne exclusively by 
  Purchaser;  however, Seller shall make available such books, 
  records and materials as may be reasonably requested by 
  Purchaser or its accountants in order to conduct such audit.  
  All such audit activities shall be conducted at Seller's place 
  of business in a commercially reasonable fashion during normal 
  business hours and upon five (5) days prior notice from 
  Purchaser to Seller.
  
  1.1 		No Material Changes.  Prior to Closing, Seller 
  shall:  (i) not cancel or permit cancellation of any hazard or 
  liability insurance carried with respect to the Project; (ii) 
  remedy all material violations of laws, ordinances, orders or 
  requirements relating to the Project which are not caused by 
  Purchaser and of which Seller has received actual  notice and 
  provide Purchaser with evidence of curing of same (provided that 
  Seller shall not be required to expend more than $10,000, in the 
  aggregate, with respect to such matters); and (iii) operate the 
  Project on a basis consistent with Seller's operations 
  including, without limitation, undertaking all reasonably  
  required ordinary maintenance and repair of the Project.  Prior 
  to Closing, Seller also will not, without the prior written 
  consent of Purchaser, (i) sell, transfer or dispose or become 
  obligated to sell, transfer or dispose of any of the Project, 
  except for the use and consumption of inventory, office and 
  other supplies and spare parts, and the replacement of worn out, 
  obsolete and defective tools, equipment and appliances, in the 
  ordinary course of the business, (ii) after the expiration of 
  the Inspection Period except as specifically permitted by this 
  Agreement, enter into any transaction, or make any commitment 
  with respect to the Project other than in the ordinary course of 
  the business, (iii) amend, renew, extend, modify or terminate 
  any Contract, Permit or Lease except as contemplated by this 
  Agreement or except in the ordinary course of business.  Subject 
  to Section  below regarding Seller's continued leasing 
  obligations, prior to Closing, Seller shall operate and maintain 
  the Project in substantially the same manner and condition as 
  Seller has operated and maintained the Project immediately prior 
  to the Effective Date.  Seller will perform current or routine 
  maintenance and repairs in the ordinary course of business of or 
  to the Project as may be required or reasonably appropriate to 
  operate and maintain the Project other than tenant improvements 
  relating to new leases.  Provided, however, that Seller shall 
  not be obligated to make an expenditure, which would be 
  capitalized pursuant to generally accepted accounting 
  principles, in excess of $15,000 and in the event Seller elects 
  not to make an expenditure greater than said amount, then at 
  Closing, Purchaser shall receive a credit for such excess amount 
  as evidenced by a bona fide third party contract, proposal or 
  bid for such item(s).  After expiration of the Inspection 
  Period, Seller shall be required to gain Purchaser's written 
  approval of any new or modified contract or agreement which will 
  affect the operation of the Project, which approval will not be 
  unreasonably withheld, conditioned or delayed.
  
  1.1 		Consents.  Seller and Purchaser shall each 
  promptly file or submit and diligently prosecute any and all 
  applications or notices with federal, state and/or local 
  authorities and all other requests with any private persons or 
  entities for consents, approvals, authorizations and permissions 
  which are reasonably considered necessary or appropriate by the 
  other party for the consummation of the Transaction or to 
  prevent the termination of any Lease, Contract or Permit, or any 
  loss or disadvantage to the Project. 
  
  1.1 		Payments.  Seller will cause to be paid when due 
  or shall be responsible for all taxes, license fees, trade 
  accounts and costs and expenses of operation and maintenance of 
  the Project incurred through the Closing Date, except amounts 
  subject to proration under Section .
  
  1.1 		Cooperation.  Seller will reasonably assist and 
  cooperate with any environmental evaluation, study or audit of 
  the Project prepared by, for or at the request of Purchaser.
  
  1.1 		Notification of Subsequent Events.  Prior to 
  Closing, Seller shall notify Purchaser of any written notice 
  received by Seller of any material adverse change in or to the 
  Project including, without limitation, any notice relating to 
  any insurance contract or policy now held or owned by Seller to 
  cancel or materially increase any premiums relating thereto.
  
  1.1 		Existing Loan Matters.  In the event Purchaser 
  has elected for part of the Purchase Price to be paid by an 
  assumption of of the Existing Indebtedness, Seller and Purchaser 
  shall use their reasonable efforts to obtain the written consent 
  to the transactions contemplated herein from all parties whose 
  consent to the assumption by Purchaser of such Loan Documents is 
  required thereunder, together with a release of Seller from any 
  liability under the Loan Documents, and an "estoppel 
  certificate" executed by Lender substantially in the form 
  attached hereto as Exhibit  certifying that Loan Documents are 
  in full force and effect and that no default exists thereunder. 
   To the extent required by the Lender, Seller shall pay to the 
  Lender up to 1% of the outstanding principal balance of the 
  existing note as a loan transfer and assumption fee.  Seller 
  shall pay any other transfer, assumption or other fees and costs 
  (including reasonable attorneys' fees, but not attorneys' fees 
  of Purchaser's counsel) imposed by any of such parties with 
  respect to such consent and assumption (including any loan 
  transfer or assumption fee in excess of 1% of the outstanding 
  balance of the existing note) up to a maximum of $10,000.  
  Purchaser and Seller shall reasonably cooperate with each other 
  and the Lender in connection with such consent and assumption 
  (and shall promptly deliver such information, including 
  financial information, respecting Purchaser or its principals as 
  any of such parties may request).  The parties' sole obligations 
  in connection with the consent matters herein contemplated  
  shall be to utilize reasonable efforts to obtain such consents, 
  and to reasonably cooperate with Purchaser to the extent 
  necessary.  If such consents are not obtained on or before the 
  Closing Date, the obligation of Purchaser to purchase the 
  Project shall not terminate and the Purchase Price shall be paid 
  in immediately available funds at Closing and the Existing 
  Indebtedness shall be paid in full at Closing.  In the event the 
  Existing Indebtedness is paid in full at Closing, Buyer agrees 
  to and shall pay, on behalf of Seller as additional 
  consideration and not part of or a credit to the Purchase Price, 
  any and all prepayment fees assessed by Lender upon prepayment 
  of the Existing Indebtedness.  Seller's sole obligation 
  hereunder with respect to obtaining an "estoppel certificate" 
  from the Lender shall be to utilize reasonable efforts to obtain 
  such "estoppel certificate" (such reasonable efforts not 
  including any obligation to institute legal proceedings or to 
  expend any additional monies therefor, other than for minor 
  administrative charges).
  
  1.1 		Estoppel Certificates.  Before the expiration of 
  the Inspection Period, Seller shall have delivered currently 
  dated (no earlier than thirty (30) days prior to the scheduled 
  Closing Date) estoppel certificates in material conformance with 
  the form attached hereto as Exhibit .1 from each Major Tenant or 
  a Seller's estoppel certificate in the form attached hereto as 
  Exhibit .2 for each non-major tenant not providing an estoppel 
  certificate directly.  "Major Tenant" shall mean Morgan Keegan & 
  Company, Inc., and tenants identified on Exhibit .3.  Seller and 
  Purchaser shall use reasonable efforts to obtain a Subordination 
  Non-Disturbance and Attornment Agreement ("SD&A") in the form 
  reasonably requested by any lender of Purchaser and from each 
  Tenant requested by any such lender.  Seller and Purchaser shall 
  use reasonable efforts to negotiate the final form of any SD&A 
  with the applicable tenant and lender during the Inspection 
  Period.  If such SD&A are not obtained on or before the Closing 
  Date, the obligation of Purchaser to purchase the Project shall 
  not terminate and the Purchase Price shall be paid in 
  immediately available funds at Closing.  Seller shall also 
  deliver to Purchaser an estoppel certificate from the lessor 
  under the Ground Lease in material conformance with the form 
  attached hereto as Exhibit .4
  
  1.1 		Leasing.  Seller (and/or Seller's agents), in 
  consultation with Purchaser, shall continue in good faith to 
  advance all leasing activities for the Project including, 
  without limitation, new leases, renewals, extensions, expansions 
  or other modifications.  Provided, however, Seller shall not 
  enter into any new lease or any renewal, expansion or other 
  modification of any existing Lease without Purchaser's prior 
  written consent which shall not be unreasonably withheld, 
  conditioned or delayed.  
  
  1.1 		Leasing Commissions.  Except as set forth in 
  Section   and Exhibit , there are no outstanding commissions, 
  leasing, brokerage or otherwise, payable to any leasing agents, 
  brokers,  or similar type parties, regarding the sale of the 
  Project or the execution, renewal, amendment, or modification of 
  any Lease in the Project.
  
  1.1 		Knowledge Standard.  As used in this Agreement, 
  "the Seller's knowledge "or any similar phrase, shall mean the 
  current actual knowledge of Joseph C. Weller; provided, however, 
  that nothing in this Agreement shall be deemed to create or 
  impose any personal liability of any kind on Joseph C. Weller.  
  Joseph C. Weller is the Chief Manager of the Seller with respect 
  to the Project and as such has personal knowledge of the Project 
  and its operations.
  
                            1 ARTICLE 
  
                          CLOSING MATTERS
  
  1.1 	  Conditions to Purchaser's Obligations.  The 
  obligations of Purchaser to consummate the transactions 
  contemplated by this Agreement are subject to the satisfaction 
  of each of the following conditions as of the Closing Date, 
  except to the extent any such condition is waived in whole or in 
  part by Purchaser in writing at or prior to Closing:
  
  (a) 	  Satisfaction.  The representations and warranties of 
  Seller contained in this Agreement shall have been true on the 
  date of this Agreement and on Closing.  Seller shall have 
  performed all obligations and complied with all covenants 
  required by this Agreement.  
    
  (a) 	  No Injunction.  On the Closing Date, there shall be 
  no third party injunction, writ, preliminary restraining order 
  or any order of any nature issued by a court of competent 
  jurisdiction directing that the transactions contemplated herein 
  not be consummated as herein provided which relates to the acts 
  or omissions of Seller.
  
  (a) 	  Certificates. Purchaser shall have received the 
  estoppel certificates  referenced in Section  above, from or for 
  each tenant referenced on the Rent Roll and the ground lessor 
  under the Ground Lease.  
  
  (a) 	 Ground Lease Consent.  Receipt of consent from the 
  ground lessor or other appropriate governmental authority 
  regarding the assignment of the Ground Lease contemplated 
  hereby.
  
  (a) 	  Lease Renewal By Morgan Keegan. Purchaser shall have 
  received an executed lease agreement or renewal from Morgan 
  Keegan & Company, Inc. for a term of at least ten (10) years 
  from Closing encompassing no less than 159,910 rentable square 
  feet on terms and conditions reasonably consistent with the form 
  lease agreement attached hereto as Exhibit .  Purchaser and 
  Seller shall finalize negotiations of the lease agreement during 
  the Inspection Period, however, Seller hereby commits to the 
  financial terms in Paragraphs 1, 3, 4, 5, 19 and 33 of the form 
  lease agreement attached hereto.
  
  (a) 	  No Adverse Change.  No material and adverse change 
  shall have occurred without Purchaser's written consent, in the 
  state or condition of the Project or in the title matters 
  described in the Title Commitment and the Survey.
  
  1.1 	  Conditions to Seller's Obligations.  The obligations 
  of Seller to consummate the transactions contemplated by this 
  Agreement are subject to the satisfaction of each of the 
  following conditions as of the Closing Date, except to the 
  extent any such condition is waived in whole or in part by 
  Seller in writing at or prior to Closing:
  
  (a) 	  Satisfaction.  The representations and warranties of 
  Purchaser contained in this Agreement shall have been true on 
  the date of this Agreement and on Closing.  Purchaser shall have 
  performed all obligations and complied with all covenants 
  required by this Agreement.  
  
  (a) 	  No Injunction.  On the Closing Date, there shall be 
  no third party injunction, writ, preliminary restraining order 
  or any order of any nature issued by a court of competent 
  jurisdiction directing that the transactions contemplated herein 
  not be consummated as herein provided which relates to acts or 
  omissions of Purchaser.
  
  1.1 	  Closing Documents.  At Closing, Seller shall deliver 
  to Purchaser the following documents, all properly executed by 
  Seller and delivered to Purchaser and/or executed by Purchaser 
  and delivered to Seller shall be in a form reasonably acceptable 
  to Purchaser and Seller and include, but are not limited to:
  
  (a) 	  Limited Assignment of Leases.  A limited warranty 
  Assignment of Leases in form attached hereto as Exhibit (a).  
  Such Assignment of Leases shall be joined in by Purchaser for 
  the purpose of assuming all obligations under the Operating 
  Agreements arising from and after the Closing Date.
  
  (a) 	  Assignment and Bill of Sale.  An Assignment and  
  Assumption Agreement and Bill of Sale in form attached hereto as 
  Exhibit (b).  Such Assignment and Bill of Sale shall be joined 
  in by Purchaser for the purpose of assuming all obligations 
  under any assigned item arising from and after the Closing Date.
  
  (a) 	  Existing Indebtedness.  If applicable, appropriate 
  documentation to evidence the assumption by Purchaser of the 
  Loan Documents as contemplated by this Agreement.
  
  (a) 	 Documents.  Executed original copies, or copies 
  certified as correct by Seller, if originals are not available, 
  of (i) all Leases in force on the Closing Date covering portions 
  of the Project and all other documents referred to in the Rent 
  Roll, (ii) all Contracts and Permits of which Seller is aware 
  transferred and assigned to Purchaser, (iii) all "as built" 
  plans, specifications, surveys or other documents relating or 
  pertaining to the Project in the possession of Seller 
  (collectively "Plans"), including, but not limited to, all 
  records relating to repair, renovation and maintenance of the 
  Project; (iv) all notices to tenants relating to this 
  Transaction and the receipt of security deposits as necessary or 
  appropriate under applicable law; and (v) all other documents 
  referred to in the schedules and exhibits referred to herein.
  
  (a) 	  Rent Roll.  A current and updated Rent Roll.
  
  (a) 	  FIRPTA.  Affidavit from Seller that Seller is not a 
  foreign person as defined in the Foreign Investment in Real 
  Property Tax Act of 1980, as amended, in the form attached 
  hereto as Exhibit (f).
  
  (a) 	  Keys.  All keys and master keys in Seller's 
  possession or control  to all locks located on the Project 
  properly tagged for identification as well as cards keys and 
  cards for the security systems, if any.
  
  (a) 	  Telephone and Mail.  Such documents as may be 
  reasonably requested by Purchaser and required by (i) the local 
  telephone company to assign to Purchaser all of Seller's rights 
  and interest in each telephone number or phone line used by 
  Seller exclusively for the operation of the Project, and (ii) 
  the U.S. Postal Service to assign to Purchaser all of Seller's 
  rights and interest in each post office box and drawer 
  exclusively for the operation of the Project.
  
  (a) 	  Evidence of Authority.  Both parties will deliver to 
  each other and the Title Company such evidence or documents as 
  may reasonably be required evidencing the authority of any 
  person who is executing any of the documents required hereunder.
  
  (a) 	  Miscellaneous.  Such other documents as may be 
  required under other provisions of this Agreement or as may 
  reasonably be required by Purchaser to consummate the 
  Transaction, so long as such document does not increase either 
  party's liability or obligations hereunder, including, but not 
  limited to, (i) a Closing Statement, (ii) tenant's notice 
  letter, and (iii) a Quitclaim Deed with the legal description 
  contained in Exhibit (a) and/or the Survey, if the legal 
  description of the Land contained in the Survey differs from the 
  legal description contained in Exhibit (a).
  
                               1 ARTICLE 
   
                          DEFAULTS AND REMEDIES
  
  1.1 	  Damages Against Purchaser.  IF PURCHASER DEFAULTS 
  UNDER ANY PROVISION OF THIS AGREEMENT AND CLOSING DOES NOT 
  OCCUR, THEN SELLER SHALL BE RELEASED FROM ALL OBLIGATIONS IN LAW 
  OR EQUITY TO CONVEY THE PROJECT TO PURCHASER.  PURCHASER AND 
  SELLER AGREE THAT AS SELLER'S SOLE REMEDY FOR A DEFAULT 
  HEREUNDER, BY WRITTEN NOTICE TO PURCHASER AND TITLE COMPANY, 
  SELLER SHALL BE ENTITLED TO TERMINATE THIS AGREEMENT AND BE 
  ENTITLED TO RECEIVE THE ESCROW DEPOSIT, THE ADDITIONAL ESCROW 
  DEPOSIT, IF ANY, PLUS ACCRUED INTEREST THEREON AS LIQUIDATED 
  DAMAGES.  PURCHASER AND SELLER ACKNOWLEDGE AND AGREE THAT ACTUAL 
  DAMAGES WILL BE EXTREMELY DIFFICULT AND IMPRACTICAL TO 
  ASCERTAIN.  THEREFORE, THE SUM REPRESENTED BY THE ESCROW 
  DEPOSIT, THE ADDITIONAL ESCROW DEPOSIT, IF ANY, PLUS ANY ACCRUED 
  INTEREST THEREON SHALL BE DEEMED TO CONSTITUTE A REASONABLE 
  ESTIMATE AND AGREED STIPULATION OF SELLER'S DAMAGES AND SHALL 
  CONSTITUTE SELLER'S SOLE AND EXCLUSIVE REMEDY IN THE EVENT THIS 
  TRANSACTION FAILS TO CLOSE AS A RESULT OF PURCHASER'S   DEFAULT. 
   NOTWITHSTANDING THE FOREGOING, PURCHASER'S LIABILITY UNDER 
  SECTION 6.1 HEREOF AND SHALL REMAIN IN FULL FORCE AND EFFECT.
  
  	Initialed by:
  
  	________________				________________
  	Seller						        Purchaser
  
  1.1 	  DAMAGES AGAINST SELLER.  IN THE EVENT THAT SELLER 
  FAILS TO PERFORM ALL OF SELLER'S OBLIGATIONS UNDER THIS 
  AGREEMENT AND PURCHASER PERFORMS ALL OF ITS OBLIGATIONS OR 
  TENDERS PERFORMANCE, INCLUDING THE OBLIGATION TO CONSUMMATE THE 
  TRANSACTION, THEN PURCHASER MAY MAKE WRITTEN DEMAND TO SELLER 
  FOR PERFORMANCE OF THIS AGREEMENT.  IF SELLER FAILS TO COMPLY 
  WITH PURCHASER'S WRITTEN DEMAND WITHIN 30 DAYS AFTER RECEIPT OF 
  SUCH WRITTEN DEMAND FOR PERFORMANCE, PURCHASER SHALL HAVE THE 
  EXCLUSIVE RIGHT TO (I) WAIVE SUCH DEFAULT, (II) SEEK SPECIFIC 
  PERFORMANCE OF SELLER'S OBLIGATIONS UNDER THIS AGREEMENT, OR 
  (III) TERMINATE THIS AGREEMENT AND PROMPTLY RECEIVE A FULL 
  REFUND OF THE ESCROW DEPOSIT, THE ADDITIONAL ESCROW DEPOSIT, IF 
  ANY, AND ALL INTEREST THEREON AND PAYMENT BY SELLER OF AN AMOUNT 
  NOT TO EXCEED $25,000 IN ORDER TO REIMBURSE PURCHASER'S 
  REASONABLE OUT OF POCKET EXPENSES ASSOCIATED WITH THIS 
  TRANSACTION, BUT WITHOUT FURTHER LIABILITY ON SELLER'S PART.  
  SELLER AGREES THAT THE PROJECT IS UNIQUE AND THAT DAMAGES FOR 
  FAILURE BY SELLER TO CONSUMMATE THE TRANSACTION WILL BE 
  IMPRACTICABLE AND EXTREMELY DIFFICULT TO DETERMINE.  THEREFORE, 
  IN THE EVENT THAT SELLER FAILS OR REFUSES TO CONSUMMATE THE 
  TRANSACTION AND PURCHASER SEEKS SPECIFIC PERFORMANCE, SELLER 
  SPECIFICALLY AGREES THAT THE REMEDY OF SPECIFIC PERFORMANCE  IS 
  AN APPROPRIATE REMEDY FOR PURCHASER, AND SELLER WAIVES AND 
  AGREES NOT TO ASSERT ANY CLAIM OR DEFENSE THAT SPECIFIC 
  PERFORMANCE IS NOT AN APPROPRIATE REMEDY FOR PURCHASER.  
  
  	Initialed by:
  
  	________________				________________
  	Seller			        			Purchaser
  
                              1 ARTICLE 
  
                             RISK OF LOSS
  	
  1.1 	  Risk of Loss.  Prior to Closing, Seller shall have 
  full risk of loss or damage with respect to the Project.  Upon 
  Closing, full risk of loss or damage with respect to the Project 
  shall pass to Purchaser.  For purposes of this Article, "loss or 
  damage" shall mean the following:  (i) any loss, damage, 
  destruction or injury by fire, storm, accident, flood or other 
  casualty or hazard to the Project; and (ii) any condemnation, 
  eminent domain or other similar proceeding.
  
  1.1 	  Minor Damage.  In the event of loss or damage to the 
  Project or any portion thereof (the "premises in question") 
  which is not "major" (as hereinafter defined), this Agreement 
  shall remain in full and effect provided Seller performs any 
  necessary repairs or, at Seller's option, reduces the cash 
  portion of the Purchase Price in an amount equal to the cost of 
  such repairs, Seller thereby retaining all of the Seller's 
  right, title and interest to any claims and proceeds Seller may 
  have with respect to any casualty insurance policies or 
  condemnation awards relating to the premises in question.  In 
  the event Seller elects to perform repairs upon the Project, 
  Seller shall use reasonable efforts to complete such repairs 
  promptly and if necessary, the date of Closing shall be extended 
  a reasonable time in order to allow for the completion of such 
  repairs;  provided, however, Closing may not be extended for a 
  period of more than thirty (30) days without the prior consent 
  of Purchaser.
  
  1.1 	  Major Damage.  In the event of a "major" loss or 
  damage, Purchaser may either (i) terminate this Agreement and 
  immediately receive a refund of the Escrow Deposit and all 
  interest thereon, or (ii) it may proceed with this transaction 
  and receive Seller's insurance proceeds, if any, for such 
  damage, plus payment from Seller of the amount of the applicable 
  insurance deductible relating thereto not to exceed the actual 
  repair cost.  In such event, Seller shall execute all documents 
  reasonably requested by Purchaser to assign Seller's rights and 
  interest to such insurance proceeds.    
  
  1.1 	  Definition of Major Loss or Damage.  For purposes of 
  Sections  and , "major" loss or damage refers to the following: 
   (i) loss or damage to the Project or any portion thereof such 
  that the cost of repairing or restoring the premises in question 
  to a condition substantially identical to that of the premises 
  in question prior to the event of damage or loss would be, in 
  the certified opinion of a mutually acceptable architect, equal 
  to or greater than One Hundred Thousand Dollars ($100,000), and 
  (ii) any loss or damage due to a condemnation which permanently 
  and materially impairs the current use of the Project.
  
                              1 ARTICLE 
  
                         GENERAL PROVISIONS
  
  1.1 	  Brokerage Commission.  Seller and Purchaser 
  represent to each other that they have acted directly and 
  independently with the other as principals and that neither 
  Seller nor Purchaser have retained or authorized the services of 
  any broker or finder with respect to this Transaction.  Seller 
  agrees to indemnify and hold Purchaser harmless from and against 
  all claims, liabilities, and obligations for any commission, 
  finder's fee, or other compensation in connection with this 
  Agreement claimed by or through Seller.  Purchaser agrees to 
  indemnify and hold Seller harmless from and against all claims, 
  liabilities, and obligations for any commission, finder's fee, 
  or other compensation in connection with this Agreement claimed 
  by or through Purchaser.
  
  1.1 	  Confidentiality.  Unless Seller otherwise agrees in 
  writing, Purchaser agrees that all confidential proprietary 
  information regarding the Project of whatsoever nature made 
  available to it by Seller or Seller's agents or representatives 
  or developed by Purchaser ("Confidential Information"), is 
  confidential and shall not be disclosed to any other person 
  except those assisting Purchaser with this Transaction, or 
  Purchaser's lender, if any, except as required by law.  The 
  provisions of the foregoing sentence shall not apply to any 
  information which is otherwise available to the public or which 
  has been obtained from sources that are not subject to a similar 
  confidentiality restriction or to disclosures as required by 
  law.  Further, Purchaser agrees not to use any Confidential 
  Information for any purpose other than to determine whether to 
  proceed with the Transaction contemplated by this Agreement.  
  Upon Closing, all such Confidential Information shall be the 
  sole and exclusive property of Purchaser and not subject in any 
  manner to this confidentiality restriction.   Provided, however, 
  in the event the transaction contemplated by this Agreement does 
  not close for any reason other than a breach by Seller, the 
  provisions of this Section  shall survive the termination of 
  this Agreement.  This Section  is in addition to and not in 
  limitation of the Confidentiality Agreement executed by 
  Purchaser dated August 8, 1997 pertaining to the Project.
  
  1.1 	   Entire Agreement.  This Agreement, together with 
  all exhibits or schedules either attached or delivered pursuant 
  hereto and other agreements expressly referred to herein, 
  constitutes the entire agreement between the parties with 
  respect to the purchase and sale of the Project.  All prior to 
  or contemporaneous agreements, understandings, representations, 
  warranties and statements, oral or written, are superseded.
  
  1.1 	   Further Assurances.  The parties agree to take such 
  further action and execute such documents and instruments as may 
  be reasonably required in order to more effectively carry out 
  the terms of this Agreement and the intentions of the parties.
  
  1.1 	   Modification, Waiver.  Except as expressly 
  contemplated herein, no modification, waiver, supplement or 
  discharge of this Agreement shall be valid unless the same is in 
  writing and signed by the party against whom the enforcement 
  thereof is or may be sought.  No waiver of a breach of any of 
  the terms, covenants or conditions of this Agreement by either 
  party shall be construed or held to be a waiver of any 
  succeeding or preceding breach of the same or any other term, 
  covenant or condition herein contained.  No waiver of any 
  default by either party hereunder shall be implied from any 
  omissions by either party to take any action on account of such 
  default if such default persists or is repeated, and no express 
  waiver shall affect a default other than as specified in such 
  waiver.
  
  1.1 	   Severability.  If any term, provision, covenant or 
  condition of this Agreement is held to be invalid, void or 
  otherwise unenforceable to any extent by any court of competent 
  jurisdiction, the remainder of this Agreement shall not be 
  affected thereby, and each term, provision, covenant or 
  condition of this Agreement shall be valid and enforceable to 
  the fullest extent permitted by law.
  
  1.1 	  Successors.  Subject to the restriction on 
  assignment provided herein, all terms of this Agreement shall be 
  binding upon, inure to the benefit of, and be enforceable by the 
  parties hereto and their respective heirs, legal 
  representatives, successors and assigns.
  
  1.1 	  Assignment.  Purchaser may assign its rights under 
  this Agreement to a wholly owned subsidiary of Purchaser, or to 
  a limited partnership controlled by either Purchaser or its 
  wholly owned subsidiary without Seller's consent; provided, 
  however, no such assignment shall relieve Purchaser of its 
  obligations hereunder and the assignee must sign an assumption 
  agreement in form reasonably acceptable to Seller.  Except as 
  contemplated by the preceding sentence, Seller and Purchaser 
  shall not assign their respective rights, obligations or 
  interest under this Agreement without the prior written consent 
  of the other.
  
  1.1 	  Survival of Representations and Warranties.  All 
  obligations hereunder to be performed after Closing, and all 
  warranties and representations contained herein, shall survive 
  Closing and the delivery of the Limited Assignment of Leases to 
  Purchaser for a period of eighteen (18) months after the 
  Closing, at which time such warranties, representations and 
  covenants shall terminate in all respects unless written notice 
  of any such breach has been delivered to the breaching party 
  prior to such date.
  
  1.1 	  Attorneys' Fees.  If either party commences legal 
  proceedings for any relief against the other party arising out 
  of this Agreement, the losing party shall pay the prevailing 
  party's reasonable attorneys' fees.
  
  1.1 	  Time.  Time is of the essence with respect to this 
  Agreement.
  
  1.1 	  No Other Inducement.  The making, execution and 
  delivery of this Agreement by the parties hereto has been 
  induced by no representations, statements, warranties or 
  agreements other than those expressed herein.
  
  1.1 	  Computation of Time Periods.  All periods of the 
  time referred to in this Agreement shall include all Saturdays, 
  Sundays and state or national holidays, unless the period of 
  time specifies business days, provided that if the date or last 
  date to perform any act or give any notice or approval shall 
  fall on a Saturday, Sunday or state or national holiday, such 
  act or notice may be timely performed or given on the next 
  succeeding day which is not a Saturday, Sunday or state or 
  national holiday.
  
  1.1 	  Notices.  Any notice, request, instruction or other 
  document to be given or furnished under this Agreement by either 
  party to the other party or to the Title Company shall be in 
  writing and shall be delivered personally or shall be sent by 
  facsimile transmission (with a copy sent by regular U. S. mail) 
  or registered or certified mail, postage prepaid, or by prepaid 
  overnight delivery service, at the address or telecopy number in 
  this Section  or to such other address, telecopy number of 
  person as either party may designate by written notice to the 
  other party.  A notice, request, instruction or other documents 
  shall be deemed to be given (a) when delivered personally, (b) 
  sent by facsimile transmission (with a copy sent by regular U. 
  S. mail), or (c) if sent by certified mail or overnight delivery 
  service, at the time the delivery is indicated on the duly 
  completed United States Postal Service return receipt or the 
  time of package pick up as indicated on the records of or 
  certificates provided by the overnight delivery service.
  
  Seller:  			Morgan Properties, LLC
              Attention:  Joseph C. Weller
  			
  Office Address:	Morgan Keegan Tower
               			Fifty Front Street
               			Memphis, Tennessee  38103
  
  Telephone Number:	(901) 524-4165
  Telecopy Number: 	(901) 579-4443
  
  with a copy to:	David M. Minnick, Esq.
               			Morgan Properties, LLC
               			Morgan Keegan Tower
               			50 North Front Street
               			Memphis, Tennessee  38103
  
  Telephone Number:	(901) 524-4165
  Telecopy Number:	(901) 579-4443
  
  Purchaser:		Parkway Properties, L.P.
  Attention:  James M. Ingram
  
  Office Address:	Suite 1000, One Jackson Place
               			188 East Capitol Street
               			Jackson, Mississippi 39201
  
  Mailing Address:	Post Office Box 24647
                			Jackson, Mississippi 39225
  
  Telephone Number:	(601) 948-4091
  Telecopy Number: 	(601) 949-4077
  
  with a copy to:	Forman, Perry, Watkins, Krutz & Tardy, PLLC
               			Attention:  Steven M. Hendrix
  
  Office Address:	Suite 1200, One Jackson Place
               			188 East Capitol Street
               			Jackson, Mississippi  39201
  
  Telephone Number:	(601) 960-8603
  Telecopy Number: 	(601) 960-8609
  
  1.1 	  Headings.  The captions and paragraph headings used 
  in this Agreement are inserted for convenience of reference only 
  and are not intended to define, limit or affect the 
  interpretation or construction of any term or provision hereof.
  
  1.1 	  Exhibits.  All schedules or exhibits referred to 
  herein or attached hereto are incorporated herein by this 
  reference.
  
  1.1 	  Counterparts.  This Agreement may be executed in 
  multiple copies, each of which shall be deemed an original, but 
  all of which shall constitute one Agreement binding on all 
  parties.
  
  1.1 	  Governing Law.  This Agreement shall be governed, 
  construed and enforced in accordance with the laws of the State 
  of Tennessee.
  
  1.1 	  Effective Date.  The date of delivery to Title 
  Company of a fully executed counterpart of this Agreement, as 
  evidenced by Title Company's notation in the space set forth 
  below, shall be deemed the effective date of this Agreement (the 
  "Effective Date").
  
  1.1 	  Limitation on Liability.  Notwithstanding anything 
  contained herein to the contrary, Seller acknowledges and agrees 
  that no limited partner of Purchaser, nor any trustee, director, 
  holder of any beneficial interests, shareholder, officer or 
  employee of Purchaser or any affiliate of Purchaser (except an 
  affiliate to which this Agreement has been assigned) shall have 
  any personal liability, directly or indirectly, under this 
  Agreement, or under any certificate, representation, warranty or 
  other instrument delivered in connection herewith, and Seller 
  shall have recourse hereunder only against Purchaser's assets.  
  Each document to be executed by Purchaser at Closing shall 
  contain a similar exculpation.
  
  	IN WITNESS WHEREOF, Seller and Purchaser have executed this 
  Agreement as of the Effective Date.
  
  						SELLER:
  
  Morgan Properties, LLC
  
  Executed by Seller this
  ____ day of August, 1997		
  
  By:________________________________________
  							Joseph C. Weller, Chief 
  Manager
  
  						PURCHASER:
  
  Executed by Purchaser this		
  PARKWAY PROPERTIES, L.P.
  ____ day of August, 1997	
  
  By: 
  Parkway Properties General 
  Partners, Inc., its sole general partner
  			
  
  						
  By:___________________________________
  						
  Name:_________________________________
  						
  Title:________________________________
  
  						
  By:___________________________________
  						
  Name:_________________________________
  						
  Title:________________________________
  
                       ACKNOWLEDGMENT BY TITLE COMPANY
  
  	Title Company hereby agrees to perform its obligations 
  under this Agreement and acknowledge receipt of (a) the Escrow 
  Deposit from Purchaser in the amount of SEVENTY-FIVE THOUSAND 
  AND NO/100 DOLLARS ($75,000.00) on the _____ day of August, 1997 
  and (b) a fully executed counterpart of this Agreement on the 
  _____ day of August, 1997.
  
  Lawyers Title Insurance 
  Corporation
  
  By: 
  ____________________________
         Name: 
  ____________________________
         Title: 
  ____________________________
  
                              LIST OF EXHIBITS
  
  Exhibit (a)	1
  Exhibit  	2
  Exhibit 4.2(a)	7
  Exhibit 4.2(b)	7
  Exhibit 	14
  Exhibit 	14
  Exhibit 	15
  Exhibit 	17
  Exhibit .1	18
  Exhibit .2	18
  Exhibit .3	18
  Exhibit .4	18
  Exhibit 	19
  Exhibit (a)	20
  Exhibit (b)	20
  Exhibit (f)	21
  
                                  EXHIBIT (a)
  
                              Legal Description
  
                              [attached hereto]
  
                                    EXHIBIT 
  
                               Personal Property
  
                               [attached hereto]
  
                                  EXHIBIT (a)
  
                             SURVEY CERTIFICATION
  
  	The plat of survey must be accompanied by a certificate 
  meeting the following requirements:
  
  	1.	The certification should be by a registered land 
  surveyor.
  
  	2.	The certification should include the signature with 
  the seal and registration number of the certifying party.
  
  	3.	The certification should contain a jurat executed by a 
  notary public.
  
  	4.	If the surveyor finds that any easement furnished to 
  him which purports to affect the property does not, in fact, 
  affect the property, he should specifically certify that such 
  easement, identified by book and page of recording, does not 
  affect the property.
  
  	5.	The form of certificate should be substantially as 
  follows:  "I,_______________________a registered land surveyor 
  do hereby certify to______________________and____________________
  Title Company, that the accompanying plat of survey represents a 
  true and correct survey made by me and has: (i) been prepared in 
  accordance with the most current minimum standard detail 
  requirements for a Land Title Survey adopted by the American 
  Land Title Association and the American Congress on Surveying 
  and Mapping; (ii) includes optional items 2-11 of Table A 
  thereof; and (iii) has been prepared pursuant to the Accuracy 
  Standards (as adopted by ALTA and ACSM) in effect on the date of 
  this Certification of an Urban Survey of the following described 
  property (the "Project") on the______day of___________________, 199_:
  [Insert legal description]
  
  I further certify that:
  
  	(i) 	the accompanying plat of survey correctly shows the 
  location of all buildings, structures, and other improvements 
  situated on the Project,
  
  	(ii)	except as shown, there are no visible easements or 
  rights-of-way across the Property or other easements or rights-
  of-way affecting the Property of which the undersigned has been 
  advised,
  
  	(iii)	there are no party walls included in any 
  buildings, structures, or other improvements on the Property,
  	(iv)	except as shown, there are no encroachments on 
  adjoining premises, streets, or alleys by any of the buildings, 
  structures, or other improvements on the Property, and
  
  	(v)	except as shown, there are no encroachments on the 
  property by any buildings, structures, or other improvements 
  located on adjoining premises.                 
  
                                   EXHIBIT
  
                            OUTSTANDING COMMISSIONS
                           AND BROKERAGE AGREEMENTS
  
                                   EXHIBIT 
  
                            EXISTING INDEBTEDNESS
  
  	1.	Promissory Note, dated May 31, 1996.
  
  	2.	Fee Deed of Trust, Assignment of Leases and Security 
  Agreement dated May 31, 1996.
  
  	3.	Leasehold Deed of Trust, Assignment of Leases and 
  Security Agreement dated May 31, 1996.
  
  	4.	Assignment of Rents and Leases, dated May 31, 996.
  
  	5.	Certificate and Indemnity Regarding Hazardous 
  Substances dated May 31, 1996.
  
  	6.	Unlimited Guaranty - Morgan Keegan, Inc. dated May 31, 
  1996.
  
  	7.	UCC-1 financing statements filed with the Shelby 
  County Register and the Tennessee Secretary of State.
  
                                EXHIBIT .1
  
                    FORM OF TENANT ESTOPPEL CERTIFICATE
  
  Parkway Properties, L.P.
  300 One Jackson Place
  188 East Capitol Street
  Jackson, MS   39201
  
  	RE:	_______________________
  
  Gentlemen:
  
  	The undersigned as Tenant hereby certifies to Parkway 
  Properties, L.P., and its successors or assigns ("Purchaser"), 
  and any beneficiary under a deed of trust covering the above 
  captioned property ("Mortgagee") that:
  
  	(a)	It is a Tenant of a portion of the captioned 
  property under a certain lease (the "Lease") 
  as follows:
  
  		Landlord: _________________________________________
  
  		Tenant: ___________________________________________
  
  		Lease Dated: ______________________________________
  
  		Amendment(s) Dated (if any):_______________________
  
  		Current Annual Base Rent:__________________________
  
  		Current CAM or Operating Expense Charges:__________
  
  		Square Footage:____________________________________
  
  		Original term (or current option period,
  		if applicable) expires:____________________________
  
  		Security Deposit and/or
  		Lease Deposit:  $__________________________________
  
  		Outstanding Tenant Improvement Allowance (if any): 
  $_______________
  		
  
  		Outstanding Leasing Commission (if any): 
  $______________
  
   	(b)	All rentals payable under the Lease have been paid 
  through ______, 19___; and except for _________, no 
  rent has been paid more than one month in advance of 
  its due date.
  
   	(c)	That attached hereto as Exhibit A is a true 
  and complete copy of the Lease and all 
  amendments thereto.
  
   	(d)	Tenant has unconditionally accepted and 
  occupied the leased premises, is paying rent 
  under the Lease without claim or right of 
  set-off, or claim of any default by the 
  Landlord, and is now conducting business on 
  the premises;
  
   	(e)	The Lease sets forth the entire agreement 
  between the Landlord and Tenant, is in full 
  force and effect in accordance with its 
  terms and has not, in any way, been amended, 
  modified, assigned or sublet;
  
   	(f)	There exists no default by either party to 
  the Lease, or other grounds for ceasing or 
  reducing the payment of rental, or for 
  cancellation or termination of the Lease;
  
   	(g)	All requirements of the Lease have been 
  complied with and no charges, set-offs or 
  other credits exist against the rentals;
   
   	(h)	The Lease contains, and Tenant has, no outstanding 
  options or rights of first refusal to purchase the 
  Premises nor any part of the real property of which 
  the Premises are a part.
  
   	(i)	Tenant has not assigned, mortgaged, sublet, encumbered 
  or otherwise transferred any of its interest under the 
  Lease and has received no notice of any assignment, 
  mortgage or encumbrance of the Lease by Landlord.
  
  From and after the date that Purchaser acquires title to 
  the Project:
  
   	(j)	Tenant shall not agree to any alteration, 
  modification, amendment or termination of 
  its Lease, nor subordinate or permit 
  subordination of the Lease to any lien in 
  favor of anyone other than Purchaser or 
  Mortgagee, without first obtaining 
  Purchaser's or such Mortgagee's prior 
  written approval provided Tenant has been 
  provided the name and address of such 
  Mortgagee;
  	
    (k)	Tenant shall give any Mortgagee 30 days 
  notice of any default by the Landlord under 
  the Lease and a reasonable opportunity for 
  Mortgagee to cure any default upon 
  Borrower's failure to do so;
  
   	(l)	Tenant will not pay rent in advance for more 
  than the current month without Mortgagee's 
  prior written consent.  No concession or 
  allowance has been granted by Landlord which 
  permits Tenant to occupy the leased premises 
  without payment of Rent or any other 
  financial obligation contained in the Lease, 
  nor will Tenant accept such concession or 
  allowance or negotiate for the same without 
  the prior written consent of Purchaser or 
  Mortgagee;
  
   	(m)	Purchaser may subsequently execute and 
  deliver to Mortgagee an Assignment of Leases 
  and Rents conveying the rentals under the 
  Lease as additional security for a loan 
  secured by the Morgan Keegan Tower Building, 
  and Tenant hereby expressly consents to such 
  Assignment and has no notice of a prior 
  Assignment of the Lease or the rents 
  thereunder;
  
   	(n)	Tenant will not look to any mortgagee, or 
  its successors or assigns, for the return of 
  or credit for security deposit or prepaid 
  rent, if any, unless said sums have been 
  actually transferred to such mortgagee or 
  its successors or assigns.
  
  	Tenant understands that Purchaser is relying on the above 
  representations in connection with the purchase of the above 
  referenced building and does hereby warrant and affirm to and 
  for the benefit of Purchaser, its successors and assigns, that 
  each of the foregoing representations is true, correct and 
  complete as of the date hereof.
  
  		                                                    
  By:___________________________________________
  Name:_________________________________________
  Title:________________________________________
  Date:_________________________________________
  
                                  EXHIBIT .2
  
                      FORM OF SELLER ESTOPPEL CERTIFICATE
  
  Parkway Properties, L.P.
  300 One Jackson Place
  188 East Capitol Street
  Jackson, MS   39201
  
  	RE:	_____________
  
  Gentlemen:
  
  	The undersigned as Landlord hereby certifies to Parkway 
  Properties, L.P. and its successors and assigns ("Purchaser")  
  that:
  
  	(a)	It is a Landlord of a portion of the above 
  referenced property under a certain lease 
  (the "Lease") as follows:
  
  		Landlord:________________________________________
  
  		Tenant:__________________________________________
  
  		Lease Dated:_____________________________________
  
  		Amendment(s) Dated (if any):_____________________
  
  		Current Annual Base Rent:________________________
  
  		Current CAM or Operating Expense Charges:________
  
  		Square Footage:__________________________________
  
  		Original term (or current option period,
  		if applicable) expires:__________________________
  
  		Security Deposit and/or
  		Lease Deposit:  $_________________________________
  
  		Outstanding Tenant Improvement Allowance (if any): 
  $_______________
  		
  		Outstanding Leasing Commission (if any): 
  $______________
  
  	(b)	All rentals payable under the Lease have been paid 
  through ________, 19___.
  
   	(c)	That attached hereto as Exhibit A is a true 
  and complete copy of the Lease and all 
  amendments thereto.
  
  	(d)	Tenant has unconditionally accepted and 
  occupied the leased premises, commenced 
  payment of rent under the Lease without 
  claim or right of set-off, or claim of any 
  default by the Landlord, and is now 
  conducting business on the premises;
  
  	(e)	The Lease sets forth the entire agreement 
  between the Landlord and Tenant, is in full 
  force and effect in accordance with its 
  terms and has not, in any way, been amended, 
  modified, assigned or sublet;
  
  	(f)	There exists no default by either party to 
  the Lease, or other grounds for ceasing or 
  reducing the payment of rental, or for 
  cancellation or termination of the Lease;
  
  	(g)	All requirements of the Lease have been 
  complied with and no charges, set-offs or 
  other credits exist against the rentals;
  
  	Landlord understands that Purchaser is relying on the above 
  representations in consenting to purchase the above referenced 
  building and does hereby warrant and affirm to and for the 
  benefit of Purchaser, its successors and assigns, that each of 
  the foregoing representations is true, correct and complete as 
  of the date hereof.  Purchaser acknowledges that this Seller's 
  Estoppel Certificate shall terminate upon delivery of a Tenant's 
  Estoppel Certificate in a form reasonably acceptable to 
  Purchaser and containing information consistent with the 
  information set forth herein.
  
  		                                                    
  
  		By:___________________________________________
  		Name:_________________________________________
  		Title:________________________________________
  		Date:_________________________________________
  
                                EXHIBIT .3
  
                              MAJOR TENANTS
  
  1.	Morgan Keegan & Company, Inc.
  
  2.	King Cotton Cafe
  
  3.	Deloitte & Touche
  
  4.	KPMG/Peat Marwick
  
  5.	Waring Cox
  
  6.	Walker & Associates
  
  7.	Coopers & Lybrand
  
  8.	Birch, Porter & Johnson
  
  9.	Tennessee Valley Authority
  
                                 EXHIBIT .4
  
                  FORM OF GROUND LEASE ESTOPPEL CERTIFICATE
  
  Parkway Properties, L.P.
  300 One Jackson Place
  188 East Capitol Street
  Jackson, MS   39201
  
  	RE:	Morgan Keegan Tower, 50 Front Street, Memphis, Shelby 
  County, Tennessee
  
  Gentlemen:
  
  	The undersigned as Lessor hereby certifies to Parkway 
  Properties, L.P., and its successors or assigns ("Purchaser"), 
  and any beneficiary under a deed of trust covering the above 
  captioned property ("Mortgagee") that:
  
  	(a)	It is a Lessor of the captioned property 
  under a certain Ground Lease (the "Lease") 
  as follows:
  
  		Lessor:_____________________________________________________
  
  		Lessee:_____________________________________________________
  
  		Lease Dated:________________________________________________
  
  		Amendment(s) Dated (if any):________________________________
  
  		Current Annual Rent:________________________________________
  
  		Any Other Charges or Fees:__________________________________
  
  		Original term (or current option period,
  		if applicable) expires:_____________________________________
  
  		Security Deposit and/or
  		Lease Deposit:  $___________________________________________
  
  		
  		Outstanding Leasing Commission (if any): 
  $______________
  
  	(b)	Lessor is the sole current owner and holder 
  of lessor's interest in the Lease and the 
  fee title owner to the leased premises.
  
  	(c)	All rentals payable under the Lease have 
  been paid through ______, 19___; and except 
  for _________, no rent has been paid more 
  than one month in advance of its due date.
  
   	(d)	That attached hereto as Exhibit A is a true 
  and complete copy of the Lease and all 
  amendments thereto.
  
  	(e)	The Lease sets forth the entire agreement 
  between the Lessor and Lessee, is in full 
  force and effect in accordance with its 
  terms and except as set forth herein has 
  not, in any way, been amended, modified, 
  assigned or sublet;
  
  	(f)	There exists no default by either party to 
  the Lease, or other conditions which with 
  the giving of notice or passage of time, or 
  both, would constitute a default or create 
  other grounds for terminating Lessee's 
  rights thereunder or increasing the payment 
  of rent, or for cancellation or termination 
  of the Lease in any other manner;
  
  	(g)	All requirements of the Lease have been 
  complied with and no charges, expenses, 
  offsets or other credits exist thereunder;
  
  	(h)	The Lease contains, and Lessee has (and upon 
  closing Purchaser shall have) an option, 
  exercisable at any time, to purchase the 
  real property of which the Project is a part 
  for $___________ as more fully set forth in 
  Section 11.01 of the Lease.
  
  	(i)	Lessor has not assigned, mortgaged, 
  encumbered or otherwise transferred any of 
  its interest under the Lease and has 
  received no notice of any assignment, 
  mortgage, sublet or encumbrance of the Lease 
  by Lessee.
  
  	(j)	Lessor hereby consents to the assignment to 
  and assumption of the Lease by Purchaser.
  
  	Lessor understands that Purchaser is relying on the above 
  representations in connection with the purchase of the above 
  referenced building and does hereby warrant and affirm to and 
  for the benefit of Purchaser, its successors and assigns, that 
  each of the foregoing representations is true, correct and 
  complete as of the date hereof.
  
  		                                                    
  		By:________________________________________________
  		Name:______________________________________________
  		Title:_____________________________________________
  		Date:______________________________________________
  
                                EXHIBIT 
  
                         FORM LEASE AGREEMENT
  
                              EXHIBIT (c)
  
                       FORM OF LENDER'S ESTOPPEL
  
  Parkway Properties L.P.
  1000 One Jackson Place
  188 East Capitol Street
  Jackson, MS   39201
  
  RE:	Assignment to Parkway Properties L.P. ("Buyer") by Morgan 
  Keegan & Company, Inc. ("Seller"), of its obligations under 
  _____________________ ("Lender") loan #_____, in the 
  original principal amount of $______________ (the "Loan")
  
  Gentlemen:
  
  	Lender hereby certifies to Parkway Properties L.P., and its 
  successors or assigns that:
  	
  
  	(a)	All sums payable under the Loan have been paid through 
  ______, 19___;
  
  	(b)	The outstanding principal balance of the Loan as of   
                   , 1997 is     				. 
  
   	(c)	 Attached hereto as Exhibit A are true and complete 
  copies of the following 		documents (the "Loan Documents"):
  
  		1.	Promissory Note, dated May 31, 1996.
  
  		2.	Fee Deed of Trust, Assignment of Leases and 
  Security Agreement dated May 31, 1996.
  
  		3.	Leasehold Deed of Trust, Assignment of Leases and 
  Security Agreement dated May 31, 1996.
  
  		4.	Assignment of Rents and Leases, dated May 31, 
  1996.
  
  		5.	Certificate and Indemnity Regarding Hazardous 
  Substances dated May 31, 1996.
  
  		6.	Unlimited Guaranty - Morgan Keegan, Inc. dated 
  May 31, 1996.
  
  		7.	UCC-1 financing statements filed with the Shelby 
  County Register and the Tennessee Secretary of 
  State.
  
  	(d)	The Loan Documents set forth the entire agreement 
  between the Lender and Seller, are in full force and 
  effect in accordance with their terms and, to Lender's 
  knowledge, have not, in any way, been amended, 
  modified,  or assigned;
  
  	(e)	To Lender's knowledge, there exists no default by 
  either party to the Loan Documents, or other grounds 
  for declaring an event of default thereunder;
  
  	(f)	Lender has not assigned or otherwise transferred any 
  of its interest under the Loan Documents. 
  
   (g)	There are no escrow, improvement accounts maintained, 
  by Lender, or required to be maintained by Lender or 
  funded by Seller in connection with the Loan 
  Documents.  Seller has met all of its obligations to 
  fund any such accounts.
  
  	Lender understands that Purchaser is relying on the above 
  representations in connection with the purchase of the above 
  referenced property and assuming the Loan and does hereby 
  warrant and affirm to and for the benefit of Purchaser, its 
  successors and assigns, that each of the foregoing 
  representations is true, correct and complete as of the date 
  hereof.
  
  			NATIONAL BANK OF COMMERCE
  
  			By:____________________________
  			Name:__________________________
  			Title:_________________________
    	Date:__________________________
   
  
                                  EXHIBIT (a)
  
                  FORM OF LIMITED WARRANTY ASSIGNMENT OF LEASES
  
                           ASSIGNMENT AND ASSUMPTION
                     OF INTERESTS IN LEASES AND AGREEMENTS
  
  	THIS ASSIGNMENT AND ASSUMPTION OF INTERESTS IN LEASES AND 
  AGREEMENTS made and entered into this ____ day of _____________, 
  1997, by and between MORGAN PROPERTIES, LLC, a Tennessee limited 
  liability company with offices at 50 North Front Street, 21st 
  Floor, Memphis, Tennessee  38103 (herein "Assignor"); and 
  PARKWAY PROPERTIES, L.P., a Delaware limited partnership with 
  offices at 188 East Capitol Street, Suite 1000, Jackson, 
  Mississippi  39201 (herein "Assignee").
  
  WITNESSETH:
  
  	That each of the aforesaid parties acknowledges the receipt 
  and sufficiency of a valuable consideration from the other, 
  Assignor hereby grants, bargains, sells, transfers, conveys, 
  assigns and confirms to Assignee any and all of Assignor's 
  rights, titles, privileges, interests and obligations in those 
  certain Leases and other Agreements described on Schedule "1" 
  annexed hereto and incorporated herein by this reference 
  (collectively, herein the "Leases and Agreements"), together 
  with the buildings and improvements thereon and all 
  appurtenances thereto.  The Leases and Agreements lease and 
  otherwise pertain to the premises described on Exhibit "A" 
  annexed hereto and incorporated herein by this reference (the 
  "Premises"), such Premises being located in the City of Memphis, 
  County of Shelby, State of Tennessee.
  
  	TO HAVE AND TO HOLD the same unto the Assignee, its 
  successors and assigns, from the date hereof for the remainder 
  of the term set forth in the Leases and Agreements and any 
  extensions, options and otherwise contained therein, subject to 
  the rents, covenants, conditions, and provisions therein.
  
  	The Assignor covenants, represents and warrants that:
  
  	(a)	The Leases and Agreements are, on Assignor's part, in 
  full force and effect;
  
  	(b)	To the best knowledge of the Assignor, the Assignor is 
  not in default or breach of the Leases or Agreements;
  
  	(c)	The rents reserved in the Lease and Agreements have 
  been fully paid to the date hereof and, to the best 
  knowledge of the Assignor, all other terms, covenants, 
  and conditions reserved and contained in the Leases 
  and Agreements have, on the Assignor's part, been 
  fully paid, observed and performed up to the date 
  hereof.
  	(d)	 Assignor has the right and power to assign the Leases 
  and Agreements unto the Assignee;
  
  	(e)	The Premises at all times hereafter during the terms 
  of the Leases and Agreements may be entered into and 
  held, and the rents and profits thereof received 
  accordingly, without any lawful interruption by the 
  Assignor, or any person or persons claiming by, 
  through or under Assignor, but not further or 
  otherwise, free from all encumbrances, claims and 
  demands created or occasioned by the Assignor, or by 
  any person or persons claiming by through or under 
  Assignor, but not further or otherwise, except the 
  rent, covenants, and conditions reserved and contained 
  in the Leases and Agreements, and which on Assignee's 
  part are or ought to be paid, observed and performed; 
  and
  
  	(f)	Assignor, its successors and assigns, will at all 
  times during the term, at the request and expense of 
  the Assignee, its successors and assigns, execute and 
  do every such lawful assurance and thing for further 
  assuring the Leases and Agreements unto the Assignee, 
  its successors; and assigns, for the remainder of the 
  term of the Leases and Agreements, together with any 
  extensions, options and otherwise contained therein as 
  may be reasonably required by Assignee; and
  
  	(g)	Assignor hereby warrants that Assignor will defend 
  Assignee's title thereto against the lawful claims of 
  all persons claiming by, through or under Assignor but 
  not otherwise.
  
  	The Assignee hereby agrees to and does hereby assume the 
  Leases and Agreements and to perform each and every term, 
  condition and provision contained therein on the part of 
  Assignee to be performed from and after the date hereof.  The 
  Assignee covenants and agrees that Assignee will observe and 
  perform the covenants, provisions, and conditions contained in 
  the Leases and Agreements, and which, by or on the part of the 
  lessee or obligor therein, are henceforth to be observed and 
  performed; and will at all times hereafter, at its own cost or 
  expense, defend, save harmless and keep indemnified the 
  Assignor, its successors and assigns, against all payments, 
  costs, losses, damages, and expenses whatsoever, which Assignor 
  may make, pay, sustain, or be liable to, on account of the 
  aforedescribed Leases and Agreements which shall henceforth 
  become due and payable, or any part thereof, and on account of 
  the breach, non-performance, or nonobservance, by or on the part 
  of Assignee from and after the date hereof, of all and every or 
  any of the covenants, provisions, and conditions contained in 
  the Leases and Agreements, to be observed and/or performed by 
  the lessee or obligor therein, and against all actions and/or 
  suits at law, or in equity, which shall be commenced or 
  prosecuted against the Assignor, its successors or assigns, for 
  or on account of the rent, covenants, provisions, and 
  conditions, or any of them, and henceforth to be paid, observed 
  and performed by Assignee.
  
  	Assignor will at all times hereafter, at its own cost or 
  expense, defend, save harmless and keep indemnified the 
  Assignee, its successors and assigns, against all payments, 
  costs, losses, damages, and expenses whatsoever, which Assignee 
  may make, pay, sustain, or be liable to, on account of the 
  aforedescribed Leases and Agreements which became due and 
  payable prior to the date hereof, or any part thereof, and on 
  account of the breach, non-performance, or nonobservance, by or 
  on the part of Assignor prior to the date hereof, of all and 
  every or any of the covenants, provisions, and conditions 
  contained in the Leases and Agreements, to be observed and/or 
  performed by the lessee or obligor therein, and against all 
  actions and/or suits at law, or in equity, which shall be 
  commenced or prosecuted against the Assignee, its successors or 
  assigns, for or on account of the rent, covenants, provisions, 
  and conditions, or any of them, and to be paid, observed and 
  performed by Assignor prior to the date hereof.
  
  	This Assignment and Assumption of Lessee's interest in 
  Leases and Agreements is made, executed and delivered by and 
  between the parties hereto pursuant to that certain Purchase and 
  Sale Agreement dated August ___, 1997, by and between Morgan 
  Properties, LLC, as seller, and Parkway Properties, L.P., as 
  buyer.
  
  	IN WITNESS WHEREOF,  Assignor and Assignee have executed or 
  has caused this Assignment and Assumption of Interests in Leases 
  and Agreements to be executed by and through its duly authorized 
  officer(s) or employees the day and year first above mentioned.
  
  						ASSIGNOR:
  
  					
  	By:________________________________________
  							Joseph C. Weller, Chief 
  Manager
  
  						ASSIGNEE:
  
  						PARKWAY PROPERTIES, L.P.
  						By:  Parkway Properties General 
             Partners, Inc., its sole general partner
  			
  
  						
  	By:____________________________________
  						
  	Name:__________________________________
  						
  	Title:_________________________________
  
  						
  	By:____________________________________
  						
  	Name:__________________________________
  						
  	Title:_________________________________
  
       (Add applicable acknowledgements for Shelby County, Tennessee)
  
                              EXHIBIT (b)
  
                                FORM OF
                       BILL OF SALE AND ASSIGNMENT
  
                   ASSIGNMENT AND ASSUMPTION AGREEMENT
                            AND BILL OF SALE
  
  	This ASSIGNMENT AND ASSUMPTION AGREEMENT AND BILL OF SALE 
  ("Assignment"), is made by and between Morgan Properties, LLC, a 
  Tennessee limited liability company ("Assignor") and Parkway 
  Properties, L.P., a Delaware limited partnership  ("Assignee").
  
  W I T N E S S E T H:
  
  	WHEREAS, by Purchase and Sale Agreement ("Purchase 
  Agreement") dated as of August _____, 1997, by and between 
  Assignor and Assignee, Assignor agreed to sell to Assignee 
  certain real property, and the improvements located thereon 
  ("Project") as more particularly described in the Purchase 
  Agreement; and
  
  	WHEREAS, the Purchase Agreement provides, inter alia, that 
  Assignor shall assign to Assignee certain contractual and other 
  intangible rights, that Assignee shall assume all of the 
  obligations of Assignor with respect to the property so assigned 
  from and after the date of such assignment, and that Assignor 
  and Assignee shall enter into this Assignment.
  
  	NOW, THEREFORE, in consideration of the premises and the 
  mutual covenants herein contained, the parties hereto hereby 
  agree as follows:
  
  	1.	Assignment.  Assignor hereby assigns, sets over and 
  transfers to Assignee all tangible and intangible personal 
  property owned by Assignor, located on the real property 
  described on Exhibit A hereto, and used in the ownership, 
  operation and maintenance of such real property including, 
  without limitation, the following (collectively called the 
  "Personal Property"):
  
  			(i)	All right, title, interest, estate, claim or 
  demand in and to the buildings, structure, other 
  improvements, fixtures and landscaping relating to the 
  real property described on Exhibit A hereto;
  
  			(ii)	All rights (if any) to use the name "Morgan 
  Keegan Tower" to the extent such rights are assignable 
  without expense to Assignor and only as such rights 
  relate directly to the Project (but Assignor does not 
  represent that it has exclusive rights to use such 
  trade name and Assignor has not registered the same in 
  any manner); provided, however, such rights may be 
  used by Assignee only as long as Assignor is a tenant 
  in the Project;
  
  			(iii)	The items of personal property 
  described on Exhibit B hereto;
  
  			(iv)	The interest of Assignor under the contracts 
  and agreements described on Exhibit C hereto 
  (collectively, the "Contract");
  
  			(v)	The interest of the landlord under the 
  tenant leases encumbering the real property described 
  on Exhibit D hereto (collectively, the "Leases");
  
  			(vi)	To the extent assignable without expense to 
  Assignor, the interest of Assignor in and to tenant 
  lease files and correspondence relating to the Leases, 
  plans and specifications with respect to the Project, 
  promotional materials with respect to the leasing of 
  space within the Project, warranties and guaranties 
  relating to any of the other property to be conveyed 
  pursuant to the Purchase Agreement, licenses and 
  permits relating to the Project, and all other 
  property to be conveyed pursuant to the Purchase 
  Agreement.
  
  	2.	Assignee's Assumption and Indemnification.  Assignee 
  hereby assumes the obligation to pay any and all liabilities and 
  obligations arising or accruing under any of the Contracts and 
  Leases on or after the effective date hereof.  Assignee agrees 
  to indemnify, defend and hold harmless Assignor from any loss, 
  cost, claim, liability, expense or demand of whatever nature 
  under any of the Contracts and Leases above arising or accruing 
  on or after the effective date hereof.
  
  	3.	Assignor's Indemnification.  Assignor agrees to 
  indemnify, defend and hold harmless Assignee from any loss, 
  cost, claim, liability, expense or demand of whatever nature 
  under any of the property described in Paragraph 1 above arising 
  or accruing prior to the effective date hereof.  
  
  	4.	Special Warranty of Title.  Assignor does hereby bind 
  itself, its legal representatives, successors and assigns, to 
  SPECIALLY WARRANT, and FOREVER DEFEND title to the property 
  conveyed hereby unto Assignee, its legal representatives, 
  successors and assigns, against every person whomsoever lawfully 
  claiming or to claim same or any part thereof, by, through or 
  under Assignor, but not otherwise.
  
  	5.	Limitation on Liability.  Notwithstanding anything 
  contained herein to the contrary, Assignor acknowledges and 
  agrees that no limited partner of Assignee, nor any trustee, 
  director, holder of any beneficial interests, shareholder, 
  officer or employee of Assignee or any affiliate of Assignee 
  shall have any personal liability, directly or indirectly, under 
  this Assignment, and Assignor shall have recourse hereunder only 
  against Assignee's assets.
  
  	6.	Miscellaneous.  This Assignment and the obligations of 
  the parties hereunder shall survive the closing of the 
  transaction referred to in the Purchase Agreement, shall be 
  binding upon and inure to the benefit of the parties hereto, 
  their respective legal representatives, successors and assigns, 
  shall be governed by and construed in accordance with the laws 
  of the State of Tennessee applicable to agreements made and to 
  be wholly performed within said State, and may not be modified 
  or amended in any manner other than by a written agreement 
  signed by the party to be charged therewith.
  
  	EXECUTED TO BE EFFECTIVE as of the ______ day of 
  ________________, 1997.
  
  						ASSIGNOR:
  
  						MORGAN PROPERTIES, LLC
  
  					
  	By:__________________________________
  							Joseph C. Weller, Chief 
  Manager
  
  						ASSIGNEE:
  
  						PURCHASER:
  
  					PARKWAY PROPERTIES, L.P.
  By:  Parkway Properties General Partners, Inc.,
       its sole general partner
  			
  
  						
  	By:____________________________________
  						
  	Name:__________________________________
  						
  	Title:_________________________________
  
  						
  	By:____________________________________
  						
  	Name:__________________________________
  						
  	Title:_________________________________
  
                                  EXHIBIT (f)
  
                           FORM OF FIRPTA AFFIDAVIT
  
  STATE OF TENNESSEE			
  							KNOW ALL MEN BY THESE 
  PRESENTS:
  COUNTY OF SHELBY			
  
  	Section 1445 of the Internal Revenue Code provides that a 
  transferee of a U.S. real property interest must withhold tax if 
  the transferor is a foreign person.  To inform  Parkway 
  Properties, L.P., a Delaware limited partnership ("Transferee"), 
  that withholding of tax is not required upon the disposition of 
  a U.S. real property interest by Morgan Properties, LLC, a 
  Tennessee limited liability company ("Transferor"), the 
  undersigned hereby certifies as follows:
  
  1.	Transferor is not a foreign corporation, foreign 
  partnership, foreign trust or foreign estate (as those 
  terms are defined in the Internal Revenue Code and Income 
  Tax Regulations);
  
  2.	Transferor's U.S. employer identification number is: 
  #______________________;
  
  3.	Transferor's office address is 50 North Front Street, 21st 
  Floor, Memphis, Tennessee 38103;
  
  	Transferor understands that this certification may be 
  disclosed to the Internal Revenue Service by the Transferee and 
  that any false statement contained herein could be punished by 
  fine, imprisonment, or both.
  
  	Under penalties of perjury, the undersigned, in the 
  capacity set forth below, hereby declares that he has examined 
  this certification and to the best of his knowledge and belief 
  it is true, correct and complete, and the undersigned further 
  declares that he has authority to sign this document in such 
  capacity.
  
  	EXECUTED to be effective as of the ____ day of ___________, 
  1997.
  
  						TRANSFEROR:
  
  						MORGAN PROPERTIES, LLC
  
  					
  	By:__________________________________
  							Joseph C. Weller, Chief 
  Manager
  
  STATE OF TENNESSEE
  COUNTY OF SHELBY
  
  	I, ___________________, a Notary Public of the County and 
  State aforesaid, certify that Joseph C. Weller personally came 
  before me this day and acknowledged that he is the Chief Manager 
  of Morgan Properties, LLC, a Tennessee limited liability 
  company, and that by authority duly given and as the act of the 
  company the foregoing instrument was signed in its name by its 
  Chief Manager.
  
  	WITNESS MY HAND AND OFFICIAL SEAL, this the _____ day of 
  ________________, 1997. 
  					
  ____________________________________
       					NOTARY PUBLIC
  
  My Commission Expires:______________________                    
                  
  [AFFIX NOTARIAL SEAL]
  
                       Consent of Independent Auditors
  
  We consent to the incorporation by reference in the Registration Statement
  (Form S-3, No. 33329259) and related Prospectus and Prospectus Supplement
  of Parkway Properties, Inc. of our reports iwth respect to the statements
  of rental revenue and direct operating expenses fo rhte year ended December
  1, 1996 dated April 17, 1997 for Courtyard of Arapaho included in Parkway
  Properties, Inc.'s Form 8-K/A dated May 14, 1997; dated May 29, June 20 and 
  June 25, 1997 for Sugar Grove, Vestavia Centre and Meridian, respectively,
  including in Parkway Properties, Inc.'s Form 8-K dated June 27, 1997;
  dated August 8, August 15 and August 19, 1997 for Lakewood II, NationsBank
  Tower and Fairway Plaza, respectively, included in Parkway Properties,
  Inc.'s Form 8-K/A dated August 25, 1997; and dated August 27 and August 28,
  1997 for First Tennessee Plaza and Morgan Keegan Tower, respectively, 
  included in Parkway Properties, Inc.'s Form 8-K dated September 9, 1997,
  filed with the Securities and Exchange Commission.
  
                                             ERNST & YOUNG LLP
  Jackson, Mississippi
  September 9, 1997