<PAGE>
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): November 1, 1996
WEEKS CORPORATION
(Exact name of registrant as specified in its charter)
Georgia 011-13254 58-1525322
------- --------- ----------
(State of (Commission File (IRS Employer Identification
Incorporation) Number) No.)
4497 Park Drive, Norcross, Georgia 30093
----------------------------------------
(Address of principal executive offices, including zip code)
(770)923-4076
-------------
(Registrant's telephone number, including area code)
<PAGE>
ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS
On November 1, 1996 (the "Initial Closing"), Weeks Realty, L.P., a Georgia
limited partnership (the "Operating Partnership") acquired 17 completed and in-
service industrial buildings and a related third-party brokerage business in
Nashville, Tennessee for aggregate acquisition consideration of approximately
$69.5 million. The 17 buildings (the "Completed Properties") total approximately
1.4 million square feet of leasable space and had average occupancy as of
September 30, 1996, of approximately 95%. The acquisition was consummated
pursuant to certain acquisition agreements by and among the Operating
Partnership, Weeks Corporation, a Georgia corporation (together with the
Operating Partnership, the "Company"), NWI Warehouse Group, L.P., a Tennessee
limited partnership ("NWI"), and Buckley & Company Real Estate, Inc., a
Tennessee corporation ("Buckley"). The acquisition consideration was determined
through arm's length negotiations between the Company, NWI and Buckley after an
evaluation of the properties' physical condition, lease characteristics,
operating expense rates and future capital improvement needs.
The acquisition agreements provide for NWI to combine its property portfolio,
management team and business operations, and for Buckley to combine its third-
party brokerage business, with and into the Company in exchange for units of
limited partnership interest ("Units") in the Operating Partnership and the
assumption of debt. Units issued to NWI and Buckley in the transaction will be
convertible into shares of common stock of the Company ("Shares") on a one-for-
one basis, or into cash, at the Company's option; however, such exchange rights
may not be exercised at any time that NWI or Buckley would be prohibited from
selling its Units pursuant to the registration rights and lock-up arrangements
described below. NWI's two principals, John W. Nelley, Jr., 47, and Albert W.
Buckley, Jr., 52, joined the Company as members of senior management and all of
NWI's 14 other employees were employed by the Company. Mr. Nelley has been
elected to the Company's Board of Directors. In order to maintain the
independent majority on the Board of Directors, the Company intends to add one
additional director. In addition Messrs. Nelley and Buckley each were granted
options to purchase 40,000 Shares at a per Share price equal to the closing
price of the Shares on the New York Stock Exchange on November 1, 1996.
Consideration for the Completed Properties consisted of 1,080,752 Units with an
agreed upon value of approximately $27 million, based on the average per share
trading price of the Company's common stock ($25.00) for the 20 trading days
immediately preceding the date on which the parties signed the letter of intent
relating to the acquisition (May 22, 1996, as amended on July 30 1996), and the
assumption of approximately $42 million of mortgage indebtedness with a weighted
average interest rate of 8.5%.
<PAGE>
The Company also acquired NWI's third-party brokerage operations, formerly
conducted through Buckley, at the Initial Closing, in consideration of the
issuance of an additional 20,000 Units with an agreed upon value of $500,000, or
$25.00 per Unit. Of the total consideration for the third-party brokerage
operations, 60% of the Units issued are subject to rescission at the end of
three years if certain agreed upon levels of operating performance are not
achieved.
The acquisition agreements also provide for the acquisition of six industrial
buildings currently under development or in lease-up (the "Development
Properties") to be acquired as each property achieves stabilization (generally
95% occupancy), but in no event later than March 31, 1998, a date which is 18
months after the last expected shell completion date of the Development
Properties. For each Development Property acquired on or before March 31, 1997,
the acquisition consideration will be computed by dividing net operating income
(as defined in the acquisition agreements) expected to be produced by such
Development Property for the 12 months following stabilization by a
capitalization rate of 10.0%. Under the acquisition agreements, net operating
income generally is adjusted to take into account an assumed 4% management fee,
a 5% vacancy factor, and a structural reserve of $.05 per square foot.
Consideration for these Development Properties will consist of Units with an
agreed upon value of $25.00 per Unit, and the assumption of certain construction
indebtedness.
For each Development Property acquired by the Company from April 1, 1997 to
March 31, 1998, the acquisition consideration will be computed as the greater of
(i) net operating income, as described above, capitalized at 10.25%, or (ii) the
cost of development. Consideration for these Development Properties will consist
of Units with a value per Unit based on the average closing price of the
Company's common stock for the 20 trading days prior to the acquisition of the
applicable Development Property, and the assumption of construction
indebtedness. The Company has assumed development responsibilities for tenant
finish improvements for each of the Development Properties.
Based on the formula discussed previously, and assuming the Development
Properties achieve their budgeted net operating income by their respective
budgeted stabilization dates, the Company believes that the total acquisition
consideration of the Development Properties will be approximately $39.3 million.
The Company currently expects that the Development Properties will be
contributed subject to approximately $10 million of construction indebtedness
(which the Company will likely refinance through borrowings under its line of
credit), resulting in the issuance to NWI of Units having a value of
approximately $29.3 million. As of October 29, 1996, the six Development
Properties had an average pre-leasing of approximately 34%.
<PAGE>
The acquisition agreements also provide that the Company will acquire
approximately 147 net usable acres of undeveloped land from NWI (the
"Undeveloped Land") in staged acquisitions over a period of up to six years,
with the first closing occurring no later than March 31, 1997.
The Company will acquire approximately 89 net usable acres of the Undeveloped
Land (the "I-440/Aspen Grove Land") in consideration of the issuance of Units
having a notional value of approximately $9.8 million (adjusted in certain cases
for changes in the Consumer Price Index subsequent to March 31, 1997), although
the total consideration may be increased depending on the performance of
buildings developed by the Company on certain portions of this I-440/Aspen Grove
Land. In addition, the Company will pay for certain infrastructure and carrying
costs associated with the I-440/Aspen Grove Land. Consideration for I-440/Aspen
Grove Land acquired by March 31, 1997 will consist of Units with an agreed upon
value per Unit of $25.00. Consideration for I-440/Aspen Grove Land acquired
after March 31, 1997 will consist of Units with a value per Unit based on the
average closing price of the Company's common stock for the 20 trading days
prior to the date of acquisition.
The Company expects to acquire on or before November 30, 1996, the remaining 58
net usable acres of Undeveloped Land (the "Briley Parkway Land") for NWI's cost,
including infrastructure and carrying costs associated with the Briley Parkway
Land. The Company estimates aggregate consideration for this portion of the
Briley Parkway Land will total approximately $3 million, of which approximately
$1.2 million will consist of a combination of cash and the issuance of Units
with an agreed upon value per Unit of $25.00, and the remainder of which will
consist of the Company's assumption of fixed-rate purchase money mortgage
indebtedness in an amount of approximately $1.8 million secured by the Briley
Parkway Land.
The acquisition agreements also contain certain registration rights and lock-up
arrangements by and among the Company, NWI, Buckley, and Mr. Nelley and Mr.
Buckley. Under these provisions, the Company is obligated to establish a shelf
for the registration of all Shares into which Units are convertible with respect
to all Units issued to NWI and Buckley (the "Registration Rights Participants")
on or before March 31, 1998. Each Unit issued to a Registration Rights
Participant must be retained for one year before disposition. Units or Shares
beneficially owned by Mr. Nelley and Mr. Buckley must be retained for three
years before disposition.
The registration rights arrangements also grant certain piggyback registration
rights to NWI with respect to any Units issued to NWI after March 31, 1998.
Pursuant to such piggyback registration rights, NWI will be entitled, subject to
certain restrictions, to include its Shares in a registered public offering
<PAGE>
initiated by the Company or another holder of the Company's securities. If all
of the Units owned by NWI are not successfully sold through the piggyback
registration rights, NWI will be entitled to two demand registration rights
after the fifth anniversary of the Initial Closing.
The Company currently estimates that fees and expenses of the Nashville
acquisitions will total approximately $1.5 million.
<PAGE>
<TABLE>
<CAPTION>
COMPLETED PROPERTIES
- --------------------------------------------------------------------------------
Business Park/ Square 9/30/96 Year
Property Feet Occupancy Constructed
- --------------------------------------------------------------------------------
<S> <C> <C> <C>
AIRPARK BUSINESS CENTER
1420 Donelson Pike 90,000 87% 1985
1410 Donelson Pike 108,300 84% 1986
1400 Donelson Pike 102,727 100% 1986
400 Airpark Center Drive 52,748 62% 1989
500 Airpark Center Drive 90,185 100% 1988
600 Airpark Center Drive 78,800 96% 1990
700 Airpark Center Drive 77,500 95% 1992
800 Airpark Center Drive 93,928 91% 1995
900 Airpark Center Drive 84,307 100% 1995
5270 Harding Place 51,960 100% 1996
1413 Donelson Pike 66,737 100% 1996
- --------------------------------------------------------------------------------
Subtotal 897,192 93%
- --------------------------------------------------------------------------------
BRENTWOOD SOUTH BUSINESS CENTER
7104 Crossroad Boulevard 103,200 100% 1987
7106 Crossroad Boulevard 103,200 93% 1987
7108 Crossroad Boulevard 99,000 99% 1989
119 Seaboard Lane 90,024 100% 1990
121 Seaboard Lane 45,480 100% 1990
123 Seaboard Lane 63,360 100% 1990
- --------------------------------------------------------------------------------
SUBTOTAL 504,264 98%
- --------------------------------------------------------------------------------
TOTAL COMPLETED PROPERTIES 1,401,456 95%
- --------------------------------------------------------------------------------
DEVELOPMENT PROPERTIES
- --------------------------------------------------------------------------------
Business Park/ Square 9/30/96 Year
Property Feet Pre-leasing Constructed
- --------------------------------------------------------------------------------
AIRPARK BUSINESS CENTER
Airpark Business Center X 106,122 0% 1996
Airpark Business Center XII 156,830 51% 1996
ASPEN GROVE BUSINESS CENTER
277 Mallory Station Road 127,205 87% 1995
320 Premier Court 106,358 6% 1996
Aspen Grove V 160,848 0% 1996
FOUR-FORTY BUSINESS CENTER
735 Melrose Avenue 165,777 48% 1995
- --------------------------------------------------------------------------------
TOTAL DEVELOPMENT PROPERTIES 823,140 34%
- --------------------------------------------------------------------------------
</TABLE>
This Current Report contains forward-looking information that is subject to
certain risks and uncertainties that could cause actual results to differ
materially from those projected. Among those risks and uncertainties are the
general economic climate; the supply of and demand for industrial properties in
Nashville, Tennessee and the Southeast; and risks associated with the
development and acquisition of properties, including risks that the development,
acquisition or lease-up may not be completed on schedule, that tenants will not
take occupancy or pay rent, or that development or operating costs may be
greater than anticipated. For further information on factors which could impact
the Company and the statements contained herein, reference is made to the
Company's other filings with the Securities and Exchange Commission.
<PAGE>
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS.
(a) Financial Statements of Business Acquired.
The financial statements required by this Item 7(a) relating to the NWI
acquisition described in Item 2 are attached hereto as Exhibit A and
incorporated herein by this reference.
(b) Pro Forma Financial Information.
The pro forma financial information required by this Item 7(b) relating to
the NWI acquisition described in Item 2 is attached hereto as Exhibit B and
incorporated herein by this reference.
(c) Exhibits
Exhibit # Description
--------- -----------
A Financial statements required by Item 7(a)
B Pro forma financial information required by Item 7(b)
2.1 Agreement of Merger by and between NWI Warehouse Group, LLC
and Weeks Realty, L.P., dated November 1, 1996.
2.2 Contribution Agreement for Development Properties between
Weeks Realty, L.P., and NWI Warehouse Group, L.P., dated
November 1, 1996.
2.3 Contribution Agreement for Aspen Grove Land between Weeks
Realty, L.P., and NWI Warehouse Group, L.P., dated November
1, 1996.
2.4 Contribution Agreement for I-440 Land between Weeks Realty,
L.P., and NWI Warehouse Group, L.P., dated November 1, 1996.
2.5 Contribution Agreement for NWI Operating Business by and
between Weeks Realty, L.P. and NWI Warehouse Group, L.P.
dated November 1, 1996.
2.6 Contribution Agreement for Buckley Operating Business by and
between Weeks Realty, L.P. and Buckley & Company Real
Estate, Inc., dated November 1, 1996.
2.7 Contribution Agreement for Briley Land between Weeks Realty,
L.P. and NWI Warehouse Group, L.P. dated November 1, 1996.
3.1 Second Amended and Restated Bylaws of Weeks Corporation.
10.1 Employment Agreement by and between John W. Nelley, Jr. and
Weeks Corporation, dated November 1, 1996.
<PAGE>
10.2 Employment Agreement by and between Albert W. Buckley, Jr.
and Weeks Corporation, dated November 1, 1996.
10.3 Noncompetition Agreement by and among NWI Warehouse Group,
Weeks Corporaiton, Weeks Realty, L.P., Weeks Realty
Services, Inc., Weeks Construction Services, Inc., Weeks GP
Holdings, Inc., Weeks LP Holdings, Inc., and their
respective successors, dated November 1, 1996.
10.4 Noncompetition Agreement by and among John W. Nelley, Jr.,
Weeks Corporation, Weeks Realty, L.P., Weeks Realty
Services, Inc., Weeks Construction Services, Inc., Weeks GP
Holdings, Inc., Weeks LP Holdings, Inc., and any other
entity under the common control of Weeks Corporation, and
their respective successors, dated November 1, 1996.
10.5 Noncompetition Agreement by and among Albert W. Buckley,
Jr., Weeks Corporation, Weeks Realty, L.P., Weeks Realty
Services, Inc., Weeks Construction Services, Inc., Weeks GP
Holdings, Inc., Weeks LP Holdings, Inc., and any other
entity under the common control of Weeks Corporation, and
their respective successors, dated November 1, 1996.
10.6 Indemnification Agreement by and between Weeks Corporation
and John W. Nelley, Jr., dated November 1, 1996.
10.7 Registration Rights and Lock-Up Agreement, by and among
Weeks Corporation, NWI Warehouse Group, L.P., Buckley &
Company Real Estate, Inc., John W. Nelley, Jr., and Albert
W. Buckley, Jr., dated November 1, 1996.
10.8 Registration Rights Agreement for Post-March 31, 1998 Shares
and Units, by and among Weeks Corporation, NWI Warehouse
Group, L.P., and Buckley & Company Real Estate, Inc., dated
November 1, 1996.
10.9 Second Amended and Restated Agreement of Limited Partnership
of Weeks Realty, L.P., dated October 30, 1996.
10.10 First Amendment to the Second Amended and Restated Agreement
of Limited Partnership of Weeks Realty, L.P. by and among
NWI Warehouse Group, L.P., Buckley & Company Real Estate,
Inc. and Weeks GP Holdings, Inc. dated November 1, 1996.
23.1 Consent of Ernst & Young LLP.
<PAGE>
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.
WEEKS CORPORATION
Registrant
Date: November 5, 1996 /s/David P. Stockert
-----------------------------------
David P. Stockert
Senior Vice President and
Chief Financial Officer
<PAGE>
Audited Combined Financial Statements
NWI Warehouse Group
Years ended December 31, 1994 and 1995
with Report of Independent Auditors
<PAGE>
NWI Warehouse Group
Audited Combined Financial Statements
Years ended December 31, 1994 and 1995
CONTENTS
Report of Independent Auditors................................................1
Audited Combined Financial Statements
Combined Balance Sheets as of December 31, 1994
and 1995 and June 30, 1996 (Unaudited)......................................2
Combined Statements of Income for the Years Ended
December 31, 1994 and 1995 and the Six Months
Ended June 30, 1995 and 1996 (Unaudited)....................................3
Combined Statements of OwnersO Equity for the Years
Ended December 31, 1994 and 1995 and the Six Months
Ended June 30, 1996 (Unaudited).............................................4
Combined Statements of Cash Flows for the Years Ended
December 31, 1994 and 1995 and the Six Months
Ended June 30, 1995 and 1996 (Unaudited)....................................5
Notes to Combined Financial Statements........................................7
<PAGE>
Report of Independent Auditors
To the Partners of NWI Warehouse Group, L.P.
and Owners of Buckley & Company Real Estate, Inc.
We have audited the accompanying combined balance sheets as of DecemberE31, 1994
and 1995, of NWI Warehouse Group (Note 1), and the related combined statements
of income, owners' equity, and cash flows for the years ended December 31, 1994
and 1995. These financial statements are the responsibility of management. Our
responsibility is to express an opinion on these financial statements based on
our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the combined financial position at DecemberE31, 1994 and
1995, of NWI Warehouse Group (Note 1), and the combined results of their
operations and their cash flows for the years ended December 31, 1994 and 1995
in conformity with generally accepted accounting principles.
ERNST & YOUNG LLP
Atlanta, Georgia
September 27,1996
<PAGE>
NWI Warehouse Group
Combined Balance Sheets
(In thousands)
<TABLE>
<CAPTION>
DECEMBER 31 JUNE 30,
1994 1995 1996
--------------------------------
(Unaudited)
<S> <C> <C> <C>
ASSETS
Real estate assets:
Land $ 9,113 $13,008 $17,342
Buildings and improvements 30,885 35,255 41,817
Accumulated depreciation (5,453) (6,575) (7,181)
------------------------------
Operating real estate assets 34,545 41,688 51,978
Developments in progress 1,870 11,149 10,255
Land held for future development 4,866 9,555 7,037
------------------------------
Net real estate assets 41,281 62,392 69,270
Cash and cash equivalents 785 1,313 2,669
Notes receivable from related parties 4,662 - -
Deferred financing costs, net 354 716 875
Receivables, net 981 753 936
Receivables, related parties 55 166 36
Other assets 313 85 121
------------------------------
Total assets $48,431 $65,425 $73,907
==============================
LIABILITIES AND OWNERS' EQUITY
Mortgage notes payable $29,237 $43,641 $50,269
Bank line of credit 185 640 1,500
Notes payable, other 523 963 899
Notes payable, related parties 1,362 1,220 1,560
Accounts payable and accrued expenses 2,098 2,438 2,313
Other liabilities 92 126 155
------------------------------
Total liabilities 33,497 49,028 $50,269
1,500
Owners' equity 24,180 25,219 899
Less: notes receivable from owners (9,246) (8,822) 1,560
Owners' equity, net 14,934 16,397 2,313
155
------------------------------
Total liabilities and owners' equity $48,431 $65,425 $73,907
==============================
</TABLE>
See accompanying notes.
<PAGE>
NWI Warehouse Group
Combined Statements of Income
(In thousands)
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31 SIX MONTHS ENDED JUNE 30
1994 1995 1995 1996
------------------------- --------------------------
(Unaudited)
<S> <C> <C> <C> <C>
Revenues:
Rental income $4,978 $5,836 $2,718 $3,675
Tenant reimbursements 875 994 350 662
Other 28 348 84 134
------------------------- --------------------------
5,881 7,178 3,152 4,471
------------------------- --------------------------
Expenses:
Property operating and maintenance 763 762 380 426
Real estate taxes 559 642 321 335
Tenant improvements and lease
commissions 131 445 200 307
Depreciation 984 1,127 543 621
Interest - third party 2,470 3,000 1,440 2,029
Interest - related party 11 93 45 65
Amortization of deferred financing
costs 53 93 47 54
General and administrative 479 643 271 325
------------------------- --------------------------
5,450 6,805 3,247 4,162
------------------------- --------------------------
Operating income (loss) 431 373 (95) 309
Interest income from related parties 1,385 1,117 588 445
------------------------- --------------------------
Income before income taxes 1,816 1,490 493 754
Income tax expense 39 102 41 48
------------------------- --------------------------
Net income $1,777 $1,388 $ 452 $ 706
========================= ==========================
</TABLE>
See accompanying notes.
<PAGE>
NWI Warehouse Group
Combined Statements of Owners' Equity
(In thousands)
<TABLE>
<S> <C>
Owners' equity, January 1, 1994 $22,431
Contributions 288
Distributions/dividends (316)
Net income 1,777
---------
Owners' equity, December 31, 1994 24,180
Distributions/dividends (349)
Net income 1,388
---------
Owners' equity, December 31, 1995 25,219
Distributions/dividends (unaudited) (1,147)
Net income (unaudited) 706
---------
Owners' equity, June 30, 1996 (unaudited) $24,778
=========
</TABLE>
See accompanying notes.
<PAGE>
NWI Warehouse Group
Combined Statements of Cash Flows
(In thousands)
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31 SIX MONTHS ENDED JUNE 30
1994 1995 1995 1996
------------------------ --------------------------
(Unaudited)
OPERATING ACTIVITIES
<S> <C> <C> <C> <C>
Net income $ 1,777 $ 1,388 $ 452 $ 706
Adjustments to reconcile net income to
net cash provided by operating
activities:
Depreciation and amortization 1,037 1,220 590 675
Provision for bad debts 168 183 61 36
Straight-line rent revenue 60 171 86 47
Accrued interest income on notes
receivable from related parties (905) (572) (42) (162)
Net change in:
Receivables 259 (203) 155 (106)
Accounts payable, accrued expenses and
other liabilities 196 211 (130) (63)
Other (300) 153 171 (52)
----------------------- --------------------------
Net cash provided by operating
activities 2,292 2,551 1,343 1,081
----------------------- --------------------------
INVESTING ACTIVITIES
Property acquisition, development and
construction (9,499) (22,034) (10,367) (7,546)
Notes receivable collections 1,762 10,823 10,823 850
Interest proceeds on notes receivable - 3,483 3,483 572
Notes receivable additions - (8,648) (8,649) (5)
------------------------ --------------------------
Net cash used in investing activities (7,737) (16,376) (4,710) (6,129)
------------------------ --------------------------
</TABLE>
<PAGE>
NWI Warehouse Group
Combined Statements of Cash Flows (continued)
(In thousands)
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31 SIX MONTHS ENDED JUNE 30
1994 1995 1995 1996
------------------------- --------------------------
(Unaudited)
<S> <C> <C> <C> <C>
FINANCING ACTIVITIES
Proceeds from mortgage, construction
and other notes payable 3,730 21,610 4,269 8,583
Repayments of mortgage, construction
and other notes payable (625) (6,766) (315) (2,019)
Proceeds from notes payable to related
parties 961 517 427 520
Principal payments on notes payable to
related parties (62) (659) (659) (180)
Line of credit proceeds (repayments),
net 185 455 (90) 860
Contributions 288 - - -
Distributions/dividends (316) (349) (162) (1,147)
Deferred financing costs (44) (455) (219) (213)
------------------------- --------------------------
Net cash provided by financing
activities 4,117 14,353 3,251 6,404
------------------------- --------------------------
INCREASE (DECREASE) IN CASH AND CASH
EQUIVALENTS (1,328) 528 (116) 1,356
CASH AND CASH EQUIVALENTS AT
BEGINNING OF PERIOD 2,113 785 785 1,313
------------------------- --------------------------
CASH AND CASH EQUIVALENTS AT END OF
PERIOD $ 785 $ 1,313 $ 669 $ 2,669
========================= ==========================
Supplemental disclosure of cash flow
information:
Interest paid $ 2,478 $ 2,972 $ 1,258 $ 2,185
========================= ==========================
Interest capitalized $ 75 $ 135 $ 112 $ 156
========================= ==========================
</TABLE>
See accompanying notes.
<PAGE>
NWI Warehouse Group
Notes to Combined Financial Statements
Years ended December 31, 1994 and 1995
1. ORGANIZATION AND BASIS OF COMBINATION
NWI Warehouse Group ("NWI") represents the combined industrial building
development, construction, ownership and management operations of NWI Warehouse
Group, L.P. (the "Partnership") and certain assets, liabilities and operations
of Buckley & Company Real Estate, Inc. ("Buckley"), comprising primarily the
property management operations of NWI. The accompanying financial statements of
NWI have been presented on a combined basis due to the anticipated common
ownership through their acquisition by a real estate investment trust (Note 10).
As of December 31, 1995, NWI owned and managed 15 industrial buildings
comprising 1.3 million square feet and had nine additional buildings under
development or in lease-up comprising an additional 1.1 million square feet.
The buildings are located in Nashville, Tennessee.
The Partnership commenced business operations in 1993 through a combination with
nine related partnerships and the contribution of certain assets and liabilities
of other related partnerships and entities under common management and control.
In 1994, six additional related partnerships were combined with and into the
Partnership. These combining, related partnerships (the "Predecessor
Partnerships") discussed herein, and their related properties, are as follows:
<PAGE>
1. ORGANIZATION AND BASIS OF COMBINATION (CONTINUED)
<TABLE>
<CAPTION>
COMMENCEMENT OF
RENTAL OPERATIONS
PREDECESSOR PARTNERSHIPS PROPERTY
------------------------------------------------------------------------------
<S> <C> <C>
Partnerships:
Pine Tree Corporation Airpark I 1985
NWI VI, L.P. Airpark II 1986
NWI VII, L.P. Airpark III 1986
NWI XIV, L.P. Airpark IV 1989
NWI XI, L.P. Airpark V 1988
NWI XVI, L.P. Airpark VI 1990
NWI XIX, L.P. Airpark VII 1992
NWI XX, L.P. Airpark VIII 1995
NWI XXI, L.P. Airpark IX 1995
NWI VIII, L.P. Brentwood South I 1987
NWI IX, L.P. Brentwood South II 1987
NWI XVII, L.P. Brentwood South III 1989
NWI XVIII, L.P. Brentwood South IV 1990
NWI XXIII, L.P. Brentwood South V 1990
NWI XXII, L.P. Brentwood South VI 1990
</TABLE>
The combination of the Predecessor Partnerships, described above, was accounted
for as a reorganization of entities under common control and, accordingly, the
related assets, liabilities and owner's equity were reflected at historical cost
in a manner similar to that in pooling of interests accounting. Accordingly,
the accompanying combined financial statements of NWI, have been presented
giving retroactive effect to all periods prior to the combinations. All
significant intercompany accounts and transactions have been eliminated in these
combined financial statements.
<PAGE>
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
REAL ESTATE ASSETS
Buildings and improvements are recorded at the lower of cost or estimated fair
value and are depreciated on the straight-line basis over their estimated useful
lives of 19 to 31.5 years. The cost of buildings and improvements includes
interest, property taxes and insurance incurred during the period of
construction. Initial tenant finishes are capitalized and depreciated over the
life of the building. Subsequent tenant finishes are generally expensed unless
permanent changes are made to the leasehold improvement. Significant
renovations or betterments which extend the economic useful life of an asset are
capitalized. Expenditures for maintenance and repairs are charged to operations
as incurred.
CASH AND CASH EQUIVALENTS
Cash and cash equivalents consist of highly liquid investments purchased with
original maturities of three months or less from the date of purchase. NWI
maintains, from time to time, cash deposits in excess of federally insured
amounts at one banking institution.
REVENUE RECOGNITION
All leases are classified as operating leases and the related rental income is
recognized on a straight-line basis over the terms of the respective leases.
Costs incurred to procure operating leases are expensed. Straight-line rent
receivables totaled $392,000 and $563,000 as of December 31, 1994 and 1995,
respectively. Tenant reimbursements for property taxes and other recoverable
expenses are recognized as revenues in the period the applicable expenses are
incurred. NWI provides for uncollectible tenant receivables based on a review
of specific receivable balances and past collection experience. The allowance
for doubtful accounts totaled $77,000 and $114,000 at December 31, 1994 and
1995, respectively.
<PAGE>
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
DEFERRED FINANCING COSTS
Deferred financing costs include fees and costs incurred to obtain long-term
financing, and are amortized over the term of the loan. Accumulated
amortization totaled $146,000 and $239,000 at December 31, 1994 and 1995,
respectively.
ACCOUNTING RECORDS
NWI's underlying accounting records are maintained on the cash basis of
accounting utilized for income-tax reporting purposes. The accompanying
combined financial statements have been adjusted to the accrual basis of
accounting prescribed by generally accepted accounting principles and thus
reflect accounts receivable, accrued straight-line rents, accrued interest on
notes receivable to related parties, accounts payable, accrued interest, and
other accruals that are not recorded in the accounting records. The combined
financial statements also reflect adjustments for depreciation and amortization
to convert the accounting records to the accrual basis of accounting.
USE OF ESTIMATES
The preparation of the financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the amounts reported in the financial statements and
accompanying notes. Actual results could differ from those estimates.
RECENT ACCOUNTING PRONOUNCEMENTS
In March 1995, SFAS No. 121, Accounting for the Impairment of Long-Lived Assets
and for Long-Lived Assets to Be Disposed Of, was issued. SFAS 121 established
new standards on how impairment losses on long-lived assets, including real
estate assets, should be measured. NWI's adoption of Statement 121, effective
January 1, 1995, had no effect on the accompanying combined financial
statements.
<PAGE>
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
UNAUDITED INTERIM FINANCIAL INFORMATION
The combined balance sheet as of June 30, 1996 and the combined statements of
income and cash flows for the six months ended June 30, 1995 and 1996 (interim
financial statements) have been prepared by management and are unaudited. In
the opinion of management the interim financial statements include all
adjustments, consisting of only normal recurring adjustments, necessary for a
fair presentation of the interim results. The results for the six months ended
June 30, 1995 and 1996 may not be indicative of operating results for the full
respective years.
3. NOTES RECEIVABLE FROM OWNERS AND RELATED PARTIES
NWI has $13,908,000 and $8,822,000 at December 31, 1994 and 1995, respectively,
in notes receivable from the owners of NWI and other related real estate
partnerships that have the same owners and/or general partner as the
Partnership. The notes are unsecured, payable upon demand and are generally
repaid from the sale of the assets, if any. The notes bear interest at 10% which
is not due until the note is paid in full. However, at the option of the payee
interest can be paid throughout the period that the note is outstanding.
Interest earned on notes receivable from related parties totaled $1,385,000 and
$1,117,000 for the years ended DecemberE31, 1994 and 1995, respectively.
<PAGE>
3. NOTES RECEIVABLE FROM OWNERS AND RELATED PARTIES (CONTINUED)
The related parties, along with the principal and interest owed by each at
December 31, 1994 and 1995, are as follows:
<TABLE>
<CAPTION>
1994
- ------------------------------------------------------------------------
RELATED PARTY PRINCIPAL INTEREST TOTAL
- ------------------------------------------------------------------------
<S> <C> <C> <C>
Notes receivable from Owners:
NWI X, L.P. $4,594 $1,795 $6,389
Albert Buckley 193 116 309
John W. Nelley, Jr. 948 532 1,480
Pine Tree Corporation 765 303 1,068
--------------------------------
$6,500 $2,746 $9,246
================================
Notes receivable from Related Parties:
Four Forty Associates, L.P. $3,759 $ 713 $4,472
Airpark West, L.P. 167 23 190
--------------------------------
$3,926 $ 736 $4,662
================================
</TABLE>
<TABLE>
<CAPTION>
1995
- ------------------------------------------------------------------------
RELATED PARTY PRINCIPAL INTEREST TOTAL
- ------------------------------------------------------------------------
<S> <C> <C> <C>
Notes receivable from Owners:
NWI X, L.P. $5,200 $ 311 $5,511
Albert Buckley 360 31 391
John W. Nelley, Jr. 1,500 130 1,630
Pine Tree Corporation 1,190 100 1,290
--------------------------------
$8,250 $ 572 $8,822
================================
</TABLE>
NWI X, L.P. is the general partner of the Partnership. The general partners of
NWI X, L.P. are also the general partners of Airpark West, L.P. and Four Forty
Associates, L.P.
<PAGE>
4. RELATED PARTY TRANSACTIONS
NWI has notes payable to partners of the Partnership of $1,362,000 and
$1,220,000 and accrued interest payable of $11,000 and $7,000 at DecemberE31,
1994 and 1995, respectively. These notes payable are unsecured, payable upon
demand and bear interest ranging from 9% to 10%.
NWI purchased undeveloped land from related parties for $3,895,000 and
$5,204,000 in 1994 and 1995, respectively. NWI also paid legal, accounting and
property maintenance fees to related parties totaling $241,000 and $26,000 in
1994 and 1995, respectively.
NWI received rental income and expense reimbursements of $639,000 and $251,000,
for the years ended December 31, 1994 and 1995, respectively, from entities
which are owned by individuals who are also investors in NWI.
<PAGE>
5. NOTES PAYABLE AND BANK LINE CREDIT
Mortgage notes payable consists of the following (in thousands):
<TABLE>
<CAPTION>
DECEMBER 31
1994 1995
------------------------
<S> <C> <C>
Mortgage note, principal and interest payable
monthly at 8.1%, due in 2006 $12,745 $12,521
Mortgage note, principal and interest payable
monthly at 8.0%, due in 2006 - 8,962
Mortgage note, principal and interest payable
monthly at 9.5%, due in 2000 7,230 7,157
Mortgage note, principal and interest payable
monthly at 9.5%, due in 1998 2,683 2,659
Mortgage note, with monthly payments at varying
amounts, including interest at bank prime plus
1/2% (9.0% at December 31, 1995), due in 1998 2,411 2,404
Mortgage note, principal and interest payable
monthly at 9.80%, due in 2000 2,210 2,193
Mortgage note, principal and interest payable
monthly at 8.0%, due in 2006 - 1,990
Construction loans, with varying monthly
payments and interest at bank prime plus 1/2%,
due in 1997 through 1999 1,958 3,503
Land loan, annual principal payments of $300,000
plus monthly payments of interest at bank prime
plus 1/2% (9.0% at December 31, 1995), due in
1998 - 2,252
-----------------------
$29,237 $43,641
=======================
</TABLE>
<PAGE>
5. NOTES PAYABLE AND BANK LINE OF CREDIT (CONTINUED)
At December 31, 1995, the Partnership had a secured line of credit agreement
with a bank. Under its terms, the Partnership could borrow up to $1,110,000 at
the bankOs index rate (8.5% at DecemberE31, 1995). The agreement was secured by
land held for development totaling $2,090,000 at DecemberE31, 1995. At December
31, 1994 and 1995, the Partnership had borrowings of $185,000 and $640,000 under
this agreement, respectively. In 1996, the line of credit was renewed and
expanded into a $5,600,000 agreement which matures in 1999.
As of December 31, 1994 and 1995 NWI had other notes payable totaling $523,000
and $963,000, respectively, to various unrelated individuals and trusts that are
unsecured and payable upon demand. These notes bear interest ranging from 9% to
10% and are used to purchase land, construct buildings, and fund operations.
At December 31, 1995, aggregate available borrowing capacity under construction
loans was approximately $6,102,000.
Aggregate principal payments required by mortgage, construction and other notes
payable as of December 31, 1995 are as follows (in thousands):
1995
----------------
1996 $ 2,469
1997 1,494
1998 6,031
1999 3,058
2000 11,060
Thereafter 21,132
----------------
$45,244
================
<PAGE>
6. LEASING ACTIVITY
Future minimum rentals receivable in accordance with tenant lease terms under
noncancelable operating leases as of DecemberE31, 1995 are as follows (in
thousands):
1995
---------------
1996 $ 5,870
1997 5,202
1998 4,200
1999 3,134
2000 1,514
Thereafter 860
---------------
$20,780
===============
7. COMMITMENTS AND CONTINGENCIES
As of DecemberE31, 1995, NWI had total construction commitments of $11,228,000
on buildings under development.
NWI is involved in litigation arising in the ordinary course of business. Such
matters, if decided adversely to NWI, would not, in the opinion of management,
have a material adverse effect on the combined financial condition of NWI.
8. INCOME TAXES
The Partnership is not subject to federal or state income taxes as Partnership
income or loss is reported by the individual partners in their respective tax
returns. Accordingly, income taxes are not reflected in the accompanying
combined financial statements of NWI related to the Partnership. Buckley is a
taxable entity. In accordance with the provisions of the SFAS No. 109,
Accounting for Income Taxes, current taxes have been attributed to the accounts
of Buckley as if it were a separate tax payer. At December 31, 1994 and 1995
income tax expense of $39,000 and $102,000, respectively, has been reflected in
the combined financial statements at statutory rates.
<PAGE>
9. FAIR VALUE OF FINANCIAL INSTRUMENTS
Based on interest rates and other pertinent information available to NWI at
December 31, 1995, NWI estimates that the carrying value of cash and cash
equivalents, receivables, notes payable, line of credit borrowings and other
liabilities approximate their fair values when compared to instruments of
similar type, terms and maturity. The carrying amount of related party notes
receivable and notes payable approximate fair value however, such amounts have
not been revalued by a party independent of management.
Disclosure about fair value of financial instruments is based on pertinent
information available to management as of December 31, 1995. Although
management is not aware of any factors that would significantly affect its
estimated fair value amounts, such amounts have not been comprehensively
revalued for purposes of these combined financial statements since that date.
10. PROPOSED MERGER
On July 31, 1996, NWI announced it had reached an agreement to contribute
substantially all of its assets and operations to a real estate investment trust
(Weeks Corporation and its subsidiaries) in a staged transaction for aggregate
consideration of approximately $120 million, upon its completion. The
transaction is structured in the form of a merger of ownership interests. The
initial closing, involving aggregate consideration of approximately $70 million,
is expected to occur in November 1996.
<PAGE>
WEEKS CORPORATION
PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET
JUNE 30, 1996
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
Lichtin
NWI Properties Principal
Company Acquisition Acquisition Properties Pro Forma
(Unaudited, in thousands) Historical(a) Historical(b) Historical(c) Historical(d) Adjustments Pro Forma
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Assets
Land $ 43,207 $17,342 $ 4,422 $ 4,353 $ 7,999 (e) $ 77,323
Building and improvements 272,753 41,817 86,648 26,602 16,560 (e) 444,380
Accumulated depreciation (35,029) (7,181) (19,244) -- 26,425 (C) (35,029)
- ------------------------------------------------------------------------------------------------------------------------------------
Operating real estate assets 280,931 51,978 71,826 30,955 50,984 486,674
- ------------------------------------------------------------------------------------------------------------------------------------
Development in progress 28,307 10,255 3,524 -- (13,779)(j) 28,307
Land held for future development 4,208 7,037 2,017 -- (8,054)(e) 5,208
- ------------------------------------------------------------------------------------------------------------------------------------
Net real estate assets 313,446 69,270 77,367 30,955 29,151 520,189
- ------------------------------------------------------------------------------------------------------------------------------------
Cash and cash equivalents 107 2,669 276 -- (2,312)(j) 740
Direct financing lease 5,188 -- -- -- -- 5,188
Deferred costs, net 9,486 875 3,564 -- (4,439)(j) 9,486
Investments in and notes
receivable from unconsolidated
subsidiaries 7,639 -- -- -- -- 7,639
Receivables and other assets 11,929 1,093 2,327 -- (3,308)(e)(j) 12,041
- ------------------------------------------------------------------------------------------------------------------------------------
Total Assets 347,795 73,907 83,534 30,955 19,092 555,283
- ------------------------------------------------------------------------------------------------------------------------------------
Liabilities & Shareholders' Equity
Mortgage notes payable 112,785 50,269 92,096 -- (28,525)(f) 226,625
Bank credit facility borrowings 65,685 1,500 3,407 30,955 10,200 (g) 111,747
Notes payable -- related parties -- 2,459 8,819 -- (11,278)(j) --
Accounts payable and accrued
expenses 7,250 2,313 3,155 -- (5,468)(j) 7,250
Other liabilities 1,819 155 478 -- -- 2,452
- ------------------------------------------------------------------------------------------------------------------------------------
Total Liabilities 187,539 56,696 107,955 30,955 (35,071) 348,074
- ------------------------------------------------------------------------------------------------------------------------------------
Minority Interests in
Operating Partnership 30,034 -- -- -- 28,943 (h) 58,977
Shareholders' and Owners'Equity
Common Stock 112 -- -- -- -- 112
Preferred Stock -- -- -- -- -- --
Additional paid-in capital 191,263 -- -- -- -- 191,263
Accumulated deficit (61,153) -- -- -- 18,010 (i) (43,143)
Owners' equity -- 17,211 (24,421) -- 7,210 (j) --
- ------------------------------------------------------------------------------------------------------------------------------------
Total Shareholders' and
Owners' Equity 130,222 17,211 (24,421) -- 25,220 148,232
- ------------------------------------------------------------------------------------------------------------------------------------
Total Liabilities and
Shareholders' and
Owners' Equity $347,795 $73,907 $ 83,534 $30,955 $ 19,092 $555,283
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
See accompanying notes.
<PAGE>
WEEKS CORPORATION
NOTES AND ASSUMPTIONS TO UNAUDITED PRO FORMA
CONDENSED CONSOLIDATED BALANCE SHEET AS OF
JUNE 30, 1996
1. BASIS OF PRESENTATION
The unaudited pro forma condensed consolidated balance sheet is presented as if
the Company acquired as of June 30, 1996, the business operations and real
estate assets of NWI (described in this Current Report on Form 8-K), the
business operations and real estate assets of Lichtin Properties (described in a
separate Current Report on Form 8-K of the Company dated November 5, 1996), and
the Principal Properties (described in the Company's Current Report on Form 8-K
dated August 9, 1996). The unaudited pro forma condensed consolidated balance
sheet is not necessarily indicative of what the actual financial position would
have been at June 30, 1996, nor does it purport to represent the future
financial position of the Company.
The unaudited pro forma condensed consolidated balance sheet should be read in
conjunction with the unaudited pro forma condensed consolidated statements of
operations of the Company included herein, the consolidated financial statements
and accompanying notes thereto of the Company included in its Annual Report on
Form 10-K for the year ended December 31, 1995, and the unaudited condensed
consolidated financial statements and accompanying notes thereto of the Company
included in its June 30, 1996 Quarterly Report on Form 10-Q.
The unaudited pro forma amounts of NWI and Lichtin Properties reflected in the
June 30, 1996 condensed consolidated pro forma balance sheet include the
operating businesses, land and the office and industrial properties acquired or
to be acquired at the respective initial closing dates of each acquisition. The
Northern Telecom properties, office and industrial properties under development
and land held for future development of NWI and Lichtin Properties to be
acquired subsequent to the initial closing dates discussed herein and in the
separate Current Report on Form 8-K of the Company dated November 5, 1996
relating to Lichtin Properties have been excluded from the accompanying pro
forma amounts as of June 30, 1996.
The acquisitions of NWI, Lichtin Properties and the Principal Properties have
been accounted for under the purchase method of accounting. Accordingly, assets
acquired and liabilities assumed have been or will be recorded at their
estimated fair values which may be subject to further modification based upon
the final determination of actual closing costs associated with each of the NWI
and Lichtin Properties transactions and the final terms of the Lichtin
Properties' transaction. Management believes that its final allocation of the
purchase price will not differ materially from the purchase price allocations
included herein.
2. ASSUMPTIONS TO THE UNAUDITED PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET
(a) Represents the Company's unaudited condensed consolidated historical
balance sheet contained in its Quarterly Report on Form 10-Q as of
June 30, 1996.
(b) Represents the historical unaudited combined balance sheet of NWI as
of June 30, 1996, included herein in Exhibit A.
<PAGE>
(c) Represents the historical unaudited combined balance sheet of Lichtin
Properties as of June 30, 1996, as set forth in Exhibit A to the
Company's Current Report on Form 8-K dated November 5, 1996 relating
to the Lichtin Properties acquisition.
(d) Represents the aggregate purchase price, including closing costs and
acquisition expenses, of the Principal Properties of $30,955,000
funded through borrowings under the Company's revolving credit
facility, as set forth in the Company's Current Report on Form 8-K
dated August 9, 1996, relating to the Principal acquisition.
(e) Represents the adjustments to reflect the initial purchase price of
the NWI business operations and real estate assets of $71,000,000 and
the estimated purchase price of the Lichtin Properties business
operations and real estate assets of $104,900,000, including closing
costs and acquisition expenses. Approximately $112,000 of the purchase
price relating to furniture and equipment is included in receivables
and other assets.
(f) Represents the adjustment to reflect the assumption of mortgage,
construction and other notes payable of NWI of $42,196,000 (as of June
30, 1996) and of Lichtin Properties of $71,644,000 (as of June 30,
1996). The weighted average interest rate was 8.5% on the NWI debt and
8.4% on the Lichtin Properties debt.
(g) Represents the assumption of $3,407,000 of Lichtin Properties' line of
credit borrowings and borrowings of $11,700,000 under the Company's
revolving credit facility to fund the cash component and closing costs
of the NWI and Lichtin Properties transactions.
(h) Represents the issuance of 1,092,000 Units with an agreed upon value
for purposes of the initial closing of the NWI transaction at $25.00
per Unit, and an estimated 778,000 Units with an agreed upon value for
purposes of the initial closing of the Lichtin Properties transaction
of $25.25 per Unit. The resulting consolidated pro forma minority
interest balance was adjusted to reflect the consolidated pro forma
minority interest percentage of 28.46% at June 30, 1996 as follows (in
thousands):
<TABLE>
<CAPTION>
<S> <C>
Value of NWI Units $ 27,304
Value of Lichtin Properties Units 19,649
Reclassification to shareholders' equity (18,010)
---------
$ 28,943
=========
</TABLE>
(i) Represents the adjustment to state the consolidated pro forma shareholders'
equity balance and minority interest balance to 71.54% and 28.46%,
respectively, of the total consolidated pro forma equity interests (both
shareholders' equity and minority interests) in the Company.
(j) Represents adjustments to eliminate certain asset and liability amounts
that are not acquired or assumed as part of the NWI and Lichtin Properties
transactions or which are not being acquired or assumed as part of the
initial closings of the acquisition transactions reflected in this pro
forma balance sheet.
<PAGE>
WEEKS CORPORATION
PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE SIX MONTHS ENDED JUNE 30, 1996
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------------------
Lichtin
NWI Properties Principal
(Unaudited, in thousands, except Company Acquisition Acquisition Properties Pro Forma
per share data) Historical(a) Historical(b) Historical(c) Historical(d) Adjustments Pro Forma
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Revenue
Rental income $21,943 $3,675 $ 5,609 $1,639 $(1,793) (e) $31,073
Tenant reimbursements 2,007 662 1,709 137 (993) (e) 3,522
Income from directfinancing lease 384 -- -- -- -- 384
Other 174 134 53 -- 182 (k) 543
- ------------------------------------------------------------------------------------------------------------------------------------
Total Revenue 24,508 4,471 7,371 1,776 (2,604) 35,522
- ------------------------------------------------------------------------------------------------------------------------------------
Expenses
Property operating andmaintenance 2,687 426 1,700 197 (811) (e) 4,199
Real estate taxes 2,153 335 494 146 (185) (e) 2,943
Depreciation and amortization 6,000 928 1,840 -- 493 (f) 9,261
Interest 4,955 2,094 3,893 -- (256) (g) 10,686
Amortization of deferred
financing costs 421 54 107 -- (161) (g) 421
General and administrative 1,414 325 568 -- -- 2,307
- ------------------------------------------------------------------------------------------------------------------------------------
Total Expenses 17,630 4,162 8,602 343 (920) 29,817
- ------------------------------------------------------------------------------------------------------------------------------------
Operating Income 6,878 309 (1,231) 1,433 (1,684) 5,705
Interest income 198 445 13 -- (458) (h) 198
Equity in earnings of
unconsolidated subsidiaries 543 -- -- -- -- 543
- -----------------------------------------------------------------------------------------------------------------------------------
Income before Income Taxes 7,619 754 (1,218) 1,433 (2,142) 6,446
Income Taxes -- (48) -- -- 48 (i) --
- ------------------------------------------------------------------------------------------------------------------------------------
Income before Minority Interests 7,619 706 (1,218) 1,433 (2,094) 6,446
Minority Interests (1,426) -- -- -- (409) (j) (1,835)
- ------------------------------------------------------------------------------------------------------------------------------------
Net Income $ 6,193 $ 706 $(1,218) $1,433 $(2,503) $ 4,611
- ------------------------------------------------------------------------------------------------------------------------------------
Per Share Data
Net Income $ 0.56 -- -- -- -- $ 0.41
- ------------------------------------------------------------------------------------------------------------------------------------
Weighted Average Shares Outstanding 11,156 -- -- -- -- 11,156
- ------------------------------------------------------------------------------------------------------------------------------------
Weighted Average Shares
and Units Outstanding 13,723 1,092 778 -- -- 15,593
- ------------------------------------------------------------------------------------------------------------------------------------
See accompanying notes.
</TABLE>
<PAGE>
WEEKS CORPORATION
NOTES AND ASSUMPTIONS TO UNAUDITED PRO FORMA
CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE SIX MONTHS ENDED JUNE 30, 1996
1. BASIS OF PRESENTATION
The unaudited pro forma condensed consolidated statement of operations for the
six months ended June 30, 1996 is presented as if the Company acquired as of
January 1, 1996 the business operations and real estate assets of NWI (described
in this Current Report on Form 8-K), the business operations and real estate
assets of Lichtin Properties (described in a seperate Current Report on Form 8-K
of the Company dated November 5, 1996) and the Principal Properties (described
in the Company's Current Report on Form 8-K dated August 9, 1996). In
management's opinion, all adjustments necessary to present fairly the effects of
these acquisitions have been made.
This unaudited pro forma condensed consolidated statement of operations should
be read in conjunction with unaudited pro forma condensed consolidated balance
sheet of the Company included herein, the consolidated financial statements and
accompanying notes thereto of the Company included in its Annual Report on Form
10-K for the year ended December 31, 1995, and the unaudited condensed
consolidated financial statements and accompanying notes thereto of the Company
included in its June 30, 1996 Quarterly Report on Form 10-Q.
This unaudited pro forma condensed consolidated statement of operations is not
necessarily indicative of what the actual results of operations of the Company
would have been assuming the Company had acquired NWI, Lichtin Properties and
the Principal Properties (as described above) as of the beginning of the period
presented, nor do they purport to represent the results of operations for future
periods.
The unaudited historical results of operations of NWI included herein have been
adjusted to reflect on a pro forma basis the operating business, land and
industrial properties acquired at the initial closing of the NWI transaction on
November 1, 1996. NWI's industrial properties under development or in lease-up
and land held for development and their associated results of operations to be
acquired subsequent to the initial closing on November 1, 1996 discussed herein
have been excluded from the accompanying pro forma amounts for the period
presented.
The unaudited historical results of operations of Lichtin Properties included
herein have been adjusted to reflect on a pro forma basis the operating
business, land and industrial and office properties to be acquired at the
initial closing of the Lichten Properties' transaction which is probable of
closing in December 1996, or January 1997. Certain of Lichtin Properties'
buildings leased to Northern Telecom, certain other of Lichtin Properties'
office and industrial properties under development and land held for future
development and their associated results of operations to be acquired subsequent
to the initial closing date discussed in the separate Current Report on Form 8-K
of the Company dated November 5, 1996 relating to Lichtin Properties have been
excluded from the accompanying pro forma amounts for the period presented.
<PAGE>
2. ASSUMPTION TO THE UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF
OPERATIONS
(a) Represents the Company's unaudited condensed consolidated historical
statement of operations contained in its Quarterly Report on Form 10-Q
for the six months ended June 30, 1996.
(b) Represents the historical unaudited combined statement of operations
of NWI for the six months ended June 30, 1996, included herein in
Exhibit A.
(c) Represents the historical unaudited combined statement of operations
of Lichtin Properties for the six months ended June 30, 1996, as set
forth in Exhibit A to the Company's Current Report on Form 8-K dated
November 5, 1996, relating to the Lichtin Properties acquisition.
(d) Represents the historical unaudited rental income, tenant
reimbursements, real estate taxes and property operating and
maintenance expenses of the Principal Properties for the six months
ended June 30, 1996, as set forth in the Company's Current Report on
Form 8-K dated August 9, 1996, relating to the Principal acquisition.
(e) Represents the net adjustment to reduce rental income, tenant
reimbursements, real estate taxes and property operating and
maintenance expenses for the results of operations of certain of
Lichtin Properties' buildings leased to Northern Telecom, certain
properties of NWI and Lichtin Properties under development or in
lease-up and expenses associated with land held for development which
are to be acquired subsequent to the initial closing dates of the NWI
and Lichtin Properties acquisitions as shown below (in thousands):
<TABLE>
<CAPTION>
Lichtin
NWI Properties Total
--- ---------- -----
<S> <C> <C> <C>
Rental income $331 $1,462 $1,793
Tenant reimbursement 41 952 993
Property operating and
maintenance expenses 59 752 811
Real estate taxes 36 149 185
</TABLE>
(f) Represents the adjustment to reflect depreciation and amortization
expense of the acquired properties (consisting of properties acquired
and to be acquired at the initial closing dates for the NWI and
Lichtin Properties acquisitions and the closing of the Principal
Properties) based upon the assumed allocation of the acquisition price
to land, buildings and improvements using a 35 year life for buildings
and the life of the lease for tenant improvements. Aggregate pro forma
depreciation and amortization expense for the six months ended June
30, 1996, was $1,122,000, $1,623,000 and $516,000 for NWI, Lichtin
Properties and the Principal Properties, respectively.
(g) Represents the adjustment of interest expense and the amortization of
deferred financing costs to reflect interest on notes payable and bank
line of credit borrowings assumed or to be assumed at the initial
closing dates in the NWI and Lichtin Properties transactions, interest
costs associated with additional borrowings under the Company's
<PAGE>
revolving credit facility of $30.9 million at 7.0% for the purchase of
the Principal Properties and interest costs associated with additional
borrowings under the Company's revolving credit facility of $11.7
million at 7.0% to fund the cash portion of the Lichtin Properties
initial closing price and cash closing and acquisition expenses of the
NWI and Lichtin Properties transactions.
(h) Represents the adjustment to eliminate interest income included in the
NWI and Lichtin Properties historical amounts as the notes receivable
and cash balances are not being acquired by the Company.
(i) Represents the adjustment to eliminate income tax expense as the
Company has and expects to continue to qualify as a real estate
investment trust.
(j) Represents the net adjustment of pro forma minority interest to adjust
the pro forma consolidated minority interest amount to reflect the
weighted average ownership percentage of the Unitholders in the
Operating Partnership of 28.46% for the six months ended June 30,
1996.
(k) Represents the reduction of general and administrative expenses
resulting from the payment by Lichtin Properties to the Company of
management fees and overhead cost reimbursements relating to the
Company's management of certain buildings leased to Northern Telecom
for periods subsequent to the initial closing date of the Lichtin
Properties transaction.
<PAGE>
WEEKS CORPORATION
PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 1995
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
Lichtin
NWI Properties Principal
(Unaudited, in thousands, except Company Acquisition Acquisition Properties Pro Forma
per share data) Historical(a) Historical(b) Historical(c) Historical(d) Adjustments Pro Forma
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Revenue
Rental income $31,217 $5,836 $10,245 $3,235 $(3,065) (e) $47,468
Tenant reimbursements 2,464 994 3,374 281 (2,046) (e) 5,067
Income from direct financing lease 776 -- -- -- -- 776
Other 480 348 24 -- 365 (l) 1,217
- ------------------------------------------------------------------------------------------------------------------------------------
Total Revenue 34,937 7,178 13,643 3,516 (4,746) 54,528
- ------------------------------------------------------------------------------------------------------------------------------------
Expenses
Property operating and maintenance 3,565 762 3,029 455 (1,770) (e) 6,041
Real estate taxes 2,997 642 817 293 (337) (e) 4,412
Depreciation and amortization 8,177 1,572 3,264 -- 1,685 (f) 14,698
Interest 8,106 3,093 7,094 -- (277) (g) 18,016
Amortization of deferred
financing costs 691 93 191 -- (284) (g) 691
General and administrative 1,848 643 1,154 -- -- 3,645
- ------------------------------------------------------------------------------------------------------------------------------------
Total Expenses 25,384 6,805 15,549 748 (983) 47,503
- ------------------------------------------------------------------------------------------------------------------------------------
Operating Income 9,553 373 (1,906) 2,768 (3,763) 7,025
Gain on sale of property -- -- 1,245 -- (1,245) (h) --
Interest income 334 1,117 18 -- (1,135) (i) 334
Equity in earnings of
unconsolidated subsidiaries 1,220 -- -- -- -- 1,220
- ------------------------------------------------------------------------------------------------------------------------------------
Income before Income Taxes 11,107 1,490 (643) 2,768 (6,143) 8,579
Income Taxes -- (102) -- -- 102 (j) --
- ------------------------------------------------------------------------------------------------------------------------------------
Income before Minority Interests 11,107 1,388 (643) 2,768 (6,041) 8,579
Minority Interests (2,681) -- -- -- (362) (k) (3,043)
- ------------------------------------------------------------------------------------------------------------------------------------
Net Income $ 8,426 $1,388 $ (643) $2,768 $(6,403) $ 5,536
- ------------------------------------------------------------------------------------------------------------------------------------
Per Share Data
Net Income $ 1.03 -- -- -- -- $ 0.66
- ------------------------------------------------------------------------------------------------------------------------------------
Weighted Average Shares
Outstanding 8,171 -- -- -- -- 8,171
- ------------------------------------------------------------------------------------------------------------------------------------
Weighted Average Shares
and Units Outstanding 10,760 1,092 778 -- -- 12,630
- ------------------------------------------------------------------------------------------------------------------------------------
See accompanying notes.
</TABLE>
<PAGE>
WEEKS CORPORATION
NOTES AND ASSUMPTIONS TO UNAUDITED PRO FORMA
CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 1995
1. BASIS OF PRESENTATION
The unaudited pro forma condensed consolidated statement of operations for the
year ended December 31, 1995 is presented as if the Company acquired as of
January 1, 1995, the business operations and real estate assets of NWI
(described in this Current Report on Form 8-K), the business operations and real
estate assets of Lichtin Properties (described in a separate Current Report on
Form 8-K of the Company dated November 5, 1996) and the Principal Properties
(described in the Company's Current Report on Form 8-K dated August 9, 1996).
In management's opinion, all adjustments necessary to present fairly the effects
of these acquisitions have been made.
This unaudited pro forma condensed consolidated statement of operations should
be read in conjunction with unaudited pro forma condensed consolidated balance
sheet of the Company included herein and the consolidated financial statements
and accompanying notes thereto of the Company included in its Annual Report on
Form 10-K for the year ended December 31, 1995.
The unaudited pro forma condensed consolidated statement of operations is not
necessarily indicative of what the actual results of operations of the Company
would have been assuming the Company had acquired NWI, Lichtin Properties and
the Principal Properties (as described above) as of the beginning of the period
presented, nor do they purport to represent the results of operations for future
periods.
The historical results of operations of NWI included herein have been adjusted
to reflect on a pro forma basis the operating business, land and industrial
properties acquired at the initial closing of the NWI transaction on November 1,
1996. NWI's industrial properties under development or in lease-up and land
held for development and their associated results of operations to be acquired
subsequent to the initial closing on November 1, 1996 discussed herein have been
excluded from the accompanying pro forma amounts for the period presented.
The unaudited historical results of operations of Lichtin Properties included
herein have been adjusted to reflect on a pro forma basis the operating
business, land and industrial and office properties to be acquired at the
initial closing of an acquisition transaction which is probable of closing in
December 1996, or January 1997. Certain of Lichtin Properties' buildings leased
to Northern Telecom certain other of Lichtin Properties' office and industrial
properties under development and land held for future development and their
associated results of operations to be acquired subsequent to the initial
closing date discussed in the separate Current Report on Form 8-K of the Company
dated November 5, 1996 relating to Lichtin Properties have been excluded from
the accompanying pro forma amounts for the period presented.
<PAGE>
2. ASSUMPTIONS TO THE UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF
OPERATIONS
(a) Represents the Company's historical consolidated historical statement
of operations contained in its Annual Report on Form 10-K for the year
ended December 31, 1995.
(b) Represents the historical combined statement of operations
of NWI for the year ended December 31, 1995, included herein in
Exhibit A.
(c) Represents the historical combined statement of operations of Lichtin
Properties for the year ended December 31, 1995 as set forth in
Exhibit A to the Company's Current Report on Form 8-K dated
November 5, 1996 relating to the Lichtin Properties Acquisition.
(d) Represents the historical rental income, tenant reimbursements, real
estate taxes and property operating and maintenance expenses for the
Principal Properties for the year ended December 31, 1995, as set
forth in the Company's Current Report on Form 8-K dated August 9,
1996, relating to the Pricipal Acquisition.
(e) Represents the net adjustment to reduce rental income, tenant
reimbursements, real estate taxes and property operating and
maintenance expenses for the results of operations of certain of
Lichtin Properties' buildings leased to Northern Telecom, certain
properties of NWI and Lichtin Properties under development or in
lease-up and expenses associated with land held for development which
are to be acquired subsequent to the initial closing dates of the NWI
and Lichtin Properties acquisitions as shown below (in thousands):
<TABLE>
<CAPTION>
Lichtin
NWI Properties Total
--- ---------- -----
<S> <C> <C> <C>
Rental income $122 $2,943 $3,065
Tenant reimbursements 11 2,035 2,046
Property operating and
maintenance expenses 29 1,741 1,770
Real estate taxes 33 304 337
</TABLE>
(f) Represents the adjustment to reflect depreciation and amortization
expense of the acquired properties (consisting of properties acquired
and to be acquired at the initial closing dates for the NWI and
Lichtin Properties acquisitions and the closing of the Principal
Properties) based upon the assumed allocation of the acquisition price
to land, buildings and improvements using a 35 year life for buildings
and the life of the lease for tenant improvements. Aggregate pro forma
depreciation and amortization expense for the year ended December 31,
1995, was $2,243,000, $3,245,000 and $1,033,000 for NWI, Lichtin
Properties and the Principal Properties, respectively.
(g) Represents the adjustment of interest expense and the amortization of
deferred financing costs to reflect interest on notes payable and bank
line of credit borrowing assumed or to be assumed at the initial
closing dates of the NWI and Lichtin Properties transactions, interest
costs associated with additional borrowings under the Company's
<PAGE>
revolving credit facility of $30.9 million at 7.0% for the purchase of
the Principal Properties and interests cost associated with additional
borrowings under the Company's revolving credit facility of $11.7
million at 7.0% to fund the cash portion of the Lichtin Properties
initial closing price and cash closing and acquisition expenses of the
NWI and Lichtin Properties transactions.
(h) Represents the adjustment to eliminate the gain on sale of property as
the property was not part of the Lichtin Properties acquisition
transaction.
(i) Represents the adjustment to eliminate interest income included in the
NWI and Lichtin Properties historical amounts as the notes receivable
and cash balances are not being acquired by the Company.
(j) Represents the adjustment to eliminate income tax expense as the
Company has and expects to continue to qualify as a real estate
investment trust.
(k) Represents the net adjustment of pro forma minority interest to adjust
the pro forma consolidated minority interest amount to reflect the
weighted average ownership percentage of the Unitholders in the
Operating Partnership of 35.47% for the year ended December 31, 1995.
(l) Represents the reduction of general and administrative expenses
resulting from the assumed payment by Lichtin Properties to the
Company of management fees and overhead cost reimbursements relating
to the Company's management of certain buildings leased to Northern
Telecom for periods subsequent to the initial closing date of the
Lichtin Properties transaction.
<PAGE>
Exhibit Index
-------------
A Financial statements required by Item 7(a)
B Pro forma financial information required by Item 7(b)
2.1 Agreement of Merger by and between NWI Warehouse Group, LLC
and Weeks Realty, L.P., dated November 1, 1996.
2.2 Contribution Agreement for Development Properties between
Weeks Realty, L.P., and NWI Warehouse Group, L.P., dated
November 1, 1996.
2.3 Contribution Agreement for Aspen Grove Land between Weeks
Realty, L.P., and NWI Warehouse Group, L.P., dated November
1, 1996.
2.4 Contribution Agreement for I-440 Land between Weeks Realty,
L.P., and NWI Warehouse Group, L.P., dated November 1, 1996.
2.5 Contribution Agreement for NWI Operating Business by and
between Weeks Realty, L.P. and NWI Warehouse Group, L.P.
dated November 1, 1996.
2.6 Contribution Agreement for Buckley Operating Business by and
between Weeks Realty, L.P. and Buckley & Company Real
Estate, Inc., dated November 1, 1996.
2.7 Contribution Agreement for Briley Land between Weeks Realty,
L.P. and NWI Warehouse Group, L.P. dated November 1, 1996.
3.1 Second Amended and Restated Bylaws of Weeks Corporation.
10.1 Employment Agreement by and between John W. Nelley, Jr. and
Weeks Corporation, dated November 1, 1996.
<PAGE>
10.2 Employment Agreement by and between Albert W. Buckley, Jr.
and Weeks Corporation, dated November 1, 1996.
10.3 Noncompetition Agreement by and among NWI Warehouse Group,
Weeks Corporaiton, Weeks Realty, L.P., Weeks Realty
Services, Inc., Weeks Construction Services, Inc., Weeks GP
Holdings, Inc., Weeks LP Holdings, Inc., and their
respective successors, dated November 1, 1996.
10.4 Noncompetition Agreement by and among John W. Nelley, Jr.,
Weeks Corporation, Weeks Realty, L.P., Weeks Realty
Services, Inc., Weeks Construction Services, Inc., Weeks GP
Holdings, Inc., Weeks LP Holdings, Inc., and any other
entity under the common control of Weeks Corporation, and
their respective successors, dated November 1, 1996.
10.5 Noncompetition Agreement by and among Albert W. Buckley,
Jr., Weeks Corporation, Weeks Realty, L.P., Weeks Realty
Services, Inc., Weeks Construction Services, Inc., Weeks GP
Holdings, Inc., Weeks LP Holdings, Inc., and any other
entity under the common control of Weeks Corporation, and
their respective successors, dated November 1, 1996.
10.6 Indemnification Agreement by and between Weeks Corporation
and John W. Nelley, Jr., dated November 1, 1996.
10.7 Registration Rights and Lock-Up Agreement, by and among
Weeks Corporation, NWI Warehouse Group, L.P., Buckley &
Company Real Estate, Inc., John W. Nelley, Jr., and Albert
W. Buckley, Jr., dated November 1, 1996.
10.8 Registration Rights Agreement for Post-March 31, 1998 Shares
and Units, by and among Weeks Corporation, NWI Warehouse
Group, L.P., and Buckley & Company Real Estate, Inc., dated
November 1, 1996.
10.9 Second Amended and Restated Agreement of Limited Partnership
of Weeks Realty, L.P., dated October 30, 1996.
10.10 First Amendment to the Second Amended and Restated Agreement
of Limited Partnership of Weeks Realty, L.P. by and among
NWI Warehouse Group, L.P., Buckley & Company Real Estate,
Inc. and Weeks GP Holdings, Inc. dated November 1, 1996.
23.1 Consent of Ernst & Young LLP.
<PAGE>
AGREEMENT OF MERGER
THIS AGREEMENT OF MERGER (this "Agreement"), dated as of November 1, 1996,
by and between NWI WAREHOUSE GROUP, LLC, a Delaware limited liability company
("NWI"), and WEEKS REALTY, L.P., a Georgia limited partnership ("Weeks Realty");
WITNESSETH:
----------
WHEREAS, NWI has been formed for the sole purpose of effecting a
contribution of certain assets of NWI Warehouse Group, L.P. to Weeks Realty in
exchange for limited partnership interests therein and is intended to exist only
as a transitory conduit for this purpose and not to conduct any other business
or activity; and
WHEREAS, the parties hereto desire that NWI be merged with and into Weeks
Realty on the terms and subject to the conditions set forth in this Agreement;
NOW, THEREFORE, in consideration of the premises and the mutual covenants,
conditions and agreements set forth herein, the parties hereby agree as follows:
ARTICLE 1
THE MERGER
1.1 Merger. Subject to the terms and conditions of this Agreement, at the
Effective Time (as defined in this Agreement), NWI shall be merged with and into
Weeks Realty (the "Merger") pursuant to Section 18-209 of the Delaware Limited
Liability Company Act ("DLLCA") and Section 14-9-206.1 of the Georgia Revised
Uniform Limited Partnership Act ("GRULPA").
1.2 Effects of the Merger. The Merger shall have the effects set forth in
Section 18-209 of DLLCA and Section 14-9-206.1 of GRULPA.
1.3 Effective Time. The Merger shall become effective at such time as
certificates of merger are filed with the Secretary of State of the State of
Georgia and with the Secretary of State of the State of Delaware (the "Effective
Time").
1.4 Surviving Business Entity. Weeks Realty shall be the surviving
business entity in the Merger and shall continue to be governed by GRULPA. The
Second Amended and Restated Agreement of Limited Partnership of Weeks Realty,
dated as of October ___, 1996, as amended by the First Amendment to the Second
Amended and Restated Agreement of Limited Partnership of Weeks Realty dated as
of the date hereof (the "Partnership Agreement"), shall be the
<PAGE>
partnership agreement of the surviving limited partnership. The general partner
of the surviving limited partnership shall be Weeks GP Holdings, Inc., a Georgia
corporation.
1.5 Closing. The closing of the Merger (the "Closing") will take place as
of the Effective Time at the offices of Baker, Donelson, Bearman & Caldwell,
Suite 1700, Union City Center, 511 Union Street, Nashville, Tennessee 37219.
1.6 Conversion of Interests. At the Effective Time, by virtue of the
Merger and without any further action on the part of Weeks Realty or the
partners thereof or NWI or the member thereof, the interest of the member of NWI
in NWI shall be converted into and exchanged for the number of units of limited
partnership interest in Weeks Realty as set forth in the First Amendment to the
Partnership Agreement.
ARTICLE 2
MISCELLANEOUS
2.1 Amendment. This Agreement may be supplemented, amended or modified by
the parties hereto at any time prior to the Effective Time. This Agreement may
not be amended except by an instrument in writing signed by the parties hereto.
2.2 Waiver. At any time prior to the Effective Time, the parties hereto
may waive compliance with any of the agreements or conditions contained herein.
2.3 Notices. All notices and other communications to be given or made
hereunder by any party shall be delivered by first class mail, or by personal
delivery, postage or fees prepaid, to the appropriate party at the following
addresses:
NWI Warehouse Group, LLC
1410 Donelson Pike, Suite A-5
Nashville, Tennessee 37217
Attention: John W. Nelley, Jr.
Weeks Realty, L.P.
4497 Park
Norcross, Georgia 30093
Attention: Thomas D. Senkbeil
2.4 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 instrument.
-2-
<PAGE>
2.5 Severability. If any term or other provision of this Agreement is
invalid, illegal or incapable of being enforced by any rule of law or public
policy, all other conditions and provisions of this Agreement shall nevertheless
remain in full force and effect so long as the economic or legal substance of
the transactions contemplated hereby is not affected in any manner materially
adverse to any party.
2.6 Remedies. Except as otherwise expressly provided herein, this
Agreement is not intended to confer any rights or remedies hereunder upon any
person not a party hereto.
2.7 Assignment. This Agreement shall not be assigned by operation of law
or otherwise without the consent of all parties hereto.
2.8 No Implied Waiver. Except as expressly provided in this Agreement, no
course of dealing among the parties hereto and no delay by any of them in
exercising any right, power or remedy conferred herein or now or hereafter
existing at law or in equity, by statute or otherwise, shall operate as a waiver
of, or otherwise prejudice, any such right, power or remedy.
2.9 Governing Law. This Agreement shall be governed by, and construed in
accordance with, the laws of the State of Georgia (regardless of the laws that
might otherwise govern under applicable principles of conflicts of law) as to
all matters, including, but not limited to, matters of validity, construction,
effect, performance and remedies.
-3-
<PAGE>
IN WITNESS WHEREOF, the undersigned have executed this Agreement the date
first written above.
NWI WAREHOUSE GROUP, LLC
By: NWI WAREHOUSE GROUP, L.P., its
Sole Member
By: NWI X, L.P., its Sole General
Partner
By: _______________________
John W. Nelley, Jr.,
General Partner
By: _______________________
Albert W. Buckley, Jr.,
General Partner
WEEKS REALTY, L.P.
By: Weeks GP Holdings, Inc., a Georgia
corporation, its sole General Partner
By: ______________________
Name:
Title:
-4-
<PAGE>
=============================================================================
CONTRIBUTION AGREEMENT
FOR
DEVELOPMENT PROPERTIES,
BETWEEN
WEEKS REALTY, L.P.
AND
NWI WAREHOUSE GROUP, L.P.
=============================================================================
<PAGE>
TABLE OF CONTENTS
-----------------
Page
----
1. DEFINED TERMS................................................... 1
2. COVENANT TO CONTRIBUTE.......................................... 10
3. STRUCTURE OF CONTRIBUTION....................................... 10
4. TIMING OF CONTRIBUTION.......................................... 11
5. CONTRIBUTION VALUE.............................................. 13
6. ADJUSTED CONTRIBUTION VALUE..................................... 14
7. ISSUANCE OF UNITS............................................... 15
8. INTERIM CONDUCT................................................. 16
9. EXISTING LOANS.................................................. 17
10. TITLE AND SURVEY................................................ 18
11. DATE, TIME AND PLACE OF CONTRIBUTION............................ 18
12. COSTS AND EXPENSES; PREPARATION OF DOCUMENTS.................... 20
13. ACCESS TO AND EXAMINATION OF THE DEVELOPMENT PROPERTIES......... 21
14. REPRESENTATIONS AND WARRANTIES OF NWI........................... 21
15. REPRESENTATIONS AND WARRANTIES OF WEEKS......................... 22
16. CONDITIONS...................................................... 23
17. FIRE AND CASUALTY............................................... 25
18. EMINENT DOMAIN.................................................. 26
19. DEFAULT......................................................... 26
i
<PAGE>
Page
----
20. BROKERAGE FEES.................................................. 27
21. ADDITIONAL UNIT EARNOUT......................................... 27
22. MISCELLANEOUS................................................... 31
ii
<PAGE>
SCHEDULE OF EXHIBITS
EXHIBIT A Aspen Grove Park
EXHIBIT B Development Properties
EXHIBIT C Existing Loans
EXHIBIT D Legal Descriptions of Land
EXHIBIT E Leasing Guidelines
EXHIBIT F Pro Forma Annual Operating Expense
EXHIBIT G Pro Forma Costs
EXHIBIT H Pro Forma Rental Rates
EXHIBIT I Rent Roll
EXHIBIT J Tenant Estoppel Certificate Form
EXHIBIT K Illustrative Calculation
EXHIBIT L Exclusive Development, Leasing and Management Agreement
EXHIBIT M Pro Forma Reimbursable Amounts
EXHIBIT N Permitted Exceptions
EXHIBIT O I-440 Land
EXHIBIT P Briley Parkway Land
iii
<PAGE>
CONTRIBUTION AGREEMENT
(Development Properties)
THE CONTRIBUTION AGREEMENT (hereinafter referred to as this
"Agreement"), made and entered into as of this 1st day of November, 1996, by and
between NWI WAREHOUSE GROUP, L.P., a Tennessee limited partnership (hereinafter
referred to as "NWI"); and WEEKS REALTY, L.P., a Georgia limited partnership
(hereinafter referred to as "Weeks");
W I T N E S S E T H:
- - - - - - - - - -
WHEREAS, NWI, through the merger into Weeks of a wholly owned
affiliate of NWI, has agreed to contribute certain assets of NWI to the capital
of Weeks in several stages (hereinafter referred to as the "Transaction");
WHEREAS, on even date herewith, through the merger into Weeks of the
wholly owned affiliate of NWI, NWI contributed to the capital of Weeks
(hereinafter referred to as the "Initial Contribution") the "Completed
Properties" (as defined in that certain Amendment to Partnership Agreement of
Weeks, dated as of even date herewith) in exchange for "Units" (as hereinafter
defined) and assumption (subject to the limitation on recourse provisions) of
certain indebtedness as one of the stages in the Transaction;
WHEREAS, NWI has under development and lease-up several properties
hereinafter defined as the "Development Properties";
WHEREAS, as another stage of the Transaction, NWI, through the merger
into Weeks of wholly owned affiliates of NWI, has agreed to contribute, from
time to time, each of the Development Properties to the capital of Weeks in
exchange for the issuance of additional Units and, in several instances, the
assumption (subject to the limitation on recourse provisions) of certain
indebtedness, as and when certain conditions are met, all as more particularly
set forth in this Agreement; and
WHEREAS, Weeks has agreed to the merger referenced above and has
agreed to accept such contribution of the Development Properties and, in
connection therewith, issue Units to NWI and assume (subject to the limitations
of recourse provisions) certain liabilities, all as more particularly set forth
in this Agreement.
NOW, THEREFORE, for and in consideration of the foregoing premises,
the mutual covenants and agreements herein set forth and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, NWI
and Weeks hereby covenant and agree as follows:
<PAGE>
1. DEFINED TERMS. In addition to terms defined elsewhere in this
-------------
Agreement, the following words, when used in this Agreement, shall have the
meanings ascribed thereto in this paragraph:
a. "Adjusted Contribution Value" means the adjusted contribution value
---------------------------
for Development Property arrived at after making the adjustments
provided for in Paragraph 6 of this Agreement.
b. "Aspen Grove Park" means that certain warehouse/industrial park
---------------
depicted on the master plan, attached hereto as Exhibit A and by this
---------
reference made a part hereof.
c. "Bulk Building" means a building with a minimum of eighteen (18) feet
-------------
of clear interior height with dock level loading in which ten percent
(10%) or less of the rentable area is devoted to office use.
d. "Contribution" means the consummation of a contribution to the
------------
capital of Weeks of a Development Property pursuant to the terms and
conditions of this Agreement.
e. "Contribution Date", for each Development Property, means the date on
-----------------
which that Development Property is contributed by NWI to the capital
of Weeks pursuant to Paragraph 4 of this Agreement.
f. "Contribution Value" means the contribution value of a Development
------------------
Property determined in accordance with Paragraph 5 of this Agreement.
g. "Development Property" means the Real Property, the Tangible Personal
--------------------
Property and the Intangible Personal Property located at,
attributable to or used in connection with one of the six (6)
projects under development and lease-up identified on Exhibit B,
---------
attached hereto and by this reference made a part hereof; and
Development Properties means, collectively, all of the Real Property,
----------------------
the Tangible Personal Property and the Intangible Personal Property
located at, attributable to or used in connection with all of the six
(6) projects identified on Exhibit B hereto. Any reference to a
---------
specific Development Property shall be made by incorporating the name
of the project as set forth on Exhibit B; for example, a specific
---------
reference to the first listed Development Property shall be the
"Airpark Center X Development Property".
-2-
<PAGE>
h. "Distribution Building" means a building with a minimum of eighteen
---------------------
(18) feet of clear interior height with dock level loading in which
more than ten percent (10%) of the rentable area is devoted to office
use.
i. "85% Stabilization", with reference to a specific Development
-----------------
Property, means that all of the following conditions have been met:
(i) eighty-five percent (85%) of the net leasable area of the
Improvements have been leased to creditworthy Tenant(s) approved by
Weeks under Lease(s) approved by Weeks (which will base its approval
on commercially reasonable standards); (i) Tenant(s) are in actual
possession and have accepted possession of eighty-five percent (85%)
of the net leasable area of the Improvements, including Tenant
improvements; (iii) except for free-rent periods expressly stipulated
in the Lease(s), rental shall have commenced on eighty-five percent
(85%) of the net leaseable area of the Improvements and all other
concessions (besides any free rent periods) shall have expired; (iv)
no default by NWI or any Tenant is then outstanding and uncured under
the Lease(s), and (v) all of matters described in the foregoing four
(4) clauses have been confirmed to Weeks by the Tenant(s) pursuant to
Tenant Estoppel Certificate(s). For the purposes this definition, NWI
and Weeks agree that the net leasable area of the Improvement in each
Development Property is that set forth on Exhibit B hereto.
---------
j. "Environmental Laws" means the Resource Conservation and Recovery Act
------------------
(42 U.S.C. (S) 6901 et seq.), as amended by the Hazardous Materials
-- ----
Transportation Act (490 U.S.C. (S) 1801 et seq.); the Toxic Substance
Control Act (15 U.S.C. (S) 2601 et seq.); Clean Air Act U.S.C. (S)
-- ---
136 et seq.); the Occupational Safety and Health Act (29 U.S.C. (S)
-- ---
651 et seq.) and all applicable federal, state and local
-- ---
environmental laws, including obligations under the common law,
ordinances, rules and regulations, as any of the foregoing may have
been amended, supplemented or supplanted prior to the date hereof,
relating to regulation or control of hazardous, toxic or dangerous
substances or wastes, or their handling, storage or disposal or to
environmental health and safety.
k. "Existing Loan" means one of the loans identified on Exhibit C,
------------- ---------
attached hereto and by this reference made a part hereof; and
"Existing Loans" means, collectively, all of the loans identified on
Exhibit C hereto.
l. "Existing Loan Documents" means, collectively, all of the loan
----------------------
documents evidencing and securing an Existing Loan.
-3-
<PAGE>
m. "Flex Building" means a building with less than eighteen (18) feet of
-------------
clear interior height with grade level loading.
n. "Gross Income", for the purpose of determining the Contribution Value
------------
of a Development Property and subject to certain adjustments and
deductions expressly provided in this definition, means the gross
rental income, including applicable Pro Forma Reimbursable Amounts,
to be paid by the Tenant(s) under their respective Lease(s) for the
twelve (12) month period commencing on the Contribution Date, subject
to the following:
i. If Tenant concessions for a Lease exceed (A) three (3) months for
a Lease that has an original term of at least five (5) years, or
(B) one (1) month for a Lease that has an original term of less
than five (5) years (in either case, such excess, the "Excess
Tenant Concessions"); then, the amount included in determining
Gross Income from this Lease shall equal the dollar amount
derived from the following formula:
(A) [(B - C) /B] = D
where in the foregoing formula:
A = gross rental income, including applicable Pro Forma
Reimbursable Amounts, to be paid under the Lease for the
twelve (12) month period commencing on the Contribution
Date;
B = total gross rental income, including applicable Pro Forma
Reimbursable Amounts, scheduled to be paid under the Lease
for the original term of the Lease, calculated without
regard to Excess Tenant Concessions;
C = total value of the Excess Tenant Concessions for
the initial term of the Lease; and
D = amount to be included in Gross Income from the Lease.
ii. if the percentage of space finished as office space exceeds the
applicable Pro Forma Level of Office Finish for the Development
Property, in question, or for any Lease in that Development
Property; for the purpose of determining Gross Income from this
Development Property or this Lease, the rental income
attributable to the twelve (12) month period commencing on the
Contribution Date shall be reduced by the amount attributable to
that twelve (12) month period for amortization of such excess
office finish and Lease commissions attributable to such excess
office finish, if any; provided, however, in instances where
percentage of space finished as office space does not exceed
applicable Pro Forma Level of Office Finish for
-4-
<PAGE>
the total net leasable area of the Development Property, but
the percentage of space finished as office space under a Lease
does exceed the applicable Pro Forma Level of Office Finish,
Weeks may nevertheless consider, in its discretion, the
appropriateness of not deducting amortization of such excess
office finish and related commission cost, taking into account
factors such as Tenant layout, Tenant improvement allowances
granted to other tenants in such Development Property, and the
likelihood that such Tenant improvements would be readily
useable upon releasing of such space in the future. For this
purpose, the amortization shall be computed by treating the
amount of the excess office finish and related commission cost
as a loan to Tenant having a term equal to the original term of
the Lease and bearing interest at a simple interest rate per
annum of ten and one-quarter percent (10.25%) to be repaid in
equal monthly installments of principal and interest over the
original term of the Lease.
iii. If a Development Property is being contributed pursuant to
Paragraph 4(d) or Paragraph 4(c) of this Agreement, for the
percentage of space that must be leased that would be necessary
to bring the total leased space to ninety-five percent (95%) of
the space in the Development Property, rental income shall be
attributed in determining Gross Income for that Development
Property, at the lesser of the applicable Pro Forma Rental
Rates or the average actual rental rates for the space leased
in that Development Property plus, in either instance, Pro
Forma Reimbursable Amounts.
o. "Hazardous Materials" means (i) those substances included within
-------------------
definitions of or identified as "hazardous substances," "hazardous
materials," or "toxic substances" in or pursuant to Environmental
Laws; (ii) those substances listed in the United States Department of
Transportation Table (40 CFR 172.101 and amendments thereto) or by
the Environmental Protection Agency (or any successor agency) as
hazardous substances (40 CFR Part 302 and amendments thereto); (iii)
any material, waste or substance which is or contains (A) petroleum,
including crude oil or any fraction thereof, natural gas or synthetic
gas usable for fuel or any mixture thereof, or any product containing
the foregoing substances, (B) asbestos or asbestos containing
material, (C) polychlorinated biphenyls, (D) any substance designated
as "hazardous substance" pursuant to Section 311 of the Clean Water
Act, 33 U.S.C. (S) 1251 et seq. (33 U.S.C. (S) 1321), or listed
-- ---
pursuant to Section 307 of the Clean Water Act (33 U.S.C. (S) 1317);
(E) flammable explosives; (F) radioactive materials; and (iv) such
other substances, materials
-5-
<PAGE>
and wastes which are or become regulated as hazardous, toxic or
"special wastes" under Environmental Laws.
p. "Improvements" means all buildings, structures and other
------------
improvements, including such fixtures as constitute real property,
located on the Land.
q. "I-440 Land" means those certain tracts or parcels of real property
----------
depicted on the site plan, attached hereto as Exhibit O and by this
---------
reference made a part hereof.
r. "Intangible Personal Property" means any intangible personal property
----------------------------
now or hereafter owned by NWI in connection with the Land, the
Improvements or the Tangible Personal Property, and all of NWI's
rights under all contracts, utility arrangements, and other
agreements relating to the ownership, operation and occupancy
thereof, including, without limitation, warranties from contractors
on the Improvements, roof warranties, equipment warranties, the
Leases and Service Contracts; provided, however, the terms
-------- -------
"Intangible Personal Property" does not include any cash on hand and
in bank accounts, notes receivable, accounts receivable and rights
under pending litigation (that are not lease enforcement actions,
filed in the ordinary course of business).
s. "Land" means those certain tracts or parcels of real property located
----
in Davidson and Williamson Counties, Tennessee, and containing
approximately 41.0 acres, in the aggregate, as more particularly
described in Exhibit D, attached hereto and by this reference made a
---------
part hereof, together with all of NWI's right, title and interest in
and to all appurtenances, rights, easements, tenements and
hereditaments incident thereto.
t. "Lease" means any lease or occupancy agreement affecting the
-----
Development Properties.
u. "Leasing Guidelines" means the leasing guidelines set forth on
------------------
Exhibit E, attached hereto and by this reference made a part hereof.
---------
v. "Lender" means the holder of an Existing Loan.
------
w. "Liens" means any liens, security interests, mortgages, deeds of
-----
trust, charges, claims, encumbrances, pledges, options, rights of
first offer or first refusal and any other rights or interests of
others of any kind or nature, actual or contingent, or other similar
encumbrances of any nature whatsoever.
-6-
<PAGE>
x. "Net Operating Income", for the purposes of determining the
--------------------
Contribution Value of a Development Property as of its Contribution
Date, means (i) Vacancy Adjusted Gross Income; less (ii) Operating
Expenses.
y. "95% Stabilization", with reference to a specific Development
-----------------
Property, means that all of the following conditions have been met:
(i) ninety-five percent (95%) of the net leasable area of the
Improvements have been leased to creditworthy Tenant(s) approved by
Weeks under Lease(s) approved by Weeks (which will base its approval
on commercially reasonable standards); (i) Tenant(s) are in actual
possession and have accepted possession of ninety-five percent (95%)
of the net leasable area of the Improvements, including Tenant
improvements; (iii) except for free-rent periods expressly stipulated
in the Lease(s), rental shall have commenced on ninety-five percent
(95%) of the net leasable area of the Improvements and all other
concessions (besides any free rent periods) shall have expired; (iv)
no default by NWI or any Tenant is then outstanding and uncured under
the Lease(s), and (v) all of matters described in the foregoing four
(4) clauses have been confirmed to Weeks by the Tenant(s) pursuant to
Tenant Estoppel Certificate(s). For the purposes this definition, NWI
and Weeks agree that the net leasable area of the Improvement in each
Development Property is that set forth on Exhibit B hereto.
---------
z. "Office Building" means a building with dropped ceilings, finished
---------------
walls and floors, and heating, ventilating and air conditioning
which is used primarily for office purposes.
aa. "Operating Expenses", for the purposes of determining the
------------------
Contribution Value of a Development Property, means the applicable
Pro Forma Annual Operating Expense for the twelve (12) month period
commencing on the Contribution Date for that Development Property.
Operating Expenses also shall include, without limitation, (i) a
management fee equal to four percent (4%) (or such other percentage
as is contractually agreed in a Lease for the gross rental income
from that Lease) of Vacancy Adjusted Gross Income (but not including
reimbursables) for the twelve (12) month period commencing on the
Contribution Date for that Development Property, and (ii) a reserve
for expenses in the amount of five cents ($.05) per square foot of
area in that Development Property per annum.
bb. "Partnership Amendment" means that certain First Amendment to Second
---------------------
Amended and Restated Agreement of Limited Partnership, dated of even
date herewith, pursuant to which NWI is admitted as a limited
partner to Weeks.
-7-
<PAGE>
cc. "Permitted Exceptions" means those matters set forth in Exhibit N,
--------------------
attached hereto and by this reference made a part hereof, together
with any matter expressly approved by Weeks pursuant to this
Agreement.
dd. "Pro Forma Annual Operating Expense" means the pro forma annual
----------------------------------
operating expenses set forth on Exhibit F, attached hereto and by
---------
this reference made a part hereof.
ee. "Pro Forma Level of Office Finish" means the following applicable
--------------------------------
percentages of net leasable area finished or to be finished, in
total, as office space in the following Development Properties or
the percentage of net leasable area finished or to be finished, in
total, as office space under a Lease in those Development
Properties:
Development Property Percentage
-------------------- ----------
440 Business Center I 25%
Airpark Center X 50%
Aspen Grove II 50%
All Others 40%
ff. "Pro Forma Costs" means the pro forma cost for each Development
---------------
Property set forth on Exhibit G, attached hereto and by this
---------
reference made a part hereof.
gg. "Pro Forma Reimbursable Amounts" means the pro forma reimbursable
------------------------------
amounts set forth on Exhibit M, attached hereto and by this
---------
reference made a part hereof.
hh. "Pro Forma Rental Rates" means to pro forma rental rates set forth
----------------------
on Exhibit H, attached hereto and by this reference made a part
---------
hereof.
ii. "Real Property" means collectively, the Land and the Improvements.
-------------
jj. "Rent Roll" means any and all Leases containing, with respect to
---------
each Lease, information as to the commencement date of such Lease,
the termination date of such Lease, any renewal rights or expansion
rights under such Lease, the approximate square footage of the
leased premises under such Lease, the annual base rental and
additional rent due under such Lease, and the amount and duration of
any rent or other concessions made to the Tenant under such Lease.
The Rent Roll attached hereto as Exhibit I and by this reference
---------
made a part hereof, sets forth the status of leasing at the
Development Properties as of the date hereof.
-8-
<PAGE>
kk. "Rights Agreements", collectively, means that certain Registration
-----------------
Rights and Lock-Up Agreement and that certain Registration Rights
and Lock-Up Agreement for Post-March 31, 1998 Shares and Units,
both dated of even date herewith and both by and between Weeks and
NWI.
ll. "Service Contracts" means any and all of the service contracts,
-----------------
equipment, labor or material contracts, management contracts,
maintenance or repair contracts, or other agreements (other than
the Leases and related lease commission agreements) entered into by
NWI and that are in force and effect and that affect the
Development Properties or the operation, repair, or maintenance
thereof.
mm. "Security Deposits" means the refundable deposits (in the form of
-----------------
cash, letters of credit or certificates of deposit) made by Tenants
with NWI as security for such Tenants' obligations under their
respective Leases, to the extent not previously forfeited, applied
or refunded, together with interest thereon accrued as of the
Contribution Date which NWI is obligated to pay to any such
Tenants.
nn. "Tangible Personal Property" means all tangible personal property
--------------------------
located on the Real Property which is owned by NWI and used in the
ownership, operation and maintenance of the Land and Improvements,
including, without limitation, all art, furniture, furnishings,
fixtures and equipment and stock for completion of Tenant
improvements.
oo. "Tenant" means any Tenant or lessee under any of the Leases.
------
pp. "Tenant Estoppel Certificate" means the certificate to be submitted
---------------------------
for execution to each Tenant with respect to the Lease pursuant to
which such Tenant leases space in the Improvements, such
certificate to be in the form attached hereto as Exhibit J and
---------
incorporated herein by this reference.
qq. "To NWI's Knowledge" means to the current actual knowledge of John
------------------
W. Nelley, Jr. or Albert W. Buckley, Jr.
rr. "Total Potential Gross Income", for the purpose of determining
----------------------------
Vacancy Adjusted Gross Income, means at the Contribution Date the
sum of (i) Gross Income, and (ii) the amount of Gross Income
(including Pro Forma Reimbursable Amounts) that would accrue from
all vacant space in a Completed Property if such vacant space were
leased at applicable Pro Forma Rental Rates, and assuming a term of
less than 10 years, with no adjustment for Excess Tenant
Concessions or excess office finish and related Lease
-9-
<PAGE>
commissions; provided, however, that if a Development Property is
contributed pursuant to Paragraph 4(d) or 4(e) of this Agreement,
such Gross Income attributable to vacant space will be computed
using the lesser of the applicable Pro Forma Rental Rates or the
average actual rental rates for the space leased in that
Development Property.
ss. "Units" means limited partnership units in Weeks Realty, L.P., as
-----
described in the Rights Agreements.
tt. "Unit Value" means (i) for Contributions for which the Contribution
----------
Date occurs on or before March 31, 1997, Twenty-Five Dollars
($25.00); and (ii) for Contributions for which the Contribution
Date occurs after March 31, 1997, the arithmetic average of the
daily closing price of a share of common stock of Weeks Corporation
on the New York Stock Exchange for the twenty (20) business days
immediately prior to the Contribution Date. The Unit Value set
forth in clause (i) of the immediately preceding sentence is a
negotiated amount for the purposes of this transaction and does not
reflect a valuation by either NWI or Weeks of Weeks Corporation or
Weeks.
uu. "Vacancy Adjusted Gross Income", to adjust for possible future
-----------------------------
vacancy, for each Development Property as of the Contribution Date,
means the following:
i. If on the Contribution Date, less than ninety-five percent
(95%) of the space in the Development Property is leased, then
the Vacancy Adjusted Gross Income shall equal the Gross
Income.
ii. If on the Contribution Date, at least ninety-five percent
(95%) of the space in that Development Property is leased,
then the Vacancy Adjusted Gross Income shall be the lesser of:
(1) Gross Income of that Development Property; or
(2) ninety-five percent (95%) of Total Potential Gross Income
of that Development Property, plus an amount equal to five
percent (5.0%) of the Gross Income attributable to leases
having a term of ten years or more.
iii. If the Development Property is being contributed pursuant to
Paragraph 4(d) or 4(e) of this Agreement, then the Vacancy
Adjusted Gross Income shall be computed as in the manner
detailed in the immediately preceding Paragraph 1.uu.ii.(2)
above.
-10-
<PAGE>
2. COVENANT TO CONTRIBUTE. NWI hereby covenants and agrees to
----------------------
contribute the Development Properties to the capital of Weeks in accordance
with, and subject to, the terms and conditions of this Agreement. Weeks hereby
covenants and agrees to accept Contribution of the Development Properties to its
capital in accordance with, and subject to, the terms and conditions of this
Agreement.
3. STRUCTURE OF CONTRIBUTION. Each time a Development Property is to be
-------------------------
contributed to the capital of Weeks by NWI pursuant to this Agreement, (a) NWI
shall form a limited liability company under Delaware law, with NWI as the sole
member, substantially similar to that company formed for the Initial
Contribution, (b) NWI shall contribute the Development Property to that company
by instruments substantially similar to that used for the Initial Contribution,
(c) that company shall then merge into Weeks, with Weeks being the surviving
entity, pursuant to agreements of merger substantially similar to that used in
connection with the Initial Contribution, and (d) Weeks shall issue Units as
provided in this Agreement to NWI in exchange for NWI's membership interests in
that company. Each limited liability company to be formed by NWI pursuant to the
immediately preceding sentence shall have as its sole business purpose the
ownership of the Development Property in question and shall assume or incur no
unrelated liability or obligation. NWI shall deliver possession of the
Development Property to Weeks on the Contribution Date.
4. TIMING OF CONTRIBUTION.
----------------------
a. Subject to certain exceptions and notification requirements
hereinafter provided in this Paragraph 4, after a Development
Property first achieves 95% Stabilization, NWI shall contribute
that Development Property to Weeks pursuant to this Agreement.
b. Notwithstanding anything in this Paragraph 4 to the contrary, and
provided all conditions in Paragraph 16 hereof are satisfied,
including shell completion and the obtaining of Tenant Estoppel
Certificates, any Development Property not previously contributed
to Weeks by NWI pursuant to this Agreement shall be contributed to
Weeks on March 31, 1998, even if it has not yet achieved 85%
Stabilization or 95% Stabilization, as applicable.
c. If 95% Stabilization (or 85% Stabilization, if applicable) has
occurred with respect to the Aspen Grove I Development Property or
the Aspen Grove II Development Property, but not the other, then
NWI may elect (but does not have the obligation so to elect) to
delay Contribution of the Development Property that has achieved
95% Stabilization (or 85% Stabilization, if applicable) until the
earlier of March 31, 1998 (provided all conditions in Paragraph 16
are satisfied) or until Aspen Grove I Development Property and
Aspen Grove II Development Property both have achieved 95%
Stabilization (or 85% Stabilization, if applicable).
-11-
<PAGE>
d. If Weeks commences construction of a warehouse/industrial building
in Aspen Grove Park, then NWI may contribute to Weeks pursuant to
this Agreement, the Aspen Grove I Development Property, the Aspen
Grove II Development Property and the Aspen Grove V Development
Property after the later of (i) the date Weeks commenced
construction of such other Aspen Grove Park building, or (ii) the
date each such Development Property first achieves 85%
Stabilization [but in no event shall Contribution be later than
March 31, 1998, as provided in Paragraph 4(b) above and provided
all conditions in Paragraph 16 hereof are satisfied]. For the
purpose of this subparagraph and the next subparagraph, Weeks only
shall be deemed to have commenced construction of a building if
Weeks has approved the development of a specific building pursuant
to its customary procedures and grading of the site of that
building has commenced.
e. If Weeks commences construction of a warehouse/industrial building
on the I-440 Land, then NWI may contribute to Weeks, pursuant to
this Agreement, the 440 Business Center I Development Property
after the later of (i) the date Weeks commenced construction of
such other I-440 Land building, or (ii) the date the 440 Business
Center I Development Property first achieves 85% Stabilization [but
in no event shall Contribution be later than March 31, 1998, as
provided in Paragraph 4(b) above and provided all conditions in
Paragraph 16 hereof are satisfied].
f. Before April 1, 1997, NWI may elect to accelerate Contribution to
Weeks of any Development Property (provided all conditions in
Paragraph 16 hereof are satisfied, including shell completion and
the obtaining of Tenant Estoppel Certificates) which has not yet
achieved either 95% Stabilization or 85% Stabilization, as
applicable, and without regard to any minimum return achieved by
such Development Property.
g. After March 31, 1997, NWI may otherwise elect to accelerate
Contribution to Weeks of any Development Property (provided all
conditions in Paragraph 16 hereof are satisfied, including shell
completion and the obtaining of Tenant Estoppel Certificates) which
has not yet achieved 95% Stabilization or 85% Stabilization, as
applicable, if the (i) Net Operating Income from that Development
Property, divided by (ii) the Pro Forma Costs for that Development
Property (which Pro Forma Costs shall be reduced by those amounts
not yet expended for tenant finish, related lease commissions and
other costs attributable to space not yet leased) equals or exceeds
decimal one zero two five (.1025).
-12-
<PAGE>
h. NWI is seeking to negotiating a 160,000 square foot Lease with AMR,
Inc., or other tenant approved by Weeks for the entire Aspen Grove V
Development Property pursuant to which such tenant would initially
occupy and pay rent with respect to 120,000 square feet of the
Improvements and would subsequently occupy and pay rent with respect
to the balance of the Improvements within one (1) year following the
date of its initial occupancy. If NWI is successful in having such
Lease executed by such tenant, and such tenant occupies such 120,000
square feet and commences payment of rent with respect thereto on or
prior to March 31, 1997 (all as confirmed to Weeks in a Tenant
Estoppel Certificate from such tenant), then the Contribution of
Aspen Grove V Development Property shall occur within thirty (30)
days thereafter.
i. If pursuant to the foregoing subparagraphs of this Paragraph 4, a
Development Property is to be Contributed after it achieves 95%
Stabilization or 85% Stabilization, as applicable, then NWI shall
notify Weeks as soon as the Development Property has achieved 95%
Stabilization or 85% Stabilization, as applicable, and such notice
shall specify a date within thirty (30) days after such notice which
shall be for the purposes of this Agreement the Contribution Date
for that Development Property. If pursuant to the foregoing
subparagraphs of this Paragraph 4, NWI may elect to contribute a
Development Property before it achieves 95% Stabilization or 85%
Stabilization, as applicable, NWI may make such election by notice
to Weeks, which notice shall specify a date within thirty (30) days
after such notice which shall be for the purposes of this Agreement
the Contribution Date for that Development Property. If a
Development Property has not been Contributed by March 31, 1998,
that date shall be the Contribution Date for the purposes of this
Agreement. NWI and Weeks agree to use reasonable best efforts to
complete Contribution of a Development Property as soon as is
reasonably practicable after the Contribution Date is established
pursuant to the applicable, immediately preceding sentences;
provided, however, if the Contribution of a Development Property is
not completed pursuant to the requirements of this Agreement within
sixty (60) day after the date established as that Development
Property's Contribution Date pursuant to the applicable, immediately
preceding sentences and such delay is the result of a default by
NWI, in addition to any other remedies Weeks may have under this
Agreement, at law or in equity, Weeks reserves the right to delay
the Contribution Date for that Development Property to the date
Contribution can be completed and the Contribution Value and
Adjusted Contribution Value shall be adjusted accordingly.
-13-
<PAGE>
5. CONTRIBUTION VALUE. The Contribution Value of a Development
------------------
Property shall be determined as of the Contribution Date in accordance with the
following:
a. For any Development Property whose Contribution Date is on or
before March 31, 1997, the Contribution Value shall equal the Net
Operating Income of that Development Property determined as of the
Contribution Date divided by decimal one zero (.10).
b. For any Development Property whose Contribution Date is after March
31, 1997, the Contribution Value shall equal the greater of (A) the
Net Operating Income of that Development Property determined as of
the Contribution Date divided by decimal one zero two five (.1025),
or (B) the applicable Pro Forma Costs (which Pro Forma Costs shall
be reduced by those amounts not yet expended for tenant finish,
related lease commissions and other costs attributable to space not
yet leased).
c. Notwithstanding the provisions of subparagraphs (a) and (b) above,
if the Aspen Grove V Development Property is contributed pursuant
to Paragraph 4(h) of this Agreement [as a result of NWI's
successful leasing of the Property as described in Paragraph 4(h)],
the Contribution Value shall equal the Net Operating Income of the
Aspen Grove V Development Property determined as of the
Contribution Date divided by decimal one zero (.10).
6. ADJUSTED CONTRIBUTION VALUE. After determination of the Contribution
---------------------------
Value of a Development Property, such Contribution Value shall be subject to the
following further prorations, allocations and adjustments, all as of the
Contribution Date (the "Adjusted Contribution Value"):
a. If no adjustment to Gross Income has been made for free rent
concessions pursuant to clause (i) of the definition of Gross
Income, the Contribution Value shall be reduced by the amount of
free rent concessions unexpired as of the Contribution Date;
provided, however, NWI may elect to make a cash payment to Weeks
for the amount of unexpired free rent concessions in lieu of such
adjustment.
b. If adjustment to Gross Income has been made for excess office
finish and related Lease commissions pursuant to clause (ii) of the
definition of Gross Income, the Contribution Value shall be
increased by the actual cost of such excess office finish and
related Lease commisions.
c. If a Development Property is being contributed pursuant to
Paragraph 4(d) or 4(e) of this Agreement, the Contribution Value
shall be reduced by the pro forma amount which would be incurred
for tenant improvements and Lease
-14-
<PAGE>
commissions (all in accordance with the Leasing Guidelines) on the
amount of vacant space in the Development Property which, it if
were leased and occupied, would result in the Development Property
being ninety five percent (95%) occupied.
d. If the Development Property is to be contributed subject to an
Existing Loan in accordance with the terms and conditions of
Paragraph 9 of this Agreement, the Contribution Value shall be
reduced by the outstanding principal balance of that Existing Loan
as of the Contribution Date.
7. ISSUANCE OF UNITS.
-----------------
a. Upon Contribution of a Development Property to Weeks, on the
Contribution Date, Weeks shall issue to NWI (pursuant to the
structure set forth in Paragraph 3 of this Agreement) a number of
Units equal to the quotient of (i) the Adjusted Contribution Value
for that Development Property, divided by (ii) the Unit Value.
b. For any Development Property Contributed after March 31, 1997, but
prior to achievement of 85% Stabilization or 95% Stabilization, as
applicable, the Adjusted Contribution Value (using for the purpose
of the recomputation the outstanding principal balance of any
applicable Existing Loan on the Contribution Date) shall be
recomputed as of the earlier of (i) the date the Development
Property first achieves 85% Stabilization or 95% Stabilization, as
applicable, or (ii) March 31, 1998, and, if this newly recomputed
Adjusted Contribution Value exceeds the Adjusted Contribution Value
determined on the Contribution Date for this Development Property,
Weeks shall issue to NWI in respect of such previously Contributed
Development Property an additional number of Units equal to the
quotient of (i) such excess divided by (ii) the Unit Value
[determined under clause (ii) of the definition of Unit Value as of
the date of recomputation under this subparagraph].
c. If the Aspen Grove V Development Property is contributed pursuant
to Paragraph 4(h) of this Agreement and if, and only if, AMR, Inc.
or other Tenant approved by Weeks commences paying rental with
respect to the entire Aspen Grove V Development Property pursuant
to the original terms of its Lease (as same is confirmed to Weeks
by acceptable Tenant Estoppel Certificate from such tenant), Weeks
shall issue to NWI in respect of such previously Contributed
Development Property an additional number of Units equal to the
quotient of (i) the quotient of the Net Operating Income
attributable to the additional space for which such tenant has
commenced to pay rent since that Development Property was
Contributed, divided by decimal one zero two five (.1025), divided
by (ii) the Unit Value [determined
-15-
<PAGE>
under clause (ii) of the definition of Unit Value as of the date of
the recomputation under this subparagraph].
d. Units issued by Weeks Corporation to NWI pursuant to this Agreement
shall be held by NWI subject to the terms and conditions of the
Partnership Amendment and the applicable Rights Agreements.
e. Notwithstanding any provision of this Agreement to the contrary, no
fractional Units shall be issued to NWI pursuant to this Agreement.
If as a result of the application of the foregoing formulas, a
fractional Unit is due NWI, Weeks shall pay to NWI, in cash on the
same date as the fractional Unit would otherwise be issued and in
lieu of any such fractional Unit, an amount equal to that
fractional Unit times the applicable Unit Price, as determined
pursuant to this Agreement.
f. NWI and Weeks agree that Exhibit K, attached hereto and by this
---------
reference made a part hereof, which is an example based upon
certain hypothetical assumptions, sets forth an accurate
illustration of the application of the valuation formulas and
definitions in this Agreement.
8. INTERIM CONDUCT.
---------------
a. NWI hereby covenants and agrees with Weeks that, so long as this
Agreement remains in full force and effect, NWI will not sell,
assign, rent, lease, convey (absolutely or as security), grant a
security interest in, or otherwise encumber or dispose of, the
Development Properties (or any interest or estate therein) without
the prior consent of Weeks; provided, however, NWI may enter into
Leases for space in the Development Properties without the prior
consent of Weeks so long as (i) the terms of the Lease equal or
exceed the Leasing Guidelines, (ii) the prospective Tenant is
approved by Weeks, in the exercise of commercially reasonable
judgment (provided, however, if the Tenant is an affiliate of NWI,
John W. Nelley, Jr., Albert W. Buckley, Jr. or a partner of any of
the foregoing, Weeks may elect to withhold its approval in its
absolute and sole discretion), (iii) the Lease is on a form
previously approved by Weeks, and (iv) within ten (10) business
days after execution and delivery of the Lease, NWI shall furnish a
copy thereof to Weeks.
b. NWI covenants and agrees that, so long as this Agreement remains in
full force and effect, NWI will not amend or modify the Existing
Loan Documents in any way, will make all payments of money, and
will perform all obligations, required under the Existing Loan
Documents; and that NWI will take no affirmative action which shall
cause NWI to be unable to contribute good and marketable title to
the Development Properties or which shall cause any
-16-
<PAGE>
warranty or representation contained in this Agreement to be
incorrect or misleading at any time.
c. Weeks and NWI agree that a Bulk Building, a Distribution Building,
a Flex Building and an Office Building do not compete with each
other for prospective Tenants. Until such time as the net leasable
area of a Development Property (which has not yet been contributed
to Weeks) is at least fifty percent (50%) leased, Weeks agrees to
not commence construction of a building in the same park as that
Development Property is located that would compete with that
Development Property. By way of illustration and not limitation, if
a Development Property is classified as a "Flex Building", then
pursuant to the foregoing restriction, Weeks could commence
construction of a Bulk Building, a Distribution Building or an
Office Building, but could not commence construction of a Flex
Building until such time as the net leasable area of that
Development Property, classified as a Flex Building, is at least
fifty percent (50%) leased.
d. On even date herewith, NWI shall enter into an agreement with Weeks
(i) for the provision of construction and development services with
respect to the construction of Tenant improvements in each of the
Development Properties for which Weeks shall earn fees equal to
five percent (5%) of the hard cost of Tenant construction commenced
after the date this Agreement, payable monthly; and (ii) for the
provision of property management and leasing services for each of
the Development Properties for a term commencing on the date hereof
and ending, with respect to each of the Development Properties, on
the date that that Development Property is contributed to Weeks for
a management fee equal to four percent (4%) (or such other
percentage as is contractually agreed in a Lease with respect to
the rental collected from that Lease) of the gross collected rent
(excluding reimbursables) for each of the Development Properties,
payable monthly. The form of this agreement is attached hereto as
Exhibit L and by this reference made a part hereof.
---------
e. NWI hereby covenants and agrees to construct the Improvements on
the Land in a good and workerlike fashion, in compliance with all
applicable laws, ordinances and regulations and substantially in
accordance with plans and specifications approved by Weeks,
pursuant to separate written instrument. NWI further agrees and
covenants to prosecute such construction in a diligent manner so as
to comply with all terms and conditions of the Existing Loan
Documents or any Lease affecting the Development Properties.
-17-
<PAGE>
9. EXISTING LOANS. The Development Properties are subject to the
--------------
Existing Loans and are encumbered by the Existing Loan Documents. Unless Weeks
requests otherwise in writing, at the time a Development Property is to be
contributed to Weeks pursuant to this Agreement, Weeks, at its sole cost and
expense, excluding any prepayment fee, will pay-in-full the Existing Loan that
encumbers the Development Property to be contributed and shall cause the
Existing Loan Documents to be canceled. NWI shall pay any prepayment fee due
upon such payoff.
10. TITLE AND SURVEY.
----------------
a. Weeks hereby approves the Permitted Exceptions (including, without
limitation, the Leases identified on the Rent Roll) and agrees to
accept the Contribution of a Development Property subject to the
Permitted Exceptions applicable to the Development Property, except
for those Permitted Exceptions that relate to the Existing Loan
that encumbers that Development Property that is not to be assumed
by Weeks pursuant to Paragraph 9 of this Agreement.
b. Within ten (10) business days of the notice of intent to Contribute
pursuant to Paragraph 11 hereof, Weeks shall cause title and survey
to be updated and Weeks shall identify in such notice any title
exception (other than Permitted Exceptions) Weeks determines to be
objectionable. NWI shall cure any such exception on or before the
date designated for Contribution to Weeks' reasonable satisfaction
and, if such cure is not completed by that date, then the
Contribution shall be delayed for a period not to exceed sixty (60)
days to permit NWI additional time to cure. If after such delay,
such title objection is not cured to Weeks' reasonable
satisfaction, Weeks may elect to do one of the following: (i) cure
the exception, with all costs and expenses incurred by Weeks
applied to reduce the Contribution Value and the Adjusted
Contribution Value, in which case the Contribution shall be further
delayed an additional sixty (60) day period, or (ii) terminate this
Agreement as to that Development Property or as to the remaining
uncontributed Development Properties (at Weeks' election) and sue
NWI for damages at law, or (iii) seek specific performance of NWI's
obligations hereunder.
11. DATE, TIME AND PLACE OF CONTRIBUTION. Each Contribution shall
------------------------------------
commence at 9:00 a.m., EST, on the Contribution Date at the offices of Baker,
Donelson, Bearman & Caldwell, Suite 1700 Union City Center, 511 Union Street,
Nashville, Tennessee 37219, or at such other place as may be agreed by NWI and
Weeks. The following adjustments and prorations shall be made on the
Contribution Date with respect to the Development Property to be Contributed on
that date by appropriate cash payments between NWI and Weeks.
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<PAGE>
a. NWI shall be entitled to all rents [including any additional rent
and any accrued tax and operating expense escalations, subject to
clause (ii) below], charges, and other revenue of any kind
attributable to any period under the Leases or otherwise up to but
not including the Contribution Date. Weeks shall be entitled to all
rents [including any additional rent and any accrued tax and
operating expense escalations, subject to clause (ii) below],
charges and other revenue of any kind attributable to any period
under the Leases or otherwise on and after the Contribution Date.
Rents and expense escalations or other reimbursements due landlord
under the Leases collected prior to the Contribution Date and
attributable to both NWI's and Weeks' periods of ownership shall be
prorated as of the Contribution Date. Uncollected rents and expense
escalations or other reimbursements due landlord under the Leases
shall not be prorated at the time of Contribution, but Weeks shall
include such amounts in Weeks' monthly billing statements to the
Tenants and tender the same to NWI upon receipt, provided that all
rents, escalations and other reimbursements due landlord under the
Leases collected by Weeks on or after the Contribution Date shall be
prorated as of the Contribution Date and shall first be applied to
all amounts due under the Leases at the time of collection (i.e.,
current rents, delinquent rents attributable to periods after
Contribution and sums due Weeks as the current owner and landlord)
with the balance (if any) payable to NWI, but only to the extent of
amounts delinquent and actually due NWI. NWI shall not have any
right to sue any Tenant under the Leases for sums due NWI for
periods attributable to NWI's ownership of the Development Property.
NWI shall pay to Weeks a sum equal to all Security Deposits
(excluding certificates of deposit, letters of credit or the like
which shall be assigned to Weeks at Contribution to the extent
assignable by NWI, NWI agreeing to make reasonable efforts to cause
the same to be assignable by NWI or otherwise to be assigned to
Weeks) and pre-paid rentals held by NWI under the Leases.
b. Real estate taxes shall be prorated as of the Contribution Date. NWI
shall be responsible for all real estate taxes attributable to the
Development Property to, but not including the, Contribution Date.
If the real estate tax rate and assessments have not been set for
the year in which the Contribution occurs, then the proration of
such taxes shall be based upon the rate and assessments for the
preceding tax year, and such proration shall be adjusted in cash
between NWI and Weeks upon presentation of written evidence that the
actual taxes paid for the year in which the Contribution occurs
differ from the amounts used at Contribution. Notwithstanding the
foregoing, NWI shall be entitled to a refund of NWI's proportionate
share of such taxes for which NWI has not been reimbursed by
Tenants, to the extent Weeks after Contribution recovers an increase
in taxes attributable to the year in which Contribution occurs from
the Tenants under the Leases, and Weeks agrees to conduct an
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<PAGE>
annual reconciliation of tax "pass-through" for the tax year of
Contribution in accordance with the terms of the Leases.
Notwithstanding the foregoing provisions of this clause (ii) to the
contrary, NWI, may elect to defer payment to Weeks of its prorated
portion of the real estate taxes attributable to the Development
Property until such date as such real estate taxes are due, but not
past due, to the appropriate taxing authority and the obligation to
make such deferred payment shall be secured as provided in the
Partnership Amendment.
c. Operating expenses for the Development Property shall be prorated as
of the Contribution Date. NWI shall pay all utility charges and
other operating expenses attributable to the Development Property
for the period prior to but not including the Contribution Date
(except for those utility charges and operating expenses payable by
Tenants in accordance with the Leases) and Weeks shall pay all
utility charges and other operating expenses attributable to the
Development Property for the period on or after the Contribution
Date. If a Tenant defaults in the payment of its pro rata share of
utility charges or other operating expenses under its Lease, to the
extent that such utility charges or operating expenses are
attributable to any period prior to the Contribution Date, NWI shall
reimburse Weeks for such defaulted payment upon written demand from
Weeks and NWI's obligation to pay such sums shall be secured as
provided in the Partnership Amendment. NWI shall not assign to Weeks
any deposits which NWI has with any of the utility services or
companies servicing the Development Property. Weeks shall arrange
with such services and companies to have accounts opened in Weeks'
name beginning at 12:01 a.m. on the day following the Contribution
Date.
d. If the Development Property is to be contributed subject to an
Existing Loan in accordance with the terms and conditions of
Paragraph 9 of this Agreement, (i) NWI shall make a cash payment to
Weeks equal to the sum of the amount of accrued but unpaid interest
due under the Existing Loan attributable to any period up to, but
not including, the Contribution Date; and (ii) Weeks shall make a
cash payment to NWI equal to the amount of any tax, insurance
premium or other escrow deposits maintained pursuant to the Existing
Loan Documents to the extent ownership of such deposits are
transferred to Weeks.
e. If at any time following the Contribution Date the amount of an item
listed in the subparagraphs of this Paragraph 11 shall prove to be
incorrect, the party in whose favor the error was made shall
promptly pay to the other party the sum necessary to correct such
error upon receipt of proof of such error, provided that such proof
is delivered to the party from whom payment is requested on or
before one (1) year after the Contribution Date.
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<PAGE>
12. COSTS AND EXPENSES; PREPARATION OF DOCUMENTS. Costs and expenses
--------------------------------------------
shall be apportioned in the following manner:
a. Weeks shall pay the premium for title insurance, the survey fees and
recording costs related to each Contribution, as well as all costs
incurred by it in inspecting the Development Properties and making
such other investigations thereof as it deems appropriate. Weeks
also shall pay all fees and expenses incurred in the creation of
limited liability companies and their subsequent merger into Weeks
as contemplated in Paragraph 3 of this Agreement.
b. NWI shall pay all transfer taxes, if any, and any fees and expense
imposed by a Lender under Paragraph 9 hereof.
c. Each party shall pay its own attorneys' fees in connection with this
transaction.
d. Weeks' attorney shall prepare all Contribution documents, which
shall be subject to the reasonable approval of NWI's attorney and
which shall be substantially the same as the documents used in the
Initial Contribution.
13. ACCESS TO AND EXAMINATION OF THE DEVELOPMENT PROPERTIES. Weeks,
-------------------------------------------------------
personally or through agents, employees or contractors, may go upon the
Development Properties during normal business hours prior to Contribution to
conduct such soil, engineering, environmental and other tests, investigations
and analyses of the Land and Improvements as Weeks deems desirable and to review
and make photocopies of the Leases, lease commission agreements, Service
Contracts, amendments, contracts and plans and specifications relating to or
affecting the Development Properties. Weeks shall pay all costs incurred in
making such tests, analyses, copies, and investigations. In no event shall
Weeks conduct any intrusive or destructive tests, analyses, or investigations of
the Development Properties without first obtaining NWI's written consent, which
will not be unreasonably withheld. Weeks acknowledges that any such
examinations or inspections of the Development Properties pursuant to this
subparagraph or otherwise are subject to the rights of all Tenants, and Weeks
agrees to conduct such inspections or examinations in such a manner so as to
honor the rights of the Tenants and to prevent disruption of the ordinary
operation of the Tenants' business on the Development Properties. Weeks agrees
to repair any damage to the Development Properties resulting or relating to such
inspection or examination and agrees to and does hereby indemnify, defend, and
hold the NWI harmless from any personal injury, death, damage to property,
damages, liens, claims, losses, and liabilities arising out of Weeks' exercising
such right and privilege to go upon the Development Properties, including the
acts and omissions of Weeks' employees, agents, contractors and consultants (but
under no circumstances shall Weeks be liable to NWI for
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<PAGE>
consequential damages attributable to the results or findings of such tests).
Weeks' indemnity under this subparagraph shall survive the Contribution or any
termination of this Agreement.
14. REPRESENTATIONS AND WARRANTIES OF NWI. As of the date of this
-------------------------------------
Agreement, NWI hereby makes for the benefit of Weeks each and every
representation and warranty set forth in Exhibit E to the Partnership Amendment
---------
but as to and in respect of the Development Properties and not the "Completed
Properties" (as that term is defined in the Partnership Amendment).
15. REPRESENTATIONS AND WARRANTIES OF WEEKS. Weeks represents and
---------------------------------------
warrants to NWI, as follows:
a. Weeks is a limited partnership duly formed, validly existing and in
good standing under the laws of the State of Georgia. By the first
Contribution Date, Weeks will be qualified to transact business in
the State of Tennessee. Weeks has full power and authority to
execute and deliver this Agreement and all other documents executed
and delivered, or to be executed and delivered, by it
(contemporaneously herewith or at Contribution) in connection with
the transactions described herein and to perform all of its
obligations arising under this Agreement and such other documents;
the officers executing this Agreement and such other documents on
behalf of Weeks have the authority to bind Weeks hereunder and
thereunder.
b. Neither the execution and delivery of this Agreement nor any other
documents executed and delivered, or to be executed and delivered
by Weeks (contemporaneously herewith or at Contribution) in
connection with the transactions described herein will violate any
provision of Weeks's limited partnership agreement, articles of
incorporation or by-laws of Weeks's General Partner or of any
agreements, regulations, or laws to which Weeks is bound, except
for waivers and consents that have been obtained prior to the date
hereof.
c. To Weeks' knowledge, there is no action, suit, proceeding, or claim
affecting Weeks pending or being prosecuted in any court or by or
before any federal, state, county, or municipal department,
commission, board, bureau, agency, or other governmental
instrumentality which would prevent consummation by Weeks of the
Contribution of the Development Properties or materially and
adversely affect the performance of any of Weeks's other
obligations hereunder to be performed prior to, at or after
Contribution.
d. Weeks is solvent, has not made a general assignment for the benefit
of its creditors, and has not admitted in writing its inability to
pay its debts as they become due, nor has Weeks filed, nor does it
contemplate the filing of, any
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<PAGE>
bankruptcy, reorganization, arrangement, insolvency or liquidation
proceedings, or any other proceeding for the relief of debtors in
general, nor has any such proceeding been instituted by or against
Weeks, nor is any such proceeding to Weeks' knowledge threatened or
contemplated.
16. CONDITIONS.
----------
a. In addition to any other conditions provided in this Agreement,
Weeks' obligation to accept Contribution of a Development Property
pursuant to this Agreement is subject to the satisfaction of each
of the following conditions at or prior to the Contribution Date
for that Development Property:
i. NWI shall have complied with and performed all of its
obligations and covenants set forth in this Agreement.
ii. On or before the Contribution Date, NWI shall have executed
and delivered all documents required to be delivered by NWI
pursuant to the terms of this Agreement. Additionally, NWI
shall have delivered to Weeks reasonable evidence of its
authority to consummate the transaction herein contemplated,
including without limitation, an opinion of counsel in form
and content reasonably acceptable to Weeks.
iii. All of the representations and warranties made by NWI in
Paragraph 14 shall be true correct at and as of the
Contribution Date as though such representations and
warranties were made both at and as of the date hereof and at
and as of the Contribution Date. Provided, further, the
representations and warranties concerning Rent Roll and
Leases, when reaffirmed at Contribution shall be made with
respect to a Rent Roll made as of Contribution and such Rent
Roll shall disclose no material changes from the Rent Roll
attached hereto as Exhibit I, except those approved by Weeks
---------
in writing.
iv. NWI shall have obtained and delivered to Weeks by the date and
time of Contribution a Tenant Estoppel Certificate for all
Leases then in effect in the Development Property, each duly
executed by an authorized officer of the Tenant under such
Lease and dated no earlier than thirty (30) days before the
Contribution Date. NWI agrees to use NWI's diligent good faith
efforts to obtain such Tenant Estoppel Certificates at or
prior to Contribution. Any material modification to the form
of Tenant Estoppel Certificate shall be approved in writing by
Weeks in advance and, in Weeks' discretion, may be the basis
upon
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<PAGE>
which Weeks excludes such certificate in the determination as
to whether this condition has been satisfied. During the term
of this Agreement, as and when received, NWI shall provide to
Weeks copies of each Tenant Estoppel Certificate received from
any Tenant promptly after receipt of such Tenant Estoppel
Certificate. Weeks shall have the right to delay Contribution
by up to thirty (30) days by written notice to NWI if NWI has
not obtained the required Tenant Estoppel Certificates.
v. No material adverse change shall have occurred to the
Development Properties.
vi. NWI shall have completed construction of the Improvements as
required under this Agreement as evidenced by the foregoing
(A) final, unconditional certificate(s) of occupancy for the
building shell(s) and each leased tenant space shall have been
issued by the appropriate governmental authority; (B) the
building shell(s) and each leased tenant space shall have been
completed substantially in accordance with plans and
specifications approved by Weeks, subject only to customary
punch list items approved by Weeks and appropriate reserves
established with Weeks to Weeks' reasonable satisfaction for
such items; (C) all contractors shall have been paid-in-full
and released any lien rights in the Development Property and
appropriate evidence of such shall have been furnished to
Weeks including, without limitation, a final general
contractor's affidavit and lien waiver, if applicable; and (D)
Weeks shall have inspected and accepted the Improvements.
vii. Weeks shall have obtained title insurance coverage on ALTA
Form Policy issued by a title insurance company approved by
Weeks, in an amount not in excess of the Contribution Value,
and specifying as exceptions to coverage only the Permitted
Exceptions.
viii. The limited liability company formed for the Contribution of
the Development Property in question pursuant to Paragraph 3
hereof shall be wholly-owned by NWI, shall own only the
Development Property as its sole business activity and shall
have no indebtedness, other than the applicable Existing Loan.
ix. The contingencies set forth in this Paragraph 16(a) are for
the sole benefit of Weeks, and Weeks may elect in writing to
waive any such contingency reserved for its benefit and
proceed to consummate the transaction contemplated hereby.
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<PAGE>
b. In addition to any other conditions provided in this Agreement,
NWI's obligation to contribute a Development Property is subject to
the satisfaction of each of the following conditions at or prior to
the Contribution Date for that Development Property:
i. Weeks shall have complied with and performed all of its
obligations and covenants set forth in this Agreement.
ii. On or before the Contribution Date, Weeks shall have
executed and delivered all documents required to be
delivered by Weeks pursuant to the terms of this Agreement,
and shall have issued Units to NWI as required under
Paragraph 7 hereof. Additionally, Weeks shall have delivered
to NWI reasonable evidence of its authority to consummate
the transaction herein contemplated, including without
limitation, an opinion of counsel in form and content
reasonably acceptable to NWI.
iii. The contingencies set forth in this Paragraph 16(b) are for
the sole benefit of NWI, and NWI may elect in writing to
waive any such contingency reserved for its benefit and
proceed to consummate the transaction contemplated hereby.
17. FIRE AND CASUALTY. Prior to the Contribution of a Development
-----------------
Property, the risk of loss shall remain with NWI and NWI shall bear all
ownership risks and obligations, including construction risks and the risk of
cost overruns. NWI shall maintain in effect until the Contribution Date all
insurance policies currently in force with respect to the Development Property
to be contributed including liability insurance and fire and extended coverage
insurance. If at any time prior to the Contribution Date any portion of the
Development Properties is destroyed or damaged as a result of fire or any other
casualty (a "Casualty"), NWI shall promptly give written notice (a "Casualty
Notice") thereof to Weeks. If a Development Property is the subject of a
Casualty, Weeks shall have the right, at its sole option, of terminating this
Agreement (by written notice to NWI given within thirty (30) days after receipt
of the Casualty Notice from NWI) as to that Development Property, unless
(a) (i) all such damage or destruction is repaired at the sole cost
and expense of NWI prior to Contribution to substantially the condition existing
immediately prior to such damage or destruction, or (ii) the cost to fully
repair or restore such damage is less than Two Hundred Fifty Thousand Dollars
($250,000) and either (x) insurance proceeds sufficient to restore fully such
damage are available and the insurance company issuing NWI's insurance policies
has confirmed in writing prior to the expiration of such thirty (30) day period
that such Casualty is covered by such policies and that no defense to payment of
the claim on
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<PAGE>
account thereof exists, or (y) NWI gives Weeks a credit at Contribution (the
"Credit") in an amount equal to the deficiency in any insurance proceeds
described in clause (x); and
(b) such Casualty (i) does not result in any Tenant terminating its
Lease or asserting a right to terminate its Lease, and (ii) would not entitle
any Tenant to terminate its Lease after Contribution if such Tenant has not
waived such right as of Contribution.
If a Casualty Notice is given to Weeks less than thirty (30) days prior to
Contribution, at Weeks' option Contribution shall be postponed to a date not
earlier than thirty (30) days after Weeks' receipt of the Casualty Notice. If
Weeks terminates this Agreement pursuant to this Paragraph, then this Agreement
shall terminate and the parties hereto shall have no further rights or
obligations hereunder, with regard to that Development Property. If Weeks does
not terminate this Agreement, the proceeds of any insurance with respect to the
Development Property paid between the date of this Agreement and the
Contribution Date, together with the Credit if applicable, shall be paid to
Weeks at the time of Contribution and all unpaid claims and rights in connection
with property damage to the Development Properties shall be assigned to Weeks at
Contribution without in any manner affecting the Adjusted Contribution Value.
18. EMINENT DOMAIN. In the event of a taking by condemnation or
--------------
eminent domain proceedings of any material portion of a Development Property
[prior to Contribution, NWI shall promptly give written notice thereof to Weeks
and Weeks shall have the right, at its sole option, of terminating this
Agreement as to that Development Property by written notice given to NWI on or
before the tenth (10th) day following receipt of such notice. If Weeks so
terminates this Agreement as to that Development Property, then this Agreement
shall terminate as to that Development Property, and the parties hereto shall
have no further rights or obligations hereunder. If Weeks does not terminate
the Agreement pursuant to this Paragraph as to that Development Property, then
NWI shall pay over to Weeks on the Contribution Date all monies received or
collected by NWI by reason of such taking, and NWI shall further assign and
transfer to Weeks all of NWI's right, title and interest of, in and to any
awards that have been or may be made for such condemnation or eminent domain
proceedings and the additional money that may be payable when the same is and
becomes assignable as a matter of law.
19. DEFAULT.
-------
a. If Weeks defaults hereunder, NWI may either proceed against Weeks
at law for damages or seek specific performance of Weeks'
obligations hereunder.
b. If NWI defaults hereunder, Weeks may either proceed against NWI at
law for damages or seek specific performance of NWI's obligations
hereunder. After notice as provided in Paragraph 19(c) below, and
lapse of cure period without cure by NWI, Weeks may elect to cure
NWI's default hereunder and NWI shall promptly, upon demand,
reimburse Weeks for all costs and expenses
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<PAGE>
incurred in cure, including interest on such costs and expenses, at
a rate equal to the sum of the "Prime Rate" (as announced from time
to time by Wachovia Bank of Georgia, N.A.) plus two percent (2.0%),
per annum, from the date incurred until the date of reimbursement,
and upon Contribution of the Development Property in question, if
ever, the Contribution Value and Adjusted Contribution Value for
such Development Property shall be reduced by such costs and
expenses of cure and accrued interest thereon.
c. Prior to exercising any of its rights hereunder or at law or in
equity for a default, a party shall give the other party written
notice of such default hereunder and the other party shall have
thirty (30) days to cure such default from and after such notice.
20. BROKERAGE FEES. Except for brokers paid-in-full at the Initial
--------------
Contribution pursuant to separate written agreements that cover the transactions
contemplated in this Agreement as well as the Initial Contribution and other
related transactions, NWI and Weeks each represent and warrant to the other that
it has not employed, retained, or consulted any broker, agent, or finder in
connection with this Agreement or the Contribution, and NWI and Weeks each
hereby indemnify and agree to hold the other harmless from and against any and
all claims, demands, causes of action, debts, liabilities, judgments and damages
(including costs and reasonable attorneys' fees incurred in connection with the
enforcement of this indemnity) which may be asserted or recovered against the
indemnified party for or on account of any brokerage fee, commission, or other
compensation arising by reason of the indemnitor's breach of this representation
and warranty.
21. ADDITIONAL UNIT EARNOUT. Weeks hereby grants to NWI the right to
-----------------------
have additional Units issued to NWI in consideration of NWI's contribution of
the Development Properties to the capital of Weeks, upon and subject to the
following terms and conditions:
a. In addition to the terms defined in Paragraph 1 of this Agreement,
the following definitions also shall apply:
i. "Aspen Grove Contribution Agreement" means that certain
----------------------------------
Contribution Agreement, dated of even date herewith, by and
between NWI and Weeks concerning the contribution of the
"Core Parcel", the "FEMA Parcel" and the "Out Parcel" (as
those terms are defined in the Aspen Grove Contribution
Agreement) (collectively, as used in this Paragraph 21, the
"Aspen Grove Land").
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<PAGE>
ii. "Briley Parkway Land" means that certain tract or parcel of
-------------------
land consisting of approximately 58 acres located in Davidson
County, Tennessee, as more particularly described in Exhibit
P, attached hereto and by this reference made a part hereof.
iii. "Development Properties Consideration" means the aggregate
------------------------------------
of the Adjusted Contribution Value for each Development
Properties, as determined pursuant to Paragraph 6 of this
Agreement for each Development Property as of the
Contribution Date of that Development Property plus, if a
Development Property was contributed subject to an Existing
Loan, the outstanding principal balance of that loan as of
the Contribution Date.
iv. "Earnout Contribution Value" means (i) in the case of a
--------------------------
Tract in the Briley Parkway Land, the payment by Weeks to
NWI at Contribution to reimburse NWI for its out-of-pocket
expenditures for the acquisition of the Briley Parkway Land,
including the down payment, brokerage fees, closing costs
and taxes and insurance, plus the costs of carry on those
items from the date paid, plus the outstanding principal
balance of the purchase money debt assumed at Contribution,
all allocated to that Tract on the basis of the number of
square feet of planned development for the Briley Parkway
Land, and (ii) in the case of a Tract in the Aspen Grove
Land, the sum of the Contribution Value of that Tract
determined as provided in the Aspen Grove Contribution
Agreement plus, in the case of any Tract from the Core
Parcel of the Aspen Grove Land, the aggregate Unit Price
(determined as of the date of issuance) of any Units issued
to NWI as of the "Revaluation Date" (as that term is defined
in the Aspen Grove Contribution Agreement) as provided in
the Aspen Grove Contribution Agreement.
v. "Excess Tract Value" means, as of the Valuation Date, the
------------------
excess, if any, of the Tract Value over the Total
Development Cost of that Tract.
vi. "Interest Rate", for a Tract, means an annual rate equal to
-------------
Weeks' weighted average borrowing rate under its principal
revolving credit facility (London Interbank Offering Rate,
plus applicable margin, option) for the period from and
including the date of Contribution for that Tract (the date
of Contribution for Tracts in the Briley Parkway Land is the
date of this Agreement) to and including the Valuation Date
for that Tract plus .75% (75 basis points).
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<PAGE>
vii. "Minimum Value" means the sum of (A) Thirty-Eight Million
-------------
Seven Hundred Fifty-Five Thousand Dollars ($38,755,000), plus
(B) the aggregate additional amount expended by NWI for tenant
improvements and allowances and lease commissions for the
Development Properties as approved by Weeks due to increases
in the office finish percentages for the Development
Properties above the Pro Forma Level of Office Finish, minus
(C) an amount equal to the sum of (1) the aggregate decrease
in the amount expended for tenant improvements and allowances
and lease commissions due to decreases in the office finish
percentages for the Development Properties below the Pro Forma
Level of Office Finish, and (2) the product of Eighty-Two
Thousand Dollars ($82,000) times the number of acres, or
fraction thereof, within the FEMA Parcel (as that term is
defined in the Aspen Grove Contribution Agreement) in excess
of three (3) acres which are determined not to be subject to
flood plain restrictions upon conclusion of the FEMA study of
the FEMA Parcel.
viii. "Operating Expense Deficit" or "Operating Expense
------------------------- -----------------
Surplus", for a Tract for the period from the date of issuance
-------
of a certificate of occupancy for the first building shell
constructed on that Tract until 95% Stabilization of that
Tract means, in the case of an Operating Expense Deficit, the
excess of operating expenses (e.g., property taxes, insurance
---
premiums, utility charges, maintenance expenses, management
fees and other customary expenses) incurred over gross rental
income and operating expense reimbursables collected for that
same period and, in the case of an Operating Expense Surplus,
the excess of gross rental income and operating expense
reimbursables collected over operating expenses incurred for
that period.
ix. "Remaining Shortfall Balance" means, at any date the excess,
---------------------------
if any, of the Shortfall Amount over the aggregate of the Unit
Price (determined as the date of issuance) of all Units issued
to NWI as of that date pursuant to this Paragraph 21. Once the
Remaining Shortfall Balance is reduced to zero or less, NWI
shall be entitled to no further Units under this Paragraph 21.
x. "Shortfall Amount" means the amount, if any, by which the
----------------
Minimum Value exceeds the Development Properties
Consideration.
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xi. "Total Development Cost", for a Tract, means the total of
----------------------
(i) all costs and expenses incurred through the Valuation Date
in acquisition, development, construction and lease-up of that
Tract and the building(s) located thereon, including without
limitation the Earnout Contribution Value of that Tract, site
preparation costs and expenses, construction costs and fees,
tenant finish costs and expenses, lease commissions, property
taxes and any other items which would be capitalized under
generally accepted accounting principles (excluding interest),
plus (ii) Operating Expense Deficit (or less Operating Expense
Surplus), plus (iii) a fee for development equal to five
percent (5%) of the pro forma project cost budget, plus (iv)
an amount computed like simple interest thereon at the
Interest Rate on sum of the foregoing components as and when
funded by Weeks (and the Earnout Contribution Value will be
deemed to have been incurred on the date of the contribution
of the Tract).
xii. "Tract" means a portion of the Briley Parkway Land or the
-----
Aspen Grove Land and any Improvements constructed thereon,
if any.
xiii. "Tract Value" means the value of a Tract determined as
-----------
of the Valuation Date by dividing the Net Operating Income of
that Tract, determined as of the Valuation Date, by decimal
one zero two five (.1025).
xiv. "Unit Value", for the purposes of this Paragraph 21, shall
----------
mean the arithmetic average of the daily closing price of a
share of common stock of Weeks Corporation on the New York
Stock Exchange for the twenty (20) business days immediately
prior to the Valuation Date.
xv. "Valuation Date" means the earlier of the date on which a
--------------
Tract achieves 95% Stabilization (if there are more than one
building on a Tract when all buildings on said tract achieve
95% Stabilization) or December 31, 2010. There shall be only
one Valuation Date per Tract.
b. All of the Development Properties shall have been contributed to
Weeks pursuant to this Agreement.
c. On or before April 30, 1998, Weeks and NWI shall determine in
writing if a Shortfall Amount exists as of March 31, 1998. If no
Shortfall Amount exists as of that date, NWI shall have no further
right to receive Units pursuant to this Paragraph 21. If a
Shortfall Amount exists, then NWI shall have the right to receive
additional Units as provided in this Paragraph 21.
-30-
<PAGE>
d. Within thirty (30) days after the Valuation Date for a Tract, Weeks
shall issue to NWI a number of Units equal to the lesser of the (i)
Excess Tract Value or (ii) the Remaining Shortfall Balance, divided
by the Unit Value. Any Units issued to NWI pursuant to this
Paragraph 21 shall be held subject to the Rights Agreements and the
Partnership Amendment. Any potential Fractional Units shall be
handled as provided in Paragraph 7(e) of this Agreement.
22. MISCELLANEOUS.
-------------
a. Notwithstanding any provision of this Agreement to the contrary, (i)
Airpark Center XII Development Property and 440 Business Center I
Development Property may be contributed to Weeks as part of the
Initial Contribution in order to accommodate applicable platting
restrictions and/or lender requirements and (ii) at the time Aspen
Grove I Development Property is contributed to Weeks pursuant to
this Agreement, Aspen Grove II Development Property may be
contributed to Weeks as part of that same transaction to accommodate
applicable platting restrictions even though it is not eligible for
Contribution to Weeks pursuant to the terms of this Agreement. Even
though such Development Properties may be contributed to Weeks prior
to being eligible for Contribution to Weeks under this Agreement,
(i) Weeks and NWI agree that all of the benefits and burdens of
ownership, and the risk of loss, shall remain with NWI, subject to
this Agreement, and (ii) such Development Properties shall be
treated in the same manner as the other Development Properties under
this Agreement including, without limitation, issuance of Units,
calculation of Gross Income, calculation of Net Operating Income,
determination of Contribution Value and determination of Adjusted
Contribution Value and responsibilities for completion of
Improvements and funding of carrying costs.
b. Weeks shall not assign, sell, convey or otherwise transfer any or
all its rights under this Agreement without the prior written
consent of NWI. NWI shall not assign, sell, convey, or otherwise
transfer any or all of the Development Properties or its rights
under this Agreement without the prior written consent of Weeks. No
such assignment by NWI or Weeks shall relieve or release the
assigning party of any liability hereunder. 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.
c. This Agreement and the other "Transaction Documents" (as that term
is defined in the Partnership Amendment) supersedes all prior
agreements between the parties hereto with respect thereto. No claim
of waiver, modification, consent or acquiescence with respect to any
of the provisions of this Agreement shall be made against either
party, except on the basis of a written instrument executed by or on
behalf of such parties.
-31-
<PAGE>
d. This Agreement shall be governed by and construed in accordance with
the laws of the State of Tennessee.
e. The headings of the several paragraphs and subparagraphs of this
Agreement are inserted solely for the convenience of reference and
are not a part of and are not intended to govern, limit, or aid in
the construction of any term or provision hereof, except otherwise
provided in Paragraph 1 of this Agreement.
f. Words of any gender used in this Agreement shall be held and
construed to include any other gender, and words of a singular
number shall be held to include the plural and vice versa, unless
the context requires otherwise.
g. Any notice, request or other communication (a "notice") required
------
or permitted to be given hereunder shall be in writing and be
delivered by hand or overnight courier (such as UPS Next Day Air) or
mailed by United States registered or certified mail, return receipt
requested, postage prepaid and addressed to each party at its
address as set forth below. Any such notice shall be considered
given on the date of such hand or courier delivery, deposit with
such overnight courier for next business day delivery, or deposit in
the United States mail, but the time period (if any is provided
herein) in which to respond to such notice shall commence on the
date of hand or courier delivery or on the date received following
deposit in the United States mail as provided above. Rejection or
other refusal to accept or inability to deliver because of changed
address of which no notice was given shall be deemed to be receipt
of the notice. By giving at least five (5) days' prior written
notice thereof, any party may from time to time and at any time
change its mailing address hereunder. Any notice of any party may be
given by such party's counsel. The parties respective notice
addresses are as follows:
Weeks: Weeks Corporation
4497 Park Drive
Norcross, Georgia 30093
Attention: Thomas D. Senkbeil,
Vice Chairman/Chief
Investment Officer
-32-
<PAGE>
With Copy To: King & Spalding
191 Peachtree Street
Atlanta, Georgia 30303-1763
Attention: William J. Armstrong, Esq.
NWI: NWI Warehouse Group, L.P.
1410 Donelson Pike
Suite A-5
Nashville, Tennessee 37217
Attention: John W. Nelley, Jr.,
Chief Financial Officer
h. If any provision of this Agreement or the application thereto to any
person or circumstance shall be invalid or unenforceable to any
extent, the remainder of this Agreement and the application of such
provisions to the other persons or circumstances shall not be
affected thereby and shall be enforced to the greatest extent
permitted by law.
i. Nothing in this Agreement shall be construed as giving any person,
firm, corporation, or other entity, other than the parties hereto,
their successors and assigns, any rights, remedy or claim under or
in respect to this Agreement or any provision hereof.
j. This Agreement may be executed in any number of counterparts, each
of which so executed shall be deemed an original; such counterparts
together shall constitute the one agreement.
k. Time is of the essence of this Agreement; provided, however, that if
-------- -------
the time within which any action, consent, approval, or other
activity herein contemplated, expires on a Saturday, Sunday, or
legal holiday, such time period shall automatically be deemed
extended to the first day after the scheduled termination of such
time period which is not a Saturday, Sunday, or legal holiday.
l. No failure or delay by a party to exercise any right it may have by
reason of the default of the other party shall operate as a waiver
of default or modification of this Agreement or shall prevent the
exercise of any right by the first party while the other party
continues to be so in default.
m. All representations, warranties and agreements of NWI and Weeks
contained in this Agreement shall not be merged into the
Contribution documents and shall survive Contribution subject to the
provisions of the Partnership Amendment.
-33-
<PAGE>
n. In the event of a breach of this Agreement by either party, the non-
breaching party shall be entitled to recover all costs associated
with enforcing this Agreement, including reasonable attorneys' fees
and expenses actually incurred.
o. NWI agrees not to offer to any party other than Weeks, the
Development Properties, or any portion thereof or any interest
therein, for sale or lease, except for the leasing of space pursuant
to the terms of this Agreement, and NWI agrees not to negotiate,
solicit or entertain any offers from or with any party other than
Weeks, to purchase or lease the property, or any portion thereof or
any interest therein, except for the leasing of space as aforesaid.
p. Contemporaneously with the execution and delivery of this Agreement,
Weeks and NWI shall enter into a short form memorandum of this
Agreement, which shall be recorded in the public records of Davidson
and Williamson Counties, Tennessee, to give notice of Weeks'
interest in the Development Properties pursuant to this Agreement.
-34-
<PAGE>
IN WITNESS WHEREOF, the parties hereto have executed this Agreement
as of the date first above stated.
WEEKS:
-----
WEEKS REALTY, L.P.
By: Weeks GP Holdings, Inc.,
a Georgia corporation,
its Sole General Partner
By:
-----------------------------
Thomas D. Senkbeil
Vice Chairman and
Chief Investment Officer
NWI:
---
NWI WAREHOUSE GROUP, L.P.
BY: NWI X, L.P., its Sole
General Partner
BY:
----------------------------------
John W. Nelley, Jr.,
General Partner
BY:
---------------------------------
Albert W. Buckley, Jr.,
General Partner
-35-
<PAGE>
CONTRIBUTION AGREEMENT
(ASPEN GROVE LAND)
This Agreement ("Agreement") is made as of this 1st day of November, 1996,
between NWI WAREHOUSE GROUP, L.P., a Tennessee limited partnership ("NWI"); and
WEEKS REALTY, L.P., a Georgia limited partnership ("Weeks").
1. Description of The Property. NWI, through the merger into Weeks of
---------------------------
wholly owned affiliates of NWI, agrees to contribute to the capital of
Weeks and Weeks agrees to such mergers and agrees to accept such
contribution to its capital, for the contribution value and upon the
terms and conditions set forth below, those certain parcels of land
located in Williamson County, Tennessee, containing in the aggregate
approximately 62.375 gross acres, as further described on Exhibit A
---------
hereto (the "Core Parcel"); those certain parcels of land located in
Williamson County, Tennessee, containing in the aggregate approximately
20.93 gross acres, as further described on Exhibit B hereto (the "FEMA
---------
Parcel"); and that certain parcel of land located in Williamson County,
Tennessee, containing approximately 2.2 gross acres, as further
described on Exhibit C hereto (the "Out Parcel") (the Core Parcel, the
---------
FEMA Parcel and the Out Parcel, collectively, the "Property").
2. Contribution Value. Subject to prorations, credits and adjustment
------------------
for which express provision is made in this Agreement, the
contribution value (the "Contribution Value") of the Property is as
follows:
a. for the Core Parcel, Eighty Two Thousand Five Hundred Dollars
($82,500.00) per "Net Usable Acre" (as hereinafter defined);
b. for the FEMA Parcel, Eighty Two Thousand Dollars ($82,000.00)
per Net Usable Acre; and
c. for the Out Parcel, the sum of (i) One Hundred Seventy-Six
Thousand Forty-Three and 38/100 Dollars ($176,043.38) ("Out
Parcel Base Value"), plus (ii) "Carry Costs" (as hereinafter
defined) paid or incurred by NWI for the period from and
including the date of NWI's acquisition of the Out Parcel to,
but not including, the date NWI contributes the Out Parcel to
Weeks pursuant to this Agreement. "Carry Cost" means,
collectively, real estate taxes, liability insurance premiums,
interest on any acquisition loan and any special assessments by
governmental authorities, each attributable to the tract of
land in question for the period of time in question.
<PAGE>
For the purpose of calculation of the Contribution Value, Net
Usable Acres shall be based upon the "Survey" (as defined in
Paragraph 4 hereof), shall include acreage to be used for new roads
and infrastructure necessary for development of the Property and
shall not include any acreage in any area designated as flood
plain.
As provided in Paragraph 5 below, the contribution of the Property
by NWI to Weeks pursuant to this Agreement may occur in increments
with successive contributions and if a contribution occurs after
March 31, 1997, the applicable Contribution Value determined in
accordance with Paragraphs 2a, 2b or 2c (but, in the case of
Paragraph 2c, only the Out Parcel Base Value and not the Carry
Costs shall be subject to increase for any increases in the CPI)
shall be increased (but not decreased) to reflect any increase in
the "CPI" (as hereinafter defined) from March 31, 1997 to the date
of contribution. For this purpose, the "CPI" shall mean the Bureau
of Labor Statistics Consumer Price Index (South All Items; 1982-84
= 100) or, if such index ceases being published, such other
comparable index as Weeks shall designate, subject to the
reasonable approval of NWI. The applicable Contribution Value
determined pursuant to Paragraphs 2a, 2b or 2c (but only Out Parcel
Base Value, as stated above) above shall be multiplied by a
fraction; the numerator of which shall be the CPI most recently
published on or before the date of contribution and denominator of
which shall be the CPI most recently published on or before March
31, 1997. If such fraction is equal to or less than one, there
shall be no adjustment.
As of the date of contribution of a "Tract" (as defined in
Paragraph 5 hereof), Weeks shall issue to NWI a number of "Units"
(as hereinafter defined), equal to the Contribution Value of that
Tract, after adjustments for the prorations, credits and
adjustments stipulated in this Agreement, divided by the "Unit
Price" (as hereinafter defined), to be held by NWI subject to that
certain Registration Rights and Lock-Up Agreement (as to Units
issued on or before March 31, 1998) or that certain Registration
Rights and Lock-Up Agreement for Post-March 31, 1998 Shares and
Units (as to Units issued after March 31, 1998), both of even date
herewith, both between Weeks and NWI (collectively, the "Rights
Agreements") and that certain First Amendment to the Second Amended
and Restated Agreement of Limited Partnership of Weeks, dated of
even date herewith (pursuant to which NWI was admitted to Weeks as
a limited partner) (the "Partnership Amendment"). "Units" shall
mean limited partnership units in Weeks Realty, L.P., as defined in
the above-described Rights Agreements. "Unit Price" shall mean (a)
if a contribution occurs on or before March 31, 1997, an assumed
value of $25.00 per Unit; and (b) if a contribution occurs after
March 31, 1997, the arithmetic average of the New York Stock
Exchange closing price of a share of common stock of Weeks
Corporation for a twenty (20) business day period immediately
preceding the date of contribution. The dollar amount stated in
clause (a) of the immediately preceding sentence is a negotiated
amount for the purposes of this Agreement and does not reflect a
valuation by either NWI or Weeks of Weeks Corporation or Weeks.
-2-
<PAGE>
After the contribution of a Tract from the Core Parcel (and not the
FEMA Parcel or the Out Parcel), Weeks shall issue to NWI additional
Units for that Tract, upon and subject to the following conditions:
a. For the purpose of determining whether additional Units are to be
issued and the number of Units to be issued, the following
definitions shall apply:
i. "Gross Income", for the Tract, means the gross rental income,
------------
including applicable Pro Forma Reimbursable Amounts, to be paid
by the tenant(s) under their respective lease(s) of space in
the building(s) developed by Weeks on the Tract for the twelve
(12) month period commencing on the Revaluation Date, subject
to the following:
A. If tenant concessions for a lease exceed (1) three (3)
months for a lease that has an original term of at least
five (5) years, or (2) one (1) month for a lease that has
an original term of less than five (5) years (in either
case, such excess, the "Excess Tenant Concessions"); then,
the amount included in determining Gross Income from this
lease shall equal the dollar amount derived from the
following formula:
(A) [(B - C) /B] = D
where in the foregoing formula:
A = gross rental income, including applicable Pro Forma
Reimbursable Amounts, to be paid under the lease for
the twelve (12) month period commencing on the
Revaluation Date;
B = total gross rental income, including applicable
Pro Forma Reimbursable Amounts, scheduled to be paid
under the lease for the original term of the Lease,
calculated without regard to Excess Tenant Concessions;
C = total value of the Excess Tenant Concessions
for the initial term of the lease;
-3-
<PAGE>
D = amount to be included in Gross Income from the lease.
B. If the percentage of space finished as office space exceeds
the applicable Pro Forma Level of Office Finish for the
Tract in question, or for any lease in that Tract, for the
purpose of determining Gross Income from this Tract or this
lease, the gross rental income attributable to the twelve
(12) month period commencing on the Revaluation Date shall
be reduced by the amount attributable to that twelve (12)
month period for amortization of such excess office finish
and lease commissions attributable to such excess office
finish; provided, however, in instances where percentage of
space finished as office space does not exceed applicable
Pro Forma Level of Office Finish for the total net leasable
area of the Tract, but the percentage of space finished as
office space under a lease does exceed the applicable Pro
Forma Level of Office Finish, Weeks may nevertheless
consider, in its discretion, the appropriateness of not
deducting amortization of such excess office finish and
related commission cost, taking into account factors such
as tenant layout, tenant improvement allowances granted to
other tenants in such Tract, and the likelihood that such
tenant improvements would be readily useable upon releasing
of such space in the future. For this purpose, the
amortization shall be computed by treating the amount of
the excess office finish and related commission cost as a
loan to tenant having a term equal to the original term of
the lease and bearing interest at a simple interest rate
per annum of ten and one-quarter percent (10.25%) to be
repaid in equal monthly installments of principal and
interest over the original term of the lease.
ii. "Revaluation Date", for each Tract, means the earliest of
----------------
(A) the date on which the Tract achieves 95% Stabilization, or
(B) the date which is the third (3rd) anniversary of the date of
shell completion of the last building to be developed on that
Tract (as evidenced by the date of issuance of the certificate of
occupancy for that last building), or (C) December 31, 2010.
There shall be only one Revaluation Date for each Tract.
iii. "Net Operating Income" for a Tract as of its Revaluation
--------------------
Date, means (i) Vacancy Adjusted Gross Income; less
(ii) Operating Expenses.
-4-
<PAGE>
iv. "Operating Expenses", for a Tract, means all real and
------------------
personal property taxes, utility charges, insurance costs,
maintenance expenses and other amounts projected to be
expended in connection with the ownership, maintenance and
operation of the building(s) to be developed by Weeks on
that Tract, as reasonably budgeted by Weeks, for the twelve
(12) month period commencing on the Revaluation Date for
that Tract. Operating Expenses shall include, without
limitation, (i) a management fee equal to four percent (4%)
(or such other percentage as is contractually agreed in a
lease for the gross rental income from that lease) of the
Vacancy Adjusted Gross Income, not including reimbursables,
to be paid by the tenant(s) under their lease(s) for the
twelve (12) month period commencing on the Revaluation Date
for that Tract, and (ii) a reserve for expenses in the
amount of five cents ($.05) per square foot per annum of
area in the building(s) located on that Tract.
v. "Vacancy Adjusted Gross Income", to adjust for possible
-----------------------------
future vacancy, for each Tract as of the Revaluation Date,
means the following:
A If on the Revaluation Date, less than ninety-five
percent (95%) of the space in the building(s) located on
the Tract is leased, then the Vacancy Adjusted Gross
Income shall equal the Gross Income.
B If on the Revaluation Date, at least ninety-five percent
(95%) of the space in the building(s) located on the
Tract is leased, then the Vacancy Adjusted Gross Income
shall be the lesser of:
(i) Gross Income of that Tract; or
(ii) ninety-five percent (95%) of Total Potential Gross
Income of that Tract, plus an amount equal to five
percent (5%) of the Gross Income attributable to
leases having a term of ten (10) years or more.
vi. "Pro Forma Level of Office Finish" means the following
--------------------------------
percentage of net leasable area finished or to be finished,
in total, as office space in the Tract or the percentage of
net leasable area finished or to be finished, in total, as
office space under a lease in the Tract: 40%
-5-
<PAGE>
vii. "Upper Dollar Limit Value", with respect to a Tract
------------------------
determined on the Revaluation Date, means the number of Net
Usable Areas times Ninety-Five Thousand Dollars ($95,000)
(as adjusted for increases in the CPI from March 31, 1997,
to the Revaluation Date, computed in the same manner as
outlined above).
viii. "Base Dollar Value", with respect to a Tract from the
-----------------
Core Parcel, means the number of Net Usable Areas in that
Tract times Ninety Thousand Dollars ($90,000.00).
ix. "95% Stabilization", with reference to a specific Tract,
-----------------
means that all of the following conditions have been met:
(A) ninety-five percent (95%) of the net leasable area of
the building(s) located on that Tract have been leased to
creditworthy tenant(s) approved by Weeks under lease(s)
approved by Weeks (which will base its approval on
commercially reasonable standards); (B) tenant(s) are in
actual possession and have accepted possession of ninety-
five percent (95%) of the net leasable area of such
building(s), including tenant improvements; (C) except for
free-rent periods expressly stipulated in the lease(s),
rental shall have commenced on ninety-five percent (95%) of
the net leasable area of such building(s) and all other
concessions (besides any free rent periods) shall have
expired; and (D) no default by any tenant is then
outstanding and uncured under the lease.
x. "Pro Forma Reimbursable Amounts" means the pro forma
------------------------------
reimbursable amounts reasonably budgeted by Weeks to be
funded by tenants of space leased in the building(s)
developed by Weeks on the Tract in reimbursement of
Operating Expenses for the twelve (12) month period
commencing on the Revaluation Date for the Tract.
xi. "Total Potential Gross Income", for the purpose of
----------------------------
determining Vacancy Adjusted Gross Income, means at the
Revaluation Date the sum of (i) Gross Income, and (ii) the
amount of Gross Income (including Pro Forma Reimbursable
Amounts) that would accrue from all vacant space in a Tract
if such vacant space were leased at applicable pro forma
rental rates, and assuming a term of less than ten (10)
years, with no adjustment for Excess Tenant Concessions or
excess office finish and related lease commissions.
b. As of the Revaluation Date, the value of the Tract in question
shall be determined by dividing the Net Operating Income by
decimal one zero seven five (.1075) (the "Revaluation Date
Value").
-6-
<PAGE>
c. The number of additional Units to be issued, if any, shall be
determined by dividing the Unit Price (for this purpose being the
arithmetic average of the New York Stock Exchange closing price of
a share of common stock of Weeks Corporation for a twenty (20)
business day period immediately preceding the Revaluation Date)
into the lesser of (i) the excess of the Revaluation Date Value,
if any, over the Total Development Cost of that Tract; or (ii) the
excess of the Upper Dollar Limit Value over the Contribution Value
of that Tract. The following definitions shall pertain to the
calculation set forth in the immediately preceding sentence:
(i) "Interest Rate", for a Tract, means an annual rate equal to
-------------
Weeks' weighted average borrowing rate under its principal
revolving credit facility (London Interbank Offering Rate,
plus applicable margin, option) for the period from and
including the Contribution Date for that Tract to and
including the Revaluation Date for that Tract plus .75% (75
basis points).
(ii) "Operating Expense Deficit" or "Operating Expense Surplus",
------------------------- -------------------------
for a Tract for the period from the date of issuance of a
certificate of occupancy for the first building shell
constructed on that Tract until 95% Stabilization of that
Tract, means, in the case of an Operating Expense Deficit,
the excess of operating expenses (e.g., property taxes,
----
insurance premiums, utility charges, maintenance expenses,
management fees and other customary expenses) incurred over
gross rental income and operating expense reimbursables
collected for that same period and, in the case of an
Operating Expense Surplus, the excess of gross rental income
and operating expense reimbursables collected over operating
expenses incurred for that period.
(iii) "Total Development Cost", for a Tract, means the total of
----------------------
(i) all costs and expenses incurred through the Revaluation
Date in acquisition, development, construction and lease-up
of that Tract and the building(s) located thereon, including
without limitation the Contribution Value of that Tract,
site preparation costs and expenses, construction costs and
fees, tenant finish costs and expenses, lease commissions,
property taxes and any other items which would be
capitalized under generally accepted accounting principles
(excluding interest), plus (ii) Operating Expense Deficit
(or less Operating Expense Surplus), plus (iii) a fee for
development equal to five percent (5%) of the pro forma
project cost budget, plus (iv) if any adjustment to Gross
Income has been made for excess office finish and related
lease commissions pursuant to Clause (B) of the definition
of Gross Income, the actual cost of such excess office
finish and related lease commission, plus (v) an amount
computed like simple interest thereon at the Interest Rate
on the sum of each of the
-7-
<PAGE>
foregoing components as and when funded by Weeks (and the
Contribution Value will be deemed to have been incurred for
this purpose on the date of the contribution of the Tract
pursuant to this Agreement) until the Tract achieved 95%
Stabilization.
d. If, after the last Revaluation Date, the total value of all Units
issued by Weeks to NWI for the Contribution Value of Tracts (for
the purpose of this calculation, each Unit being valued at the Unit
Price ascribed thereto pursuant to this Agreement on the relevant
Contribution Date, without regard to subsequent fluctuations in
share price of the common stock of Weeks Corporation) plus the
total value of all Units issued by Weeks to NWI as of the
Revaluation Date for each Tract (for the purpose of this
calculation, each Unit being valued at the Unit Price ascribed
thereto pursuant to this Agreement on the relevant Revaluation
Date, without regard to subsequent fluctuations in share price of
the common stock of Weeks Corporation) does not equal or exceed the
Base Dollar Value; then Weeks shall issue a number of additional
Units equal to the amount of the shortfall. The number of
additional Units to be issued, if any, shall be determined by
dividing the amount of such shortfall by the Unit Price (for this
purpose being the arithmetic average of the New York Stock Exchange
closing price of a share of common stock of Weeks Corporation for a
twenty (20) business day period immediately preceding the last
Revaluation Date).
e. Within thirty (30) days after the Revaluation Date, Weeks shall
issue to NWI effective as of the Revaluation Date the appropriate
number of Units, determined in accordance with this Paragraph, to
be held by NWI subject to the applicable Rights Agreements and the
Partnership Amendment.
f. With regard to any Tract, Weeks and NWI may by mutual agreement
elect to have Weeks issue to NWI on the date of contribution of
that Tract additional Units equal to an agreed estimate of the
number of additional Units NWI may receive pursuant to the
foregoing as of the Revaluation Date. If Weeks and NWI by mutual
agreement make the election set forth in the immediately preceding
sentence, then, notwithstanding any provision of this Agreement to
the contrary, (i) NWI waives any right to additional Units if, as
of the Revaluation Date, it is determined that the estimate of
additional Units pursuant to the preceding sentence was lower than
the number of Units that would have been issued as of the
Revaluation Date; and (ii) Weeks waives the right to require NWI to
return Units to Weeks if it is determined that the estimate of
additional Units was in excess of the number of Units that would
have been issued as of the Revaluation Date.
-8-
<PAGE>
Notwithstanding any provision of that Agreement to the contrary, no
fractional Units shall be issued to NWI pursuant to this Agreement.
If as a result of the application of the foregoing formulas, a
fractional Unit is due NWI, Weeks shall pay to NWI, in cash on the
same date as the fractional Unit would otherwise be issued and in
lieu of any such fractional Units, an amount equal to that fractional
Unit times applicable Unit Price, as determine pursuant to this
Agreement.
3. Title Exceptions. The Property shall be contributed subject to the
----------------
following title exceptions and no other:
a. Applicable building and zoning laws.
b. Encroachments, easements and other matters identified on Exhibit D.
---------
c. Covenants, easements and other matters to which Weeks and NWI
have agreed as provided below in Paragraph 4 hereto.
d. Any matter arising by, through or under Weeks after the date of
this Agreement, including, without limitation, dedications and
grants of easements requested by Weeks pursuant to Paragraph 4
hereof.
4. Title Insurance and Survey. Weeks acknowledges receipt of, and hereby
--------------------------
approves, that certain ALTA Commitment Title Insurance issued to Weeks
by Old Republic National Title Insurance Company, Commitment No. 96-
437 (Revised), committing to issue title insurance on the Property in
the amounts of coverage therein stated (the "Commitment"). Weeks
hereby approves the title exceptions and the surveys (the "Surveys")
identified in Schedule B, Part II of the Commitment as applicable to
the Property. NWI shall cause to be issued at contribution of a Tract
a policy of title insurance (ALTA Form) pursuant to the Commitment as
to the Tract containing only those exceptions specified in Paragraph 3
above and any other exceptions that may be acceptable to Weeks.
Prior to giving notice for a contribution on a Tract pursuant to
Paragraph 5 hereof, Weeks shall cause the Commitment and the
applicable Survey to be updated for that Tract and Weeks shall
identify in such notice any title exception affecting the Tract (other
than those specified in Paragraph 3) that Weeks determines to be
objectionable. NWI shall cure any such exception on or before the date
designated for contribution to Weeks's reasonable satisfaction and, if
such cure is not completed by that date, then the contribution shall
be delayed for a period not to exceed sixty (60) days to permit NWI
additional time to cure. If after such delay, such title objection is
not cured to Weeks's reasonable satisfaction, Weeks may elect to do
one of the following: (i) cure the exception, with all costs and
expenses incurred by Weeks applied to reduce the Contribution Value
(and amounts advanced will also reduce the Revaluation Date
-9-
<PAGE>
Value), in which case the contribution shall be further delayed an
additional sixty (60) day period, or (ii) terminate this Agreement as
to the Tract or as to the remaining uncontributed Property (at Weeks'
election) and sue NWI for damages at law, or (iii) seek specific
performance of NWI's obligations hereunder.
NWI hereby covenants and agrees with Weeks that, so long as this
Agreement remains in full force and effect, (i) NWI will not sell,
assign, rent, lease, convey (absolutely or as security), grant a
security interest in, or otherwise encumber or dispose of, the
Property (or any interest or estate therein) without the prior written
consent of Weeks; and (ii) NWI will not apply for any modification to
the zoning in effect for the Property as of the date of this Agreement
or agree to any impact fees or other restrictions on future
development rights that would affect the Property, without the prior
written consent of Weeks. NWI will not grade, cut timber or otherwise
alter the physical characteristics of the Property without the prior
written consent of Weeks, in each instance, excluding grading ongoing
and under contract as of the date of this agreement. NWI further
covenants and agrees that, so long as this Agreement remains in full
force and effect, NWI will make all payments of money, and do all
other things required of NWI, required under that certain indebtedness
of NWI in the principal amount of Two Million Seven Hundred Seventy-
Seven Thousand and no/100 Dollars ($2,777,000.00) to First Union
National Bank of Tennessee, and any related security documents (the
"Land Loan"), and that NWI will take no affirmative action which shall
cause the NWI to be unable to contribute good and marketable title to
the Property or which shall cause any warranty or representation
contained in this Agreement to be incorrect or misleading at any time.
NWI further covenants and agrees that (i) NWI will not amend or modify
the loan documents evidencing and securing the Land Loan, in any way,
without in each instance obtaining the prior written consent of Weeks,
and (ii) at the time a Tract of the Property is contributed to Weeks
pursuant to this Agreement, NWI shall cause such Tract to be released
from the lien of the loan documents securing the Land Loan, at its
sole cost and expense.
From time to time during the pendency of this Agreement, at the
request of Weeks, NWI agrees to take actions, to support applications
and to enter into any easements, covenants or other agreements with
Weeks and third-parties pertaining to development (including
infrastructure, roads, utilities and other development requirements),
affecting the uncontributed portion of the Property to facilitate
Weeks' development of Tracts contributed to Weeks and the remainder of
the Property.
Additionally, at the request of Weeks, NWI agrees to dedicate to the
public or quasi-public authorities, portions of the Property not yet
contributed to Weeks pursuant to this Agreement for the purpose of
dedicating public right-of-ways, utility easements and other
infrastructure items to facilitate development of the Tracts
-10-
<PAGE>
contributed to Weeks and the remainder of the Property. NWI agrees to
cooperate and support fully all requests and actions taken by Weeks
pursuant to this paragraph. Because Weeks is obligated in any case
ultimately to acquire all of the Property pursuant to, and subject to,
the terms and conditions of this Agreement, NWI will cooperate with
Weeks to enable Weeks to develop and construct roads, utilities,
lines, facilities and other improvements, storm water detention lines,
facilities and other improvements, landscaping, lighting, signage and
traffic improvements, sidewalks and other infrastructure for the total
development within the Property by granting easements as reasonably
necessary to serve the tracts which have been or that are being
contributed to Weeks and prior to the contribution of the remaining
Property on which such infrastructure improvements are developed.
Contemporaneously with the execution and delivery of this Agreement,
Weeks and NWI shall enter into a short form memorandum of this
Agreement, which shall be recorded in the public records of Williamson
County, Tennessee, to give notice of Weeks' interest in the Property
pursuant to this Agreement.
5. Contribution. The contribution of the Property to the capital of Weeks
------------
shall take place at the offices of Baker, Donelson, Bearman &
Caldwell, Suite 1700 Union City Center, 511 Union Street, Nashville,
Tennessee 37219, or at such other place as may be agreed by NWI and
Weeks. The contribution of the Property shall occur in incremental
tracts (a "Tract") with successive contributions until all of the
Property is contributed by NWI to Weeks, subject to the following
conditions: (i) no Tract shall be less than ten (10) Net Usable Areas,
(ii) the first contribution must take place on or before March 31,
1997, (iii) after the first contribution, there must be at least one
(1) contribution during each successive twelve (12) month period
following March 31, 1997, and (iv) on March 31, 2004, NWI shall
contribute to Weeks any portion of the Property not previously
contributed to Weeks. Except for the contribution to be made on March
31, 2004, if necessary, the date for each contribution shall be
designated by written notice by Weeks to NWI given at least fifteen
(15) business days before the date designated in such notice, which
notice shall be accompanied by a revision of the Survey showing the
Tract to be contributed and evidence satisfactory to both parties that
all requirements of applicable law, state and local, pertaining to
subdivision and replating of the Property to separate the Tract have
been satisfied (Weeks and NWI agree to cooperate in good faith in the
obtaining of all necessary approvals in this regard).
Notwithstanding any other provision of this Paragraph 5 to the
contrary, (i) with respect to any Tract previously contributed by NWI
to Weeks pursuant to this Agreement, if Weeks has not commenced
construction of a building on that Tract or there remains a portion of
that Tract that could be developed with a building but no building has
been started [such unused Tract(s) or portion of Tract(s) collectively
the "Unused Acreage"]; and (ii) Weeks has a prospective tenant who
desires to locate its
-11-
<PAGE>
building on an area of the Property not yet contributed by NWI to
Weeks pursuant to this Agreement; then, at the written request of
Weeks, NWI agrees to contribute to Weeks pursuant to this Agreement
the Tract (the "Deferred Issuance Tract") desired by the prospective
tenant except that issuance of Units for the Contribution Value of the
acreage of the Deferred Issuance Tract that does not exceed the
Contribution Value of the Unused Acreage shall not be issued until the
earlier of (A) the Revaluation Date for that Deferred Issuance Tract
or (B) the date on which Weeks commences construction of a building on
the Unused Acreage (to the extent of the acreage used for that
building). For the purpose of this paragraph, Weeks only shall be
deemed to have commenced construction of a building if it has approved
the budget for the construction of the building pursuant to its
customary procedures and grading of the tract for that building has
commenced.
Notwithstanding any other provision of this Paragraph 5 to the
contrary, if during a twelve (12) month period NWI has already
contributed to Weeks a Tract in accordance with this Agreement, then
in that same twelve (12) month period, Weeks may request that
additional Tracts be contributed to it pursuant to this Agreement,
provided, however, such additional Tracts do not have to be at least
ten (10) Net Usable Acres (provided, however, the size of such Tract
shall be subject to the reasonable approval of NWI) and such
additional Tracts shall not be counted towards the obligation of Weeks
to accept a contribution of a Tract in the next succeeding twelve (12)
month period.
Each time a Tract is to be contributed to Weeks by NWI pursuant to
this Agreement, at NWI's request, (a) NWI shall form a limited
liability company under Delaware law, with NWI as the sole member,
substantially similar to that company formed for the initial
contribution of Completed Properties on even date herewith (the
"Initial Contribution"), (b) NWI shall contribute that Tract to that
company by instruments substantially similar to that used for the
Initial Contribution, (c) that company shall then merge into Weeks,
with Weeks being the surviving entity, pursuant to agreements of
merger substantially similar to those used in connection with the
Initial Contribution, and (d) Weeks shall issue Units as provided in
this Agreement to NWI in exchange for NWI's membership interests in
that company. Each limited liability company to be formed by NWI
pursuant to the immediately preceding sentence shall have as its sole
business purpose the ownership of the Tract in question and shall
assume or incur no unrelated liability or obligation. NWI shall
deliver possession of the Tract to Weeks on the contribution date.
6. Adjustments. Real estate taxes and assessments on the Property
-----------
(collectively, "taxes") shall be apportioned and prorated as of 11:59
pm on the day before the date of this Agreement by appropriate cash
payments between the parties. If the amount of taxes for 1996 are not
known, they shall be apportioned on the basis of the most current
information available. If actual taxes attributable to the Property
are different
-12-
<PAGE>
than the taxes on which the proration is computed, such proration
shall be adjusted in cash between NWI and Weeks upon presentation of
written evidence of the actual taxes paid for 1996. At each
contribution, there shall be no further proration of taxes because,
pursuant to Paragraph 14, Weeks shall fund payment of taxes.
7. Costs and Expenses; Preparation of Documents. Costs and expenses shall
--------------------------------------------
be apportioned in the following manner:
a. Weeks shall pay the premium for title insurance, the survey fees
and recording costs related to this transaction, as well as all
costs incurred by it in inspecting the Property and making such
other investigations thereof as it deems appropriate. Weeks also
shall pay all fees and expenses incurred in the creation of
limited liability companies and their subsequent merger into
Weeks as contemplated in Paragraph 5 of this Agreement.
b. NWI shall pay all transfer taxes.
c. Each party shall pay its own attorneys' fees in connection with
this transaction.
Weeks's attorney shall prepare all documents, which shall be subject
to the reasonable approval of NWI's attorney and which shall be
substantially the same as the documents used in the Initial
Contribution.
8. Condemnation. If any authority having the power of eminent domain
------------
shall commence negotiations with NWI or shall commence legal action
against NWI for the damaging, taking or acquiring of all or any part
of the Property, either temporarily or permanently in any condemnation
proceeding or by exercise of the power of eminent domain, NWI shall
immediately give notice of the same to Weeks. Upon the occurrence of
any of the foregoing events, if it reasonably appears that such taking
would materially interfere with Weeks' intended use of the Property,
Weeks shall have the right, at its option, to terminate this Agreement
by giving notice thereof to NWI, in which event Weeks shall be
released of all further obligations hereunder with respect to that
portion of the Property not yet contributed, but continue to have
obligations to issue Units, subject to the conditions contained
herein, with respect to the portions of the Property already
contributed. Assuming no termination, at the time of contribution, NWI
shall assign to Weeks all rights of NWI in and to any unpaid awards,
settlement proceeds or other proceeds payable by reason for any such
taking.
In the event of any negotiations regarding the payment of any such
awards or proceeds, NWI will inform Weeks of all such negotiations of
which NWI has notice and no settlement shall be agreed to by NWI
without Weeks' written approval.
-13-
<PAGE>
9. Representations and Warranties. As of the date of this Agreement NWI
------------------------------
hereby makes for the benefit of Weeks each and every representation
and warranty set forth in Exhibit E to the Partnership Amendment as to
---------
the Property, to the extent applicable to unimproved land. As of the
date of contribution for each Tract under this Agreement, NWI shall
remake for the benefit of Weeks each and every representation and
warranty set forth on Exhibit E to the Partnership Amendment as to
---------
that Tract, to the extent applicable to unimproved land.
10. Weeks' Inspection; "AS-IS" Sale; Hazardous Wastes. NWI grants Weeks
-------------------------------------------------
the right to enter the Property to inspect it, make soil tests
borings, make drainage tests, and make engineering and architectural
drawings or tests of the Property, provided that the foregoing shall
not materially alter or damage the Property or interfere with NWI's
activities on the Property. Weeks shall be liable to NWI for any
damage, loss and expenses (including reasonable attorneys' fees) NWI
incurs by reason of such activities, and if the transaction
contemplated hereby does not close, Weeks shall provide NWI with
copies of all tests results and drawings.
Except for the representations and warranties contained or provided
for herein, the property is being sold in an "AS-IS" condition and
"WITH ALL FAULTS" as of the date of this Agreement and of the date of
contributions. Except as expressly set forth in this Agreement, no
representations or warranties have been made or are made and no
responsibility has been or is assumed by NWI or by any officer,
person, firm, agent or representative acting or purporting to act on
behalf of NWI as to the condition or repair of the Property or the
value, expense of operation, or income potential thereof or as to any
other facet or condition which has or might affect the Property, or
the condition, repair, value, expense of operation, or income
potential of the Property or any portion thereof. The parties agree
that all understandings and agreements heretofore made between them or
their respective agents or representatives with respect to the
Property are merged in this Agreement, the exhibits hereto annexed and
other documents being entered into by the parties on the date hereof
(including, without limitation, the other agreements expressly
referred to herein) or contemplated in those documents, which together
fully and completely express their agreement, and that this Agreement
has been entered into with Weeks being satisfied with the opportunity
afforded for investigation (all such agreements, documents and
exhibits, collectively, the "Transaction Documents"). Weeks is not
relying upon any statement or representation by NWI unless such
statement or representation is specifically embodied in this Agreement
or the other Transaction Documents.
To the extent that NWI has provided to Weeks information from any
inspection, engineering or environmental reports concerning harmful or
toxic substances, NWI makes no representations or warranties with
respect to the accuracy or completeness, methodology of preparation or
otherwise concerning the contents of such reports.
-14-
<PAGE>
Weeks acknowledges that NWI has requested Weeks to inspect fully the
Property and investigate all matters relevant thereto and to rely
solely upon the results of Weeks' own inspections or other information
obtained or otherwise available to Weeks, rather than any information
that may have been provided by NWI to Weeks, other than the
representations and warranties of NWI contained or provided for herein
on which Weeks is entitled to rely.
Weeks has obtained the Phase I Environmental Site Assessment Update of
Aspen Grove Drive and Seaboard Lane, Franklin, Tennessee, prepared by
3D/International Environmental Group, Project No. D5388.04, dated
October 1, 1996 (the "Audit") and Weeks hereby approves the Audit and
agrees to accept title to the Property subject to such environmental
matters as are reflected in the Audit. If any material adverse
environmental condition affecting the Property is discovered by, or
comes to the attention of, Weeks that is not disclosed in the Audit,
then Weeks may elect by written notice to NWI to terminate this
Agreement as to all or any portion of the Property not previously
purchased by Weeks.
The terms and provisions of this Paragraph 10 shall survive
contribution hereunder.
11. Notices. Any notice, request or other communication (a "notice")
------- ------
required or permitted to be given hereunder shall be in writing and
shall be delivered by hand or overnight courier (such as UPS Next Day
Air) or mailed by United States registered or certified mail, return
receipt requested, postage prepaid and addressed to each party at its
address as set forth below. Any such notice shall be considered given
on the date of such hand or courier delivery, deposit with such
overnight courier for next business day delivery, or deposit in the
United States mail, but the time period (if any is provided herein) in
which to respond to such notice shall commence on the date of hand or
courier delivery or on the date received following deposit in the
United States mail as provided above. Rejection or other refusal to
accept or inability to deliver because of changed address of which no
notice was given shall be deemed to be receipt of the notice. By
giving at least five (5) days' prior written notice thereof, any party
may from time to time and at any time change its mailing address
hereunder. Any notice of any party may be given by such party's
counsel. The parties respective notice addresses are as follows:
Weeks: Weeks Corporation
4497 Park Drive
Norcross, Georgia 30093
Attention: Thomas D. Senkbeil,
Vice Chairman/Chief
Investment Officer
-15-
<PAGE>
With Copy To: King & Spalding
191 Peachtree Street
Atlanta, Georgia 30303-1763
Attention: William J. Armstrong, Esq.
NWI: NWI Warehouse Group, L.P.
1410 Donelson Pike
Suite A-5
Nashville, Tennessee 37217
Attention: John W. Nelley, Jr.,
Chief Financial Officer
12. Brokers. Except for brokers paid-in-full at the Initial Contribution
-------
pursuant to separate written agreements that cover the transactions
contemplated in this Agreement as well as the other Transaction
Documents; NWI and Weeks represent and warrant that neither has dealt
with any broker in connection with this transaction. If any claim is
made or brought by any broker in connection with this transaction,
the party whose agreement gave rise to such claim shall indemnify the
other for any damage or expenses sustained in connection therewith
including, without limitation, reasonable attorneys' fees. The terms
and provisions of this Paragraph 12 shall survive contributions
hereunder.
13. Default. If Weeks defaults hereunder, NWI may either proceed against
-------
Weeks at law for damages or seek specific performance of Weeks'
obligations hereunder. If NWI defaults hereunder, Weeks may either
proceed against NWI at law for damages or seek specific performance
of NWI's obligations hereunder.
14. Infrastructure and Land Carry Costs. Within sixty (60) days after the
-----------------------------------
date of this Agreement, NWI shall submit to Weeks, for Weeks
reasonable approval, an itemization of all fees, costs and expenses
incurred by NWI to and through the date of this Agreement for
infrastructure, grading, architectural services and engineering
services with respect to the Property, together with interest thereon
from date incurred at the "Interest Rate" (As defined under Paragraph
2c of this Agreement). Upon Weeks' approval of such itemization,
Weeks shall either (i) reimburse NWI in cash or (ii) issue to NWI a
number of units equal to the amount to be divided by a Unit Price of
Twenty-Five Dollars ($25.00), to be held by NWI subject to the
Partnership Amendment and the applicable Rights Agreement. From and
after the date of this Agreement, and so long as this Agreement is in
full force and effect, Weeks agrees to pay all real estate taxes and
other property assessments assessed on the Property for 1996 and
thereafter until this Agreement is no longer in force and effect. If,
after the date of this Agreement, Weeks elects to construct roads,
utility lines, rain water detention facilities or other
infrastructure items, such installation shall
-16-
<PAGE>
be at the sole cost and expense of Weeks, without reimbursement
obligation on NWI.
15. Headings. The Paragraph headings are inserted for convenience only
--------
and are not intended to describe, interpret, define or limit the
scope or intent of this Agreement or any provision thereof.
16. Miscellaneous. All prior understandings and agreements between the
-------------
parties are deemed merged herein and in the other Transaction
Documents. This Agreement may be modified only by an agreement in
writing signed by the parties. Weeks may assign, sell, convey or
otherwise transfer any or all its rights under this Agreement without
the prior written consent of NWI. NWI shall not assign, sell, convey
or otherwise transfer any or all of the Properties or its rights
under this Agreement. No such assignment by NWI or Weeks shall
relieve or release the assigning party of any liability hereunder.
Subject to the foregoing, this Agreement and the terms and provision
hereof shall inure to the benefit of and be binding upon the
successors and assigns of the parties. This Agreement shall be
governed by Tennessee law. Time is of the essence.
IN WITNESS WHEREOF, NWI and Weeks have set their hand as of the date
and year first above written.
NWI:
---
NWI WAREHOUSE GROUP, L.P.
BY: NWI X, L.P., its Sole General Partner
By: /s/ John W. Nelley, Jr.
---------------------------------
John W. Nelley, Jr.,
General Partner
By: /s/ Albert W. Buckley, Jr.
---------------------------------
Albert W. Buckley, Jr.,
General Partner
- -17-
<PAGE>
WEEKS:
-----
WEEKS REALTY, L.P.
By: Weeks GP Holdings, Inc.
a Georgia corporation,
its Sole General Partner
BY: /s/ Thomas D. Senkbeil
------------------------------
Thomas D. Senkbeil
Vice Chairman/Chief
Investment Officer
-18-
<PAGE>
CONTRIBUTION AGREEMENT
(I-440 LAND)
This Agreement ("Agreement") is made as of this 1st day of November,
1996, between NWI WAREHOUSE GROUP, L.P., a Tennessee limited partnership
("NWI"); and WEEKS REALTY, L.P., a Georgia limited partnership ("Weeks").
1. Description of The Property. NWI, through the merger into Weeks of
---------------------------
wholly owned affiliates of NWI, agrees to contribute to the capital of
Weeks and Weeks agrees to such mergers and agrees to accept such
contribution to its capital, for the contribution value and upon the
terms and conditions set forth below, that certain parcel of land
located in Davidson County, Tennessee, containing in the aggregate
approximately 21.74 gross acres, as further described on Exhibit A
---------
hereto (the "Property").
2. Contribution Value. Subject to prorations, credits and adjustment for
------------------
which express provision is made in this Agreement, the contribution
value (the "Contribution Value") of the Property is One Hundred
Seventy-Five Thousand Dollars ($175,000.00) per "Net Usable Acres" (as
hereinafter defined).
For the purpose of calculation of the Contribution Value, Net Usable
Acres shall be based upon the "Survey" (as defined in Paragraph 4
hereof), shall include acreage to be used for new roads and
infrastructure necessary for development of the Property and shall not
include any acreage in any area designated as flood plain.
As of the date of contribution of a "Tract" (as defined in Paragraph 5
hereof), Weeks shall issue to NWI a number of "Units" (as hereinafter
defined), equal to the Contribution Value of that Tract, after
adjustments for the prorations, credits and adjustments stipulated in
this Agreement, divided by the "Unit Price" (as hereinafter defined),
to be held by NWI subject to that certain Registration Rights
and Lock-Up Agreement, dated of even date herewith, between Weeks and
NWI (the "Rights Agreement") and that certain First Amendment to the
Second Amended and Restated Agreement of Limited Partnership, dated of
even date herewith (pursuant to which NWI was admitted to Weeks as a
limited partner) (the "Partnership Amendment"). "Units" shall mean
limited partnership units in Weeks Realty, L.P., as defined in the
Rights Agreement. "Unit Price" shall mean (a) if a contribution occurs
on or before March 31, 1997, an assumed value of $25.00 per Unit; and
(b) if a contribution occurs after March 31, 1997, the arithmetic
average of the New York Stock Exchange closing price of a share of
common stock of Weeks Corporation for the twenty (20) business day
period immediately preceding the date of contribution. The dollar
amount stated in clause (a) of the immediately preceding sentence is a
negotiated
<PAGE>
amount for the purposes of this Agreement and does not reflect a
valuation by either NWI or Weeks of Weeks Corporation or Weeks.
Notwithstanding any provision of that Agreement to the contrary, no
fractional Units shall be issued to NWI pursuant to this Agreement. If
as a result of the application of the foregoing formulas, a fractional
Unit is due NWI, Weeks shall pay to NWI, in cash on the same date as
the fractional Unit would otherwise be issued and in lieu of any such
fractional Unit, an amount equal to that fractional Unit times the
applicable Unit Price, as determined pursuant to this Agreement.
3. Title Exceptions. The Property shall be contributed subject to the
----------------
following title exceptions and no other:
a. Applicable building and zoning laws.
b. Encroachments, easements and other matters identified on
Exhibit B.
---------
c. Covenants, easements and other matters to which Weeks and NWI have
agreed as provided below in Paragraph 4 hereto.
d. Any matter arising by, through or under Weeks after the date of
this Agreement.
4. Title Insurance and Survey. Weeks acknowledges receipt of, and hereby
--------------------------
approves, that certain ALTA Commitment Title Insurance issued to Weeks
by Old Republic National Title Insurance Company, Commitment No. 96-
437 (Revised), committing to issue title insurance on the Property in
the amounts of coverage therein stated (the "Commitment"). Weeks
hereby approves the title exceptions and the surveys (the "Surveys")
identified in Schedule B, Part II of the Commitment as applicable to
the Property. NWI shall cause to be issued at contribution of a Tract
a policy of title insurance (ALTA Form) pursuant to the Commitment as
to the Tract containing only those exceptions specified in Paragraph 3
above and any other exceptions that may be acceptable to Weeks.
Prior to giving notice for a contribution of a Tract pursuant to
Paragraph 5 hereof, Weeks shall cause the Commitment and the Survey to
be updated for that Tract and Weeks shall identify in such notice any
title exception affecting the Tract (other than those specified in
Paragraph 3) that Weeks determines to be objectionable. NWI shall cure
any such exception on or before the date designated for contribution
to Weeks' reasonable satisfaction and, if such cure is not completed
by that date, then the contribution shall be delayed for a period not
to exceed sixty (60) days to permit NWI additional time to cure. If
after such delay, such title objection is not cured to Weeks's
reasonable satisfaction, Weeks may elect to do one of the following:
(i) cure
-2-
<PAGE>
the exception, with all costs and expenses incurred by Weeks applied
to reduce the Contribution Value, in which case the contribution shall
be further delayed an additional sixty (60) day period, or (ii)
terminate this Agreement as to the Tract or as to the remaining
uncontributed Property (at Weeks' election) and sue NWI for damages at
law, or (iii) seek specific performance of NWI's obligations
hereunder.
NWI hereby covenants and agrees with Weeks that, so long as this
Agreement remains in full force and effect, (i) NWI will not sell,
assign, rent, lease, convey (absolutely or as security), grant a
security interest in, or otherwise encumber or dispose of, the
Property (or any interest or estate therein) without the prior written
consent of Weeks; and (ii) NWI will not apply for any modification to
the zoning in effect for the Property as of the date of this Agreement
or agree to any impact fees or other restrictions on future
development rights that would affect the Property, without the prior
written consent of Weeks. NWI will not grade, cut timber or otherwise
alter the physical characteristics of the Property without the prior
written consent of Weeks, in each instance. NWI further covenants and
agrees that, so long as this Agreement remains in full force and
effect, NWI will make all payments of money, and do all other things
required of NWI, required under that certain indebtedness of NWI in
the principal amount of One Million Five Hundred Thousand and no/100
Dollars ($1,500,000.00) to First Union National Bank of Tennessee, and
any related security documents (the "Land Loan"), and that NWI will
take no affirmative action which shall cause NWI to be unable to
contribute good and marketable title to the Property or which shall
cause any warranty or representation contained in this Agreement to be
incorrect or misleading at any time. NWI further covenants and agrees
that (i) NWI will not amend or modify the loan documents evidencing
and securing the Land Loan, in any way, without in each instance
obtaining the prior written consent of Weeks, and (ii) at the time a
Tract of the Property is contributed to Weeks pursuant to this
Agreement, NWI shall cause such Tract to be released from the lien of
the loan documents securing the Land Loan, at its sole cost and
expense.
From time to time during the pendency of this Agreement, at the
request of Weeks, NWI agrees to take actions, to support applications
and to enter into any easements, covenants or other agreements
pertaining to development (including infrastructure, roads, utilities
and other development requirements), affecting the uncontributed
portion of the Property to facilitate Weeks' development of Tracts
contributed to Weeks and the remainder of the Property. Additionally,
at the request of Weeks, NWI agrees to dedicate to the public or
quasi-public authorities, portions of the Property not yet contributed
to Weeks pursuant to this Agreement for the purpose of dedicating
public right-of-ways, utility easements and other infrastructure items
to facilitate development of the Tracts contributed to Weeks and the
remainder of the Property. NWI agrees to cooperate and support fully
all requests and actions taken by Weeks pursuant to this paragraph.
-3-
<PAGE>
Contemporaneously with the execution and delivery of this Agreement,
Weeks and NWI shall enter into a short form memorandum of this
Agreement, which shall be recorded in the public records of Davidson
County, Tennessee, to give notice of Weeks' interest in the Property
pursuant to this Agreement.
5. Contribution. The contribution of the Property to the capital of
------------
Weeks shall take place at the offices of Baker, Donelson, Bearman &
Caldwell, Suite 1700 Union City Center, 511 Union Street, Nashville,
Tennessee 37219, or at such other place as may be agreed by NWI and
Weeks. The contribution of the Property shall occur in incremental
tracts (a "Tract") with successive contributions until all of the
Property is contributed by NWI to Weeks, subject to the following
conditions:
a. Weeks and NWI agree that for the purpose of this Agreement, the
Property is subdivided into two (2) Tracts, one (1) Tract
containing approximately 11.7 gross acres (the "I-440 3 Tract")
and one (1) Tract containing approximately 10.8 gross acres (the
"I-440 4 Tract"), all as more particularly shown on that certain
site plan attached hereto as Exhibit C;
---------
b. NWI shall contribute to the capital of Weeks the I-440 4 Tract as
soon as the following conditions are satisfied: (i) a lease, in
form and content acceptable to Weeks with a Tenant, approved by
Weeks, for not less than 60,000 square feet of area in the
building on that Tract, having an initial term of not less than
ten (10) years and average "Net Operating Income" (as hereinafter
defined) over the initial term of at least $3.50 per square foot
of area, and (ii) Weeks shall have approved, in the exercise of
commercially reasonable judgment, a pro forma development budget
for the I-440 4 Tract, assuming improvement of that Tract with the
building contemplated in such pro forma development budget and
assuming lease-up of such building in accordance with such pro
forma development budget, predicts that Net Operating Income
divided by "Total Development Cost" (as hereinafter defined)
equals or exceeds decimal one zero two five (.1025) for that
Tract, as hypothetically developed and leased-up;
c. The I-440 4 Tract shall be contributed as soon as Weeks shall have
approved, in the exercise of commercially reasonable judgment, a
pro forma development budget for the I-440 4 Tract, assuming
improvement of that Tract with the building contemplated in such
pro forma development budget and assuming lease-up of such
building in accordance with such pro forma development budget,
predicts that Net Operating Income divided by Total Development
Cost equals or exceeds decimal one zero two five (.1025) for that
Tract, as hypothetically developed and leased-up; and
-4-
<PAGE>
d. on March 31, 1998, NWI shall contribute to Weeks any portion of
the Property not previously contributed to Weeks.
For the purpose of the immediately preceding paragraph, the following
definitions shall apply:
a. "Gross Income", for the Tract, as reasonably projected by
------------
Weeks, means the gross rental income, including reasonable
reimbursable amounts, to be paid by the tenant(s) under their
respective lease(s) for a twelve (12) month period commencing on
the Measurement Date.
b. "Measurement Date", for each Tract, the hypothetical date used
----------------
in the pro forma development budget as the date the Tract is
expected to be stabilized.
c. "Net Operating Income" for a Tract as of its Measurement Date,
--------------------
means (i) Gross Income; less (ii) Operating Expenses, and less
(iii) Vacancy Factor.
d. "Operating Expenses", for a Tract, means all real and personal
------------------
property taxes, utility charges, insurance costs, maintenance
expenses and other amounts projected to be expended in
connection with the ownership, maintenance and operation of that
Tract and the building to be constructed thereon, as reasonably
budgeted by Weeks, for the twelve (12) month period commencing
on the Measurement Date for that Tract. Operating Expenses shall
include, without limitation, (i) a management fee equal to four
percent (4%) of the gross rental income, not including
reimbursables and with adjustment for Vacancy Factor, to be paid
by the tenant(s) under their lease(s) for the twelve (12) month
period commencing on the Measurement Date for that Tract, and
(ii) a reserve for expenses in the amount of five cents ($.05)
per square foot per annum of area in the building(s) located on
that Tract.
e. "Vacancy Factor" means five percent (5%) of Gross Income.
--------------
f. "Interest Rate", for a Tract, as reasonably projected by Weeks,
-------------
means an annual rate equal to Weeks' weighted average borrowing
rate under its principal revolving credit facility (London
Interbank Offering Rate, plus applicable margin, option) for the
twelve (12) month period from the Measurement Date for that Tract
plus .75% (75 basis points).
g. "Operating Expense Deficit" or "Operating Expense Surplus", for a
------------------------- -------------------------
Tract, as reasonably projected by Weeks, for the twelve (12)
month lease-up period assumed in the pro forma development
budget, means, in the case of an Operating Expense Deficit, the
excess of operating expenses (e.g., property
---
-5-
<PAGE>
taxes, insurance premiums, utility charges, maintenance expenses,
management fees and other customary expenses) incurred over gross
rental income and operating expense reimbursables collected for
that same period and, in the case of an Operating Expense
Surplus, the excess of gross rental income and operating expense
reimbursables collected over operating expenses incurred for that
period.
h. "Total Development Cost", for a Tract, as reasonably projected by
----------------------
Weeks, means the total of (i) all costs and expenses incurred
through the Measurement Date in acquisition, development,
construction and lease-up of that Tract and the building(s)
located thereon, including without limitation the Contribution
Value of that Tract, site preparation costs and expenses,
construction costs and fees, tenant finish costs and expenses,
lease commissions, property taxes and any other items which would
be capitalized under generally accepted accounting principles
(excluding interest), plus (ii) Operating Expense Deficit (or
less Operating Expense Surplus), plus (iii) an amount computed
like simple interest thereon through the Measurement Date at the
Interest Rate on each of the foregoing components as and when
projected to be funded by Weeks (and the Contribution Value will
be deemed to have been incurred for this purpose on the date of
the contribution of the Tract pursuant to this Agreement).
Except for the contribution to be made on March 31, 1998, if
necessary, the date for each contribution shall be designated by
written notice by Weeks to NWI given at least fifteen (15) business
days before the date designated in such notice.
Each time a Tract is to be contributed to Weeks by NWI pursuant to
this Agreement, at NWI's request, (a) NWI shall form a limited
liability company under Delaware law, with NWI as the sole member,
substantially similar to that company formed for the initial
contribution of Completed Properties on even date herewith (the
"Initial Contribution"), (b) NWI shall contribute that Tract to that
company by instruments substantially similar to those used for the
Initial Contribution, (c) that company shall then merge into Weeks,
with Weeks being the surviving entity, pursuant to agreements of
merger substantially similar to that used in connection with the
Initial Contribution, and (d) Weeks shall issue Units as provided in
this Agreement to NWI in exchange for NWI's membership interests in
that company. Each limited liability company to be formed by NWI
pursuant to the immediately preceding sentence shall have as its sole
business purpose the ownership of the Tract in question and shall
assume or incur no unrelated liability or obligation. NWI shall
deliver possession of the Tract to Weeks on the contribution date.
6. Adjustments. Real estate taxes and assessments (collectively,
-----------
"taxes") on each Tract of the Property shall be apportioned and
prorated as of 11:59 pm on the day before
-6-
<PAGE>
the date that Tract is contributed to Weeks pursuant to this
Agreement by appropriate cash payments between the parties. If
the amount of taxes for the year of contribution are not known,
they shall be apportioned on the basis of the most current
information available. If actual taxes attributable to the Tract
are different than the taxes on which the proration is computed,
such proration shall be adjusted in cash between NWI and Weeks
upon presentation of written evidence of the actual taxes paid
for the year of contribution.
7. Costs and Expenses; Preparation of Documents. Costs and
--------------------------------------------
expenses shall be apportioned in the following manner:
a. Weeks shall pay the premium for title insurance, the survey
fees and recording costs related to this transaction, as well
as all costs incurred by it in inspecting the Property and
making such other investigations thereof as it deems
appropriate. Weeks also shall pay all fees and expenses
incurred in the creation of limited liability companies and
their subsequent merger into Weeks as contemplated in
Paragraph 5 of this Agreement.
b. NWI shall pay all transfer taxes, if any.
c. Each party shall pay its own attorneys' fees in connection
with this transaction.
Weeks' attorney shall prepare all documents, which shall be
subject to the reasonable approval of NWI's attorney and which
shall be substantially the same as the documents used in the
Initial Contribution.
8. Condemnation. If any authority having the power of eminent
------------
domain shall commence negotiations with NWI or shall commence
legal action against NWI for the damaging, taking or acquiring of
all or any part of the Property, either temporarily or
permanently in any condemnation proceeding or by exercise of the
power of eminent domain, NWI shall immediately give notice of the
same to Weeks. Upon the occurrence of any of the foregoing
events, if it reasonably appears that such taking would
materially interfere with Weeks' intended use of the Property,
Weeks shall have the right, at its option, to terminate this
Agreement by giving notice thereof to NWI, in which event Weeks
shall be released of all further obligations hereunder with
respect to that portion of the Property not yet contributed, but
shall continue to have obligations with respect to the portions
of the Property already contributed pursuant to this Agreement.
At the time of contribution, NWI shall assign to Weeks all rights
of NWI in and to any unpaid awards, settlement proceeds or other
proceeds payable by reason of any such taking.
-7-
<PAGE>
In the event of any negotiations regarding the payment of any
such awards or proceeds, NWI will inform Weeks of all such
negotiations of which NWI has notice and no settlement shall be
agreed to by NWI without Weeks' written approval.
9. Representations and Warranties. As of the date of this Agreement
------------------------------
NWI hereby makes for the benefit of Weeks each and every
representation and warranty set froth in Exhibit E to the
---------
Partnership Amendment as to the Property, to the extent
applicable to unimproved land. As of the date of contribution for
each Tract under this Agreement, NWI shall remake for the benefit
of Weeks each and every representation and warranty set forth on
Exhibit E to the Partnership Amendment as to that Tract, to the
---------
extent applicable to unimproved land.
10. Weeks' Inspection; "AS-IS" Sale; Hazardous Wastes. NWI grants
-------------------------------------------------
Weeks the right to enter the Property to inspect it, make soil
tests borings, make drainage tests, and make engineering and
architectural drawings or tests of the Property, provided that the
foregoing shall not materially alter or damage the Property or
interfere with NWI's activities on the Property. Weeks shall be
liable to NWI for any damage, loss and expenses (including
reasonable attorneys' fees) NWI incurs by reason of such
activities, and if the transaction contemplated hereby does not
close, Weeks shall provide NWI with copies of all tests results
and drawings.
Except for the representations and warranties contained or
provided for in this Agreement and the other Transaction
Documents, the property is being sold in an "AS-IS" condition and
"WITH ALL FAULTS" as of the date of this Agreement and of the
contribution date. Except as expressly set forth in this
Agreement, no representations or warranties have been made or are
made and no responsibility has been or is assumed by NWI or by any
officer, person, firm, agent or representative acting or
purporting to act on behalf of NWI as to the condition or repair
of the Property or the value, expense of operation, or income
potential thereof or as to any other facet or condition which has
or might affect the Property or the condition, repair, value,
expense of operation, or income potential of the Property or any
portion thereof. The parties agree that all understandings and
agreements heretofore made between them or their respective agents
or representatives with respect to the Property are merged in this
Agreement, the exhibits hereto annexed and other documents being
entered into by the parties on the date hereof (including, without
limitation, the other agreements expressly referred to herein) or
contemplated in those documents, which together fully and
completely express their agreement, and that this Agreement has
been entered into with Weeks being satisfied with the opportunity
afforded for investigation (all such agreements, documents and
exhibits, collectively, the "Transaction Documents"). Weeks is not
relying upon any statement or representation by NWI unless such
statement or representation is specifically embodies in this
Agreement or the other Transaction Documents.
-8-
<PAGE>
To the extent that NWI has provided to Weeks information from any
inspection, engineering or environmental reports concerning harmful
or toxic substances, NWI makes no representations or warranties
with respect to the accuracy or completeness, methodology of
preparation or otherwise concerning the contents of such reports.
Weeks acknowledges that NWI has requested Weeks to inspect fully
the Property and investigate all matters relevant thereto and to
rely solely upon the results of Weeks' own inspections or other
information obtained or otherwise available to Weeks, rather than
any information that may have been provided by NWI to Weeks other
than the representations and warranties of NWI contained in this
Agreement and the other Transaction Documents on which Weeks is
entitled to rely.
Weeks has obtained the Phase I Environmental Site Assessment of 440
Business Center, Melrose Avenue, Berry Hill, Davidson County,
Tennessee, prepared by 3D/International Environmental Group,
Project No. D5288.02, dated October 1, 1996 (the "Audit") and Weeks
hereby approves the Audit and agrees to accept title to the
Property subject to such environmental matters as are reflected in
the Audit. If any material adverse environmental condition
affecting the Property is discovered by, or comes to the attention
of, Weeks that is not disclosed in the Audit, then Weeks may elect
by written notice to NWI to terminate this Agreement as to all or
any portion of the Property not previously purchased by Weeks.
The terms and provisions of this Paragraph 10 shall survive
contribution hereunder.
11. Notices. Any notice, request or other communication (a "notice")
------- ------
required or permitted to be given hereunder shall be in writing and
shall be delivered by hand or overnight courier (such as UPS Next
Day Air) or mailed by United States registered or certified mail,
return receipt requested, postage prepaid and addressed to each
party at its address as set forth below. Any such notice shall be
considered given on the date of such hand or courier delivery,
deposit with such overnight courier for next business day delivery
or deposit in the United States mail, but the time period (if any
is provided herein) in which to respond to such notice shall
commence on the date of hand or courier delivery or on the date
received following deposit in the United States mail as provided
above. Rejection or other refusal to accept or inability to deliver
because of changed address of which no notice was given shall be
deemed to be receipt of the notice. By giving at least five (5)
days' prior written notice thereof, any party may from time to time
and at any time change its mailing address hereunder. Any notice of
any party may be given by such party's counsel. The parties
respective notice addresses are as follows:
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<PAGE>
Weeks: Weeks Corporation
4497 Park Drive
Norcross, Georgia 30093
Attention: Thomas D. Senkbeil,
Vice Chairman/Chief
Investment Officer
With Copy To: King & Spalding
191 Peachtree Street
Atlanta, Georgia 30303-1763
Attention: William J. Armstrong, Esq.
NWI: NWI Warehouse Group, L.P.
1410 Donelson Pike
Suite A-5
Nashville, Tennessee 37217
Attention: John W. Nelley, Jr.,
Chief Financial Officer
12. Brokers. Except for brokers paid-in-full at the Initial
-------
Contribution pursuant to separate written agreements that cover the
transactions contemplated in this Agreement as well as the other
Transaction Documents; NWI and Weeks represent and warrant that
neither has dealt with any broker in connection with this
transaction. If any claim is made or brought by any broker in
connection with this transaction, the party whose agreement gave
rise to such claim shall indemnify the other for any damage or
expenses sustained in connection therewith including, without
limitation, reasonable attorneys' fees. The terms and provisions of
this Paragraph 12 shall survive contributions hereunder.
13. Default. If Weeks defaults hereunder, NWI may either proceed
-------
against Weeks at law for damages or seek specific performance of
Weeks' obligations hereunder. If NWI defaults hereunder, Weeks may
either proceed against NWI at law for damages or seek specific
performance of NWI's obligations hereunder.
14. Headings. The Paragraph headings are inserted for convenience only
--------
and are not intended to describe, interpret, define or limit the
scope or intent of this Agreement or any provision thereof.
15. Early Transfer. Notwithstanding any provision of this Agreement to
--------------
the contrary, at the time the I-440 4 Tract is contributed to Weeks
pursuant to this Agreement, the I-400 3 Tract may be contributed to
Weeks as part of that same transaction to accommodate applicable
platting restrictions even though it is not eligible for
-10-
<PAGE>
contribution to Weeks pursuant to the terms of this Agreement. Even
though the I-400 3 Tract may be contributed to Weeks prior to being
eligible for contribution to Weeks under this Agreement, (i) Weeks
and NWI agree that all of the benefits and burdens of ownership, and
the risk of loss, shall remain with NWI, subject to this Agreement,
and (ii) the I-400 3 Tract shall be treated in the same manner as
the I-400 4 Tract under this Agreement including, without
limitation, issuance of Units, calculation of Gross Income,
calculation of Net Operating Income, determination of Contribution
Value and determination of Adjusted Contribution Value.
16. Infrastructure and Land Carry Costs. At the time a Tract is
------------------------------------
contributed to Weeks under this Agreement, NWI shall submit to
Weeks, for Weeks reasonable approval, an itemization of all fees,
costs and expenses incurred with respect to that Tract, by NWI to
and through the date of Contribution of that Tract for
infrastructure, grading, architectural services and engineering
services with respect to the Property, together with interest
thereon from date incurred at the "Interest Rate" (as defined above
in this Agreement). Upon Weeks's approval of such itemization,
Weeks shall either (i) reimburse NWI in cash or (ii) issue to NWI
a number of units equal to the amount to be divided by a Unit
Price of Twenty-Five Dollars ($25.00), to be held by NWI subject
to the Partners Amendment and the applicable Rights Agreement.
17. Miscellaneous. All prior understandings and
-------------
agreements between the parties are deemed merged herein and the
other Transaction Documents. This Agreement may be modified only by
an agreement in writing signed by the parties. Weeks may assign,
sell, convey or otherwise transfer any or all its rights under this
Agreement without the prior written consent of NWI. NWI shall not
assign, sell, convey or otherwise transfer any or all of the
Properties or its rights under this Agreement. No such assignment by
NWI or Weeks shall relieve or release the assigning party of any
liability hereunder. Subject to the foregoing, this Agreement and
the terms and provision hereof shall inure to the benefit of and be
binding upon the successors and assigns of the parties. This
Agreement shall be governed by Tennessee law. Time is of the
essence.
-11-
<PAGE>
IN WITNESS WHEREOF, NWI and Weeks have set their hand as of the date
and year first above written.
NWI:
---
NWI WAREHOUSE GROUP, L.P.
BY: NWI X, L.P., its Sole General Partner
By:
--------------------------------
John W. Nelley, Jr.,
General Partner
By:
-----------------------------
Albert W. Buckley, Jr.,
General Partner
WEEKS:
-----
WEEKS REALTY, L.P.
By: Weeks GP Holdings, Inc.
a Georgia corporation,
its Sole General Partner
BY:
----------------------------
Thomas D. Senkbeil,
Vice Chairman and
Chief Investment Officer
-12-
<PAGE>
________________________________________________________________________________
________________________________________________________________________________
CONTRIBUTION AGREEMENT
FOR
NWI OPERATING BUSINESS
BY AND BETWEEN
NWI WAREHOUSE GROUP, L.P.
AND
WEEKS REALTY, L.P.
DATED AS OF NOVEMBER 1, 1996
________________________________________________________________________________
________________________________________________________________________________
<PAGE>
TABLE OF CONTENTS
-----------------
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
ARTICLE I CONTRIBUTION.................................................... 1
Section 1.01. Contribution of Assets................................. 1
Section 1.02. Excluded Assets........................................ 2
Section 1.03. Assumed Obligations.................................... 2
Section 1.04. Excluded Liabilities................................... 2
ARTICLE II CONSIDERATION.................................................. 3
Section 2.01. Consideration.......................................... 3
Section 2.02. The Closing............................................ 3
ARTICLE III REPRESENTATIONS AND WARRANTIES OF NWI.......................... 4
Section 3.01. Organization; Authority................................ 4
Section 3.02. Due Authorization; Binding Agreement................... 4
Section 3.03. Governmental Consents.................................. 4
Section 3.04. Other Consents......................................... 4
Section 3.05. No Violation........................................... 4
Section 3.06. Compliance with Laws................................... 5
Section 3.07. Absence of Undisclosed Liabilities and Contractual
Obligations............................................ 5
Section 3.08. Contracts in Force..................................... 5
Section 3.09. Litigation............................................. 5
Section 3.10. Financial Status....................................... 5
Section 3.11. Taxes.................................................. 5
Section 3.12. Employee Benefits; Labor............................... 6
Section 3.13. Title to Assets........................................ 6
ARTICLE IV REPRESENTATIONS AND WARRANTIES OF WEEKS......................... 7
Section 4.01. Organization; Authority................................ 7
Section 4.02. Due Authorization; Binding Agreement................... 7
Section 4.03. No Violation........................................... 7
Section 4.04. Litigation............................................. 7
Section 4.05. Governmental Consents.................................. 7
Section 4.06. Other Consents......................................... 7
Section 4.07. Compliance with Laws................................... 8
Section 4.08. Absence of Undisclosed Liabilities and Contractual
Obligations............................................ 8
</TABLE>
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<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Section 4.09. Financial Status....................................... 8
Section 4.10. Taxes.................................................. 8
ARTICLE V COVENANTS AND AGREEMENTS........................................ 8
Section 5.01. Further Assurances..................................... 8
Section 5.02. Employee Matters....................................... 8
ARTICLE VI COVENANTS AND AGREEMENTS....................................... 9
Section 6.01. Survival; Reliance..................................... 9
Section 6.02. Indemnification........................................ 9
ARTICLE VII MISCELLANEOUS................................................. 9
Section 7.01. Proration of Income and Expense........................ 9
Section 7.02. Fees and Expenses; Transfer Taxes...................... 9
Section 7.03. Notices................................................ 9
Section 7.04. Entire Agreement....................................... 10
Section 7.05. Waivers and Amendments................................. 10
Section 7.06. Governing Law.......................................... 10
Section 7.07. Binding Effect; Benefit................................ 10
Section 7.08. No Assignment.......................................... 11
Section 7.09. Counterparts........................................... 11
Section 7.10. Headings............................................... 11
</TABLE>
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<PAGE>
CONTRIBUTION AGREEMENT
CONTRIBUTION AGREEMENT (the "Agreement") dated as of November 1, 1996 (the
"Contribution Date"), by and between NWI Warehouse Group, L.P., a Tennessee
limited partnership ("NWI"), and Weeks Realty, L.P., a Georgia limited
partnership ("Weeks").
W I T N E S S E T H:
- - - - - - - - - -
NOW, THEREFORE, in consideration of the premises and the mutual covenants
herein contained and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto, intending to
be legally bound, agree as follows:
ARTICLE I
CONTRIBUTION
Section 1.01. Contribution of Assets. NWI hereby contributes to the
----------------------
capital of Weeks, effective as of the Contribution Date, and Weeks hereby
accepts from NWI, effective as of the Contribution Date (the "Contribution"),
the right, title and interest in and to the real estate operating business of
NWI and the assets relating thereto (the "Operating Business"); it being the
intention of NWI to contribute and it being the intention of Weeks to accept and
receive the Operating Business and the assets relating thereto, and the assets,
properties, rights, contracts, claims, operations and management of the
Operating Business of every kind and description related to or necessary for the
ownership or operation of the Operating Business, wherever located, whether
tangible or intangible, real, personal, or mixed, whether or not appearing on
the books of NWI, that are owned or leased by NWI on the date hereof, free and
clear of all liens, but excluding the Excluded Assets. Without limiting the
generality of the foregoing, the Operating Business shall include the following:
(a) All office supplies, equipment, business machines, furniture,
fixtures, information systems, computers, and other tangible property;
(b) All revenue generating contracts, agreements and other
arrangements related to property management, asset management, development
and rehabilitation, brokerage activities (including sales, leasing and
financing), and other services related or ancillary thereto;
(c) All intangible property, including any permits and licenses; and
(d) All business books and records, including, without limitation,
all financial, operating, inventory, legal, personnel, payroll, and
customer records and all sales and
-1-
<PAGE>
promotional literature, correspondence, and files, which are directly
related to the assets being transferred pursuant to this Agreement and
pursuant to the agreements described in Section 1.02(a) hereof (except that
NWI shall have reasonable access to such information and records to the
extent necessary).
Section 1.02. Excluded Assets. Notwithstanding anything to the contrary
---------------
contained in Section 1.01 hereof, the parties to this Agreement expressly
understand and agree that NWI is not, pursuant to this Agreement, conveying or
contributing to Weeks the following assets, rights and properties (collectively,
the "Excluded Assets"):
(a) Those assets which are otherwise being conveyed to Weeks pursuant
to (i) the Contribution Agreement for Development Properties by and between
NWI and Weeks dated as of even date herewith; (ii) the Contribution
Agreement for the I-440 Land by and between NWI and Weeks dated as of even
date herewith; (iii) the Contribution Agreement for the Aspen Grove Land by
and between NWI and Weeks dated as of even date herewith; and (iv) the
Agreement of Merger by and between NWI Warehouse Group, LLC and Weeks dated
as of even date herewith;
(b) Organizational seals, minute books, ledgers or other books and
records pertaining to the organization, operation and capitalization of the
NWI Operating Business (except that Weeks shall have reasonable access to
such information and records relating to the Operating Business);
(c) Personal property identified on Schedule 1.02(c), attached
----------------
hereto;
(d) Trademarks, trade names, corporate names and logos owned by NWI
and any of its subsidiaries unrelated to the NWI Operating Business;
(e) Sales tax reports, tax returns, and certificates related to the
Operating Business (except that Weeks shall have reasonable access to such
information and records relating to the Operating Business);
(f) All other business books and records, including, without
limitation, all financial, operating, inventory, legal, personnel, payroll,
and customer records and all sales and promotional literature,
correspondence, and files which are not otherwise contained in Section
1.01(d) hereof (except that Weeks shall have reasonable access to such
information and records to the extent necessary);
(g) All life insurance policies, and any related proceeds therefrom,
issued on the life of John W. Nelley, Jr., Albert W. Buckley, Jr., Ralph
Dupps, Lewis Tapia and Tim Richards; and
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<PAGE>
(h) That certain 1995 Ford truck with vehicle identification number
1FDKF38F1TEB00001.
Section 1.03. Assumed Obligations. Weeks hereby assumes, and agrees to
-------------------
pay, perform and discharge, those liabilities and obligations, and only those
liabilities and obligations, expressly identified on Schedule 1.03, attached
-------------
hereto (the "Assumed Obligations").
Section 1.04. Excluded Liabilities. Except for the Assumed Obligations,
--------------------
no obligation or liability of NWI, whether or not relating to or arising out of
the operation of the Operating Business, of any nature whatsoever (whether
expressed or implied, fixed or contingent, liquidated or unliquidated, known or
unknown, accrued, due or to become due), including without limitation, any
obligations or liability of NWI to any of its current or former employees, is
being assumed by Weeks, nor shall Weeks be liable to pay, perform or discharge
any such obligation or liability, nor shall any of property or assets being
contributed to Weeks pursuant hereto be subject to any such obligation or
liability. NWI shall pay, perform, and discharge all of the Excluded
Liabilities consistent with present practice.
ARTICLE II
CONSIDERATION
Section 2.01. Consideration. NWI is transferring and delivering the
-------------
Operating Business without additional consideration from Weeks. Each of NWI and
Weeks acknowledges that NWI is receiving adequate consideration (i.e., limited
partnership interests in Weeks (the "Units")) for its assets pursuant to those
agreements described in Section 1.02(a) hereof. Each of NWI and Weeks further
acknowledges that the consummation of this Agreement is and the consummation of
those transactions contemplated by the agreements described in Section 1.02(a)
shall be simultaneous.
Section 2.02. The Closing.
-----------
(a) The Contribution has occurred simultaneously with the execution
and delivery hereof and shall commence at 9:00 a.m., EST, on the
Contribution Date at the offices of Baker, Donelson, Bearman & Caldwell,
Suite 1700 Union City Center, 511 Union Street, Nashville, Tennessee 37219,
or at such other place as may be agreed by NWI and Weeks (the "Closing").
(b) At the Closing, NWI has executed and delivered to Weeks the
following:
(i) Assignments, bills of sale or other documents or
instruments of transfer, in form and substance reasonably acceptable
to Weeks, to transfer to Weeks all tangible and intangible property
included in the Operating Business; and
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<PAGE>
(ii) Such other instruments or documents, in form and substance
reasonably acceptable to Weeks, as may be necessary to effect the
Closing or evidence the Contribution.
(c) At the Closing, Weeks has entered into the Transaction Documents
(as defined in the First Amendment (the "First Amendment") dated as of even
date herewith to the Second Amended and Restated Agreement of Limited
Partnership Agreement of Weeks dated as of October 30, 1996) and delivered
such other instruments and documents, in form and substance reasonably
acceptable to NWI, as may be necessary to effect the Closing or evidence
the Contribution.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF NWI
Section 3.01. Organization; Authority. NWI is a limited partnership duly
-----------------------
formed, validly existing and in good standing under the laws of the State of
Tennessee and has all the necessary power and authority to enter into and
perform its obligations under this Agreement. NWI X, L.P., is the sole general
partner of NWI and is a limited partnership duly formed, validly existing and in
good standing under the laws of the State of Tennessee and has all the necessary
power and authority, in its capacity as the sole general partner of NWI, to
enter into and perform its obligations under this Agreement. John W. Nelley,
Jr. and Albert W. Buckley, Jr. are the sole general partners of NWI X, L.P.
Section 3.02. Due Authorization; Binding Agreement. The execution,
------------------------------------
delivery and performance of this Agreement by NWI has been duly and validly
authorized by all necessary action of NWI. This Agreement has been duly
executed and delivered by NWI and constitutes a legal, valid and binding
obligation of NWI, enforceable against NWI in accordance with the terms hereof
(except as enforcement may be limited by bankruptcy, insolvency or other laws
affecting enforcement of creditors' rights generally and general equity
principles).
Section 3.03. Governmental Consents. Except as has been obtained or is
---------------------
being effected as part of the consummation of the transactions contemplated by
this Agreement, no consent, waiver, approval or authorization of, or filing,
registration or qualification with, or notice to, any governmental unit or any
other regulatory body is required to be made, obtained or given by NWI in
connection with the execution, delivery and performance of this Agreement.
Section 3.04. Other Consents. Except for waivers and consents that have
--------------
been obtained prior to the date hereof, and except as would not have a material
adverse effect on the Operating Business, no consent of any party to any
agreement, contract, mortgage, indenture, lease, reciprocal easement or
operating agreement or other arrangement, to which NWI is a party, or, by which
NWI
-4-
<PAGE>
is bound, is required in connection with the execution, delivery or performance
by NWI of this Agreement or the consummation of the transactions provided for
herein.
Section 3.05. No Violation. Except for waivers and consents that have
------------
been obtained prior to the date hereof, none of the execution, delivery and
performance of this Agreement by NWI does or will, with or without the giving of
notice, lapse of time or both, (i) violate, conflict with or constitute a
default under any term or condition of (A) the organizational documents of NWI,
or (B) any term or provision of any judgment, decree, order, statute,
injunction, rule or regulation of a governmental unit applicable to NWI or any
agreement, contract, mortgage, indenture, lease, reciprocal easement or
operating agreement or other arrangement to which NWI is a party or by which it
is bound or to which any of its assets is subject, except in the case where
appropriate waivers and consents have been obtained prior to the date hereof,
and except as would not have a material adverse effect on the Operating
Business, or (ii) result in the creation of any lien or other encumbrance upon
the Operating Business, except as may be contemplated by this Agreement, and
except as would not have a material adverse effect on the Operating Business.
Section 3.06. Compliance with Laws. NWI has complied with all laws
--------------------
applicable to the conduct of the business of NWI and to the ownership, use and
operation of the Operating Business and has obtained all licenses and permits
required for the conduct thereof, except where the failure to so comply or
obtain will not have a material adverse effect on the Operating Business. To
NWI's knowledge, such licenses and permits are in full force and effect, NWI has
not taken any action that would (or failed to take any action the omission of
which would) result in the revocation of such licenses or permits, and NWI has
not received any notice of violation from any federal, state or municipal entity
or written notice of an intention by any such government entity to revoke any
certificate of occupancy or other certificate, license or permit issued by it in
connection with the Operating Business, that in each case has not been cured or
otherwise resolved to the satisfaction of such government entity, except where
such failure or such action will not have a material adverse effect on the
Operating Business.
Section 3.07. Absence of Undisclosed Liabilities and Contractual
--------------------------------------------------
Obligations. The consummation of the transactions effected hereby will not
- -----------
subject Weeks or any of its assets, including, without limitation, those
contributed pursuant hereto, to any liability or obligation whatsoever, except
for the Assumed Obligations.
Section 3.08. Contracts in Force. Each of the agreements related to the
------------------
Operating Business are valid and binding and in full force and effect,
enforceable against the parties thereto in accordance with its terms (except as
enforcement may be limited by bankruptcy, insolvency or other laws affecting
enforcement of creditors' rights generally and general equitable principles). To
NWI's knowledge, no other party to any of the contracts being transferred
pursuant to this Agreement is in default under such contract in any material
respect. The contracts being transferred pursuant to this Agreement constitute
all of the agreements which are related to the Operating Business.
-5-
<PAGE>
Section 3.09. Litigation. There are no claims, actions, suits,
----------
proceedings or investigations pending, or, to NWI's knowledge, threatened,
before any court, governmental unit, agency, arbitrator, or other forum or
tribunal with respect to the Operating Business (including, without limitation,
by any current or former employee of NWI).
Section 3.10. Financial Status. NWI is solvent, has not made a general
----------------
assignment for the benefit of its creditors, and has not admitted in writing its
inability to pay its debts as they become due, nor has NWI filed, nor does it
contemplate the filing of, any bankruptcy, reorganization, arrangement,
insolvency or liquidation proceedings, or any other proceeding for the relief of
debtors in general, nor has any such proceeding been instituted by or against
NWI, nor is any such proceeding to NWI's knowledge threatened or contemplated.
Section 3.11. Taxes. NWI has filed in a timely manner all tax returns
-----
required to be filed by it or on its behalf. All such tax returns are true,
correct and complete in all material respects, and taxes due with respect to
such tax returns have been timely paid in full.
Section 3.12. Employee Benefits.
-----------------
(a) Definition of Benefit Plans. For purposes of this Section 3.12,
---------------------------
the term "Benefit Plan" means any plan, program, arrangement, fund, policy,
practice or contract which, through which or under which NWI provides
benefits or compensation to or on behalf of employees or former employees
of NWI, whether formal or informal, and whether written or not written.
(b) Documentation. NWI has made available to Weeks a true and
-------------
complete copy of the all documents relating to any such Benefit Plan.
(c) Compliance; Legal Actions. Each Benefit Plan maintained by NWI
-------------------------
has been maintained, by its terms and in operation, in all material
respects in accordance with all applicable laws. There are no actions,
audits, suits or claims known to NWI which are pending or, to the knowledge
of the NWI, threatened against any Benefit Plan or against the assets of
any of the Benefit Plans.
(d) Funding. NWI has made full and timely payment of all amounts
-------
required to be contributed under the terms of each Benefit Plan and
applicable law or required to be paid as expenses under such Benefit Plan,
and no excise taxes are assessable as a result of any nondeductible or
other contributions made or not made to a Benefit Plan. The assets of all
Benefit Plans which are required under applicable laws to be held in trust
are in fact held in trust, and the assets of each such Benefit Plan equal
or exceed the liabilities of each such plan. The liabilities of each other
plan are in all material respects properly and accurately reported on the
financial statements and records of NWI. NWI does not owe any deferred
compensation or commission to any person as of the Contribution Date.
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<PAGE>
(e) Liabilities. NWI is not subject to any material liability, tax
-----------
or penalty whatsoever with respect to any Benefit Plan.
Section 3.13. Title to Assets. NWI is the sole owner of and holds good,
---------------
valid and marketable title to all of the assets being transferred to Weeks
pursuant to this Agreement, free and clear of any and all claims, lines,
pledges, security interests, and other encumbrances of any kind.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF WEEKS
Section 4.01. Organization; Authority. Weeks is a limited partnership
-----------------------
duly formed, validly existing and in good standing under the laws of the State
of Georgia and has all the necessary power and authority to enter into and
perform its obligations under this Agreement.
Section 4.02. Due Authorization; Binding Agreement. The execution,
------------------------------------
delivery and performance of this Agreement by Weeks has been duly and validly
authorized by all necessary action of Weeks. This Agreement has been duly
executed and delivered by Weeks and constitutes a legal, valid and binding
obligation of Weeks, enforceable against Weeks in accordance with the terms
hereof (except as enforcement may be limited by bankruptcy, insolvency or other
laws affecting enforcement of creditors' rights generally and general equity
principles).
Section 4.03. No Violation. None of the execution, delivery and
------------
performance of this Agreement by Weeks does or will, with or without the giving
of notice, lapse of time or both, (i) violate, conflict with or constitute a
default under any term or condition of (A) the organizational documents of
Weeks, or (B) any term or provision of any judgment, decree, order, statute,
injunction, rule or regulation of a governmental unit applicable to Weeks or any
agreement, contract, mortgage, indenture, lease, reciprocal easement or
operating agreement or other arrangement to which such Weeks is a party or by
which it is bound or to which any of its assets is subject, except in the case
where appropriate waivers and consents have been obtained prior to the date
hereof, and except as would not have a material adverse effect on Weeks, or (ii)
result in the creation of any lien or other encumbrance upon the assets of
Weeks, except as may be contemplated by this Agreement, and except as would not
have a material adverse effect on Weeks or its assets.
Section 4.04. Litigation. There are no claims, actions, suits,
----------
proceedings or investigations pending, or, to Weeks' knowledge, threatened,
before any court, governmental unit, agency, arbitrator or other forum or
tribunal with respect to the assets of Weeks which would have a material adverse
effect on the assets of Weeks.
-7-
<PAGE>
Section 4.05. Governmental Consents. Except as has been obtained or is
---------------------
being effected as part of the consummation of the transactions contemplated by
this Agreement, no consent, waiver, approval or authorization of, or filing,
registration or qualification with, or notice to, any governmental unit or any
other regulatory body is required to be made, obtained or given by Weeks in
connection with the execution, delivery and performance of this Agreement.
Section 4.06. Other Consents. Except for waivers and consents that have
--------------
been obtained prior to the date hereof, and except as would not have a material
adverse effect on Weeks, no consent of any party to any agreement, contract,
mortgage, indenture, lease, reciprocal easement or operating agreement or other
arrangement, to which Weeks is a party, or, by which Weeks is bound, is required
in connection with the execution, delivery or performance by Weeks of this
Agreement or the consummation of the transactions provided for herein.
Section 4.07. Compliance with Laws. Weeks has complied with all laws
--------------------
applicable to the conduct of the business of Weeks and has obtained all licenses
and permits required for the conduct thereof, except where the failure to so
comply or obtain will not have a material adverse effect on Weeks. To Weeks'
knowledge, such licenses and permits are in full force and effect, Weeks has not
taken any action that would (or failed to take any action the omission of which
would) result in the revocation of such licenses or permits, and Weeks has not
received any notice of violation from any federal, state or municipal entity or
written notice of an intention by any such government entity to revoke any
certificate of occupancy or other certificate, license or permit issued by it in
connection with its business, that in each case has not been cured or otherwise
resolved to the satisfaction of such government entity, except where such
failure or such action will not have a material adverse effect on Weeks.
Section 4.08. Absence of Undisclosed Liabilities and Contractual
--------------------------------------------------
Obligations. The consummation of the transactions effected hereby will not
- -----------
subject Weeks or any of its assets, to any liability or obligation whatsoever,
except for those which would not have a material adverse effect on Weeks.
Section 4.09. Financial Status. Weeks is solvent, has not made a general
----------------
assignment for the benefit of its creditors, and has not admitted in writing its
inability to pay its debts as they become due, nor has Weeks filed, nor does it
contemplate the filing of, any bankruptcy, reorganization, arrangement,
insolvency or liquidation proceedings, or any other proceeding for the relief of
debtors in general, nor has any such proceeding been instituted by or against
Weeks, nor is any such proceeding to Weeks's knowledge threatened or
contemplated.
Section 4.10. Taxes. Weeks has filed in a timely manner all tax returns
-----
required to be filed by it or on its behalf. All such tax returns are true,
correct and complete in all material respects, and taxes due with respect to
such tax returns have been timely paid in full.
ARTICLE V
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<PAGE>
COVENANTS AND AGREEMENTS
Section 5.01. Further Assurances. In addition to the actions, contracts
------------------
and other agreements and documents and other papers specifically required to be
taken or delivered pursuant to this Agreement, each of the parties hereto shall
execute such contracts and other agreements and documents and take such further
actions as may be reasonably required or desirable to carry out the provisions
hereof and the Contribution.
Section 5.02. Employee Matters. Weeks is entitled to offer employment to
----------------
any and all active employees of NWI, and NWI shall in no way hinder or impede
Weeks from soliciting the employment of any employee of NWI. Nothing contained
herein is intended to limit Weeks's ability to terminate or modify the terms of
employment of any active employee of NWI who accepts employment with Weeks. NWI
shall be obligated to discharge and satisfy all obligations, liabilities,
demands, claims, assessments and expenses related to any employee of NWI which
accrued prior to the Contribution Date, and Weeks shall have no liability
whatsoever in that connection. After the Contribution Date, Weeks shall be
obligated to discharge and satisfy all obligations, liabilities, demands,
claims, assessments and expenses which relate to any facts or circumstances
first occuring on or after the Contribution Date related to those employees of
NWI which Weeks decides to employ, and NWI shall have no liability whatsoever in
that connection.
ARTICLE VI
INDEMNIFICATION
Section 6.01. Survival; Reliance. The representations, warranties,
------------------
covenants and agreements made by each of the parties hereto shall survive until
the third anniversary of the Contribution Date, and each party hereto has the
right to fully rely on the representations, warranties, covenants and agreements
made by the other party.
Section 6.02. Indemnification. In the event that a party breaches any
---------------
representation, warranty, covenant or agreement contained herein, such breaching
party agrees to indemnify and hold harmless the non-breaching party from all
liabilities, demands, claims, actions, assessments, losses, fines, penalties,
costs, damages and expenses (including, without limitation, reasonable
attorneys' and accountants' fees and expenses) sustained or incurred by the non-
breaching party as result of such breach. Weeks is entitled to seek recourse
for any such breach in accordance with the indemnity and notice provisions
contained in the First Amendment.
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<PAGE>
ARTICLE VII
MISCELLANEOUS
Section 7.01. Proration of Income and Expense. The parties hereto have
-------------------------------
expressly determined to apportion all items of income and expense associated
with or related to the Operating Business as of the Contribution Date.
Section 7.02. Fees and Expenses; Transfer Taxes. Fees and expenses
---------------------------------
incident to the negotiation, preparation and execution of this Agreement and the
performance of the Contribution (including attorneys', accountants', financial
advisors' and other advisors' fees and disbursements) shall be borne by the
party incurring the expense.
Section 7.03. Notices. Any notice or other communication required or
-------
that may be given hereunder shall be in writing and shall be delivered
personally or sent by certified, registered, or express mail, postage prepaid,
to the parties at the following addresses or such other addresses as shall be
specified by the parties by like notice, and shall be deemed given when so
delivered personally or if mailed, three days after the date of mailing, as
follows:
(i) If to Weeks:
Weeks Realty, L.P.
4497 Park Drive
Norcross, Georgia 30093
Attention: Thomas D. Senkbeil
Vice Chairman and Chief Investment Officer
with a copy to:
King & Spalding
191 Peachtree Street
Atlanta, Georgia 30303
Attention: William B. Fryer, Esq.
(ii) If to NWI:
1410 Donelson Pike, Suite A-5
Nashville, Tennessee 37217
Attention: Mr. John W. Nelley, Jr.
Section 7.04. Entire Agreement. This Agreement and the Transaction
----------------
Documents (as defined in the First Amendment) constitute the entire agreement
among the parties with respect to the subject matter hereof and supersedes all
prior contracts, agreements undertakings and
-10-
<PAGE>
understandings, express or implied, written or oral, between the parties, or any
of them, with respect to the subject matter hereof and, except as otherwise
expressly provided herein, is not intended to confer upon any other person any
rights or remedies hereunder.
Section 7.05. Waivers and Amendments. This Agreement may be amended,
----------------------
modified, superseded, canceled, renewed or extended, and the terms and
conditions hereof may be waived, only by a written instrument signed by the
parties hereto.
Section 7.06. Governing Law. This Agreement shall be governed by, and
-------------
construed and enforce in accordance with and subject to, the laws of the State
of Tennessee, without regard to principles of conflicts of law.
Section 7.07. Binding Effect; Benefit. This Agreement shall inure to the
-----------------------
benefit of and be binding upon the parties hereto and their respective
successors and assigns. Nothing in this Agreement, expressed or implied, is
intended to confer on any person other than the parties hereto or their
respective successors and assigns, any rights, remedies, obligations or
liabilities under or by reason of this Agreement.
Section 7.08. No Assignment. This Agreement is not assignable (by
-------------
operation of law or otherwise) without the prior written consent of the other
party.
Section 7.09. Counterparts. This Agreement may be executed in two or more
------------
counterparts, each of which shall be deemed an original but all of which taken
together shall constitute one and same instrument.
Section 7.10. Headings. The headings in this Agreement are for reference
--------
purposes only and shall not in any way affect the meaning or interpretation of
this Agreement.
(REMAINDER OF PAGE INTENTIONALLY LEFT BLANK)
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<PAGE>
IN WITNESS WHEREOF, the parties have executed this Agreement as of
the date first above written.
NWI WAREHOUSE GROUP, L.P.
By: NWI X, L.P., its Sole General Partner
By: _______________________
John W. Nelley, Jr.,
General Partner
By: _______________________
Albert W. Buckley, Jr.,
General Partner
WEEKS REALTY, L.P.
By: Weeks GP Holdings, Inc.
a Georgia corporation, its
Sole General Partner
By: ______________________
Name:
Title:
-12-
<PAGE>
SCHEDULE 1.02(C)
----------------
[Schedule of personal effects]
-13-
<PAGE>
SCHEDULE 1.03
-------------
[Schedule of liabilities]
-14-
<PAGE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
CONTRIBUTION AGREEMENT
FOR
BUCKLEY OPERATING BUSINESS
BY AND BETWEEN
BUCKLEY & COMPANY REAL ESTATE, INC.
AND
WEEKS REALTY, L.P.
DATED AS OF NOVEMBER 1, 1996
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE>
TABLE OF CONTENTS
-----------------
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
ARTICLE I CONTRIBUTION............................................................... 1
Section 1.01. Contribution of Assets............................................... 1
Section 1.02. Excluded Assets...................................................... 2
Section 1.03. Assumed Obligations.................................................. 2
Section 1.04. Excluded Liabilities................................................. 2
ARTICLE II CONSIDERATION............................................................. 3
Section 2.01. Form and Amount of Consideration..................................... 3
Section 2.02. Recalculation of Consideration....................................... 3
Section 2.03. Minimum Consideration................................................ 3
Section 2.04. The Closing.......................................................... 4
ARTICLE III REPRESENTATIONS AND WARRANTIES OF BUCKLEY................................. 4
Section 3.01. Organization; Authority.............................................. 4
Section 3.02. Due Authorization; Binding Agreement................................. 4
Section 3.03. Governmental Consents................................................ 4
Section 3.04. Other Consents....................................................... 5
Section 3.05. No Violation......................................................... 5
Section 3.06. Compliance with Laws................................................. 5
Section 3.07. Absence of Undisclosed Liabilities and Contractual Obligations....... 5
Section 3.08. Contracts in Force................................................... 5
Section 3.09. Litigation........................................................... 6
Section 3.10. Financial Status..................................................... 6
Section 3.11. Taxes................................................................ 6
Section 3.12. Employee Benefits; Labor............................................. 6
Section 3.13. Title to Assets...................................................... 7
Section 3.14. Investment........................................................... 7
Section 3.15. Access to Data....................................................... 7
Section 3.16. No Public Market..................................................... 7
Section 3.17. Experience; Risk..................................................... 7
ARTICLE IV REPRESENTATIONS AND WARRANTIES OF WEEKS.................................... 8
Section 4.01. Organization; Authority.............................................. 8
Section 4.02. Due Authorization; Binding Agreement................................. 8
Section 4.03. No Violation......................................................... 8
</TABLE>
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<PAGE>
<TABLE>
<CAPTION>
Page
----
<S> <C>
Section 4.04. Litigation..................................................................... 8
Section 4.05. Governmental Consents.......................................................... 8
Section 4.06. Other Consents................................................................. 8
Section 4.07. Compliance with Laws........................................................... 9
Section 4.08. Absence of Undisclosed Liabilities and Contractual Obligations................. 9
Section 4.09. Financial Status............................................................... 9
Section 4.10. Taxes.......................................................................... 9
ARTICLE V COVENANTS AND AGREEMENTS............................................................. 9
Section 5.01. Further Assurances............................................................. 9
Section 5.02. Employee Matters............................................................... 9
ARTICLE VI COVENANTS AND AGREEMENTS............................................................ 10
Section 6.01. Survival; Reliance............................................................. 10
Section 6.02. Indemnification................................................................ 10
ARTICLE VII MISCELLANEOUS...................................................................... 10
Section 7.01. Proration of Income and Expenses............................................... 10
Section 7.02. Fees and Expenses; Transfer Taxes.............................................. 10
Section 7.03. Notices........................................................................ 11
Section 7.04. Entire Agreement............................................................... 11
Section 7.05. Waivers and Amendments......................................................... 11
Section 7.06. Governing Law.................................................................. 11
Section 7.07. Binding Effect; Benefit........................................................ 11
Section 7.08. No Assignment.................................................................. 12
Section 7.09. Counterparts................................................................... 12
Section 7.10. Headings....................................................................... 12
</TABLE>
-ii-
<PAGE>
CONTRIBUTION AGREEMENT
CONTRIBUTION AGREEMENT (the "Agreement") dated as of November 1, 1996 (the
"Contribution Date"), by and between Buckley & Company Real Estate, Inc., a
Tennessee corporation ("Buckley"), and Weeks Realty, L.P., a Georgia limited
partnership ("Weeks").
W I T N E S S E T H:
- - - - - - - - - -
NOW, THEREFORE, in consideration of the premises and the mutual covenants
herein contained and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto, intending to
be legally bound, agree as follows:
ARTICLE I
CONTRIBUTION
Section 1.01. Contribution of Assets. Buckley hereby contributes to the
----------------------
capital of Weeks, effective as of the Contribution Date, and Weeks hereby
accepts from Buckley, effective as of the Contribution Date (the
"Contribution"), the right, title and interest in and to the real estate
brokerage and operating business of Buckley and the assets relating thereto (the
"Operating Business"); it being the intention of Buckley to contribute and it
being the intention of Weeks to accept and receive the Operating Business and
the assets relating thereto, and the assets, properties, rights, contracts,
claims, operations and management of the Operating Business of every kind and
description related to or necessary for the ownership or operation of the
Operating Business, wherever located, whether tangible or intangible, real,
personal, or mixed, whether or not appearing on the books of Buckley, that are
owned or leased by Buckley on the date hereof, free and clear of all liens, but
excluding the Excluded Assets. Without limiting the generality of the
foregoing, the Operating Business shall include the following:
(a) All office supplies, equipment, business machines, furniture,
fixtures, information systems, computers, and other tangible property;
(b) All revenue generating contracts, agreements and other
arrangements related to property management, asset management, development
and rehabilitation, brokerage activities (including sales, leasing and
financing), and other services related or ancillary thereto;
(c) All third-party accounts receivable relating to the Operating
Business which are carried on the books of Buckley;
-1-
<PAGE>
(d) All intangible property, including any permits and licenses; and
(e) All business books and records, including, without limitation, all
financial, operating, inventory, legal, personnel, payroll, and customer
records and all sales and promotional literature, correspondence, and
files, which are directly related to the assets being transferred pursuant
to this Agreement (except that Buckley shall have reasonable access to such
information and records to the extent necessary).
Section 1.02. Excluded Assets. Notwithstanding anything to the contrary
---------------
contained in Section 1.01 hereof, the parties to this Agreement expressly
understand and agree that Buckley is not, pursuant to this Agreement, conveying
or contributing to Weeks the following assets, rights and properties
(collectively, the "Excluded Assets"):
(a) Corporate seals, minute books, stock ledgers or other books and
records pertaining to the organization, issuance of stock, operation and
capitalization of Buckley (except that Weeks shall have reasonable access
to such information and records relating to the Operating Business);
(b) Trademarks, trade names, corporate names and logos owned by
Buckley and any of its subsidiaries unrelated to the Operating Business;
(c) Sales tax reports, tax returns, and certificates related to the
Operating Business (except that Weeks shall have reasonable access to such
information and records relating to the Operating Business);
(d) Personal property identified on Schedule 1.02(d), attached hereto;
----------------
(e) All other business books and records, including, without
limitation, all financial, operating, inventory, legal, personnel, payroll,
and customer records and all sales and promotional literature,
correspondence, and files which are not otherwise contained in Section
1.01(e) hereof (except that Weeks shall have reasonable access to such
information and records to the extent necessary); and
(f) All life insurance policies, and any related proceeds therefrom,
issued on the life of Albert W. Buckley, Jr.
Section 1.03. Assumed Obligations. Weeks hereby assumes, and agrees to
-------------------
pay, perform and discharge, those liabilities and obligations, and only those
liabilities and obligations, expressly identified on Schedule 1.03, attached
-------------
hereto (the "Assumed Obligations").
Section 1.04. Excluded Liabilities. Except for the Assumed Obligations,
--------------------
no obligation or liability of Buckley, whether or not relating to or arising out
of the operation of the Operating Business, of any nature whatsoever (whether
expressed or implied, fixed or contingent, liquidated
-2-
<PAGE>
or unliquidated, known or unknown, accrued, due or to become due), including
without limitation, any obligations or liability of Buckley to any of its
current or former employees, is being assumed by Weeks, nor shall Weeks be
liable to pay, perform or discharge any such obligation or liability, nor shall
any of property or assets being contributed to Weeks pursuant hereto be subject
to any such obligation or liability. Buckley shall pay, perform, and discharge
all of the Excluded Liabilities consistent with present practice.
ARTICLE II
CONSIDERATION
Section 2.01. Form and Amount of Consideration. In consideration of
--------------------------------
Buckley's transfer and delivery of the Operating Business, Weeks does hereby
issue and deliver to Buckley 20,000 limited partnership units in Weeks (the
"Units"). Such Units shall be subject to the provisions of the Registration
Rights and Lock-Up Agreement dated as of even date herewith and the provisions
of the Second Amended and Restated Agreement of Limited Partnership of Weeks
dated as of October 30, 1996, as amended by the First Amendment thereto dated as
of even date herewith (the "First Amendment").
Section 2.02. Recalculation of Consideration. For the purposes hereof,
------------------------------
the "Brokerage Amount" means $500,000. If the cumulative net operating income
for Weeks' third-party brokerage business in Nashville, Tennessee is less than
sixty percent (60%) of the Brokerage Amount for the three (3) year period
commencing on the Contribution Date and ending on the third anniversary thereof,
then Buckley shall automatically surrender to Weeks for no consideration
effective as of such third anniversary the number of such Units equal to the
product of the total number of Units issued to Buckley on the Contribution Date
pursuant to Section 2.01 times a fraction, the numerator of which is the amount
by which sixty (60%) of the Brokerage Amount exceeds the cumulative net
operating income actually achieved for such third-party brokerage business for
such three (3) year period and the denominator of which is sixty (60%) of the
Brokerage Amount. Net operating income for the third-party brokerage business
for the relevant three (3) year period shall be determined in Weeks' reasonable
discretion and shall be defined as gross operating revenues attributable to such
business (excluding individual agent commissions) less direct expenses
attributable to such business and less a reasonable allocation of general
overhead. In computing the cumulative net operating income for Weeks' third-
party brokerage business in Nashville for the foregoing purposes, any commission
paid to Weeks by a third-party seller out of the sales proceeds for any land
acquisition for Weeks' own account in a transaction in which a brokerage
commission would otherwise be payable to a third-party broker shall be taken
into account as part of Weeks' third-party brokerage income in Nashville, but
limited to an aggregate of Ninety Thousand Dollars ($90,000) of net operating
income attributable to commissions derived from Weeks' land acquisitions during
such relevant three (3) year period.
-3-
<PAGE>
Section 2.03. Minimum Consideration. Notwithstanding the foregoing
---------------------
provisions of Section 2.02 providing for the possible surrender of Units by
Buckley depending upon the level of cumulative net operating income for Weeks'
third-party brokerage business in Nashville, Buckley will be entitled to retain
and not surrender to Weeks 8,000 Units (i.e., Units having an initial face value
of Two Hundred Thousand Dollars ($200,000) at Twenty-Five Dollars ($25) per
Unit) issued to Buckley pursuant to this Agreement.
Section 2.04. The Closing.
-----------
(a) The Contribution has occurred simultaneously with the execution
and delivery hereof and shall commence at 9:00 a.m., EST, on the
Contribution Date at the offices of Baker, Donelson, Bearman & Caldwell,
Suite 1700 Union City Center, 511 Union Street, Nashville, Tennessee 37219,
or at such other place as may be agreed by Buckley and Weeks (the
"Closing").
(b) At the Closing, Buckley has executed and delivered to Weeks the
following:
(i) Assignments, bills of sale or other documents or
instruments of transfer, in form and substance reasonably acceptable
to Weeks, to transfer to Weeks all tangible and intangible property
included in the Operating Business; and
(ii) Such other instruments or documents, in form and substance
reasonably acceptable to Weeks, as may be necessary to effect the
Closing or evidence the Contribution.
(c) At the Closing, Weeks has entered into the Transaction Documents
(as defined in the First Amendment) and delivered such other instruments
and documents, in form and substance reasonably acceptable to Buckley, as
may be necessary to effect the Closing or evidence the Contribution.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF BUCKLEY
Section 3.01. Organization; Authority. Buckley is a corporation duly
-----------------------
formed, validly existing and in good standing under the laws of the State of
Tennessee and has all the necessary power and authority to enter into and
perform its obligations under this Agreement. Albert W. Buckley, Jr. is the
sole shareholder of Buckley and possesses all necessary power and authority to
control the actions of Buckley.
Section 3.02. Due Authorization; Binding Agreement. The execution,
------------------------------------
delivery and performance of this Agreement by Buckley has been duly and validly
authorized by all necessary
-4-
<PAGE>
action of Buckley. This Agreement has been duly executed and delivered by
Buckley and constitutes a legal, valid and binding obligation of Buckley,
enforceable against Buckley in accordance with the terms hereof (except as
enforcement may be limited by bankruptcy, insolvency or other laws affecting
enforcement of creditors' rights generally and general equity principles).
Section 3.03. Governmental Consents. Except as has been obtained or is
---------------------
being effected as part of the consummation of the transactions contemplated by
this Agreement, no consent, waiver, approval or authorization of, or filing,
registration or qualification with, or notice to, any governmental unit or any
other regulatory body is required to be made, obtained or given by Buckley in
connection with the execution, delivery and performance of this Agreement.
Section 3.04. Other Consents. Except for waivers and consents that
--------------
have been obtained prior to the date hereof, and except as would not have a
material adverse effect on the Operating Business, no consent of any party to
any agreement, contract, mortgage, indenture, lease, reciprocal easement or
operating agreement or other arrangement, to which Buckley is a party, or, by
which Buckley is bound, is required in connection with the execution, delivery
or performance by Buckley of this Agreement or the consummation of the
transactions provided for herein.
Section 3.05. No Violation. Except for waivers and consents that have
------------
been obtained prior to the date hereof, none of the execution, delivery and
performance of this Agreement by Buckley does or will, with or without the
giving of notice, lapse of time or both, (i) violate, conflict with or
constitute a default under any term or condition of (A) the organizational
documents of Buckley, or (B) any term or provision of any judgment, decree,
order, statute, injunction, rule or regulation of a governmental unit applicable
to Buckley or any agreement, contract, mortgage, indenture, lease, reciprocal
easement or operating agreement or other arrangement to which Buckley is a party
or by which it is bound or to which any of its assets is subject, except in the
case where appropriate waivers and consents have been obtained prior to the date
hereof, and except as would not have a material adverse effect on the Operating
Business, or (ii) result in the creation of any lien or other encumbrance upon
the Operating Business, except as may be contemplated by this Agreement, and
except as would not have a material adverse effect on the Operating Business.
Section 3.06. Compliance with Laws. Buckley has complied with all laws
--------------------
applicable to the conduct of the business of Buckley and to the ownership, use
and operation of the Operating Business and has obtained all licenses and
permits required for the conduct thereof, except where the failure to so comply
or obtain will not have a material adverse effect on the Operating Business. To
Buckley's knowledge, such licenses and permits are in full force and effect,
Buckley has not taken any action that would (or failed to take any action the
omission of which would) result in the revocation of such licenses or permits,
and Buckley has not received any notice of violation from any federal, state or
municipal entity or written notice of an intention by any such government entity
to revoke any certificate of occupancy or other certificate, license or permit
issued by it in connection with the Operating Business, that in each case has
not been cured or otherwise resolved to the satisfaction of such government
entity, except where such failure or such action will not have a material
adverse effect on the Operating Business.
-5-
<PAGE>
Section 3.07. Absence of Undisclosed Liabilities and Contractual
--------------------------------------------------
Obligations. The consummation of the transactions effected hereby will not
- -----------
subject Weeks or any of its assets, including, without limitation, those
contributed pursuant hereto, to any liability or obligation whatsoever, except
for the Assumed Obligations.
Section 3.08. Contracts in Force. Each of the agreements related to
------------------
the Operating Business are valid and binding and in full force and effect,
enforceable against the parties thereto in accordance with its terms (except as
enforcement may be limited by bankruptcy, insolvency or other laws affecting
enforcement of creditors' rights generally and general equitable principles).
To Buckley's knowledge, no other party to any of the contracts being transferred
pursuant to this Agreement is in default under such contract in any material
respect. The contracts being transferred pursuant to this Agreement constitute
all of the agreements which are related to the Operating Business.
Section 3.09. Litigation. There are no claims, actions, suits,
----------
proceedings or investigations pending, or, to Buckley's knowledge, threatened,
before any court, governmental unit, agency, arbitrator or other forum or
tribunal with respect to the Operating Business (including, without limitation,
by any current or former employee of Buckley).
Section 3.10. Financial Status. Buckley is solvent, has not made a
----------------
general assignment for the benefit of its creditors, and has not admitted in
writing its inability to pay its debts as they become due, nor has Buckley
filed, nor does it contemplate the filing of, any bankruptcy, reorganization,
arrangement, insolvency or liquidation proceedings, or any other proceeding for
the relief of debtors in general, nor has any such proceeding been instituted by
or against Buckley, nor is any such proceeding to Buckley's knowledge threatened
or contemplated.
Section 3.11. Taxes. Buckley has filed in a timely manner all tax
-----
returns required to be filed by it or on its behalf. All such tax returns are
true, correct and complete in all material respects, and taxes due with respect
to such tax returns have been timely paid in full.
Section 3.12. Employee Benefits.
-----------------
(a) Definition of Benefit Plans. For purposes of this Section 3.12,
---------------------------
the term "Benefit Plan" means any plan, program, arrangement, fund, policy,
practice or contract which, through which or under which Buckley provides
benefits or compensation to or on behalf of employees or former employees
of Buckley, whether formal or informal, and whether written or not written.
(b) Documentation. Buckley has made available to Weeks a true and
-------------
complete copy of the all documents relating to any such Benefit Plan.
-6-
<PAGE>
(c) Compliance; Legal Actions. Each Benefit Plan maintained by
-------------------------
Buckley has been maintained, by its terms and in operation, in all material
respects in accordance with all applicable laws. There are no actions,
audits, suits or claims known to Buckley which are pending or, to the
knowledge of the Buckley, threatened against any Benefit Plan or against
the assets of any of the Benefit Plans.
(d) Funding. Buckley has made full and timely payment of all amounts
-------
required to be contributed under the terms of each Benefit Plan and
applicable law or required to be paid as expenses under such Benefit Plan,
and no excise taxes are assessable as a result of any nondeductible or
other contributions made or not made to a Benefit Plan. The assets of all
Benefit Plans which are required under applicable laws to be held in trust
are in fact held in trust, and the assets of each such Benefit Plan equal
or exceed the liabilities of each such plan. The liabilities of each other
plan are in all material respects properly and accurately reported on the
financial statements and records of Buckley. Buckley does not owe any
deferred compensation or commission to any person as of the Contribution
Date.
(e) Liabilities. Buckley is not subject to any material liability,
-----------
tax or penalty whatsoever with respect to any Benefit Plan.
Section 3.13. Title to Assets. Buckley is the sole owner of and holds
---------------
good, valid and marketable title to all of the assets being transferred to Weeks
pursuant to this Agreement, free and clear of any and all claims, lines,
pledges, security interests, and other encumbrances of any kind.
Section 3.14. Investment.
----------
(a) Buckley is acquiring the Units for its own account and not with a
view to, or for sale in connection with, the "distribution," as such term
is used in Section 2(11) of the Securities Act of 1933, as amended (the
"Securities Act"), of any of the Units in violation of the Securities Act.
(b) Buckley is an "accredited investor," as that term is defined in
Rule 501(a) of Regulation D promulgated under the Securities Act.
(c) Buckley understands that the Units have not been registered under
the Securities Act by reason of a specific exemption from the registration
provisions of the Securities Act which depends upon, among other things,
the nature of the investment intent and the accuracy of such Buckley's
representations as expressed herein.
Section 3.15. Access to Data. Buckley has had an opportunity to discuss
--------------
Weeks' business, management and financial affairs with Weeks' management and has
had an opportunity to review Weeks' financial records.
-7-
<PAGE>
Section 3.16. No Public Market. Buckley understands and acknowledges that
----------------
no public market now exists for any of the securities issued by Weeks and that
there can be no assurance that a public market will ever exist for the Units.
Section 3.17. Experience; Risk. Buckley has such knowledge and experience
----------------
in financial and business matters that Buckley is capable of evaluating the
merits and risks of the purchase of the Units pursuant to this Amendment and of
protecting the Buckley's interests in connection herewith.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF WEEKS
Section 4.01. Organization; Authority. Weeks is a limited partnership
-----------------------
duly formed, validly existing and in good standing under the laws of the State
of Georgia and has all the necessary power and authority to enter into and
perform its obligations under this Agreement.
Section 4.02. Due Authorization; Binding Agreement. The execution,
------------------------------------
delivery and performance of this Agreement by Weeks has been duly and validly
authorized by all necessary action of Weeks. This Agreement has been duly
executed and delivered by Weeks and constitutes a legal, valid and binding
obligation of Weeks, enforceable against Weeks in accordance with the terms
hereof (except as enforcement may be limited by bankruptcy, insolvency or other
laws affecting enforcement of creditors' rights generally and general equity
principles).
Section 4.03. No Violation. None of the execution, delivery and
------------
performance of this Agreement by Weeks does or will, with or without the giving
of notice, lapse of time or both, (i) violate, conflict with or constitute a
default under any term or condition of (A) the organizational documents of
Weeks, or (B) any term or provision of any judgment, decree, order, statute,
injunction, rule or regulation of a governmental unit applicable to Weeks or any
agreement, contract, mortgage, indenture, lease, reciprocal easement or
operating agreement or other arrangement to which such Weeks is a party or by
which it is bound or to which any of its assets is subject, except in the case
where appropriate waivers and consents have been obtained prior to the date
hereof, and except as would not have a material adverse effect on Weeks, or (ii)
result in the creation of any lien or other encumbrance upon the assets of
Weeks, except as may be contemplated by this Agreement, and except as would not
have a material adverse effect on Weeks or its assets.
Section 4.04. Litigation. There are no claims, actions, suits,
----------
proceedings or investigations pending, or, to Weeks' knowledge, threatened,
before any court, governmental unit, agency, arbitrator or other forum or
tribunal with respect to the assets of Weeks which would have a material adverse
effect on the assets of Weeks.
-8-
<PAGE>
Section 4.05. Governmental Consents. Except as has been obtained or is
---------------------
being effected as part of the consummation of the transactions contemplated by
this Agreement, no consent, waiver, approval or authorization of, or filing,
registration or qualification with, or notice to, any governmental unit or any
other regulatory body is required to be made, obtained or given by Weeks in
connection with the execution, delivery and performance of this Agreement.
Section 4.06. Other Consents. Except for waivers and consents that
--------------
have been obtained prior to the date hereof, and except as would not have a
material adverse effect on Weeks, no consent of any party to any agreement,
contract, mortgage, indenture, lease, reciprocal easement or operating agreement
or other arrangement, to which Weeks is a party, or, by which Weeks is bound, is
required in connection with the execution, delivery or performance by Weeks of
this Agreement or the consummation of the transactions provided for herein.
Section 4.07. Compliance with Laws. Weeks has complied with all laws
--------------------
applicable to the conduct of the business of Weeks and has obtained all licenses
and permits required for the conduct thereof, except where the failure to so
comply or obtain will not have a material adverse effect on Weeks. To Weeks'
knowledge, such licenses and permits are in full force and effect, Weeks has not
taken any action that would (or failed to take any action the omission of which
would) result in the revocation of such licenses or permits, and Weeks has not
received any notice of violation from any federal, state or municipal entity or
written notice of an intention by any such government entity to revoke any
certificate of occupancy or other certificate, license or permit issued by it in
connection with its business, that in each case has not been cured or otherwise
resolved to the satisfaction of such government entity, except where such
failure or such action will not have a material adverse effect on Weeks.
Section 4.08. Absence of Undisclosed Liabilities and Contractual
--------------------------------------------------
Obligations. The consummation of the transactions effected hereby will not
- -----------
subject Weeks or any of its assets, to any liability or obligation whatsoever,
except for those which would not have a material adverse effect on Weeks.
Section 4.09. Financial Status. Weeks is solvent, has not made a
----------------
general assignment for the benefit of its creditors, and has not admitted in
writing its inability to pay its debts as they become due, nor has Weeks filed,
nor does it contemplate the filing of, any bankruptcy, reorganization,
arrangement, insolvency or liquidation proceedings, or any other proceeding for
the relief of debtors in general, nor has any such proceeding been instituted by
or against Weeks, nor is any such proceeding to Weeks's knowledge threatened or
contemplated.
Section 4.10. Taxes. Weeks has filed in a timely manner all tax returns
-----
required to be filed by it or on its behalf. All such tax returns are true,
correct and complete in all material respects, and taxes due with respect to
such tax returns have been timely paid in full.
ARTICLE V
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<PAGE>
COVENANTS AND AGREEMENTS
Section 5.01. Further Assurances. In addition to the actions, contracts
------------------
and other agreements and documents and other papers specifically required to be
taken or delivered pursuant to this Agreement, each of the parties hereto shall
execute such contracts and other agreements and documents and take such further
actions as may be reasonably required or desirable to carry out the provisions
hereof and the Contribution.
Section 5.02. Employee Matters. Weeks is entitled to offer employment to
----------------
any and all active employees of Buckley, and Buckley shall in no way hinder or
impede Weeks from soliciting the employment of any employee of Buckley. Nothing
contained herein is intended to limit Weeks's ability to terminate or modify the
terms of employment of any active employee of Buckley who accepts employment
with Weeks. Buckley shall be obligated to discharge and satisfy all obligations,
liabilities, demands, claims, assessments and expenses related to any employee
of Buckley which accrued prior to the Contribution Date, and Weeks shall have no
liability whatsoever in that connection. After the Contribution Date, Weeks
shall be obligated to discharge and satisfy all obligations, liabilities,
demands, claims, assessments and expenses which relate to any facts or
circumstances first occuring on or after the Contribution Date related to those
employees of Buckley which Weeks decides to employ, and Buckley shall have no
liability whatsoever in that connection.
ARTICLE VI
INDEMNIFICATION
Section 6.01. Survival; Reliance. The representations, warranties,
------------------
covenants and agreements made by each of the parties hereto shall survive until
the third anniversary of the Contribution Date, and each party hereto has the
right to fully rely on the representations, warranties, covenants and agreements
made by the other party.
Section 6.02. Indemnification. In the event that a party breaches any
---------------
representation, warranty, covenant or agreement contained herein, such breaching
party agrees to indemnify and hold harmless the non-breaching party from all
liabilities, demands, claims, actions, assessments, losses, fines, penalties,
costs, damages and expenses (including, without limitation, reasonable
attorneys' and accountants' fees and expenses) sustained or incurred by the non-
breaching party as result of such breach. The sole recourse of Weeks with
respect to breaches of representations and warranties made by Buckley shall be
against the Units issued pursuant to this Agreement, and Buckley shall have no
personal liability with respect thereto. With respect to indemnification claims
under this Section 6.02, each of the parties hereto agrees to be governed by the
notice provisions contained in paragraph 11(b) of the First Amendment.
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<PAGE>
ARTICLE VII
MISCELLANEOUS
Section 7.01. Proration of Income and Expense. The parties hereto have
-------------------------------
expressly determined to apportion all items of income and expense associated
with or related to the Operating Business as of the Contribution Date.
Section 7.02. Fees and Expenses; Transfer Taxes. Fees and expenses
---------------------------------
incident to the negotiation, preparation and execution of this Agreement and the
performance of the Contribution (including attorneys', accountants', financial
advisors' and other advisors' fees and disbursements) shall be borne by the
party incurring the expense.
Section 7.03. Notices. Any notice or other communication required or
-------
that may be given hereunder shall be in writing and shall be delivered
personally or sent by certified, registered, or express mail, postage prepaid,
to the parties at the following addresses or such other addresses as shall be
specified by the parties by like notice, and shall be deemed given when so
delivered personally or if mailed, three days after the date of mailing, as
follows:
(i) If to Weeks:
Weeks Realty, L.P.
4497 Park Drive
Norcross, Georgia 30093
Attention: Thomas D. Senkbeil
Vice Chairman and Chief Investment Officer
with a copy to:
King & Spalding
191 Peachtree Street
Atlanta, Georgia 30303
Attention: William B. Fryer, Esq.
(ii) If to Buckley:
1410 Donelson Pike, Suite A-5
Nashville, Tennessee 37217
Attention: Mr. Albert W. Buckley, Jr.
Section 7.04. Entire Agreement. This Agreement and the Transaction
----------------
Documents (as defined in the First Amendment) constitute the entire agreement
among the parties with respect to the subject matter hereof and supersedes all
prior contracts, agreements undertakings and
-11-
<PAGE>
understandings, express or implied, written or oral, between the parties, or any
of them, with respect to the subject matter hereof and, except as otherwise
expressly provided herein, is not intended to confer upon any other person any
rights or remedies hereunder.
Section 7.05. Waivers and Amendments. This Agreement may be amended,
----------------------
modified, superseded, canceled, renewed or extended, and the terms and
conditions hereof may be waived, only by a written instrument signed by the
parties hereto.
Section 7.06. Governing Law. This Agreement shall be governed by, and
-------------
construed and enforce in accordance with and subject to, the laws of the State
of Tennessee, without regard to principles of conflicts of law.
Section 7.07. Binding Effect; Benefit. This Agreement shall inure to
-----------------------
the benefit of and be binding upon the parties hereto and their respective
successors and assigns. Nothing in this Agreement, expressed or implied, is
intended to confer on any person other than the parties hereto or their
respective successors and assigns, any rights, remedies, obligations or
liabilities under or by reason of this Agreement.
Section 7.08. No Assignment. This Agreement is not assignable (by
-------------
operation of law or otherwise) without the prior written consent of the other
party.
Section 7.09. Counterparts. This Agreement may be executed in two or
------------
more counterparts, each of which shall be deemed an original but all of which
taken together shall constitute one and same instrument.
Section 7.10. Headings. The headings in this Agreement are for
--------
reference purposes only and shall not in any way affect the meaning or
interpretation of this Agreement.
(REMAINDER OF PAGE INTENTIONALLY LEFT BLANK)
-12-
<PAGE>
IN WITNESS WHEREOF, the parties have executed this Agreement as of
the date first above written.
BUCKLEY & COMPANY REAL ESTATE, INC.
By: ___________________________
Name:
Title:
WEEKS REALTY, L.P.
By: Weeks GP Holdings, Inc.
a Georgia corporation, its
Sole General Partner
By: ______________________
Name:
Title:
-13-
<PAGE>
SCHEDULE 1.02(D)
----------------
[Schedule of personal effects]
-14-
<PAGE>
SCHEDULE 1.03
-------------
[Schedule of liabilities]
-15-
<PAGE>
CONTRIBUTION AGREEMENT
(BRILEY LAND)
This Agreement ("Agreement") is made as of this 1st day of November,
1996, between NWI WAREHOUSE GROUP, L.P., a Tennessee limited partnership
("NWI"); and WEEKS REALTY, L.P., a Georgia limited partnership ("Weeks").
1. Description of The Property. NWI, through the merger into Weeks of wholly
---------------------------
owned affiliates of NWI, agrees to contribute to the capital of Weeks and
Weeks agrees to such mergers and agrees to accept such contribution to its
capital, for the contribution value and upon the terms and conditions set
forth below, that certain parcel of land located in Davidson County,
Tennessee, containing in the aggregate approximately 58.00 gross acres, as
further described on Exhibit A hereto (the "Property").
---------
2. Contribution Value. Subject to prorations, credits and adjustment for
------------------
which express provision is made in this Agreement, including, without
limitation, credit for the outstanding principal balance of the "Purchase
Money Loan" (as hereinafter defined), the contribution value (the
"Contribution Value") of the Property is the sum (i) Two Million Six
Hundred Fourty Thousand Dollars ($2,640,000.00), plus (ii) "Carry Costs"
(as hereinafter defined) paid or incurred by NWI for the period from and
including the date of NWI's acquisition of the Property to, but not
including, the date NWI contributes the Property to Weeks pursuant to this
Agreement. "Carry Cost" means, collectively, fees and expenses incurred in
acquisition (including brokerage fees), real estate taxes, liability
insurance premiums, interest on any acquisition loan and any special
assessments by governmental authorities.
As of the date of contribution of the Property, Weeks shall issue to NWI a
number of "Units" (as hereinafter defined), equal to the Contribution
Value, after adjustments for the prorations, credits and adjustments
stipulated in this Agreement, divided by the "Unit Price" (as hereinafter
defined), to be held by NWI subject to that certain Registration Rights and
Lock-Up Agreement, dated of even date herewith, between Weeks and NWI (the
"Rights Agreement") and that certain First Amendment to the Second Amended
and Restated Agreement of Limited Partnership, dated of even date herewith
(pursuant to which NWI was admitted to Weeks as a limited partner) (the
"Partnership Amendment"). "Units" shall mean limited partnership units in
Weeks Realty, L.P., as defined in the Rights Agreement. "Unit Price" shall
mean an assumed value of $25.00 per Unit. The dollar amount stated in the
immediately preceding sentence is a negotiated amount for the purposes of
this Agreement and does not reflect a valuation by either NWI or Weeks of
Weeks Corporation or Weeks.
<PAGE>
Notwithstanding any provision of that Agreement to the contrary, no
fractional Units shall be issued to NWI pursuant to this Agreement. If as a
result of the application of the foregoing formulas, a fractional Unit is
due NWI, Weeks shall pay to NWI, in cash on the same date as the fractional
Unit would otherwise be issued and in lieu of any such fractional Unit, an
amount equal to that fractional Unit times applicable Unit Price, as
determined pursuant to this Agreement.
3. Title Exceptions. The Property shall be contributed subject to the
----------------
following title exceptions and no other:
a. Applicable building and zoning laws.
b. Encroachments, easements and other matters identified on Exhibit B.
---------
c. Covenants, easements and other matters to which Weeks and NWI have
agreed as provided below in this Paragraph 4 hereto.
d. Any matter arising by, through or under Weeks after the date of this
Agreement.
4. Title Insurance and Survey. Weeks acknowledges receipt of, and hereby
--------------------------
approves, that certain ALTA Commitment Title insurance issued to Weeks by
Old Republic National Title Insurance Company, Commitment No. 96-437
(Revised), committing to issue title insurance on the Property in the
amounts of coverage therein stated (the "Commitment"). Weeks hereby
approves the title exceptions and the surveys (the "Surveys") identified in
Schedule B, Part II of the Commitment as applicable to the Property. NWI
shall cause to be issued at contribution of the Property a policy of title
insurance (ALTA Form) pursuant to the Commitment containing only those
exceptions specified in Paragraph 3 above and any other exceptions that may
be acceptable to Weeks.
Prior to contribution for the Property pursuant to Paragraph 5 hereof,
Weeks shall cause the Commitment and the Survey to be updated and Weeks
shall identify in such notice any title exception affecting the Property
(other than those specified in Paragraph 3) that Weeks determines to be
objectionable. NWI shall cure any such exception on or before the date
designated for contribution to Weeks's reasonable satisfaction and, if such
cure is not completed by that date, then the contribution shall be delayed
for a period not to exceed sixty (60) days to permit NWI additional time to
cure. If after such delay, such title objection is not cured to Weeks's
reasonable satisfaction, Weeks may elect to do one of the following: (i)
cure the exception, with all costs and expenses incurred by Weeks applied
to reduce the Contribution Value, in which case the contribution shall be
further delayed an additional sixty (60) day period, or (ii) terminate this
Agreement as to the Property (as Weeks's election) and
-2-
<PAGE>
sue NWI for damages at law, or (iii) seek specific performance of NWI's
obligations hereunder.
The Property shall be contributed by NWI to Weeks pursuant to this
Agreement subject to certain purchase money indebtedness (the "Purchase
Money Loan"), in the original principal face amount of $1,780,900,
evidenced and second by the documents described on Exhibit C hereto
---------
(collectively, the "Purchase Money Loan Documents"). From and after
Contribution, Weeks agrees to indemnify and hold harmless, NWI, John W.
Nelley, Jr. and Albert W. Buckley, Jr. for any and all loss, cost or damage
they may suffer or incur as a result of a default that arises or occurs
under the Purchase Money Loan Documents on or after the contribution date
including attorney's fees and court costs. On the date of contribution, NWI
shall cause Weeks to receive from the holder of the Purchase Money Loan
Documents an estoppel and consent agreement in form and content reasonably
acceptable to Weeks confirming, among such other matters as Weeks may
reasonably require, that it is the holder of the Purchase Money Loan
Documents, the outstanding principal of the Purchase Money Loan, that no
default is then outstanding, identifying the applicable Purchase Money Loan
Documents, confirming the amounts of any tax and insurance escrows, and
consenting to the contribution to Weeks of the Property as provided in this
Agreement and the assumption by Weeks of the Purchase Money Loan.
NWI hereby covenants and agrees with Weeks that, so long as this Agreement
remains in full force and effect, (i) NWI will not sell, assign, rent,
lease, convey (absolutely or as security), grant a security interest in, or
otherwise encumber or dispose of, the Property (or any interest or estate
therein) without the prior written consent of Weeks; and (ii) NWI will not
apply for any modification to the zoning in effect for the Property as of
the date of this Agreement or agree to any impact fees or other
restrictions on future development rights that would affect the Property,
without the prior written consent of Weeks. NWI will not grade, cut timber
or otherwise alter the physical characteristics of the Property without the
prior written consent of Weeks, in each instance. NWI further covenants and
agrees that, so long as this Agreement remains in full force and effect,
NWI will not amend or modify the Purchase Money Loan Documents, will make
all payments of money, and do all other things required of NWI, required
under the Purchase Money Loan Documents, and that NWI will take no
affirmative action which shall cause the NWI to be unable to contribute
good and marketable title to the Property or which shall cause any warranty
or representation contained in this Agreement to be incorrect or misleading
at any time.
From time to time during the pendency of this Agreement, at the request of
Weeks, NWI agrees to take actions, to support applications and to enter
into any easements, covenants or other agreements pertaining to development
(including infrastructure, roads, utilities and other development
requirements), affecting the uncontributed
-3-
<PAGE>
portion of the Property to facilitate Weeks' development of the Purchase
Money Loan Documents of the Property. Additionally, at the request of
Weeks, NWI agrees to dedicate to the public or quasi-public authorities,
portions of the Property not yet contributed to Weeks pursuant to this
Agreement for the purpose of dedicating public right-of-ways, utility
easements and other infrastructure items to facilitate development of the
Tracts contributed to Weeks and the remainder of the Property. NWI agrees
to cooperate and support fully all requests and actions taken by Weeks
pursuant to this paragraph.
Contemporaneously with the execution and delivery of this Agreement, Weeks
and NWI shall enter into a short form memorandum of this Agreement, which
shall be recorded in the public records of Davidson County, Tennessee, to
give notice of Weeks' interest in the Property pursuant to this Agreement.
5. Contribution. The contribution of the Property to the capital of Weeks
------------
shall take place at the offices of Baker, Donelson, Bearman & Caldwell,
Suite 1700 Union City Center, 511 Union Street, Nashville, Tennessee 37219,
or at such other place as may be agreed by NWI and Weeks. The contribution
of the Property to the capital of Weeks shall take place on December 15,
1996, or on such earlier date as Weeks and NWI shall determine by mutual
agreement.
The Property shall be contributed by NWI pursuant to this Agreement, at
NWI's request, in accordance with the following: (a) NWI shall form a
limited liability company under Delaware law, with NWI as the sole member,
substantially similar to that company formed for the initial contribution
of Completed Properties on even date herewith (the "Initial Contribution"),
(b) NWI shall contribute the Property to that company by instruments
substantially similar to that used for the Initial Contribution, (c) that
company shall then merge into Weeks, with Weeks being the surviving entity,
pursuant to agreements of merger substantially similar to that used in
connection with the Initial Contribution, and (d) Weeks shall issue Units
as provided in this Agreement to NWI in exchange for NWI's membership
interests in that company. The limited liability company to be formed by
NWI pursuant to the immediately preceding sentence shall have as its sole
business purpose the ownership of the Property and shall assume or incur no
unrelated liability or obligation. NWI shall deliver possession of the
Tract to Weeks on the contribution date.
6. Adjustments. Real estate taxes and assessments (collectively, "taxes") on
-----------
the Property shall be apportioned and prorated as of 11:59 pm on the day
before the date the Property is contributed to Weeks pursuant to this
Agreement by appropriate cash payments between the parties. If the amount
of taxes for the year of contribution are not known, they shall be
apportioned on the basis of the most current information available. If
actual taxes attributable to the Property are different than the taxes on
which the proration is computed, such proration shall be adjusted in cash
between
-4-
<PAGE>
NWI and Weeks upon presentation of written evidence of the actual taxes
paid the year of contribution. Interest due on the Purchase Money Loan for
the month during which the contribution occurs shall be prorated as of
11:59 pm on the day before the date the Property is contributed to Weeks
pursuant to this Agreement by appropriate cash payments between the
parties. The Contribution Value shall be reduced by the oustanding
principal balance on the contribution date of the Purchase Money Loan.
7. Costs and Expenses; Preparation of Documents. Costs and expenses shall be
--------------------------------------------
apportioned in the following manner:
a. Weeks shall pay the premium for title insurance, the survey fees and
recording costs related to this transaction, as well as all costs
incurred by it in inspecting the Property and making such other
investigations thereof as it deems appropriate. Weeks also shall pay
all fees and expenses incurred in the creation of limited liability
companies and their subsequent merger into Weeks as contemplated in
Paragraph 5 of this Agreement.
b. NWI shall pay all transfer taxes, if any.
c. Each party shall pay its own attorneys' fees in connection with
this transaction.
Weeks's attorney shall prepare all documents, which shall be subject to
the reasonable approval of NWI's attorney and which shall be
substantially the same as the documents used in the Initial Contribution.
8. Condemnation. If any authority having the power of eminent domain shall
------------
commence negotiations with NWI or shall commence legal action against NWI
for the damaging, taking or acquiring of all or any part of the Property,
either temporarily or permanently in any condemnation proceeding or by
exercise of the power of eminent domain, NWI shall immediately give notice
of the same to Weeks. Upon the occurrence of any of the foregoing events,
if it reasonably appears that such taking would materially interfere with
Weeks' intended use of the Property, Weeks shall have the right, at its
option, to terminate this Agreement by giving notice thereof to NWI, in
which event Weeks shall be released of all further obligations hereunder.
At the time of contribution, NWI shall assign to Weeks all rights of NWI in
and to any unpaid awards, settlement proceeds or other proceeds payable by
reason for any such taking.
In the event of any negotiations regarding the payment of any such awards
or proceeds, NWI will inform Weeks of all such negotiations of which NWI
has notice and no settlement shall be agreed to by NWI without Weeks'
written approval.
-5-
<PAGE>
9. Representations and Warranties. As of the date of this Agreement NWI
------------------------------
hereby makes for the benefit of Weeks each and every representation and
warranty set froth in Exhibit E to the Partnership Amendment as to the
---------
Property, to the extent applicable to unimproved land. As of the date of
contribution for each Tract under this Agreement, NWI shall remake for
the benefit of Weeks each and every representation and warranty set forth
on Exhibit E to the Partnership Amendment as to that Tract, to the extent
---------
applicable to unimproved land.
10. Weeks' Inspection; "AS-IS" Sale; Hazardous Wastes. NWI grants Weeks the
-------------------------------------------------
right to enter the Property to inspect it, make soil tests borings, make
drainage tests, and make engineering and architectural drawings or tests
of the Property, provided that the foregoing shall not materially alter
or damage the Property or interfere with NWI's activities on the
Property. Weeks shall be liable to NWI for any damage, loss and expenses
(including reasonable attorneys' fees) NWI incurs by reason of such
activities, and if the transaction contemplated hereby does not close,
Weeks shall provide NWI with copies of all tests results and drawings.
Except for the representations and warranties contained or provided for
in this Agreement and the other "Transaction Documents" (as hereinafter
defined), the Property is being sold in an "AS-IS" condition and "WITH
ALL FAULTS" as of the date of this Agreement and of the contribution
date. Except as expressly set forth in this Agreement or in the other
Transaction Documents, no representations or warranties have been made or
are made and no responsibility has been or is assumed by NWI or by any
officer, person, firm, agent or representative acting or purporting to
act on behalf of NWI as to the condition or repair of the Property or the
value, expense of operation, or income potential thereof or as to any
other facet or condition which has or might affect the Property, or the
condition, repair, value, expense of operation, or income potential of
the Property or any portion thereof. The parties agree that all
understandings and agreements heretofore made between them or their
respective agents or representatives with respect to the Property are
merged in this Agreement, the exhibits hereto annexed and other documents
being entered into by the parties on the date hereof (including, without
limitation, the other agreements expressly referred to herein) or
contemplated in those documents, which together fully and completely
express their agreement, and that this Agreement has been entered into
with Weeks being satisfied with the opportunity afforded for
investigation (all such agreements, documents and exhibits, collectively,
the "Transaction Documents"). Weeks is not relying upon any statement or
representation by NWI unless such statement or representation is
specifically embodied in this Agreement or the other Transaction
Documents.
Further, to the extent that NWI has provided to Weeks information from
any inspection, engineering or environmental reports concerning harmful
or toxic substances, NWI makes no representations or warranties with
respect to the accuracy
-6-
<PAGE>
or completeness, methodology of preparation or otherwise concerning the
contents of such reports. Weeks acknowledges that NWI has requested Weeks
to inspect fully the Property and investigate all matters relevant
thereto and to rely solely upon the results of Weeks' own inspections or
other information obtained or otherwise available to Weeks, rather than
any information that may have been provided by NWI to Weeks other than
the representations and warranties of NWI contained in this Agreement and
the other Transaction Documents on which Weeks is entitled to rely.
Weeks has reviewed Phase I Environmental Site Assessment of Briley
Parkway Business Center, prepared by 3D/International Environmental
Group, Project No. D5388.03, dated October 1, 1996, (the "Audit") and
Weeks hereby approves the Audit and agrees to accept title to the
Property subject to such environmental matters as are reflected in the
Audit. If any material adverse environmental condition affecting the
Property is discovered by, or comes to the attention of, Weeks that is
not disclosed in the Audit, then Weeks may elect by written notice to NWI
to terminate this Agreement as to all or any portion of the Property not
previously purchased by Weeks.
The terms and provisions of this Paragraph 10 shall survive contribution
hereunder.
11. Notices. Any notice, request or other communication (a "notice")
------- ------
required or permitted to be given hereunder shall be in writing and shall
be delivered by hand or overnight courier (such as UPS Next Day Air) or
mailed by United States registered or certified mail, return receipt
requested, postage prepaid and addressed to each party at its address as
set forth below. Any such notice shall be considered given on the date of
such hand or courier delivery, deposit with such overnight courier for
next business day delivery or deposit in the United States mail, but the
time period (if any is provided herein) in which to respond to such
notice shall commence on the date of hand or courier delivery or on the
date received following deposit in the United States mail as provided
above. Rejection or other refusal to accept or inability to deliver
because of changed address of which no notice was given shall be deemed
to be receipt of the notice. By giving at least five (5) days' prior
written notice thereof, any party may from time to time and at any time
change its mailing address hereunder. Any notice of any party may be
given by such party's counsel. The parties respective notice addresses
are as follows:
-7-
<PAGE>
Weeks: Weeks GP Holdings, Inc.
4497 Park Drive
Norcross, Georgia 30093
Attention: Thomas D. Senkbeil,
Vice Chairman/Chief
Investment Officer
With Copy To: King & Spalding
191 Peachtree Street
Atlanta, Georgia 30303-1763
Attention: William B. Fryer, Esq.
NWI: NWI Warehouse Group, L.P.
1410 Donelson Pike
Suite A-5
Nashville, Tennessee 37217
Attention: John W. Nelley, Jr.,
Chief Financial Officer
12. Brokers. Except for brokers paid-in-full at the Initial Contribution
-------
pursuant to separate written agreements that cover the transactions
contemplated in this Agreement as well as the other Transaction
Documents; NWI and Weeks represent and warrant that neither has dealt
with any broker in connection with this transaction. If any claim is made
or brought by any broker in connection with this transaction, the party
whose agreement gave rise to such claim shall indemnify the other for any
damage or expenses sustained in connection therewith including, without
limitation, reasonable attorneys' fees. The terms and provisions of this
Paragraph 12 shall survive contributions hereunder.
13. Default. If Weeks defaults hereunder, NWI may either proceed against
-------
Weeks at law for damages or seek specific performance of Weeks'
obligations hereunder. If NWI defaults hereunder, Weeks may either
proceed against NWI at law for damages or seek specific performance of
NWI's obligations hereunder.
14. Headings. The Paragraph headings are inserted for convenience only and
--------
are not intended to describe, interpret, define or limit the scope or
intent of this Agreement or any provision thereof.
15. Infrastructure and Land Carry Costs. When the Property is contributed
-----------------------------------
to Weeks pursuant to this Agreement, NWI shall submit to Weeks, for
Weeks reasonable approval, an itemization of all fees, costs and
expenses incurred by NWI to and through the date of this Agreement for
infrastructure, grading, architectural services
-8-
<PAGE>
and engineering services with respect to the Property, together with
interest thereon from date incurred at the "Interest Rate" (as said term
is defined in the Contribution Agreement for the Aspen Grove Land). Upon
Weeks' approval of such itemization, Weeks shall either (i) reimburse NWI
in cash or (ii) issued to NWI a number of units equal to the amount to be
divided by a Unit Price of Twenty Five Dollars ($25.00), to be held by
NWI subject to the Partnership Amendment and the applicable Rights
Agreement.
16. Miscellaneous. All prior understandings and agreements between the
-------------
parties are deemed merged herein and the other Transaction Documents.
This Agreement may be modified only by an agreement in writing signed by
the parties. Weeks shall not assign, sell, convey or otherwise transfer
any or all its rights under this Agreement without the prior written
consent of NWI. NWI shall not assign, sell, convey or otherwise transfer
any or all of the Properties or its rights under this Agreement. No such
assignment by NWI or Weeks shall relieve or release the assigning party
of any liability hereunder. Subject to the foregoing, this Agreement and
the terms and provision hereof shall inure to the benefit of and be
binding upon the successors and assigns of the parties. This Agreement
shall be governed by Tennessee law. Time is of the essence.
IN WITNESS WHEREOF, NWI and Weeks have set their hand as of the date
and year first above written.
NWI:
---
NWI WAREHOUSE GROUP, L.P.
BY: NWI X, L.P., its Sole General Partner
By:
----------------------------
John W. Nelley, Jr.,
General Partner
By:
----------------------------
Albert W. Buckley, Jr.,
General Partner
-9-
<PAGE>
WEEKS:
-----
WEEKS REALTY, L.P.
By: Weeks GP Holdings, Inc.
a Georgia corporation,
its Sole General Partner
BY:
---------------------------
Thomas D. Senkbeil
Vice Chairman and Chief
Investment Officer
-10-
<PAGE>
SECOND AMENDED AND RESTATED BYLAWS
OF
WEEKS CORPORATION
ARTICLE I
SHAREHOLDERS
------------
Section 1. Annual Meeting. The annual meeting of the shareholders
--------- --------------
for the election of directors and for the transaction of such other business as
may properly come before the meeting shall be held at such place, either within
or without the State of Georgia, on such date, and at such time, as the Board of
Directors may by resolution provide, or if the Board of Directors fails to
provide, then such meeting shall be held at the principal office of the
Corporation at 10:00 a.m., local time, on the fourth Tuesday in April of each
year, if not a legal holiday under the laws of the State of Georgia, and if a
legal holiday, on the next succeeding business day. The Board of Directors may
specify by resolution prior to any special meeting of shareholders held within
the year that such meeting shall be in lieu of the annual meeting.
Section 2. Special Meetings. Special meetings of the shareholders
--------- ----------------
may be called by the Board of Directors or by the Chairman of the Board, and
shall be called by the Corporation upon the written request (which request shall
set forth the purpose or purposes of the meeting) of the shareholders of record
(as established pursuant to Section 6(b) of Article I of these Bylaws) of
outstanding shares representing more than 50% of all the votes entitled to be
cast on any issue proposed to be considered at the proposed special meeting. In
the event such meeting is called by the Board of Directors or the Chairman of
the Board, such meeting may be held at such place, either within or without the
State of Georgia, as is stated in the call and notice thereof. If such meeting
is called at the request of shareholders as provided in this Section 2, then
such meeting shall be held at such place in the State of Georgia as is stated in
the notice thereof.
Section 3. Notice of Meetings. A written or printed notice stating
--------- ------------------
the place, day and hour of the meeting, and in case of a special meeting, the
purpose or purposes for which the meeting is called, shall be delivered or
mailed by the Secretary of the Corporation to each holder of record of stock of
the Corporation at the time entitled to vote, at his address as it appears upon
the records of the Corporation, not less than 10 nor more than 60 days prior to
such meeting. If the Secretary fails to give such notice within 20 days after
the call of a meeting, the person calling
1
<PAGE>
or requesting such meeting, or any person designated by them, may give such
notice. Notice of such meeting may be waived in writing by any shareholder.
Notice of any adjourned meeting of the shareholders shall not be required if the
time and place to which the meeting is adjourned are announced at the meeting at
which the adjournment is taken, unless the Board of Directors sets a new record
date for such meeting in which case notice shall be given in the manner provided
in this Section 3.
Section 4. Quorum and Shareholder Vote. A quorum for action on any
--------- ---------------------------
subject matter at any annual or special meeting of shareholders shall exist when
the holders of shares entitled to vote a majority of the votes entitled to be
cast on such subject matter are represented in person or by proxy at such
meeting. If a quorum is present, the affirmative vote of such number of shares
as is required by the Georgia Business Corporation Code (as in effect at the
time the vote is taken), for approval of the subject matter being voted upon,
shall be the act of the shareholders, unless a greater vote is required by the
Articles of Incorporation or these Bylaws. If a quorum is not present, a
meeting of shareholders may be adjourned from time to time by the vote of shares
having a majority of the votes of the shares represented at such meeting, until
a quorum is present. When a quorum is present at the reconvening of any
adjourned meeting, and if the requirements of Section 3 of this Article I have
been observed, then any business may be transacted at such reconvened meeting in
the same manner and to the same extent as it might have been transacted at the
meeting as originally noticed.
Section 5. Proxies. A shareholder may vote either in person or by
--------- -------
proxy duly executed in writing by the shareholder or created pursuant to Article
5 of the Articles of Incorporation. Unless written notice to the contrary is
delivered to the Corporation by the shareholder, a proxy for any meeting shall
be valid for any reconvention of any adjourned meeting.
Section 6. Fixing Record Date.
--------- ------------------
(a) Except as provided in paragraph (b) of this Section 6, for the
purpose of determining shareholders entitled to notice of or to vote at any
meeting of shareholders or any adjournment thereof, or entitled to receive
payment of any dividend, or in order to make a determination of shareholders for
any other proper purpose, the Board of Directors shall have the power to fix a
date, not more than 70 days prior to the date on which the particular action
requiring a determination of shareholders is to be taken, as the record date for
any such determination of shareholders. A record date for the determination of
shareholders entitled to notice of or to vote at any meeting of shareholders or
any adjournment thereof shall not be set less than 10 days prior to such
meeting; provided that the record date for the determination of shareholders
entitled to notice of or to vote at any special meeting of shareholders called
by the Corporation at the request of holders of shares pursuant to Section 2 of
Article I hereof or any adjournment thereof shall be 20 days after the
"Determination Date" (as defined in paragraph (b) of this Section 6), and
provided further that such record date shall be 70 days prior to such special
meeting. In any case where a record date is set, under any provision of this
Section 6, only shareholders of record on the said date shall be entitled to
participate in the action for which the determination of shareholders of record
is made, whether the action is payment of a dividend,
2
<PAGE>
allotment of any rights or any change or conversion or exchange of capital stock
or other such action, and, if the record date is set for the determination of
shareholders entitled to notice of or to vote at a meeting of shareholders, only
such shareholders of record shall be entitled to such notice or vote,
notwithstanding any transfer of any shares on the books of the Corporation after
such record date.
(b) (i) In order that the Corporation may determine the shareholders
entitled to request a special meeting of the shareholders or a special meeting
in lieu of the annual meeting of the shareholders pursuant to Section 2 of
Article I hereof, the Board of Directors may fix a record date, which record
date shall not precede the date upon which the resolution fixing the record date
is adopted by the Board of Directors, and which date shall not be more than 10
days after the date upon which the resolution fixing the record date is adopted
by the Board of Directors. Any shareholder of record seeking to have the
shareholders request such a special meeting shall, by written notice to the
Secretary, request the Board of Directors to fix a record date. The Board of
Directors shall, within 10 business days after the date on which such a request
is received, adopt a resolution fixing the record date. If no record date has
been fixed by the Board of Directors within 10 business days after the date on
which such a request is received, the record date for determining shareholders
entitled to request such a special meeting shall be the first day on which a
signed written request setting forth the request to fix a record date is
delivered to the Corporation by delivery to its principal place of business, or
any officer or agent of the Corporation having custody of the books in which
proceedings of meetings of shareholders are recorded.
(ii) Every written request for a special meeting shall bear the date
of signature of each shareholder who signs the request and no such request shall
be effective to request such a meeting unless, within 70 days after the record
date established in accordance with paragraph (b)(i) of this Section, written
requests signed by a sufficient number of record holders as of such record date
to request a special meeting in accordance with Section 2 of Article I hereof
are delivered to the Corporation in the manner prescribed in paragraph (b)(i) of
this Section.
(iii) In the event of the delivery, in the manner provided by this
Section, to the Corporation of the requisite written request or requests for a
special meeting and/or any related revocation or revocations, the Corporation
shall engage nationally recognized independent inspectors of elections for the
purpose of promptly performing a ministerial review of the validity of the
requests and revocations. For the purpose of permitting a prompt ministerial
review by the independent inspectors, no request by shareholders for a special
meeting shall be effective until the earlier of (i) five business days following
delivery to the Corporation of requests signed by the holders of record (on the
record date established in paragraph (b)(i) of this Section) of the requisite
minimum number of shares that would be necessary to request such a meeting under
Section 2 of Article I hereof, or (ii) such date as the independent inspectors
certify to the Corporation that the requests delivered to the Corporation in
accordance with this Article represent at least the minimum number of shares
that would be necessary to request such meeting (the earlier of such dates being
herein referred to as the "Determination Date"). Nothing
3
<PAGE>
contained in this paragraph shall in any way be construed to suggest or imply
that the Board of Directors or any shareholder shall not be entitled to contest
the validity of any request or revocation thereof, whether during or after such
five business day period, or to take any other action (including, without
limitation, the commencement, prosecution or defense of any litigation with
respect thereto).
(iv) Unless the independent inspectors shall deliver, on or before
the Determination Date, a certified report to the Corporation stating that the
valid requests for a special meeting submitted pursuant to paragraph (iii) above
represent less than the requisite minimum number of shares that would be
necessary to request a special meeting under Section 2 of Article I hereof, the
Board of Directors shall, within five business days after the Determination
Date, adopt a resolution calling a special meeting of the shareholders and
fixing a record date for such meeting, in accordance with Section 6(a) of
Article I of these Bylaws.
Section 7. Notice of Shareholder Business. At an annual meeting of
--------- ------------------------------
the shareholders, only such business shall be conducted as shall have been
brought before the meeting (a) by or at the direction of the Board of Directors
or (b) by any shareholder of the Corporation who complies with the notice
procedures set forth in this Section 7 and only to the extent that such business
is appropriate for shareholder action under the provisions of the Georgia
Business Corporation Code. For business to be properly brought before an annual
meeting by a shareholder, the shareholder must have given timely notice thereof
in writing to the Secretary of the Corporation. To be timely, a shareholder's
notice must be delivered to or mailed and received at the principal executive
offices of the Corporation not later than the close of business on the 7th day
following the day on which notice of the date of the annual meeting was mailed
or delivered to such shareholder. A shareholder's notice to the Secretary shall
set forth as to each matter the shareholder proposes to bring before the annual
meeting (a) a brief description of the business desired to be brought before the
annual meeting and the reasons for conducting such business at the annual
meeting, (b) the name and address, as they appear on the Corporation's books, of
the shareholder proposing such business, (c) the class and number of shares of
stock of the Corporation which are beneficially owned by the shareholder, and
(d) any material interest of the shareholder in such business. Notwithstanding
anything in the Bylaws to the contrary, no business shall be conducted at an
annual meeting except in accordance with the procedures set forth in this
Section 7. At an annual meeting, the Chairman shall, if the facts warrant,
determine and declare to the meeting that business was not properly brought
before the meeting in accordance with the provisions of this Section 7, and if
he should so determine, he shall so declare to the meeting and any such business
not properly brought before the meeting shall not be transacted.
Section 8. Notice of Shareholder Nominees. Except for Directors who
--------- ------------------------------
are elected by Directors pursuant to the provisions of Section 9 of Article II
of these Bylaws, only persons who are nominated in accordance with the
procedures set forth in this Section 8 shall be eligible for election as
Directors. Nominations of persons for election to the Board of Directors of the
Corporation may be made at a meeting of shareholders (a) by or at the direction
of the Board of Directors or (b) by any shareholder of the Corporation entitled
to vote for the election of Directors at the meeting who complies with the
notice procedures set forth in this Section 8.
4
<PAGE>
Such nominations, other than those made by or at the direction of the Board of
Directors, shall be made pursuant to timely notice in writing to the Secretary
of the Corporation. To be timely, a shareholder's notice must be delivered to
or mailed and received at the principal executive offices of the Corporation not
later than the close of business on the 7th day following the day on which
notice of the date of the meeting was mailed or delivered to such shareholder.
Such shareholder's notice shall set forth (a) as to each person whom the
shareholder proposes to nominate for election or re-election as a Director, all
information relating to such person that is required to be disclosed in
solicitations of proxies for election of Directors, or is otherwise required, in
each case pursuant to Regulation 14A under the Securities Exchange Act of 1934,
as amended; and (b) as to the shareholder giving the notice (i) the name and
address, as they appear on the Corporation's books, of such shareholder and (ii)
the class and number of shares of stock of the Corporation which are
beneficially owned by such shareholder. No person shall be eligible for
election as a Director of the Corporation unless nominated in accordance with
the procedures set forth in the Bylaws. The Chairman shall, if the facts
warrant, determine and declare to the meeting that a nomination was not made in
accordance with the procedures prescribed by the Bylaws, and if he should so
determine, he shall so declare to the meeting and the defective nomination shall
be disregarded.
ARTICLE II
DIRECTORS
---------
Section 1. Powers of Directors. The Board of Directors shall manage
--------- -------------------
the business and affairs of the Corporation and, subject to any restrictions
imposed by law, by the Articles of Incorporation, or by these Bylaws, may
exercise all the powers of the Corporation.
Section 2. Number and Term of Directors. The Board of Directors
--------- ----------------------------
shall consist of eleven natural persons divided into classes and with terms as
provided in the Articles of Incorporation. No decrease in the number of
Directors shall shorten the term of an incumbent Director.
Section 3. Meetings of the Directors. The Board of Directors shall
--------- -------------------------
meet each year immediately following the annual meeting of shareholders, and the
Board may by resolution provide for the time and place of other regular
meetings. Special meetings of the Directors may be called by the Chairman of
the Board or by any two of the Directors.
Section 4. Notice of Meetings. Notice of each meeting of the
--------- ------------------
Directors shall be given by the Secretary by mailing the same at least ten days
before the meeting or by telephone, telegraph or cablegram or in person at least
five days before the meeting, to each Director, except that no notice need be
given of regular meetings fixed by the resolution of the Board or of the meeting
of the Board held at the place of and immediately following the annual meeting
of the shareholders. Any Director may waive notice, either before or after the
meeting, and shall be
5
<PAGE>
deemed to have waived notice if he is present at the meeting.
Section 5. Action of Directors Without a Meeting. Any action
--------- -------------------------------------
required by law to be taken at a meeting of the Board of Directors, or any
action which may be taken at a meeting of the Board of Directors, or of any
committee thereof, may be taken without a meeting if written consent, setting
forth the action so taken, shall be signed by all the Directors, or all the
members of the committee, as the case may be, and be filed with the minutes of
the proceedings of the Board or the committee. Such consent shall have the same
force and effect as a unanimous vote of the Board or the committee, as the case
may be.
Section 6. Committees. The Board of Directors may, in its
--------- ----------
discretion, appoint committees, each consisting of one or more Directors, which
shall have and may exercise such delegated powers as shall be conferred on or
authorized by the resolutions appointing them, except that no such committee
may: (1) approve or propose to shareholders action that the Georgia Business
Corporation Code requires to be approved by shareholders, (2) fill vacancies on
the Board of Directors or any of its committees, (3) amend the Articles of
Incorporation of the Corporation pursuant to Section 14-2-1002 of the Georgia
Business Corporation Code, (4) adopt, amend or repeal these Bylaws, or (5)
approve a plan of merger not requiring shareholder approval. A majority of any
such committee may determine its action, fix the time and place of its meetings,
and determine its rules of procedure. Each committee shall keep minutes of its
proceedings and actions and shall report regularly to the Board of Directors.
The Board of Directors shall have power at any time to fill vacancies in, change
the membership of, or discharge any such committee.
Section 7. Compensation. The Board of Directors shall have the
--------- ------------
authority to determine from time to time the amount of compensation that shall
be paid to its members for attendance at meetings of, or service on, the Board
of Directors of any committee of the Board, except that no such compensation
shall be paid to Directors who are also employees of the Corporation. The Board
of Directors also shall have the power to reimburse Directors for reasonable
expenses of attendance at Directors' meetings and committee meetings.
Section 8. Removal. Subject to the rights of the holders of any
--------- -------
series of Preferred Stock then outstanding, any or all Directors may be removed
from office at any time, but only for cause, and only by the vote of a majority
of the votes entitled to be cast.
Section 9. Vacancies. Subject to the rights of the holders of any
--------- ---------
series of Preferred Stock then outstanding to fill director vacancies, vacancies
on the Board of Directors (including vacancies resulting from retirement,
resignation, removal from office or death) shall be filled by the Board of
Directors.
Section 10. Telephone Conference Meetings. Unless the Articles of
---------- -----------------------------
Incorporation otherwise provide, members of the Board of Directors, or any
committee designated by the Board of Directors, may participate in a meeting of
the Board or committee by means of telephone conference or similar
communications equipment by means of which all persons participating in the
meeting can hear each other, and participation in a meeting pursuant to this
Section 10 shall
6
<PAGE>
constitute presence in person at such meeting.
ARTICLE III
OFFICERS
--------
Section 1. Officers. The officers of the Corporation shall consist
--------- --------
of a Chairman of the Board, a Vice Chairman of the Board, a President, one or
more Vice-Presidents, a Secretary and a Treasurer, and such other officers or
assistant officers as may be elected by the Board of Directors. Any two offices
may be held by the same person. The Board may designate a Vice-President as an
Executive Vice-President, and may designate the order in which the other Vice-
Presidents may act.
Section 2. Chairman of the Board. The Chairman of the Board shall be
--------- ---------------------
the chief executive officer of the Corporation and shall, under the direction of
the Board of Directors, have responsibility for the general direction of the
business, policies and affairs of the Corporation. He shall preside at all
meetings of the shareholders and all meetings of the Board of Directors and
shall have such other duties as the Board of Directors shall from time to time
prescribe.
Section 3. Vice Chairman of the Board. The Vice Chairman of the
--------- --------------------------
Board shall be the chief investment officer of the Corporation and shall, under
the direction of the chief executive officer, supervise the investment
activities of the Corporation. He shall have such further powers and duties as
from time to time may be conferred on him by the Board of Directors or the chief
executive officer. In the absence of the Chairman of the Board, he shall
preside at all meetings of the shareholders and the Board of Directors.
Section 4. President. The President shall be the chief operating
--------- ---------
officer of the Corporation. He shall, under the direction of the chief
executive officer, supervise the management of the day-to-day business of the
Corporation. He shall have such further powers and duties as from time to time
may be conferred on him by the Board of Directors or the chief executive
officer. In the absence of the Chairman of the Board and the Vice Chairman of
the Board, he shall preside at all meetings of the shareholders and the Board of
Directors.
Section 5. Vice-President. The Vice-President shall act in the case
--------- --------------
of the absence or disability of the Chairman of the Board and the President. If
there is more than one Vice-President, such Vice-Presidents shall act in the
order of precedence, as set out by the Board of Directors.
Section 6. Treasurer. The Treasurer shall be responsible for the
--------- ---------
maintenance of proper financial books and records of the Corporation.
7
<PAGE>
Section 7. Secretary. The Secretary shall keep the minutes of the
--------- ---------
meetings of the shareholders and the Directors and shall have custody of and
attest the seal of the Corporation.
Section 8. Other Duties and Authorities. Each officer, employee and
--------- ----------------------------
agent shall have such other duties and authorities as may be conferred on them
by the Board of Directors.
Section 9. Removal. Any officer may be removed at any time by the
--------- -------
Board of Directors, and such vacancy may be filled by the Board of Directors. A
contract of employment for a definite term shall not prevent the removal of any
officer, but this provision shall not prevent the making of a contract of
employment with any officer and shall have no effect upon any cause of action
which any officer may have as a result of removal in breach of a contract of
employment or upon the enforceability of any other provision of a contract of
employment.
Section 10. Compensation. The salaries of the officers shall be
---------- ------------
fixed from time to time by the Board of Directors, subject to the provisions of
any applicable contracts of employment. No officer shall be prevented from
receiving such salary by reason of the fact that he is also a Director of the
Corporation.
ARTICLE IV
DEPOSITORIES, SIGNATURE AND SEAL
--------------------------------
Section 1. Depositories. All funds of the Corporation shall be
--------- ------------
deposited in the name of the Corporation in such depository or depositories as
the Board may designate and shall be drawn out on checks, drafts or other orders
signed by such officer, officers, agent or agents as the Board may from time to
time authorize.
Section 2. Contracts. All contracts and other instruments shall be
--------- ---------
signed on behalf of the Corporation by the Chairman of the Board, the Vice
Chairman of the Board, the President, any Vice-President or by such other
officer, officers, agent or agents, as the Chairman of the Board, the Vice
Chairman of the Board, or the President designates from time to time or as the
Board from time to time may by resolution provide.
Section 3. Seal. The seal of the Corporation shall be as follows:
--------- ----
8
<PAGE>
The seal may be manually affixed to any document or may be
lithographed or otherwise printed on any document with the same force and effect
as if it had been affixed manually. The signature of the Secretary or Assistant
Secretary shall attest the seal and may be a facsimile if and to the extent
permitted by law.
ARTICLE V
STOCK TRANSFERS
---------------
Section 1. Form and Execution of Certificates. The certificates of
--------- ----------------------------------
shares of capital stock of the Corporation shall be in such form as may be
approved by the Board of Directors and shall be signed by the Chairman of the
Board, the Vice Chairman of the Board, the President or a Vice-President and by
the Secretary or any Assistant Secretary or the Treasurer or any Assistant
Treasurer, provided that any such certificate may be signed by the facsimile
signature of any of such officers imprinted thereon if the same is countersigned
by a transfer agent of the Corporation, and provided further that certificates
bearing the facsimile of the signature of such officers imprinted thereon shall
be valid in all respects as if such person or persons were still in office, even
though such officer or officers shall have died or otherwise ceased to be
officers.
Section 2. Transfers of Shares. Shares of stock in the Corporation
--------- -------------------
shall be transferable only on the books of the Corporation by proper transfer
signed by the holder of record thereof or by a person duly authorized to sign
for such holder of record. The Corporation or its transfer agent or agents
shall be authorized to refuse any transfer unless and until it is furnished such
evidence as it may reasonably require showing that the requested transfer is
proper.
Section 3. Lost, Destroyed or Stolen Certificates. Where the holder
--------- --------------------------------------
of record of a share or shares of stock of the Corporation claims that the
certificate representing said share has been lost, destroyed or wrongfully
taken, the Board shall by resolution provide for the issuance of a certificate
to replace the original if the holder of record so requests before the
Corporation has notice that the certificate has been acquired by a bona fide
purchaser, files with the Corporation a sufficient indemnity bond, and furnishes
evidence of such loss, destruction or wrongful taking satisfactory to the
Corporation, in the reasonable exercise of its discretion. The Board may
authorize such officer or agent as it may designate to determine the sufficiency
of such an indemnity bond and to determine reasonably the sufficiency of the
evidence of loss, destruction or wrongful taking.
Section 4. Transfer Agent and Registrar. The Board may (but shall
--------- ----------------------------
not be required to) appoint a transfer agent or agents and a registrar or
registrars to transfers, and may require that all stock certificates bear the
signature of such transfer agent or of such transfer agent and registrar.
9
<PAGE>
ARTICLE VI
INDEMNIFICATION
---------------
Section 1. Mandatory Indemnification. The Corporation shall
--------- -------------------------
indemnify to the fullest extent permitted by the Georgia Business Corporation
Code, and to the extent that applicable law from time to time in effect shall
permit indemnification that is broader than provided in these Bylaws, then to
the maximum extent authorized by law, any individual made a party to a
proceeding (as defined in the Georgia Business Corporation Code) because he is
or was a director or officer, against liability (as defined in the Georgia
Business Corporation Code), incurred in the proceeding.
Section 2. Permissive Indemnification. The Corporation shall have
--------- --------------------------
the power to indemnify to the fullest extent permitted by the Georgia Business
Corporation Code, any individual made a party to a proceeding (as defined in the
Georgia Business Corporation Code) because he is or was an employee or agent of
the Company, against liability (as defined in the Georgia Business Corporation
Code), incurred in the proceeding.
Section 3. Advances for Expenses. The Corporation shall pay for or
--------- ---------------------
reimburse the reasonable expenses incurred by a director or officer who is a
party to a proceeding, and shall have the authority to pay for or reimburse the
reasonable expenses of an employee or agent of the Company who is a party to a
proceeding, in each case in advance of the final disposition of a proceeding if:
(a) Such person furnishes the Corporation a written affirmation of
his good faith belief that he has met the standard of conduct set
forth in Section 1 or Section 2 above, as applicable; and
(b) Such person furnishes the Corporation a written undertaking,
executed personally on his behalf to repay any advances if it is
ultimately determined that he is not entitled to indemnification.
The written undertaking required by paragraph (b) above must be an
unlimited general obligation of such person but need not be secured and may be
accepted without reference to financial ability to make repayment.
Section 4. Indemnification Not Exclusive. The right to
--------- -----------------------------
indemnification and the payment of expenses incurred in defending a proceeding
in advance of its final disposition conferred in this Article VI shall not be
exclusive of any other right which any person may have or hereafter acquire
under any statute, provision of the Articles of Incorporation, provision of
these Bylaws, agreement, vote of shareholders or disinterested directors or
otherwise.
10
<PAGE>
Section 5. Amendment or Repeal. Any repeal or modification of the
--------- -------------------
foregoing provisions of this Article VI shall not adversely affect any right or
protection hereunder of any person in respect of any act or omission occurring
prior to the time of such repeal or modification.
ARTICLE VII
AMENDMENT OF BYLAWS
-------------------
Section 1. Amendment. These Bylaws may be altered, amended, repealed
--------- ---------
or new Bylaws adopted by the Board of Directors by the affirmative vote of a
majority of all directors then holding office, but any bylaws adopted by the
Board of Directors may be altered, amended, repealed, or any new bylaws adopted,
by the shareholders at an annual or special meeting of shareholders, when notice
of any such proposed alteration, amendment, repeal or addition shall have been
given in the notice of such meeting. The shareholders may prescribe that any
bylaw or bylaws adopted by them shall not be altered, amended or repealed by the
Board of Directors. Action by the shareholders with respect to these Bylaws
shall be taken by an affirmative vote of a majority of all shares outstanding
and entitled to vote generally in the election of directors, voting as a single
voting group.
11
<PAGE>
EMPLOYMENT AGREEMENT
--------------------
THIS EMPLOYMENT AGREEMENT (this "Agreement"), is made and entered into
on this 1st day of November, 1996, by and between JOHN W. NELLEY, JR., an
individual resident of the State of Tennessee (the "Executive"), and WEEKS
CORPORATION, a Georgia corporation ("the Company");
W I T N E S S E T H:
--------------------
WHEREAS, the Company desires to employ Executive, and Executive
desires to be employed by the Company, on the terms and conditions contained in
this Agreement;
NOW, THEREFORE, in consideration of the mutual promises and agreements
contained herein and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties to this Agreement,
intending to be legally bound, hereby agree as follows:
(S) 1.
Employment
----------
1.1. Employment. Subject to the terms of this Agreement, the Company
----------
hereby employs Executive, and Executive hereby accepts such employment with the
Company. Executive initially shall serve as Executive Vice President of the
Company and President of Weeks/Nashville, a division of the Company, and
initially shall have the duties, rights, and responsibilities normally
associated with such position, including, without limitation, day-to-day
responsibility (together with Albert W. Buckley, Jr., as long as Mr. Buckley
serves as an Executive Vice President of the Company) for the Company's
operations in Nashville, Tennessee, together with such other reasonable duties
relating to the operation of the business of the Company as may be assigned to
him from time to time by the Board of Directors or other governing body of the
Company. Executive shall devote his full business time, skills, and best
efforts to rendering services on behalf of the Company and shall exercise such
care as is customarily required of executives undertaking similar duties for
entities similar to the Company. Notwithstanding the foregoing, Executive may
engage in the business activities listed with respect to this Section 1.1 on
Exhibit A hereto.
- ---------
<PAGE>
(S) 2.
Compensation; Expenses
----------------------
2.1. Base Salary. Commencing on the Effective Date (as defined in
-----------
(S) 3.1), the Company shall pay Executive during the term of Executive's
employment under this Agreement a base salary equal to $150,000 per annum
(prorated for the balance of 1996) (the "Base Salary"), which amount shall be
subject to adjustment, if any, in accordance with this (S) 2.1. The
Compensation Committee of the Board of Directors or other governing body of the
Company (the "Committee") shall review Executive's Base Salary on an annual
basis, and the Committee, upon such review and in its sole discretion, may
increase or decrease Executive's Base Salary in accordance with criteria to be
established by the Committee; provided, however, that Executive's Base Salary
shall not be reduced below the amount so stated in this (S) 2.1; and provided
further, however, that such criteria shall be determined primarily on the basis
of growth in the Company's revenues and funds from operations per share of
capital stock, on the performance of the business units which are under the
management and supervision of Executive and on the basis of the satisfaction of
other employment goals established by the Committee which shall be commensurate
with the scope of Executive's duties and responsibilities. The Base Salary,
less all applicable withholding taxes, shall be paid to Executive in accordance
with the payroll procedures in effect from time to time with respect to
executive officers of the Company.
2.2. Incentive Compensation. Prior to January 1, 1998, Executive
----------------------
shall not be entitled to participate in any incentive compensation plans in
effect with respect to executive officers of the Company or otherwise receive
any incentive compensation; provided, however, the Company may elect, in its
-------- -------
sole and absolute discretion, the appropriateness of paying incentive
compensation to Executive with respect to the period commencing on the date of
this Agreement and ending on December 31, 1997, to the extent the performance of
the Company's operations in the Nashville, Tennessee market significantly exceed
the Company's budgeted projections for such period. Effective as of January 1,
1998, Executive shall be entitled to participate in any incentive compensation
plans in effect with respect to executive officers of the Company, with the
criteria for Executive's participation in such plans to be established by the
Committee in its sole discretion; provided, however, that such incentive
compensation for any year will not exceed 75% of the Base Salary for such year.
2.3. Stock Options. Executive shall be entitled to participate in
-------------
such employee stock option plans as are from time to time established for the
benefit of employees of the Company in accordance with the terms and conditions
of such plans. At the Effective Date, Executive shall be granted immediately
vested options to purchase 40,000 shares of Weeks Corporation common stock, par
value $.01 per share, in accordance with the Weeks Corporation Incentive Stock
Plan as in effect on the Effective Date.
2.4. Expenses. Executive shall be reimbursed for all reasonable
--------
business-related expenses incurred by Executive at the request of or on behalf
of the Company, including, without
-2-
<PAGE>
limitation, first class travel expenses incurred in connection with the
performance of Executive's duties and responsibilities hereunder.
2.5. Participation in Employee Benefit Plans. Executive shall be
---------------------------------------
entitled to participate in such medical, dental, disability, hospitalization,
life insurance, profit sharing, and other benefit plans as the Company shall
maintain from time to time for the benefit of executive officers of the Company,
on the terms and subject to the conditions set forth in such plans.
2.6. Vacation. In addition to Company holidays, Executive shall
--------
receive such paid vacation time each year during the term of this Agreement as
is consistent with vacation policies of the Company for its executive officers,
but in no event less than six weeks of paid vacation time annually. Executive
agrees that the vacation time provided for in this Section 2.6 will not coincide
with the vacation time of Albert W. Buckley, Jr., except for such business
related travel or other brief absences which the Company, in its reasonable
discretion, does not deem excessive, unreasonable or detrimental to the
Company's operations. Any unused vacation days in any year may not be carried
over to subsequent years and Executive shall not receive any additional
compensation for unused vacation days.
2.7. Automobile Expenses. Commencing on the Effective Date, during
-------------------
the term of Executive's employment under this Agreement, Executive shall be
reimbursed for his actual automobile expenses in an amount not to exceed $600.00
per month under this Agreement.
(S) 3.
Term of Employment
------------------
3.1. Term of Employment. Unless earlier terminated in accordance
------------------
with (S) 3.2, the employment of Executive under this Agreement shall commence as
of the date that this Agreement is executed (the "Effective Date") and shall
continue up to, but not including, the third anniversary of such date.
Thereafter, Executive's employment under this Agreement shall be extended for
such period, if any, as agreed to in writing by Executive and the Company.
3.2. Termination. Executive's employment under this Agreement may be
-----------
terminated
(a) by the Company upon the death or total disability of
Executive (total disability meaning the inability of Executive to perform his
normal required services under this Agreement for a period of six consecutive
months during the term of this Agreement by reason of Executive's mental or
physical disability, as reasonably determined by the Board of Directors or other
governing body of the Company) (which shall be referred to as a "Disability
Termination"); or
-3-
<PAGE>
(b) by the Company for "cause," which shall exist only upon the
occurrence of one or more of the following: (i) Executive is convicted of,
pleads guilty to, or confesses to any felony or any act of fraud,
misappropriation or embezzlement to the material damage or prejudice of the
Company or any affiliate of the Company, as determined by the Board of Directors
or other governing body of the Company in good faith, or (ii) Executive engages
in a fraudulent act relating to the business of the Company or any affiliate of
the Company, as determined by the Board of Directors or other governing body of
the Company in good faith (which shall be referred to individually and
collectively as a "For Cause Termination"); or
(c) by the Company for any reason other than a For Cause
Termination or a Disability Termination (which shall be referred to as a "No
Cause Termination"); or
(d) by Executive voluntarily for any reason other than an
Employee-Initiated Termination (as defined in (S) 3.2(e)) after giving 30 days
prior written notice to the Company (which shall be referred to as a "Voluntary
Termination"); or
(e) by Executive for "cause", which shall exist if the Company
fails to cure within ten days after receiving notice from Executive of the
occurrence of any of the following: (i) Executive is required to move more than
20 miles from the city limits of Nashville, Tennessee without his consent, (ii)
there is a material reduction in Executive's duties, rights or responsibilities
under this Agreement without his consent, or (iii) there is a material decrease
in the value of Executive's compensation and benefits package from the Company
without his consent (which shall be referred to as an "Employee-Initiated
Termination").
(S) 4.
Results of Termination
----------------------
4.1. Termination As Result of Voluntary Termination or For Cause
-----------------------------------------------------------
Termination. If Executive's employment under this Agreement is terminated as a
- -----------
result of a Voluntary Termination or a For Cause Termination, Executive shall
not thereafter be entitled to receive any Base Salary for periods following such
termination and shall not be entitled to receive any incentive, bonus or other
special compensation with respect to the year in which such termination occurs
or for any period thereafter; provided, however, that Executive shall be
entitled to receive any Base Salary that may be owed to Executive but is unpaid
as of the date on which Executive's employment is terminated.
4.2. Termination As Result of No Cause Termination or Employee-
---------------------------------------------------------
Initiated Termination. If Executive's employment under this Agreement is
- ---------------------
terminated as a result of a No Cause Termination or an Employee-Initiated
Termination, Executive shall be entitled to receive (i)
-4-
<PAGE>
any Base Salary that may be owed to Executive but is unpaid as of the date on
which Executive's employment is terminated, (ii) additional compensation equal
to any amount Executive would have received (with respect to the year in which
the termination occurs) under any and all incentive, bonus, and other special
compensation plans and arrangements in which Executive is a participant at the
date of termination, multiplied by a fraction, the numerator of which is the
number of days that have elapsed in such year through the date of termination,
and the denominator of which is 365, and (iii) additional compensation equal to
the total Base Salary Executive would have received (assuming the Base Salary as
in effect on the date of such termination) for the period from the date of
termination up to, but not including, the third anniversary of the Effective
Date, or, if later, through the remainder of his term of employment under any
extension of this Agreement. The compensation referred to in (i) and (iii) above
shall be paid, in equal installments, at the same times Executive would have
received salary payments had he remained an employee, unless the Company elects
to make such payments sooner. The compensation referred to in (ii) above shall
be paid at the same time or times as payments would have been made to Executive
under the applicable incentive, bonus or other special compensation arrangements
had he remained an employee. The compensation referred to in (i), (ii), and
(iii) above shall constitute the sole and exclusive remaining compensation due
to Executive hereunder.
4.3. Termination as a Result of a Disability Termination Event. If
---------------------------------------------------------
Executive's employment under this Agreement is terminated as a result of a
Disability Termination, (i) Executive shall be entitled to receive any Base
Salary that may be owed to Executive but is unpaid as of the date on which
Executive's employment is terminated, and (ii) Executive (or at his death, his
designated beneficiary, if any, or if none, his surviving spouse or, if none,
his estate) shall continue to receive Executive's Base Salary for the month in
which such termination occurs and for the following six months. If payment of
Base Salary is to be made to Executive's estate, such payment shall be made as
soon as practical after Executive's death in a single lump sum equal to the
present value, as determined using a 9% interest rate assumption, of the total
amount of Base Salary payable to the estate.
4.4. Other Employee Benefit Plans and Arrangements. The benefits, if
---------------------------------------------
any, payable to or on behalf of Executive upon his termination of employment
from the Company under any other employee benefit plans and arrangements not
specifically provided for herein shall be governed by the terms and conditions
for benefit payments set forth in such plans and arrangements.
(S) 5.
Miscellaneous
-------------
5.1. Allocation of Income. Executive hereby acknowledges that the
--------------------
Company and its related affiliates may allocate certain portions of Executive's
compensation among the Company
-5-
<PAGE>
and its affiliates. Executive agrees to such
allocation and acknowledges that for purposes of this Agreement, Executive will
be deemed to be employed by, and to perform services for, the entity to which
such compensation is allocated.
5.2. Binding Effect. This Agreement shall inure to the benefit of
--------------
and shall be binding upon Executive and his executor, administrator, heirs,
personal representative and assigns, and the Company and its successors and
assigns; provided, however, that Executive shall not be entitled to assign or
delegate any of his rights or obligations hereunder without the prior written
consent of Company.
5.3. Construction of Agreement. No provision of this Agreement or
-------------------------
any related document shall be construed against or interpreted to the
disadvantage of any party hereto by any court or other governmental or judicial
authority by reason of such party having or being deemed to have structured or
drafted such provision.
5.4. Arbitration of Disputes. If a dispute arises between the
-----------------------
parties, then the parties agree that their respective representatives shall meet
and consult in good faith and attempt to settle the dispute, within thirty (30)
days of written notice thereof, as a condition precedent to the initiation of
arbitration proceedings as set forth below.
Any dispute, controversy, or claim arising out of or relating to this
Agreement, the breach, termination or invalidity thereof, or Executive's
employment, including claims of tortious interference or other tort or statutory
claims, and including without limitation any dispute concerning the scope of
this arbitration clause, shall be settled by arbitration in accordance with the
Employment Dispute Arbitration Rules of the American Arbitrators Association
then in effect. The judgment on the award rendered by the arbitrator may be
entered in any court having jurisdiction thereof. The arbitration under this
Agreement shall be held in Nashville, Tennessee, or at such other place as may
be selected by mutual agreement of the parties.
The arbitrator shall be mutually acceptable to the parties, or failing
agreement, selected pursuant to the Employment Dispute Arbitration Rules of the
American Arbitrators Association. The parties intend that the arbitrator shall
be independent and impartial. To this end, the arbitrator shall disclose to the
parties any professional, family, or social relationships, past or present, with
any party or counsel.
Strict rules of evidence shall not apply in any arbitration conducted
pursuant to this Agreement. The parties may offer such evidence as they desire
and the arbitrator shall accept such evidence as the arbitrator deems relevant
to the issues and accord it such weight as the arbitrator deems appropriate.
The arbitrator shall have the discretion to order a prehearing exchange of
information by the parties, including without limitation, production of
requested documents, exchange of summaries of testimony of proposed witnesses,
and examination by deposition of parties. No party shall be allowed, however,
to take more than one deposition of the opposing party
-6-
<PAGE>
and no deposition shall last longer than six (6) hours. All disputes regarding
discovery shall be decided by the arbitrator.
The arbitrator award shall be in writing and shall specify the factual and
legal bases for the award. In rendering the award, the arbitrator shall
determine the respective rights and obligations of the parties according to the
laws of the State of Tennessee or, if applicable, federal law. The arbitrator
shall have the authority to award any remedy or relief that a federal or state
court within the State of Tennessee could order or grant.
Any provisional remedy that would be available from a court of law shall be
available from the arbitrator to the parties, pending the arbitrator's
determination of the merits of the parties' dispute. This shall include orders
of attachment, temporary restraining orders, injunctions, and appointment of a
receiver. If the arbitrator issues such an order, either party may immediately
apply to a court of competent jurisdiction for enforcement of the order, even
though the arbitrator may not have rendered a final award.
All fees and expenses of the arbitration, including the fees of the
arbitrator and the expense of each parties' counsel, experts, witnesses and
preparation and presentation of proofs, shall be paid by Company.
Unless legally required to do so, neither party may disclose the existence,
content, or results of any arbitration under this Agreement without the prior
written consent of the other party, nor may the arbitrator disclose any such
information without the consent of both parties. This provision shall apply to
all aspects of the arbitration proceeding, including without limitation,
discovery, testimony, other evidence, briefs, and the award.
It is the specific intent of the parties that this arbitration clause be
governed by the Federal Arbitration Act, 9 U.S.C. Section 1 et. seq. ("FAA");
however, if this cause is unenforceable for any reason under the FAA, then the
parties intend that it be governed by the provisions of Tenn. Code Ann. Sections
29-5-30 through 29-5-320.
Both Executive and Company represent and warrant they have read the
foregoing Section 5.3, that they have had an opportunity to consult with and
receive advice from legal counsel regarding the foregoing Section 5.3, and that
they hereby forever waive all rights to assert that this Section 5.3 was the
result of duress, coercion, or mistake of law or fact.
_____ _____ (Initial of both parties in each space).
5.5. Governing Law. This Agreement shall be governed by and
-------------
construed in accordance with the laws of the State of Tennessee.
-7-
<PAGE>
5.6. Survival of Agreements. All covenants and agreements made
----------------------
herein shall survive the execution and delivery of this Agreement and the
termination of Executive's employment hereunder for any reason.
5.7. Headings. The section and paragraph headings contained in this
--------
Agreement are for reference purposes only and shall not affect in any way the
meaning or interpretation of this Agreement.
5.8. Notices. All notices, requests, consents and other
-------
communications hereunder shall be in writing and shall be deemed to be given
when delivered personally or mailed first class, registered or certified mail,
postage prepaid, in either case, addressed as follows:
(a) If to Executive:
Mr. John W. Nelley, Jr.
3801 West End Avenue
Nashville, Tennessee 37203
(b) If to the Company, addressed to:
Weeks Corporation
4497 Park Drive
Norcross, Georgia 30093
Attention: Chief Executive Officer
with a copy to:
Mr. William B. Fryer
King & Spalding
191 Peachtree Street
Atlanta, Georgia 30303-1763
5.9. Counterparts. This Agreement may be executed in two or more
------------
counterparts, each of which shall be deemed to be an original, but all of which
together shall constitute one and the same instrument.
5.10. Entire Agreement. This Agreement constitutes the entire
----------------
agreement of the parties with respect to the subject matter hereof and upon the
Effective Date will supersede and replace all prior agreements, written and
oral, between the parties hereto or with respect to the subject matter hereof.
This Agreement may be modified only by a written instrument signed by each of
the parties hereto.
-8-
<PAGE>
5.11. No Violation with Other Agreements. Nothing in this Agreement
----------------------------------
shall be deemed to interfere with or be in violation of any other obligation of
Executive that may exist under other agreements to which Executive is a party;
provided, however, that such other agreements do not otherwise violate Section
1.1 hereof.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date first above written.
WEEKS CORPORATION
By:_____________________________
Title:__________________________
EXECUTIVE
________________________________
John W. Nelley, Jr.
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<PAGE>
EXHIBIT A
Section 1.1
- -----------
Permitted Outside Business Activities: Executive will be permitted to
-------------------------------------
continue to serve as a general partner of NWI X, L.P., the general partner of
NWI Warehouse Group, L.P. ("NWI"), and in that capacity (i) complete the
properties under development, (ii) discharge NWI's obligations under various
contracts with respect to such properties under development and with respect to
the Aspen Grove Land, I-440 land, and certain other properties, (iii) sell
assets of NWI and otherwise discharge its duties and responsibilities as a
general partner of NWI X, L.P. in its capacity as the general partner of NWI, in
each case consistent with that certain Noncompetition Agreement of even date
herewith between Executive and Company and the Noncompetition Agreement of even
date herewith between NWI and the Company. Executive will also be permitted to
continue to serve as financial and tax advisor for his existing clients and to
render advice in such capacity in a manner so as not to materially affect his
time spent discharging duties as an officer of the Company.
To the extent that Weeks has refused to accept a Development Property
pursuant to any right contained in one the Transaction Documents (as listed on
Exhibit A to the First Amendment to the Second Amended and Restated Agreement of
Limited Partnership of Weeks Realty), then Executive shall be entitled to
operate, develop, market and otherwise conduct business with respect to such
Development Property.
<PAGE>
EMPLOYMENT AGREEMENT
--------------------
THIS EMPLOYMENT AGREEMENT (this "Agreement"), is made and entered into
on this 1st day of November, 1996, by and between ALBERT W. BUCKLEY, JR., an
individual resident of the State of Tennessee (the "Executive"), and WEEKS
CORPORATION, a Georgia corporation ("the Company");
W I T N E S S E T H:
--------------------
WHEREAS, the Company desires to employ Executive, and Executive
desires to be employed by the Company, on the terms and conditions contained in
this Agreement;
NOW, THEREFORE, in consideration of the mutual promises and agreements
contained herein and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties to this Agreement,
intending to be legally bound, hereby agree as follows:
(S) 1.
Employment
----------
1.1. Employment. Subject to the terms of this Agreement, the Company
----------
hereby employs Executive, and Executive hereby accepts such employment with the
Company. Executive initially shall serve as Executive Vice President of the
Company, and initially shall have the duties, rights, and responsibilities
normally associated with such position, including, without limitation, day-to-
day responsibility (together with John W. Nelley, Jr., as long as Mr. Nelley
serves as an Executive Vice President of the Company) for the Company's
operations in Nashville, Tennessee, together with such other reasonable duties
relating to the operation of the business of the Company as may be assigned to
him from time to time by the Board of Directors or other governing body of the
Company. Executive shall devote his full business time, skills, and best
efforts to rendering services on behalf of the Company and shall exercise such
care as is customarily required of executives undertaking similar duties for
entities similar to the Company. Notwithstanding the foregoing, Executive may
engage in the business activities listed with respect to this Section 1.1 on
Exhibit A hereto.
- ---------
<PAGE>
(S) 2.
Compensation; Expenses
----------------------
2.1. Base Salary. Commencing on the Effective Date (as defined in
-----------
(S) 3.1), the Company shall pay Executive during the term of Executive's
employment under this Agreement a base salary equal to $150,000 per annum
(prorated for the balance of 1996) (the "Base Salary"), which amount shall be
subject to adjustment, if any, in accordance with this (S) 2.1. The
Compensation Committee of the Board of Directors or other governing body of the
Company (the "Committee") shall review Executive's Base Salary on an annual
basis, and the Committee, upon such review and in its sole discretion, may
increase or decrease Executive's Base Salary in accordance with criteria to be
established by the Committee; provided, however, that Executive's Base Salary
shall not be reduced below the amount so stated in this (S) 2.1; and provided
further, however, that such criteria shall be determined primarily on the basis
of growth in the Company's revenues and funds from operations per share of
capital stock, on the performance of the business units which are under the
management and supervision of Executive and on the basis of the satisfaction of
other employment goals established by the Committee which shall be commensurate
with the scope of Executive's duties and responsibilities. The Base Salary,
less all applicable withholding taxes, shall be paid to Executive in accordance
with the payroll procedures in effect from time to time with respect to
executive officers of the Company.
2.2. Incentive Compensation. Prior to January 1, 1998, Executive
----------------------
shall not be entitled to participate in any incentive compensation plans in
effect with respect to executive officers of the Company or otherwise receive
any incentive compensation; provided, however, the Company may elect, in its
-------- -------
sole and absolute discretion, the appropriateness of paying incentive
compensation to Executive with respect to the period commencing on the date of
this Agreement and ending on December 31, 1997, to the extent the performance of
the Company's operations in the Nashville, Tennessee market significantly exceed
the Company's budgeted projections for such period. Effective as of January 1,
1998, Executive shall be entitled to participate in any incentive compensation
plans in effect with respect to executive officers of the Company, with the
criteria for Executive's participation in such plans to be established by the
Committee in its sole discretion; provided, however, that such incentive
compensation for any year will not exceed 75% of the Base Salary for such year.
2.3. Stock Options. Executive shall be entitled to participate in
-------------
such employee stock option plans as are from time to time established for the
benefit of employees of the Company in accordance with the terms and conditions
of such plans. At the Effective Date, Executive shall be granted immediately
vested options to purchase 40,000 shares of Weeks Corporation common stock, par
value $.01 per share, in accordance with the Weeks Corporation Incentive Stock
Plan as in effect on the Effective Date.
2.4. Expenses. Executive shall be reimbursed for all reasonable
--------
business-related expenses incurred by Executive at the request of or on behalf
of the Company, including, without
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<PAGE>
limitation, first class travel expenses incurred in connection with the
performance of Executive's duties and responsibilities hereunder.
2.5. Participation in Employee Benefit Plans. Executive shall be
---------------------------------------
entitled to participate in such medical, dental, disability, hospitalization,
life insurance, profit sharing, and other benefit plans as the Company shall
maintain from time to time for the benefit of executive officers of the Company,
on the terms and subject to the conditions set forth in such plans.
2.6. Vacation. In addition to Company holidays, Executive shall
--------
receive such paid vacation time each year during the term of this Agreement as
is consistent with vacation policies of the Company for its executive officers,
but in no event less than six weeks of paid vacation time annually. Executive
agrees that the vacation time provided for in this Section 2.6 will not coincide
with the vacation time of John W. Nelley, Jr., except for such business related
travel or other brief absences which the Company, in its reasonable discretion,
does not deem excessive, unreasonable or detrimental to the Company's
operations. Any unused vacation days in any year may not be carried over to
subsequent years and Executive shall not receive any additional compensation for
unused vacation days.
2.7. Automobile Expenses. Commencing on the Effective Date, during
-------------------
the term of Executive's employment under this Agreement, Executive shall be
reimbursed for his actual automobile expenses in an amount not to exceed $600.00
per month under this Agreement.
(S) 3.
Term of Employment
------------------
3.1. Term of Employment. Unless earlier terminated in accordance
------------------
with (S) 3.2, the employment of Executive under this Agreement shall commence as
of the date that this Agreement is executed (the "Effective Date") and shall
continue up to, but not including, the third anniversary of such date.
Thereafter, Executive's employment under this Agreement shall be extended for
such period, if any, as agreed to in writing by Executive and the Company.
3.2. Termination. Executive's employment under this Agreement may be
-----------
terminated
(a) by the Company upon the death or total disability of Executive
(total disability meaning the inability of Executive to perform his normal
required services under this Agreement for a period of six consecutive
months during the term of this Agreement by reason of Executive's mental or
physical disability, as reasonably determined by the Board of Directors or
other governing body of the Company) (which shall be referred to as a
"Disability Termination"); or
-3-
<PAGE>
(b) by the Company for "cause," which shall exist only upon the
occurrence of one or more of the following: (i) Executive is convicted of,
pleads guilty to, or confesses to any felony or any act of fraud,
misappropriation or embezzlement to the material damage or prejudice of the
Company or any affiliate of the Company, as determined by the Board of
Directors or other governing body of the Company in good faith, or (ii)
Executive engages in a fraudulent act relating to the business of the
Company or any affiliate of the Company, as determined by the Board of
Directors or other governing body of the Company in good faith (which shall
be referred to individually and collectively as a "For Cause Termination");
or
(c) by the Company for any reason other than a For Cause Termination
or a Disability Termination (which shall be referred to as a "No Cause
Termination"); or
(d) by Executive voluntarily for any reason other than an Employee-
Initiated Termination (as defined in (S) 3.2(e)) after giving 30 days prior
written notice to the Company (which shall be referred to as a "Voluntary
Termination"); or
(e) by Executive for "cause", which shall exist if the Company fails
to cure within ten days after receiving notice from Executive of the
occurrence of any of the following: (i) Executive is required to move more
than 20 miles from the city limits of Franklin, Tennessee without his
consent, (ii) there is a material reduction in Executive's duties, rights
or responsibilities under this Agreement without his consent, or (iii)
there is a material decrease in the value of Executive's compensation and
benefits package from the Company without his consent (which shall be
referred to as an "Employee-Initiated Termination").
(S) 4.
Results of Termination
----------------------
4.1. Termination As Result of Voluntary Termination or For Cause
-----------------------------------------------------------
Termination. If Executive's employment under this Agreement is terminated as a
- -----------
result of a Voluntary Termination or a For Cause Termination, Executive shall
not thereafter be entitled to receive any Base Salary for periods following such
termination and shall not be entitled to receive any incentive, bonus or other
special compensation with respect to the year in which such termination occurs
or for any period thereafter; provided, however, that Executive shall be
entitled to receive any Base Salary that may be owed to Executive but is unpaid
as of the date on which Executive's employment is terminated.
4.2. Termination As Result of No Cause Termination or Employee-
---------------------------------------------------------
Initiated Termination. If Executive's employment under this Agreement is
- ---------------------
terminated as a result of a No Cause Termination or an Employee-Initiated
Termination, Executive shall be entitled to receive (i)
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<PAGE>
any Base Salary that may be owed to Executive but is unpaid as of the date on
which Executive's employment is terminated, (ii) additional compensation equal
to any amount Executive would have received (with respect to the year in which
the termination occurs) under any and all incentive, bonus, and other special
compensation plans and arrangements in which Executive is a participant at the
date of termination, multiplied by a fraction, the numerator of which is the
number of days that have elapsed in such year through the date of termination,
and the denominator of which is 365, and (iii) additional compensation equal to
the total Base Salary Executive would have received (assuming the Base Salary as
in effect on the date of such termination) for the period from the date of
termination up to, but not including, the third anniversary of the Effective
Date, or, if later, through the remainder of his term of employment under any
extension of this Agreement. The compensation referred to in (i) and (iii) above
shall be paid, in equal installments, at the same times Executive would have
received salary payments had he remained an employee, unless the Company elects
to make such payments sooner. The compensation referred to in (ii) above shall
be paid at the same time or times as payments would have been made to Executive
under the applicable incentive, bonus or other special compensation arrangements
had he remained an employee. The compensation referred to in (i), (ii), and
(iii) above shall constitute the sole and exclusive remaining compensation due
to Executive hereunder.
4.3. Termination as a Result of a Disability Termination Event. If
---------------------------------------------------------
Executive's employment under this Agreement is terminated as a result of a
Disability Termination, (i) Executive shall be entitled to receive any Base
Salary that may be owed to Executive but is unpaid as of the date on which
Executive's employment is terminated, and (ii) Executive (or at his death, his
designated beneficiary, if any, or if none, his surviving spouse or, if none,
his estate) shall continue to receive Executive's Base Salary for the month in
which such termination occurs and for the following six months. If payment of
Base Salary is to be made to Executive's estate, such payment shall be made as
soon as practical after Executive's death in a single lump sum equal to the
present value, as determined using a 9% interest rate assumption, of the total
amount of Base Salary payable to the estate.
4.4. Other Employee Benefit Plans and Arrangements. The benefits, if
---------------------------------------------
any, payable to or on behalf of Executive upon his termination of employment
from the Company under any other employee benefit plans and arrangements not
specifically provided for herein shall be governed by the terms and conditions
for benefit payments set forth in such plans and arrangements.
(S) 5.
Miscellaneous
-------------
5.1. Allocation of Income. Executive hereby acknowledges that the
--------------------
Company and its related affiliates may allocate certain portions of Executive's
compensation among the Company
-5-
<PAGE>
and its affiliates. Executive agrees to such allocation and acknowledges that
for purposes of this Agreement, Executive will be deemed to be employed by, and
to perform services for, the entity to which such compensation is allocated.
5.2. Binding Effect. This Agreement shall inure to the benefit of
--------------
and shall be binding upon Executive and his executor, administrator, heirs,
personal representative and assigns, and the Company and its successors and
assigns; provided, however, that Executive shall not be entitled to assign or
delegate any of his rights or obligations hereunder without the prior written
consent of Company.
5.3. Construction of Agreement. No provision of this Agreement or
-------------------------
any related document shall be construed against or interpreted to the
disadvantage of any party hereto by any court or other governmental or judicial
authority by reason of such party having or being deemed to have structured or
drafted such provision.
5.4. Arbitration of Disputes. If a dispute arises between the
-----------------------
parties, then the parties agree that their respective representatives shall meet
and consult in good faith and attempt to settle the dispute, within thirty (30)
days of written notice thereof, as a condition precedent to the initiation of
arbitration proceedings as set forth below.
Any dispute, controversy, or claim arising out of or relating to this
Agreement, the breach, termination or invalidity thereof, or Executive's
employment, including claims of tortious interference or other tort or statutory
claims, and including without limitation any dispute concerning the scope of
this arbitration clause, shall be settled by arbitration in accordance with the
Employment Dispute Arbitration Rules of the American Arbitrators Association
then in effect. The judgment on the award rendered by the arbitrator may be
entered in any court having jurisdiction thereof. The arbitration under this
Agreement shall be held in Nashville, Tennessee, or at such other place as may
be selected by mutual agreement of the parties.
The arbitrator shall be mutually acceptable to the parties, or failing
agreement, selected pursuant to the Employment Dispute Arbitration Rules of the
American Arbitrators Association. The parties intend that the arbitrator shall
be independent and impartial. To this end, the arbitrator shall disclose to the
parties any professional, family, or social relationships, past or present, with
any party or counsel.
Strict rules of evidence shall not apply in any arbitration conducted
pursuant to this Agreement. The parties may offer such evidence as they desire
and the arbitrator shall accept such evidence as the arbitrator deems relevant
to the issues and accord it such weight as the arbitrator deems appropriate.
The arbitrator shall have the discretion to order a prehearing exchange of
information by the parties, including without limitation, production of
requested documents, exchange of summaries of testimony of proposed witnesses,
and examination by deposition of parties. No party shall be allowed, however,
to take more than one deposition of the opposing party
-6-
<PAGE>
and no deposition shall last longer than six (6) hours. All disputes regarding
discovery shall be decided by the arbitrator.
The arbitrator award shall be in writing and shall specify the factual and
legal bases for the award. In rendering the award, the arbitrator shall
determine the respective rights and obligations of the parties according to the
laws of the State of Tennessee or, if applicable, federal law. The arbitrator
shall have the authority to award any remedy or relief that a federal or state
court within the State of Tennessee could order or grant.
Any provisional remedy that would be available from a court of law shall be
available from the arbitrator to the parties, pending the arbitrator's
determination of the merits of the parties' dispute. This shall include orders
of attachment, temporary restraining orders, injunctions, and appointment of a
receiver. If the arbitrator issues such an order, either party may immediately
apply to a court of competent jurisdiction for enforcement of the order, even
though the arbitrator may not have rendered a final award.
All fees and expenses of the arbitration, including the fees of the
arbitrator and the expense of each parties' counsel, experts, witnesses and
preparation and presentation of proofs, shall be paid by Company.
Unless legally required to do so, neither party may disclose the existence,
content, or results of any arbitration under this Agreement without the prior
written consent of the other party, nor may the arbitrator disclose any such
information without the consent of both parties. This provision shall apply to
all aspects of the arbitration proceeding, including without limitation,
discovery, testimony, other evidence, briefs, and the award.
It is the specific intent of the parties that this arbitration clause be
governed by the Federal Arbitration Act, 9 U.S.C. Section 1 et. seq. ("FAA");
however, if this cause is unenforceable for any reason under the FAA, then the
parties intend that it be governed by the provisions of Tenn. Code Ann. Sections
29-5-30 through 29-5-320.
Both Executive and Company represent and warrant they have read the
foregoing Section 5.3, that they have had an opportunity to consult with and
receive advice from legal counsel regarding the foregoing Section 5.3, and that
they hereby forever waive all rights to assert that this Section 5.3 was the
result of duress, coercion, or mistake of law or fact.
_____ _____ (Initial of both parties in each space).
5.5. Governing Law. This Agreement shall be governed by and
-------------
construed in accordance with the laws of the State of Tennessee.
-7-
<PAGE>
5.6. Survival of Agreements. All covenants and agreements made
----------------------
herein shall survive the execution and delivery of this Agreement and the
termination of Executive's employment hereunder for any reason.
5.7. Headings. The section and paragraph headings contained in this
--------
Agreement are for reference purposes only and shall not affect in any way the
meaning or interpretation of this Agreement.
5.8. Notices. All notices, requests, consents and other
-------
communications hereunder shall be in writing and shall be deemed to be given
when delivered personally or mailed first class, registered or certified mail,
postage prepaid, in either case, addressed as follows:
(a) If to Executive:
Mr. Albert W. Buckley, Jr.
111 Sawyer Road
Franklin, Tennessee 37064
(b) If to the Company, addressed to:
Weeks Corporation
4497 Park Drive
Norcross, Georgia 30093
Attention: Chief Executive Officer
with a copy to:
Mr. William B. Fryer
King & Spalding
191 Peachtree Street
Atlanta, Georgia 30303-1763
5.9. Counterparts. This Agreement may be executed in two or more
------------
counterparts, each of which shall be deemed to be an original, but all of which
together shall constitute one and the same instrument.
5.10. Entire Agreement. This Agreement constitutes the entire
----------------
agreement of the parties with respect to the subject matter hereof and upon the
Effective Date will supersede and replace all prior agreements, written and
oral, between the parties hereto or with respect to the subject matter hereof.
This Agreement may be modified only by a written instrument signed by each of
the parties hereto.
-8-
<PAGE>
5.10. No Violation with Other Agreements. Nothing in this
----------------------------------
Agreement shall be deemed to interfere with or be in violation of any other
obligation of Executive that may exist under other agreements to which Executive
is a party; provided, however, that such other agreements do not otherwise
violate Section 1.1 hereof.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date first above written.
WEEKS CORPORATION
By:_______________________________
Title:____________________________
EXECUTIVE
__________________________________
Albert W. Buckley, Jr.
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<PAGE>
EXHIBIT A
Section 1.1
-----------
Permitted Outside Business Activities: Executive will be permitted
-------------------------------------
to continue to serve as a general partner of NWI X, L.P., the general partner
of NWI Warehouse Group, L.P. ("NWI"), and in that capacity (i) complete the
properties under development, (ii) discharge NWI's obligations under various
contracts with respect to such properties under development and with respect
to the Aspen Grove Land, I-440 land, and certain other properties, (iii) sell
assets of NWI and otherwise discharge its duties and responsibilities as a
general partner of NWI X, L.P. in its capacity as the general partner of NWI,
in each case consistent with that certain Noncompetition Agreement of even
date herewith between Executive and Company and the Noncompetition Agreement
of even date herewith between NWI and the Company.
To the extent that Weeks has refused to accept a Development Property
pursuant to any right contained in one the Transaction Documents (as listed
on Exhibit A to the First Amendment to the Second Amended and Restated
Agreement of Limited Partnership of Weeks Realty), then Executive shall be
entitled to operate, develop, market and otherwise conduct business with
respect to such Development Property.
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<PAGE>
NONCOMPETITION AGREEMENT
------------------------
THIS NONCOMPETITION AGREEMENT (this "Agreement"), is made and entered into
on this 1st day of November, 1996, by and among NWI WAREHOUSE GROUP, L.P., a
limited partnership formed under the laws of the State of Tennessee ("NWI") and
the Company (as herein defined).
W I T N E S S E T H:
- - - - - - - - - -
WHEREAS, on the date hereof, the Company is entering into a series of
related transactions pursuant to which it will acquire, and obtain the
contractual right to acquire, substantially all of the real estate and operating
assets of NWI;
WHEREAS, as a condition to the consummation of the transactions described
above, the parties hereto desire to enter into certain agreements restricting
the activities of NWI in an effort to eliminate potential conflicts of interest
that may arise in the future, to protect the Company's legitimate business
interests, i.e., the value of its business and its good will, and for other
business purposes.
NOW, THEREFORE, in consideration of the foregoing and other good and
valuable consideration, the receipt and sufficiency of which hereby are
acknowledged, the parties hereto agree as follows:
1. Definitions. Capitalized terms used herein shall have the
-----------
meanings set forth below:
"Affiliate" means (i) any entity directly or indirectly controlling,
controlled by, or under common control with NWI, and (ii) each other entity in
which NWI, directly or indirectly, owns any controlling interest or of which NWI
serves as a general partner.
"Agreement" means this Noncompetition Agreement, including any
amendments hereto made in accordance with Section 8(d) hereof.
"Company" means Weeks Corporation, a Georgia corporation, Weeks
Realty, L.P., a Georgia limited partnership, Weeks Realty Services, Inc., a
Georgia corporation, Weeks Construction Services, Inc, a Georgia corporation,
Weeks GP Holdings, Inc., a Georgia corporation, Weeks LP Holdings, Inc., a
Georgia corporation, and their respective successors.
<PAGE>
"Effective Date" means the date as of which this Agreement is
executed.
"Industrial or Office Property" means any real property on which a
distribution facility, service center and/or office building development has
been constructed or is now or hereafter proposed to constructed (for example,
and not by way of limitation, a property of the type managed by the Company).
"Real Estate Activities" means those activities conducted by NWI,
including, without limitation, the acquisition, development, operation,
management, leasing, construction, or landscaping of an Industrial or Office
Property and activities substantially similar to those that NWI has performed
within the two years immediately prior hereto.
"Restricted Period" means from the Effective Date until March 31,
1998.
"Shares" means common stock, par value $.01 per share of Weeks
Corporation.
"Territory" means the standard metropolitan statistical area for
Nashville, Tennessee.
"Units" means the limited partnership interests of Weeks Realty, L.P.,
a Georgia limited partnership.
2. Noncompetition. NWI will not, during the Restricted Period and
--------------
within the Territory, serve as partner of, or own any interest in, or engage in
any Real Estate Activities; provided, however, that notwithstanding the
foregoing (i) NWI may acquire an interest in any such entity so long as the
nature of any such interest does not afford NWI, acting alone or in concert with
any other person or persons the power to influence in any material fashion the
decision making processes of the entity in which such interest is held, (ii) NWI
may serve as a partner of Weeks Realty, L.P. and as a stockholder of the
Company, and (iii) NWI may enter into and discharge its obligations under those
Contribution Agreements (as defined in the Registration Rights and Lock-Up
Agreement dated as of the date hereof) between Weeks Realty, L.P. and NWI dated
as the date hereof, as well as any other agreement which is entered into by NWI,
or an affiliate of NWI, in connection with the acquisition by the Company of
NWI's assets.
3.(a) Antipirating of Employees. NWI will not, within the Territory
-------------------------
and during the Restricted Period, employ or seek to employ on its own behalf or
on behalf of any other person, firm or corporation that engages, directly or
indirectly, in the acquisition, development, operation, management, leasing,
construction, or landscaping of an Industrial or Office Property, any person who
was employed as an employee by the Company in an executive, managerial, or
supervisory capacity.
(b) Nonsolicitation of Customers. NWI will not, within the Territory
----------------------------
and during the Restricted Period, solicit or seek to solicit on its own behalf
or on behalf of any other person, firm or corporation that engages, directly or
indirectly, in the acquisition, development, operation,
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<PAGE>
management, leasing, construction, or landscaping of an Industrial or Office
Property, any customer of the Company.
(c) Upon violation of this Section 3, NWI shall return to the Company
all documentation and other tangible materials in its possession containing
Trade Secrets or Confidential Information.
4. Reasonable and Necessary Restrictions. NWI acknowledges that the
-------------------------------------
restrictions, prohibitions and other provisions hereof, including without
limitation the Territory and Restricted Period, are reasonable, fair and
equitable in scope, terms and duration, are necessary to protect the legitimate
business interests of the Company, and are a material inducement to the Company
to enter into the transactions contemplated in the recitals hereto. NWI
covenants that it will not challenge the enforceability of this Agreement nor
will it raise any equitable defense to its enforcement.
5. Restrictions In Addition to Other Agreements. NWI acknowledges
--------------------------------------------
that the restrictions, prohibitions and other provisions hereof shall be in
addition to and not in substitution of the restrictions, prohibitions and other
provisions of certain other agreements executed between the parties hereto, as
such agreements shall be amended and supplemented from time to time.
6. Specific Performance. NWI acknowledges that the obligations
--------------------
undertaken by it pursuant to this Agreement are unique and that the Company
likely will have no adequate remedy at law if NWI shall fail to perform any of
its obligations hereunder, and NWI therefore confirms that the Company's right
to specific performance of the terms of this Agreement is essential to protect
the rights and interests of the Company. Accordingly, in addition to any other
remedies that the Company may have at law or in equity, the Company shall have
the right to have all obligations, covenants, agreements and other provisions of
this Agreement specifically performed by NWI, and the Company shall have the
right to obtain preliminary and permanent injunctive relief to secure specific
performance and to prevent a breach or contemplated breach of this Agreement by
NWI, and NWI submits to the jurisdiction of the courts of the State of Tennessee
for this purpose.
7. Operations of Affiliates. In addition to and without in any way
------------------------
limiting any of the other provisions of this Agreement, NWI agrees that it will
refrain from authorizing any Affiliate to perform any activities that would be
prohibited by the terms of this Agreement if they were performed by NWI.
Notwithstanding anything to the contrary contained in this Section 7 (or in any
other section of this Agreement), NWI shall not be required by the terms of this
Agreement to violate any fiduciary or contractual duty it owes as a partner of a
partnership, as a trustee of a trust, or as a controlling person, manager or
fiduciary of any other person or entity.
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<PAGE>
8. Miscellaneous Provisions.
------------------------
(a) Binding Effect. Subject to any provisions hereof restricting
--------------
assignment, all covenants and agreements in this Agreement by or on behalf of
any of the parties hereto shall bind and inure to the benefit of their
respective successors, assigns, heirs, and personal representatives. None of the
parties hereto may assign any of its rights under this Agreement or attempt to
have any other person or entity assume any of its obligations hereunder.
(b) Severability. If fulfillment of any provision of this Agreement,
------------
at the time such fulfillment shall be due, shall transcend the limit of validity
prescribed by law, then the obligation to be fulfilled shall be reduced to the
limit of such validity; and if any clause or provision contained in this
Agreement operates or would operate to invalidate this Agreement, in whole or in
part, then such clause or provision only shall be held ineffective to the extent
of such invalidity, as though not herein contained, and the remainder of this
Agreement shall remain operative and in full force and effect.
(c) Governing Law. This Agreement, the rights and obligations of the
-------------
parties hereto, and any claims or disputes relating thereto shall be governed by
and construed in accordance with the laws of the State of Tennessee, not
including the choice-of-law rules thereof.
(d) Amendment; Waiver. Except as otherwise expressly provided in
-----------------
this Agreement, no amendment, modification or discharge of this Agreement shall
be valid or binding unless set forth in writing and duly executed by each of the
parties hereto. Any waiver by any party or consent by any party to any variation
from any provision of this Agreement shall be valid only if in writing and only
in the specific instance in which it is given, and such waiver or consent shall
not be construed as a waiver of any other provision or as a consent with respect
to any similar instance or circumstance.
(e) Headings. Section and subsection headings contained in this
--------
Agreement are inserted for convenience of reference only, shall not be deemed to
be a part of this Agreement for any purpose, and shall not in any way define or
affect the meaning, construction or scope of any of the provisions hereof.
(f) Pronouns. All pronouns and any variations thereof shall be
--------
deemed to refer to the masculine, feminine, neuter, singular or plural, as the
identity of the person or entity may require.
(g) Arbitration. If a dispute arises between the parties, then the
-----------
parties agree that their respective representatives shall meet and consult in
good faith and attempt to settle the dispute, within thirty (30) days of written
notice thereof, as a condition precedent to the initiation of arbitration
proceedings as set forth below.
-4-
<PAGE>
Any dispute, controversy, or claim arising out of or relating to this
Agreement, the breach, termination or invalidity thereof, or NWI's
noncompetition obligations, including claims of tortious interference or other
tort or statutory claims, and including without limitation any dispute
concerning the scope of this arbitration clause, shall be settled by arbitration
in accordance with the Employment Dispute Arbitration Rules of the American
Arbitrators Association then in effect. The judgment on the award rendered by
the arbitrator may be entered in any court having jurisdiction thereof. The
arbitration under this Agreement shall be held in Nashville, Tennessee, or at
such other place as may be selected by mutual agreement of the parties.
The arbitrator shall be mutually acceptable to the parties, or failing
agreement, selected pursuant to the Employment Dispute Arbitration Rules of the
American Arbitrators Association. The parties intend that the arbitrator shall
be independent and impartial. To this end, the arbitrator shall disclose to the
parties any professional, family, or social relationships, past or present, with
any party or counsel.
Strict rules of evidence shall not apply in any arbitration conducted
pursuant to this Agreement. The parties may offer such evidence as they desire
and the arbitrator shall accept such evidence as the arbitrator deems relevant
to the issues and accord it such weight as the arbitrator deems appropriate. The
arbitrator shall have the discretion to order a prehearing exchange of
information by the parties, including without limitation, production of
requested documents, exchange of summaries of testimony of proposed witnesses,
and examination by deposition of parties. No party shall be allowed, however, to
take more than one deposition of the opposing party and no deposition shall last
longer than six (6) hours. All disputes regarding discovery shall be decided by
the arbitrator.
The arbitrator award shall be in writing and shall specify the factual and
legal bases for the award. In rendering the award, the arbitrator shall
determine the respective rights and obligations of the parties according to the
laws of the State of Tennessee or, if applicable, federal law. The arbitrator
shall have the authority to award any remedy or relief that a federal or state
court within the State of Tennessee could order or grant.
Any provisional remedy that would be available from a court of law shall be
available from the arbitrator to the parties, pending the arbitrator's
determination of the merits of the parties' dispute. This shall include orders
of attachment, temporary restraining orders, injunctions, and appointment of a
receiver. If the arbitrator issues such an order, either party may immediately
apply to a court of competent jurisdiction for enforcement of the order, even
though the arbitrator may not have rendered a final award.
All fees and expenses of the arbitration, including the fees of the
arbitrator and the expense of each parties' counsel, experts, witnesses and
preparation and presentation of proofs, shall be paid by Company.
-5-
<PAGE>
Unless legally required to do so, neither party may disclose the existence,
content, or results of any arbitration under this Agreement without the prior
written consent of the other party, nor may the arbitrator disclose any such
information without the consent of both parties. This provision shall apply to
all aspects of the arbitration proceeding, including without limitation,
discovery, testimony, other evidence, briefs, and the award.
It is the specific intent of the parties that this arbitration clause be
governed by the Federal Arbitration Act, 9 U.S.C. Section 1 et. seq. ("FAA");
however, if this cause is unenforceable for any reason under the FAA, then the
parties intend that it be governed by the provisions of Tenn. Code Ann. Sections
29-5-30 through 29-5-320.
Both NWI and Company represent and warrant they have read the foregoing
Section 8(g), that they have had an opportunity to consult with and receive
advice from legal counsel regarding the foregoing Section 8(g), and that they
hereby forever waive all rights to assert that this Section 8(g) was the result
of duress, coercion, or mistake of law or fact.
_____ _____ (Initial of both parties in each space).
(h) Execution in Counterparts. This Agreement may be executed in two
-------------------------
or more counterparts, none of which need contain the signatures of all parties
hereto and each of which shall be deemed an original.
-6-
<PAGE>
IN WITNESS WHEREOF, each of the undersigned has executed this Agreement, or
caused this Agreement to be duly executed on its behalf, as of the date first
set forth above.
WEEKS CORPORATION
By:____________________________________
Title:______________________________
WEEKS REALTY, L.P.
By: Weeks GP Holdings, Inc., its
sole General Partner
By:____________________________________
Title:______________________________
WEEKS REALTY SERVICES, INC.
By:____________________________________
Title:______________________________
-7-
<PAGE>
WEEKS CONSTRUCTION SERVICES, INC.
By:____________________________________
Title:______________________________
WEEKS GP HOLDINGS, INC.
By:____________________________________
Title:______________________________
WEEKS LP HOLDINGS, INC.
By:____________________________________
Title:______________________________
NWI WAREHOUSE GROUP, L.P.
By: NWI X, L.P., its Sole General Partner
By: _______________________
John W. Nelley, Jr.,
General Partner
By: _______________________
Albert W. Buckley, Jr.,
General Partner
-8-
<PAGE>
NONCOMPETITION AGREEMENT
------------------------
THIS NONCOMPETITION AGREEMENT (this "Agreement"), is made and entered into
on this 1st day of November, 1996, by and among JOHN W. NELLEY, JR., an
individual resident of the State of Tennessee ("Executive"), and the Company (as
herein defined).
W I T N E S S E T H:
- - - - - - - - - -
WHEREAS, on the date hereof, the Company is entering into a series of
related transactions pursuant to which it will acquire, and obtain the
contractual right to acquire, substantially all of the real estate and operating
assets of NWI Warehouse Group, L.P. and Buckley & Company Real Estate, Inc.;
WHEREAS, as a condition to the consummation of the transactions described
above, the parties hereto desire to enter into certain agreements restricting
the activities of Executive in an effort to eliminate potential conflicts of
interest that may arise in the future, to protect the Company's legitimate
business interests, i.e., the value of its business and its good will, and for
other business purposes.
NOW, THEREFORE, in consideration of the foregoing and other good and
valuable consideration, the receipt and sufficiency of which hereby are
acknowledged, the parties hereto agree as follows:
1. Definitions. Capitalized terms used herein shall have the
-----------
meanings set forth below:
"Affiliate" means (i) any entity directly or indirectly controlling,
controlled by, or under common control with Executive, and (ii) each other
entity in which Executive, directly or indirectly, owns any controlling interest
or of which Executive serves as a general partner.
"Agreement" means this Noncompetition Agreement, including any
amendments hereto made in accordance with Section 9(d) hereof.
"Company" means Weeks Corporation, a Georgia corporation, Weeks
Realty, L.P., a Georgia limited partnership, Weeks Realty Services, Inc., a
Georgia corporation, Weeks Construction Services, Inc, a Georgia corporation,
Weeks GP Holdings, Inc., a Georgia corporation, Weeks LP Holdings, Inc., a
Georgia corporation, and any other entity under the common control of Weeks
Corporation and their respective successors.
<PAGE>
"Effective Date" means the date as of which this Agreement is
executed.
"Employment Agreement" shall mean the Employment Agreement, of even
date herewith, between Executive and Weeks Corporation.
"Industrial or Office Property" means any real property on which a
distribution facility, service center and/or office building development has
been constructed or is now or hereafter proposed to constructed (for example,
and not by way of limitation, a property of the type managed by the Company).
"Managerial Responsibilities" means managerial and supervisory
responsibilities and duties of the kind contemplated by the Employment Agreement
or otherwise substantially similar to those that Executive has performed for the
Company at any time during his employment by the Company or, in the event that
Executive's employment by the Company is terminated, within two years
immediately prior thereto.
"Restricted Period" means from the Effective Date until the later of
(a) the third anniversary of the Effective Date or (b) one year following the
end of Executive's employment by the Company, subject to the provisions of
Section 4 hereof.
"Territory" means the standard metropolitan statistical area for
Nashville, Tennessee.
2. Noncompetition. Without the prior written consent of the Company,
--------------
Executive will not, during the Restricted Period, serve as an officer, director,
or partner of, or own any interest in, or engage in any Managerial
Responsibilities for or on behalf of, any corporation, partnership, venture, or
other business entity that engages, directly or indirectly, in the development,
operation, management, leasing, construction, or landscaping of an Industrial or
Office Property within the Territory; provided however, that notwithstanding the
foregoing (i) Executive may acquire an interest in any such entity so long as
the nature of any such interest does not afford Executive, acting alone or in
concert with any other person or persons the power to influence in any material
fashion the decision making processes of the entity in which such interest is
held, (ii) Executive may serve as an employee, director, partner, officer or
stockholder of the Company, and (iii) Executive may serve in the respective
capacity shown on Schedule A hereto for the entities identified on Schedule A,
---------- ----------
and to discharge Executive's fiduciary and contractual duties and obligations
with respect thereto, even though such entities (or one or more entities in
which or over which one or more of the entities shown on Schedule A has an
----------
investment or exercises control) may directly compete with the Company, provided
Executive shall not engage in any activity with respect to any such entity that
would negate or materially limit the benefits to the Company of the
restrictions, prohibitions, and provisions to which Executive otherwise is
subject pursuant hereto.
3. (a) Antipirating of Employees. Executive will not, within the
-------------------------
Territory and during the Restricted Period, employ or seek to employ on his own
behalf or on behalf of any other
-2-
<PAGE>
person, firm or corporation that engages, directly or indirectly, in the
development, operation, management, leasing, construction, or landscaping of an
Industrial or Office Property, any person who was employed as an employee by the
Company in an executive, managerial, or supervisory capacity during the term of
Executive's employment by the Company and who has not thereafter ceased to be
employed by the Company for a period of at least one (1) year.
(b) Nonsolicitation of Customers. Executive will not, within the
----------------------------
Territory and during the Restricted Period, solicit or seek to solicit on his
own behalf or on behalf of any other person, firm or corporation that engages,
directly or indirectly, in the development, operation, management, leasing,
construction, or landscaping of an Industrial or Office Property, any customer
of the Company who is a customer of the Company at any time during Executive's
employment by the Company.
(c) Trade Secrets and Confidential Information. Executive hereby
------------------------------------------
agrees that he will hold in a fiduciary capacity for the benefit of the Company,
and shall not directly or indirectly use or disclose, any Trade Secret, as
defined hereinafter, that Executive may have acquired during the term of his
employment by the Company for so long as such information remains a Trade
Secret. The term "Trade Secret" as used in this Agreement shall mean
information, including, but not limited to, technical or nontechnical data, a
formula, a pattern, a compilation, a program, a device, a method, a technique, a
drawing, a process, financial data, financial plans, product plans, or a list of
actual or potential customers or suppliers that:
(i) derives economic value, actual or potential, from not being
generally known to, and not being readily ascertainable by
proper means by, other persons who can obtain economic value
from its disclosure or use; and
(ii) is the subject of reasonable efforts by the Company to maintain
its secrecy.
In addition to the foregoing and not in limitation thereof, Executive
agrees that during the period of his employment by the Company and for a period
of one (1) year thereafter, he will hold in a fiduciary capacity for the benefit
of the Company and shall not directly or indirectly use or disclose, any
Confidential or Proprietary Information, as defined hereinafter, that Executive
may have acquired (whether or not developed or compiled by Executive and whether
or not Executive was authorized to have access to such Information) during the
term of, in the course of, or as a result of his employment by the Company. The
term "Confidential or Proprietary Information" as used in this Agreement means
any secret, confidential, or proprietary information of the Company not
otherwise included in the definition of "Trade Secret" above. The term
"Confidential and Proprietary Information" does not include information that has
become generally available to the public by the act of one who has the right to
disclose such information without violating any right of the Company.
-3-
<PAGE>
(d) At the termination of Executive's employment under the Employment
Agreement, Executive shall return to the Company all documentation and other
tangible materials in his possession containing Trade Secrets or Confidential
Information.
4. Adjustments to Restricted Period. If Executive's employment
--------------------------------
under the Employment Agreement is terminated and such termination is a No Cause
Termination or an Employee-Initiated Termination (as defined in the Employment
Agreement), the Restricted Period shall continue until what would have been
(absent such termination) the end of Executive's then current term of employment
under such Employment Agreement; provided, however, that in no event shall such
Restricted Period be less than one year from the date of such termination so
long as Executive is paid his "Base Salary" (as defined in the Employment
Agreement) in effect on the date of such termination during such continuation of
the Restricted Period.
5. Reasonable and Necessary Restrictions. Executive acknowledges
-------------------------------------
that the restrictions, prohibitions and other provisions hereof, including
without limitation the Territory and Restricted Period, are reasonable, fair and
equitable in scope, terms and duration, are necessary to protect the legitimate
business interests of the Company, and are a material inducement to the Company
to enter into the transactions contemplated in the recitals hereto. Executive
covenants that he will not challenge the enforceability of this Agreement nor
will he raise any equitable defense to its enforcement.
6. Restrictions In Addition to Employment Agreements. Executive
-------------------------------------------------
acknowledges that the restrictions, prohibitions and other provisions hereof
shall be in addition to and not in substitution of the restrictions,
prohibitions and other provisions of the Employment Agreement, as such agreement
shall be amended and supplemented from time to time.
7. Specific Performance. Executive acknowledges that the
--------------------
obligations undertaken by him pursuant to this Agreement are unique and that the
Company likely will have no adequate remedy at law if Executive shall fail to
perform any of his obligations hereunder, and Executive therefore confirms that
the Company's right to specific performance of the terms of this Agreement is
essential to protect the rights and interests of the Company. Accordingly, in
addition to any other remedies that the Company may have at law or in equity,
the Company shall have the right to have all obligations, covenants, agreements
and other provisions of this Agreement specifically performed by Executive, and
the Company shall have the right to obtain preliminary and permanent injunctive
relief to secure specific performance and to prevent a breach or contemplated
breach of this Agreement by Executive, and Executive submits to the jurisdiction
of the courts of the State of Tennessee for this purpose.
8. Operations of Affiliates. In addition to and without in any way
------------------------
limiting any of the other provisions of this Agreement, Executive agrees that he
will refrain from authorizing any Affiliate to perform any activities that would
be prohibited by the terms of this Agreement if they were performed by
Executive. Notwithstanding anything to the contrary contained in this Section 8
(or in any other section of this Agreement), Executive shall not be required by
the terms of this
-4-
<PAGE>
Agreement to violate any fiduciary or contractual duty he owes as a director or
officer of a corporation, as a partner of a partnership, as a trustee of a
trust, or as a controlling person, manager or fiduciary of any other person or
entity.
9. Miscellaneous Provisions.
------------------------
(a) Binding Effect. Subject to any provisions hereof restricting
--------------
assignment, all covenants and agreements in this Agreement by or on behalf of
any of the parties hereto shall bind and inure to the benefit of their
respective successors, assigns, heirs, and personal representatives. None of the
parties hereto may assign any of his or its rights under this Agreement or
attempt to have any other person or entity assume any of his or its obligations
hereunder.
(b) Severability. If fulfillment of any provision of this Agreement,
------------
at the time such fulfillment shall be due, shall transcend the limit of validity
prescribed by law, then the obligation to be fulfilled shall be reduced to the
limit of such validity; and if any clause or provision contained in this
Agreement operates or would operate to invalidate this Agreement, in whole or in
part, then such clause or provision only shall be held ineffective to the extent
of such invalidity, as though not herein contained, and the remainder of this
Agreement shall remain operative and in full force and effect.
(c) Governing Law. This Agreement, the rights and obligations of the
-------------
parties hereto, and any claims or disputes relating thereto shall be governed by
and construed in accordance with the laws of the State of Tennessee, not
including the choice-of-law rules thereof.
(d) Amendment; Waiver. Except as otherwise expressly provided in
-----------------
this Agreement, no amendment, modification or discharge of this Agreement shall
be valid or binding unless set forth in writing and duly executed by each of the
parties hereto. Any waiver by any party or consent by any party to any variation
from any provision of this Agreement shall be valid only if in writing and only
in the specific instance in which it is given, and such waiver or consent shall
not be construed as a waiver of any other provision or as a consent with respect
to any similar instance or circumstance.
(e) Headings. Section and subsection headings contained in this
--------
Agreement are inserted for convenience of reference only, shall not be deemed to
be a part of this Agreement for any purpose, and shall not in any way define or
affect the meaning, construction or scope of any of the provisions hereof.
(f) Pronouns. All pronouns and any variations thereof shall be
--------
deemed to refer to the masculine, feminine, neuter, singular or plural, as the
identity of the person or entity may require.
-5-
<PAGE>
(g) Arbitration. If a dispute arises between the parties, then the
-----------
parties agree that their respective representatives shall meet and consult in
good faith and attempt to settle the dispute, within thirty (30) days of written
notice thereof, as a condition precedent to the initiation of arbitration
proceedings as set forth below.
Any dispute, controversy, or claim arising out of or relating to this
Agreement, the breach, termination or invalidity thereof, or Executive's
noncompetition obligations, including claims of tortious interference or other
tort or statutory claims, and including without limitation any dispute
concerning the scope of this arbitration clause, shall be settled by arbitration
in accordance with the Employment Dispute Arbitration Rules of the American
Arbitrators Association then in effect. The judgment on the award rendered by
the arbitrator may be entered in any court having jurisdiction thereof. The
arbitration under this Agreement shall be held in Nashville, Tennessee, or at
such other place as may be selected by mutual agreement of the parties.
The arbitrator shall be mutually acceptable to the parties, or failing
agreement, selected pursuant to the Employment Dispute Arbitration Rules of the
American Arbitrators Association. The parties intend that the arbitrator shall
be independent and impartial. To this end, the arbitrator shall disclose to the
parties any professional, family, or social relationships, past or present, with
any party or counsel.
Strict rules of evidence shall not apply in any arbitration conducted
pursuant to this Agreement. The parties may offer such evidence as they desire
and the arbitrator shall accept such evidence as the arbitrator deems relevant
to the issues and accord it such weight as the arbitrator deems appropriate.
The arbitrator shall have the discretion to order a prehearing exchange of
information by the parties, including without limitation, production of
requested documents, exchange of summaries of testimony of proposed witnesses,
and examination by deposition of parties. No party shall be allowed, however,
to take more than one deposition of the opposing party and no deposition shall
last longer than six (6) hours. All disputes regarding discovery shall be
decided by the arbitrator.
The arbitrator award shall be in writing and shall specify the factual and
legal bases for the award. In rendering the award, the arbitrator shall
determine the respective rights and obligations of the parties according to the
laws of the State of Tennessee or, if applicable, federal law. The arbitrator
shall have the authority to award any remedy or relief that a federal or state
court within the State of Tennessee could order or grant.
Any provisional remedy that would be available from a court of law shall be
available from the arbitrator to the parties, pending the arbitrator's
determination of the merits of the parties' dispute. This shall include orders
of attachment, temporary restraining orders, injunctions, and appointment of a
receiver. If the arbitrator issues such an order, either party may immediately
apply to a court of competent jurisdiction for enforcement of the order, even
though the arbitrator may not have rendered a final award.
-6-
<PAGE>
All fees and expenses of the arbitration, including the fees of the
arbitrator and the expense of each parties' counsel, experts, witnesses and
preparation and presentation of proofs, shall be paid by Company.
Unless legally required to do so, neither party may disclose the existence,
content, or results of any arbitration under this Agreement without the prior
written consent of the other party, nor may the arbitrator disclose any such
information without the consent of both parties. This provision shall apply to
all aspects of the arbitration proceeding, including without limitation,
discovery, testimony, other evidence, briefs, and the award.
It is the specific intent of the parties that this arbitration clause be
governed by the Federal Arbitration Act, 9 U.S.C. Section 1 et. seq. ("FAA");
however, if this cause is unenforceable for any reason under the FAA, then the
parties intend that it be governed by the provisions of Tenn. Code Ann. Sections
29-5-30 through 29-5-320.
Both Executive and Company represent and warrant they have read the
foregoing Section 9(g), that they have had an opportunity to consult with and
receive advice from legal counsel regarding the foregoing Section 9(g), and that
they hereby forever waive all rights to assert that this Section 9(g) was the
result of duress, coercion, or mistake of law or fact.
_____ _____ (Initial of both parties in each space).
(h) Execution in Counterparts. This Agreement may be executed in two
-------------------------
or more counterparts, none of which need contain the signatures of all parties
hereto and each of which shall be deemed an original.
-7-
<PAGE>
IN WITNESS WHEREOF, each of the undersigned has executed this Agreement, or
caused this Agreement to be duly executed on its behalf, as of the date first
set forth above.
WEEKS CORPORATION
By:___________________________________
Title:_____________________________
WEEKS REALTY, L.P.
By: Weeks GP Holdings, Inc., its
sole General Partner
By:___________________________________
Title:_____________________________
WEEKS REALTY SERVICES, INC.
By:___________________________________
Title:_____________________________
-8-
<PAGE>
WEEKS CONSTRUCTION SERVICES, INC.
By:___________________________________
Title:_____________________________
WEEKS GP HOLDINGS, INC.
By:___________________________________
Title:_____________________________
WEEKS LP HOLDINGS, INC.
By:___________________________________
Title:_____________________________
______________________________________
JOHN W. NELLEY, JR.
-9-
<PAGE>
SCHEDULE A
----------
Executive may serve as a general partner of NWI X, L.P., the sole general
partner of NWI Warehouse Group, L.P. ("NWI") and in that connection (i) complete
the properties under development, (ii) discharge NWI's obligations under various
contracts with respect to such properties under development and with respect to
the Aspen Grove land, I-440 land, and certain other land, and (iii) sell assets
of NWI and otherwise discharge the duties and responsibilities as a general
partner of NWI X, L.P. in its capacity as the general partner of NWI. Executive
will also be permitted to continue to serve as financial and tax advisor for his
existing clients and to render advice in such capacity in a manner so as not to
materially affect his time spent discharging duties as an officer of the
Company.
To the extent that Weeks has refused to accept a Development Property
pursuant to any right contained in one the Transaction Documents (as listed on
Exhibit A to the First Amendment to the Second Amended and Restated Agreement of
Limited Partnership of Weeks Realty), then Executive shall be entitled to
operate, develop, market and otherwise conduct business with respect to such
Development Property.
-10-
<PAGE>
NONCOMPETITION AGREEMENT
------------------------
THIS NONCOMPETITION AGREEMENT (this "Agreement"), is made and entered into
on this 1st day of November, 1996, by and among ALBERT W. BUCKLEY, JR., an
individual resident of the State of Tennessee ("Executive"), and the Company (as
herein defined).
W I T N E S S E T H:
- - - - - - - - - -
WHEREAS, on the date hereof, the Company is entering into a series of
related transactions pursuant to which it will acquire, and obtain the
contractual right to acquire, substantially all of the real estate and operating
assets of NWI Warehouse Group, L.P. and Buckley & Company Real Estate, Inc.;
WHEREAS, as a condition to the consummation of the transactions described
above, the parties hereto desire to enter into certain agreements restricting
the activities of Executive in an effort to eliminate potential conflicts of
interest that may arise in the future, to protect the Company's legitimate
business interests, i.e., the value of its business and its good will, and for
other business purposes.
NOW, THEREFORE, in consideration of the foregoing and other good and
valuable consideration, the receipt and sufficiency of which hereby are
acknowledged, the parties hereto agree as follows:
1. Definitions. Capitalized terms used herein shall have the
-----------
meanings set forth below:
"Affiliate" means (i) any entity directly or indirectly controlling,
controlled by, or under common control with Executive, and (ii) each other
entity in which Executive, directly or indirectly, owns any controlling interest
or of which Executive serves as a general partner.
"Agreement" means this Noncompetition Agreement, including any
amendments hereto made in accordance with Section 9(d) hereof.
"Company" means Weeks Corporation, a Georgia corporation, Weeks
Realty, L.P., a Georgia limited partnership, Weeks Realty Services, Inc., a
Georgia corporation, Weeks Construction Services, Inc, a Georgia corporation,
Weeks GP Holdings, Inc., a Georgia corporation, Weeks LP Holdings, Inc., a
Georgia corporation, and any other entity under the common control of Weeks
Corporation and their respective successors.
<PAGE>
"Effective Date" means the date as of which this Agreement is
executed.
"Employment Agreement" shall mean the Employment Agreement, of even
date herewith, between Executive and Weeks Corporation.
"Industrial or Office Property" means any real property on which a
distribution facility, service center and/or office building development has
been constructed or is now or hereafter proposed to constructed (for example,
and not by way of limitation, a property of the type managed by the Company).
"Managerial Responsibilities" means managerial and supervisory
responsibilities and duties of the kind contemplated by the Employment Agreement
or otherwise substantially similar to those that Executive has performed for the
Company at any time during his employment by the Company or, in the event that
Executive's employment by the Company is terminated, within two years
immediately prior thereto.
"Restricted Period" means from the Effective Date until the later of
(a) the third anniversary of the Effective Date or (b) one year following the
end of Executive's employment by the Company, subject to the provisions of
Section 4 hereof.
"Territory" means the standard metropolitan statistical area for
Nashville, Tennessee.
2. Noncompetition. Without the prior written consent of the Company,
--------------
Executive will not, during the Restricted Period, serve as an officer, director,
or partner of, or own any interest in, or engage in any Managerial
Responsibilities for or on behalf of, any corporation, partnership, venture, or
other business entity that engages, directly or indirectly, in the development,
operation, management, leasing, construction, or landscaping of an Industrial or
Office Property within the Territory; provided however, that notwithstanding the
foregoing (i) Executive may acquire an interest in any such entity so long as
the nature of any such interest does not afford Executive, acting alone or in
concert with any other person or persons the power to influence in any material
fashion the decision making processes of the entity in which such interest is
held, (ii) Executive may serve as an employee, director, partner, officer or
stockholder of the Company, and (iii) Executive may serve in the respective
capacity shown on Schedule A hereto for the entities identified on Schedule A,
---------- ----------
and to discharge Executive's fiduciary and contractual duties and obligations
with respect thereto, even though such entities (or one or more entities in
which or over which one or more of the entities shown on Schedule A has an
----------
investment or exercises control) may directly compete with the Company, provided
Executive shall not engage in any activity with respect to any such entity that
would negate or materially limit the benefits to the Company of the
restrictions, prohibitions, and provisions to which Executive otherwise is
subject pursuant hereto.
3. (a) Antipirating of Employees. Executive will not, within the
-------------------------
Territory and during the Restricted Period, employ or seek to employ on his own
behalf or on behalf of any other
-2-
<PAGE>
person, firm or corporation that engages, directly or indirectly, in the
development, operation, management, leasing, construction, or landscaping of an
Industrial or Office Property, any person who was employed as an employee by the
Company in an executive, managerial, or supervisory capacity during the term of
Executive's employment by the Company and who has not thereafter ceased to be
employed by the Company for a period of at least one (1) year.
(b) Nonsolicitation of Customers. Executive will not, within the
----------------------------
Territory and during the Restricted Period, solicit or seek to solicit on his
own behalf or on behalf of any other person, firm or corporation that engages,
directly or indirectly, in the development, operation, management, leasing,
construction, or landscaping of an Industrial or Office Property, any customer
of the Company who is a customer of the Company at any time during Executive's
employment by the Company.
(c) Trade Secrets and Confidential Information. Executive hereby
------------------------------------------
agrees that he will hold in a fiduciary capacity for the benefit of the Company,
and shall not directly or indirectly use or disclose, any Trade Secret, as
defined hereinafter, that Executive may have acquired during the term of his
employment by the Company for so long as such information remains a Trade
Secret. The term "Trade Secret" as used in this Agreement shall mean
information, including, but not limited to, technical or nontechnical data, a
formula, a pattern, a compilation, a program, a device, a method, a technique, a
drawing, a process, financial data, financial plans, product plans, or a list of
actual or potential customers or suppliers that:
(i) derives economic value, actual or potential, from not being
generally known to, and not being readily ascertainable by
proper means by, other persons who can obtain economic value
from its disclosure or use; and
(ii) is the subject of reasonable efforts by the Company to maintain
its secrecy.
In addition to the foregoing and not in limitation thereof, Executive
agrees that during the period of his employment by the Company and for a period
of one (1) year thereafter, he will hold in a fiduciary capacity for the benefit
of the Company and shall not directly or indirectly use or disclose, any
Confidential or Proprietary Information, as defined hereinafter, that Executive
may have acquired (whether or not developed or compiled by Executive and whether
or not Executive was authorized to have access to such Information) during the
term of, in the course of, or as a result of his employment by the Company. The
term "Confidential or Proprietary Information" as used in this Agreement means
any secret, confidential, or proprietary information of the Company not
otherwise included in the definition of "Trade Secret" above. The term
"Confidential and Proprietary Information" does not include information that has
become generally available to the public by the act of one who has the right to
disclose such information without violating any right of the Company.
-3-
<PAGE>
(d) At the termination of Executive's employment under the Employment
Agreement, Executive shall return to the Company all documentation and other
tangible materials in his possession containing Trade Secrets or Confidential
Information.
4. Adjustments to Restricted Period. If Executive's employment
--------------------------------
under the Employment Agreement is terminated and such termination is a No Cause
Termination or an Employee-Initiated Termination (as defined in the Employment
Agreement), the Restricted Period shall continue until what would have been
(absent such termination) the end of Executive's then current term of employment
under such Employment Agreement; provided, however, that in no event shall such
Restricted Period be less than one year from the date of such termination so
long as Executive is paid his "Base Salary" (as defined in the Employment
Agreement) in effect on the date of such termination during such continuation of
the Restricted Period.
5. Reasonable and Necessary Restrictions. Executive acknowledges
-------------------------------------
that the restrictions, prohibitions and other provisions hereof, including
without limitation the Territory and Restricted Period, are reasonable, fair and
equitable in scope, terms and duration, are necessary to protect the legitimate
business interests of the Company, and are a material inducement to the Company
to enter into the transactions contemplated in the recitals hereto. Executive
covenants that he will not challenge the enforceability of this Agreement nor
will he raise any equitable defense to its enforcement.
6. Restrictions In Addition to Employment Agreements. Executive
-------------------------------------------------
acknowledges that the restrictions, prohibitions and other provisions hereof
shall be in addition to and not in substitution of the restrictions,
prohibitions and other provisions of the Employment Agreement, as such agreement
shall be amended and supplemented from time to time.
7. Specific Performance. Executive acknowledges that the
--------------------
obligations undertaken by him pursuant to this Agreement are unique and that the
Company likely will have no adequate remedy at law if Executive shall fail to
perform any of his obligations hereunder, and Executive therefore confirms that
the Company's right to specific performance of the terms of this Agreement is
essential to protect the rights and interests of the Company. Accordingly, in
addition to any other remedies that the Company may have at law or in equity,
the Company shall have the right to have all obligations, covenants, agreements
and other provisions of this Agreement specifically performed by Executive, and
the Company shall have the right to obtain preliminary and permanent injunctive
relief to secure specific performance and to prevent a breach or contemplated
breach of this Agreement by Executive, and Executive submits to the jurisdiction
of the courts of the State of Tennessee for this purpose.
8. Operations of Affiliates. In addition to and without in any way
------------------------
limiting any of the other provisions of this Agreement, Executive agrees that he
will refrain from authorizing any Affiliate to perform any activities that would
be prohibited by the terms of this Agreement if they were performed by
Executive. Notwithstanding anything to the contrary contained in this Section 8
(or in any other section of this Agreement), Executive shall not be required by
the terms of this
-4-
<PAGE>
Agreement to violate any fiduciary or contractual duty he owes as a director or
officer of a corporation, as a partner of a partnership, as a trustee of a
trust, or as a controlling person, manager or fiduciary of any other person or
entity.
9. Miscellaneous Provisions.
------------------------
(a) Binding Effect. Subject to any provisions hereof restricting
--------------
assignment, all covenants and agreements in this Agreement by or on behalf of
any of the parties hereto shall bind and inure to the benefit of their
respective successors, assigns, heirs, and personal representatives. None of the
parties hereto may assign any of his or its rights under this Agreement or
attempt to have any other person or entity assume any of his or its obligations
hereunder.
(b) Severability. If fulfillment of any provision of this Agreement,
------------
at the time such fulfillment shall be due, shall transcend the limit of validity
prescribed by law, then the obligation to be fulfilled shall be reduced to the
limit of such validity; and if any clause or provision contained in this
Agreement operates or would operate to invalidate this Agreement, in whole or in
part, then such clause or provision only shall be held ineffective to the extent
of such invalidity, as though not herein contained, and the remainder of this
Agreement shall remain operative and in full force and effect.
(c) Governing Law. This Agreement, the rights and obligations of the
-------------
parties hereto, and any claims or disputes relating thereto shall be governed by
and construed in accordance with the laws of the State of Tennessee, not
including the choice-of-law rules thereof.
(d) Amendment; Waiver. Except as otherwise expressly provided in
-----------------
this Agreement, no amendment, modification or discharge of this Agreement shall
be valid or binding unless set forth in writing and duly executed by each of the
parties hereto. Any waiver by any party or consent by any party to any variation
from any provision of this Agreement shall be valid only if in writing and only
in the specific instance in which it is given, and such waiver or consent shall
not be construed as a waiver of any other provision or as a consent with respect
to any similar instance or circumstance.
(e) Headings. Section and subsection headings contained in this
--------
Agreement are inserted for convenience of reference only, shall not be deemed to
be a part of this Agreement for any purpose, and shall not in any way define or
affect the meaning, construction or scope of any of the provisions hereof.
(f) Pronouns. All pronouns and any variations thereof shall be
--------
deemed to refer to the masculine, feminine, neuter, singular or plural, as the
identity of the person or entity may require.
-5-
<PAGE>
(g) Arbitration. If a dispute arises between the parties, then the
-----------
parties agree that their respective representatives shall meet and consult in
good faith and attempt to settle the dispute, within thirty (30) days of written
notice thereof, as a condition precedent to the initiation of arbitration
proceedings as set forth below.
Any dispute, controversy, or claim arising out of or relating to this
Agreement, the breach, termination or invalidity thereof, or Executive's
noncompetition obligations, including claims of tortious interference or other
tort or statutory claims, and including without limitation any dispute
concerning the scope of this arbitration clause, shall be settled by arbitration
in accordance with the Employment Dispute Arbitration Rules of the American
Arbitrators Association then in effect. The judgment on the award rendered by
the arbitrator may be entered in any court having jurisdiction thereof. The
arbitration under this Agreement shall be held in Nashville, Tennessee, or at
such other place as may be selected by mutual agreement of the parties.
The arbitrator shall be mutually acceptable to the parties, or failing
agreement, selected pursuant to the Employment Dispute Arbitration Rules of the
American Arbitrators Association. The parties intend that the arbitrator shall
be independent and impartial. To this end, the arbitrator shall disclose to the
parties any professional, family, or social relationships, past or present, with
any party or counsel.
Strict rules of evidence shall not apply in any arbitration conducted
pursuant to this Agreement. The parties may offer such evidence as they desire
and the arbitrator shall accept such evidence as the arbitrator deems relevant
to the issues and accord it such weight as the arbitrator deems appropriate.
The arbitrator shall have the discretion to order a prehearing exchange of
information by the parties, including without limitation, production of
requested documents, exchange of summaries of testimony of proposed witnesses,
and examination by deposition of parties. No party shall be allowed, however,
to take more than one deposition of the opposing party and no deposition shall
last longer than six (6) hours. All disputes regarding discovery shall be
decided by the arbitrator.
The arbitrator award shall be in writing and shall specify the factual and
legal bases for the award. In rendering the award, the arbitrator shall
determine the respective rights and obligations of the parties according to the
laws of the State of Tennessee or, if applicable, federal law. The arbitrator
shall have the authority to award any remedy or relief that a federal or state
court within the State of Tennessee could order or grant.
Any provisional remedy that would be available from a court of law shall be
available from the arbitrator to the parties, pending the arbitrator's
determination of the merits of the parties' dispute. This shall include orders
of attachment, temporary restraining orders, injunctions, and appointment of a
receiver. If the arbitrator issues such an order, either party may immediately
apply to a court of competent jurisdiction for enforcement of the order, even
though the arbitrator may not have rendered a final award.
-6-
<PAGE>
All fees and expenses of the arbitration, including the fees of the
arbitrator and the expense of each parties' counsel, experts, witnesses and
preparation and presentation of proofs, shall be paid by Company.
Unless legally required to do so, neither party may disclose the existence,
content, or results of any arbitration under this Agreement without the prior
written consent of the other party, nor may the arbitrator disclose any such
information without the consent of both parties. This provision shall apply to
all aspects of the arbitration proceeding, including without limitation,
discovery, testimony, other evidence, briefs, and the award.
It is the specific intent of the parties that this arbitration clause be
governed by the Federal Arbitration Act, 9 U.S.C. Section 1 et. seq. ("FAA");
however, if this cause is unenforceable for any reason under the FAA, then the
parties intend that it be governed by the provisions of Tenn. Code Ann. Sections
29-5-30 through 29-5-320.
Both Executive and Company represent and warrant they have read the
foregoing Section 9(g), that they have had an opportunity to consult with and
receive advice from legal counsel regarding the foregoing Section 9(g), and that
they hereby forever waive all rights to assert that this Section 9(g) was the
result of duress, coercion, or mistake of law or fact.
_____ _____ (Initial of both parties in each space).
(h) Execution in Counterparts. This Agreement may be executed in two
-------------------------
or more counterparts, none of which need contain the signatures of all parties
hereto and each of which shall be deemed an original.
-7-
<PAGE>
IN WITNESS WHEREOF, each of the undersigned has executed this Agreement, or
caused this Agreement to be duly executed on its behalf, as of the date first
set forth above.
WEEKS CORPORATION
By:_______________________________
Title:_________________________
WEEKS REALTY, L.P.
By: Weeks GP Holdings, Inc, its
sole General Partner
By:_______________________________
Title:_________________________
WEEKS REALTY SERVICES, INC.
By:_______________________________
Title:_________________________
-8-
<PAGE>
WEEKS CONSTRUCTION SERVICES, INC.
By:_______________________________
Title:_________________________
WEEKS GP HOLDINGS, INC.
By:_______________________________
Title:_________________________
WEEKS LP HOLDINGS, INC.
By:_______________________________
Title:_________________________
__________________________________
ALBERT W. BUCKLEY, JR.
-9-
<PAGE>
SCHEDULE A
----------
Executive may serve as a general partner of NWI X, L.P., the sole
general partner of NWI Warehouse Group, L.P. and in that connection (i) complete
the properties under development, (ii) discharge NWI's obligations under various
contracts with respect to such properties under development and with respect to
the Aspen Grove land, I-440 land, and certain other land, and (iii) sell assets
of NWI and otherwise discharge the duties and responsibilities as a general
partner of NWI X, L.P. in its capacity as the general partner of NWI.
To the extent that Weeks has refused to accept a Development Property
pursuant to any right contained in one the Transaction Documents (as listed on
Exhibit A to the First Amendment to the Second Amended and Restated Agreement of
Limited Partnership of Weeks Realty), then Executive shall be entitled to
operate, develop, market and otherwise conduct business with respect to such
Development Property.
-10-
<PAGE>
INDEMNIFICATION AGREEMENT
THIS INDEMNIFICATION AGREEMENT (this "Agreement"), made and entered
into as of the 1st day of November, 1996, by and between WEEKS CORPORATION, a
Georgia corporation (the "Company"), and JOHN W. NELLEY, JR., a director of the
Company ("Indemnitee"). For the purposes of this Agreement, all references to
the "Company" shall include all subsidiaries, affiliates, partnerships, joint
ventures, enterprises, employee benefit plans, trusts and other entities on
behalf of which Indemnitee serves or will serve at the Company's request as an
officer, director, partner, trustee, employee or agent or in a related capacity.
WITNESSETH:
-----------
WHEREAS, Indemnitee has agreed to serve, at the request of the
Company, as a director of the Company; and
WHEREAS, Indemnitee is willing to serve as a director of the Company
on the condition that he be indemnified, and that he have litigation expenses
advanced, to the maximum extent permitted by law;
NOW, THEREFORE, in consideration of Indemnitee's agreement to serve as
a director of the Company, and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties do hereby
agree as follows:
1. Mandatory Indemnification.
-------------------------
(a) The Company shall indemnify and hold harmless Indemnitee to the
maximum extent provided for in this Agreement, and, to the extent that
applicable law from time to time in
<PAGE>
effect shall permit indemnification that is broader than provided in this
Agreement, then to the maximum extent authorized by law. All amounts payable
under the Company's indemnification obligation shall be paid within thirty (30)
days of Indemnitee's request therefor.
(b) In connection with any threatened, pending or completed action,
suit or proceeding to which Indemnitee is made or is threatened to be made a
named defendant or respondent ("Party"), whether civil, criminal, administrative
or investigative, and whether formal or informal, except for those actions set
forth in Section 1(f) hereof (an "Action"), but not including any Action by or
in the right of the Company (a "Derivative Action"), the Company hereby agrees
to indemnify and hold Indemnitee harmless from and against any judgment,
settlement, penalty, fine (including an excise tax assessed with respect to an
employee benefit plan), interest and reasonable expense (including attorney's
fees) actually incurred by him by reason of the fact that Indemnitee is or was
an officer, director, employee or agent of the Company, or has liability under
Section 11(a)(3) of the Securities Act of 1933, as amended, or is or was serving
at the request of the Company as an officer, director, agent or fiduciary of any
corporation, partnership, joint venture, employee benefit plan, trust or other
enterprise, provided, however, that Indemnitee acted in a manner he believed in
-------- -------
good faith to be in or not opposed to the best interests of the Company, and
with respect to any criminal Action, Indemnitee had no reasonable cause to
believe his conduct was unlawful, and with respect to an employee benefit plan,
Indemnitee acted in a manner he believed in good faith to be in the interests of
the participants in and beneficiaries of the plan. Whether an Action is
threatened, and whether Indemnitee is threatened to be made a Party thereto,
shall be determined by Indemnitee in his reasonable judgment.
(c) In connection with any Derivative Action, the Company hereby
agrees to
2
<PAGE>
indemnify and hold Indemnitee harmless from and against any reasonable expenses
actually incurred by him (including amounts paid in settlement but not including
amounts paid as a judgment, penalty or fine in respect of any such action) by
reason of the fact that Indemnitee is or was an officer, director, partner,
trustee, employee or agent of the Company; provided, however, that Indemnitee
-------- -------
acted in good faith and in a manner he reasonably believed to be in or not
opposed to the best interests of the Company.
(d) The termination of any Action by judgment, order, settlement,
conviction, or upon a plea of nolo contendere or its equivalent shall not, of
itself, create a presumption that Indemnitee did not act in a manner which he
believed to be in or not opposed to the best interests of the Company and, with
respect to any criminal Action, had reasonable cause to believe that his conduct
was unlawful.
(e) Notwithstanding any foregoing provision to the contrary, under no
circumstance shall the Company indemnify or hold Indemnitee harmless from and
against any liability for judgments, settlements, penalties, fines (including
excise taxes assessed with respect to an employee benefit plan), or expenses
(including attorney's fees) incurred by Indemnitee in a proceeding in which
Indemnitee is adjudged liable to the Company or is subjected to injunctive
relief in favor of the Company (i) for any appropriation, in violation of his
duties, of any business opportunity of the Company, (ii) for acts or omissions
that involve intentional misconduct or knowing violation of law, (iii) for the
types of liability set forth in Section 14-2-832 of Georgia Business Corporation
Code, or (iv) for any transaction from which he received an improper personal
benefit.
(f) Notwithstanding any foregoing provision to the contrary, under no
3
<PAGE>
circumstance shall the Company indemnify or hold Indemnitee harmless from and
against any liability for judgments, settlements, penalties, fines (including
excise taxes assessed with respect to an employee benefit plan), or expenses
(including attorney's fees) incurred by Indemnitee in a proceeding in which
Indemnitee is adjudged liable to the Company or any the Company's affiliates or
is subjected to injunctive relief in favor of the Company or any of the
Company's affiliates (i) in connection with the Employment Agreement by and
between Indemnitee and the Company dated as of the date hereof, (ii) in
connection with the Noncompetition Agreement by and between Indemnitee and the
Company (as defined therein) dated as of the date hereof, or (iii) in connection
with any other agreement which is executed by Indemnitee in connection with the
acquisition of the assets of NWI Warehouse Group, L.P. ("NWI") and certain of
NWI's affiliates by the Company and by certain of the Company's affiliates.
2. Partial Indemnification. If Indemnitee is entitled under any
-----------------------
provision of this Agreement to indemnification by the Company for some or a
portion of any liability (including judgments, settlements, penalties, fines
(including excise taxes assessed with respect to an employee benefit plan),
interest or reasonable expenses (including attorney's fees)) actually incurred
by him but not entitled to indemnification for all of the total amount thereof,
the Company shall indemnify Indemnitee for such portion thereof to which
Indemnitee is entitled.
3. Advancement of Expenses. The Company agrees to pay, in advance
-----------------------
of the final disposition of any Action (including, for this purpose, any
proceeding in Section 5 hereof) and within ten (10) days after Indemnitee's
written request, all reasonable expenses incurred by Indemnitee in defending or
acting as a witness in connection with such Action, including but not limited to
the investigation, defense, settlement or appeal of any Action, to which
Indemnitee is a
4
<PAGE>
Party or threatened in the reasonable judgment of Indemnitee to be made a Party
by reason of the fact that Indemnitee is or was an officer, director, employee
or agent of the Company, or has liability under Section 11(a)(3) of the
Securities Act of 1933, as amended, or is or was serving at the request of the
Company as an officer, director, agent or fiduciary of any corporation,
partnership, joint venture, employee benefit plan, trust or other enterprise.
Indemnitee shall furnish the Company (i) a written affirmation of his good faith
belief that Indemnitee has met the standard of conduct set forth in Section 1(b)
of 1(c) hereof; and (ii) a written undertaking, executed personally or on
Indemnitee's behalf, to repay any advances if it is ultimately determined that
Indemnitee is not entitled to indemnification. Indemnitee agrees to reimburse
the Company for any such advancement if, when and to the extent it is ultimately
determined (by a court in a proceeding described in Section 5 or otherwise) that
Indemnitee is not entitled to indemnification pursuant to this Agreement.
4. Indemnification in Specific Actions.
-----------------------------------
(a) The determination of whether, with respect to any specific
Action, Indemnitee has met the applicable standard of conduct set forth in
Section 1(b) or Section 1(c) hereof and is entitled to indemnification pursuant
to Section 1 hereof shall be made (i) by a majority vote of a quorum of members
of the Board of Directors of the Company not at the time parties to the Action;
(ii) if the quorum required by the foregoing clause (i) cannot be obtained, by a
majority vote of a committee duly designated by the Board of Directors (in which
designation directors who are parties to the Action may participate) and
consisting solely of two or more members of the Board of Directors not at the
time parties to the Action; (iii) if a determination cannot be made under (i) or
(ii) above, in a written opinion by independent legal counsel, selected by the
Board of Directors or its committee in the manner described in the foregoing
clauses (i) or (ii) (or, if a quorum of the
5
<PAGE>
Board of Directors as required by the foregoing clause (i) cannot be obtained
and a committee cannot be designated as required by the foregoing clause (ii),
by a majority vote of the full Board of Directors (in which selection directors
who are parties to the Action may participate); or (iv) if agreed to by
Indemnitee, by the vote of a majority of shares of the Company entitled to vote
thereon (excluding shares owned by, or the voting of which is controlled by,
directors who at the time are parties to the Action).
(b) In the event that the determination is made that Indemnitee is
entitled to indemnification or advancement of expenses in a specific Action
pursuant to Section 1 hereof, such a determination is binding upon the Company
in any subsequent proceedings in connection with such Action.
5. Enforcement of this Agreement.
-----------------------------
(a) Reasonable expenses incurred by Indemnitee in connection with his
request for indemnification hereunder shall be borne by the Company, unless
Indemnitee is determined not to be entitled to indemnification for any liability
or expense hereunder. In the event that Indemnitee is a party to or intervenes
in any proceeding in which the validity or enforceability of this Agreement is
at issue or seeks an adjudication or award in arbitration to enforce his rights
under, or to recover damages for breach of, this Agreement, Indemnitee, if he
prevails in whole or in part in such action, shall be entitled to recover from
the Company and shall be indemnified by the Company against any expenses
actually and reasonably incurred by him.
(b) In any proceeding in which the validity or enforceability of this
Agreement is at issue, or in which Indemnitee seeks an adjudication or award in
arbitration to enforce his rights hereunder, the Company shall have the burden
of proving that Indemnitee is not entitled to
6
<PAGE>
indemnification hereunder.
6. Termination of Service. Indemnitee's right to indemnification
----------------------
and advancement of expenses pursuant to this Agreement shall continue regardless
of whether Indemnitee has ceased for any reason to be a director of the Company
and shall inure to the benefit of the heirs of Indemnitee and the executors or
administrators of Indemnitee's estate.
7. Maintenance of Directors and Officers Liability Insurance. In
---------------------------------------------------------
the event the Company maintains policies of Directors and Officers Liability
Insurance, Indemnitee shall be named as an insured in such manner as to provide
Indemnitee the same rights and benefits as are accorded to the most favorably
insured of the Company's directors.
8. Subrogation. In the event Indemnitee receives a payment under
-----------
this Agreement, the Company shall be subrogated to the extent of such payment to
all of the rights of recovery of Indemnitee, who shall do everything that may be
necessary to secure such rights, including the execution of such documents
necessary to enable the Company effectively to bring suit to enforce such
rights.
9. No Duplication of Payments. The Company shall not be liable
--------------------------
under this Agreement to make any payment in connection with any Action to the
extent Indemnitee has otherwise actually received payment (under any insurance
policy, bylaw provision or otherwise) of the amounts otherwise indemnifiable
hereunder.
10. Non-Exclusivity. Indemnitee's rights under this Agreement shall
---------------
be in addition to, and not in lieu of, any other rights Indemnitee may have
under any provision of the Company's Articles of Incorporation or Bylaws, the
Georgia Business Corporation Code or pursuant to any Directors or Officers
Liability Insurance. Nothing in this Agreement shall be deemed to
7
<PAGE>
diminish or otherwise restrict Indemnitee's right to indemnification under any
provision of the Company's Articles of Incorporation or Bylaws, the Georgia
Business Corporation Code or pursuant to any Directors and Officers Liability
Insurance, but the rights to indemnification hereunder shall in any event apply
notwithstanding any contrary provision in, or conflict with, any provision of
the Company's Articles of Incorporation or Bylaws, unless prohibited by law.
11. Binding Effect. This Agreement shall be binding upon and inure
--------------
to the benefit of and be enforceable by the parties hereto and their respective
successors, assigns (including any direct or indirect successor by merger or
consolidation as provided in the Georgia Business Corporation Code), heirs,
executors and administrators.
12. Governing Law. This Agreement shall be deemed to be made in, and
-------------
in all respects shall be interpreted, construed, and governed by and in
accordance with the laws of, the State of Georgia (without regard to the
conflict of laws principles thereof).
13. Severability. The Company and Indemnitee agree that the
------------
agreements and provisions contained in this Agreement are severable and
divisible, that each such agreement and provision does not depend upon any other
provision or agreement for its enforceability, and that each such agreement and
provision set forth herein constitutes an enforceable obligation between the
Company and Indemnitee. Consequently, the parties hereto agree that neither the
invalidity nor the unenforceability of any provision of this Agreement shall
affect the other provisions hereof, and this Agreement shall remain in full
force and effect and be construed in all respects as if such invalid or
unenforceable provision were omitted.
14. Certain Amendments. The Company may enter into any amendment to
------------------
this Agreement required by applicable law without shareholder approval of such
amendment, unless
8
<PAGE>
shareholder approval is required by applicable law.
15. Letter of Credit. In order to secure the obligations of the
----------------
Company to indemnify and advance expenses to Indemnitee pursuant to this
Agreement, the Company shall obtain and maintain for the benefit of Indemnitee,
for a period of five years from the time of any Change in Control, an
irrevocable standby letter of credit naming Indemnitee as the sole beneficiary
(the "Letter of Credit"). The Letter of Credit shall be in an appropriate
amount, not less than $1,000,000, issued by a financial institution having
assets in excess of $100,000,000, and contain terms and conditions reasonably
acceptable to Indemnitee. The Letter of Credit shall provide that Indemnitee
may from time to time draw certain amounts thereunder, upon written
certification by Indemnitee to the issuer of the Letter of Credit that (a)
Indemnitee has made a written request upon the Company for an amount not less
than the amount he is drawing under the Letter of Credit and that the Company
has failed or refused to provide him with such amount in full within thirty (30)
days after receipt of the request, or to advance expenses within ten (10) days
after receipt of the request, (b) Indemnitee believes that he is entitled under
the terms of this Agreement to the amount that he is drawing under the Letter of
Credit, and (c) there has not been a determination as contemplated under this
Agreement that Indemnitee is not entitled to indemnification under this
Agreement. The issuance of the Letter of Credit shall not in any way diminish
the Company's obligation to indemnify Indemnitee to the full extent required by
this Agreement. For the purposes hereof, a "Change in Control" shall be deemed
to have occurred if (i) any "Person" (as such term is used in Section 13(c) and
14(d) of the Securities Exchange Act of 1934, as amended), other than a trustee
or other fiduciary holding securities under an employee benefit plan of the
corporation or a corporation owned directly or indirectly by the shareholders of
the Company in substantially the
9
<PAGE>
same proportions as their ownership of stock of the Company, is or becomes the
"beneficial owner" (as defined in Rule 13d-3 under said Act), directly or
indirectly, of securities of the Company representing more than 50% of the total
voting power represented by the Company's then outstanding voting securities; or
(ii) during any period of two consecutive years, individuals who at the
beginning of such period constitute the Board of Directors of the Company and
any new director whose election by the Board of Directors or nomination for
election by the Company's shareholders was approved by a vote of at least two-
thirds (2/3) of the directors who either were directors at the beginning of the
two-year period or whose election or nomination for election was previously so
approved, cease for any reason to constitute a majority thereof.
10
<PAGE>
IN WITNESS WHEREOF, the parties hereto have entered into this
Agreement as of the date first above written.
[CORPORATE SEAL] WEEKS CORPORATION
Attest:
By: ____________________ By: _______________________________
Secretary Name:
Title:
INDEMNITEE
__________________________________
John W. Nelley, Jr.
11
<PAGE>
==============================
REGISTRATION RIGHTS AND LOCK-UP AGREEMENT
Dated as of November 1, 1996
by and among
WEEKS CORPORATION
and
NWI WAREHOUSE GROUP, L.P.,
BUCKLEY & COMPANY REAL ESTATE, INC.,
JOHN W. NELLEY, JR. AND ALBERT W. BUCKLEY, JR.
=============================
<PAGE>
REGISTRATION RIGHTS AND LOCK-UP AGREEMENT
THIS REGISTRATION RIGHTS AND LOCK-UP AGREEMENT (this "Agreement") is made
and entered into as of November 1, 1996, by and among WEEKS CORPORATION, a
Georgia corporation (the "Company"), NWI WAREHOUSE GROUP, L.P. a Tennessee
limited partnership, including its successors, assigns and transferees ("NWI"),
BUCKLEY & COMPANY REAL ESTATE, INC., a Tennessee corporation, including its
successors, assigns and transferees ("Buckley & Co."), JOHN W. NELLEY, JR., an
individual resident of the State of Tennessee, including his permitted assigns
and transferees, and ALBERT W. BUCKLEY, JR., an individual resident of the State
of Tennessee, including his permitted assigns and transferees. NWI and Buckley &
Co. are collectively referred to hereafter as the "NWI Group" and all references
to NWI Group shall include within its meaning both "Buckley & Co." and "NWI."
WHEREAS, this Agreement is made pursuant to (i) the Contribution Agreement
for Development Properties dated as of even date herewith and (ii) the
Contribution Agreement for the Aspen Grove Land dated as of even date herewith,
(iii) the Contribution Agreement for the I-440 Land dated as of even date
herewith, (iv) the Contribution Agreement for the NWI Operating Business dated
as of even date herewith, (v) the Contribution Agreement for the Buckley
Operating Business dated as of even date herewith, and (vi) the Agreement of
Merger dated as of even date herewith (collectively, (i) through (vi) are
hereafter referred to as the "Contribution Agreements");
WHEREAS, on the date hereof NWI Group is or will become the owner of either
Common Stock (as defined below) of the Company or Units (as defined below) in
Weeks Realty, L.P., a Georgia limited partnership (the "Operating Partnership"),
in connection with the transactions described in the Contribution Agreements;
WHEREAS, in order to induce Weeks to enter into the transactions described
in the Contribution Agreements, NWI Group has agreed to the NWI Group Lock-up
(as defined below) set forth in Section 2(a) hereof;
WHEREAS, in order to induce Weeks to enter into the transactions described
in the Contribution Agreements, NWI has agreed to the Company Participant Lock-
up (as defined below) set forth in Section 2(b) hereof;
WHEREAS, in order to induce Weeks to enter into the transactions described
in the Contribution Agreements, John W. Nelley, Jr. and Albert W. Buckley, Jr.
have agreed to the lock-up set forth in Section 2(c) hereof; and
<PAGE>
WHEREAS, in order to induce NWI Group to enter into the transactions
described in the Contribution Agreements, the Company has agreed, with respect
to the Units issued on, prior to, or as of March 31, 1998, to provide NWI Group
with the registration rights set forth in either Section 3 hereof or Sections 5
and 6 hereof;
NOW, THEREFORE, the parties hereto, in consideration of the foregoing, the
mutual covenants and agreements hereinafter set forth, and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, agree as follows:
1. Definitions.
-----------
As used in this Agreement, the following capitalized defined terms shall
have the following meanings:
"Buckley & Co." shall have the meaning set forth in the Preamble and also
-------------
shall include each of Buckley & Co.'s successors and assigns.
"Common Stock" shall mean the Common Stock, par value $.01 per share, of
------------
the Company.
"Company" shall have the meaning set forth in the Preamble and also shall
-------
include the Company's successors.
"Company Participants" shall mean John W. Nelley, Jr., an individual
--------------------
resident of the State of Tennessee, including his permitted assigns and
transferees, and Albert W. Buckley, Jr., an individual resident of the State of
Tennessee, including his permitted assigns and transferees (John W. Nelley, Jr.
and Albert W. Buckley, Jr. are herein referred to collectively as the "Company
Participants").
"Company Participants Lock-up" shall have the meaning set forth in Section
----------------------------
2(b) hereof.
"Company Participants Lock-up Period" shall have the meaning set forth in
-----------------------------------
Section 2(b) hereof.
"Contribution Agreements" shall have the meaning set forth in the
-----------------------
Preamble.
"Control" shall mean the ability, whether by the direct or indirect
-------
ownership of shares or other equity interests, by contract or otherwise, to
select a majority of the directors of a corporation, to select the managing
partner of a partnership, to select the manager of a limited liability company
or otherwise to select, or have the power to remove and then select, a majority
of those persons exercising governing authority over an Entity. In the case of a
limited partnership, the sole general partner, each of the general partners that
has equal management control and authority, or the designated managing general
partner or managing general partners thereof shall be deemed to have
-2-
<PAGE>
control of such partnership. In the case of a trust, any trustee thereof or any
Person having the right to select any such trustee shall be deemed to have
control of such trust.
"Current Market Price" of each share of Common Stock shall mean (i) the
--------------------
average of the closing prices of the Common Stock for the five-day period
immediately preceding the day in question as reported by The Wall Street Journal
-----------------------
under the New York Stock Exchange Composite Transactions quotation system (or
under any successor quotation system) or, if the Common Stock is no longer
traded on the New York Stock Exchange under the quotation system under which
such closing prices are reported or, if The Wall Street Journal no longer
-----------------------
reports such closing prices, such closing prices as reported by a newspaper or
trade journal selected by the Company or (ii) if no such closing prices are
available on such dates, the fair market value as determined in good faith by
the Board of Directors of the Company.
"Demand Prospectus" shall mean the prospectus included in the Demand
-----------------
Registration Statement, including any preliminary prospectus, and any amendment
or supplement thereto, including any supplement relating to the terms of the
offering of any portion of the Demand Registrable Securities covered by the
Demand Registration Statement, and in each case including all material
incorporated by reference therein.
"Demand Registration" shall mean a registration required to be effected
-------------------
pursuant to Section 5 hereof.
"Demand Registrable Securities" shall mean the Shares held by NWI Group,
-----------------------------
excluding (i) Shares that have been disposed of under the Demand Registration
Statement or any other effective registration statement, (ii) Shares sold or
otherwise transferred pursuant to Rule 144 under the Securities Act, and (iii)
Shares held by NWI Group if all of such Shares are eligible for sale pursuant to
Rule 144 under the Securities Act and could be sold in one transaction in
accordance with the volume limitations contained in Rule 144(e)(1)(i) under the
Securities Act.
"Demand Registration Expenses" shall mean any and all expenses incurred by
----------------------------
the Company in connection with Demand Registrations and Piggyback Registrations,
including, without limitation: (i) all SEC, stock exchange and National
Association of Securities Dealers, Inc. ("NASD") registration and filing fees,
(ii) all fees and expenses incurred in connection with compliance with state
securities or "blue sky" laws (including reasonable fees and disbursements of
counsel in connection with qualification of any of the Demand Registrable
Securities under any state securities or blue sky laws and the preparation of a
blue sky memorandum) and compliance with the rules of the NASD, (iii) all
expenses of any Persons in preparing or assisting in preparing, word processing,
printing and distributing the Demand Registration Statement, any Demand
Prospectus, certificates and other documents relating to the performance of and
compliance with this Agreement, (iv) all fees and expenses incurred in
connection with the listing, if any, of any of the Demand Registrable Securities
on any securities exchange or exchanges pursuant to Section 8(j) hereof, and
-3-
<PAGE>
(v) the fees and disbursements of counsel for the Company and of the independent
public accountants of the Company, including the expenses of any special audits
or "cold comfort" letters required by or incident to such performance and
compliance. Demand Registration Expenses shall specifically exclude "Selling
Expenses."
"Demand Registration Request" shall have the meaning set forth in Section
---------------------------
5(a) hereof.
"Demand Registrations" shall have the meaning set forth in Section 5(a)
--------------------
hereof.
"Demand Registration Statement" shall have the meaning set forth in
-----------------------------
Section 8(a) hereof.
"Dispose of" shall have the meaning set forth in Section 2(a) hereof.
----------
"Entity" shall mean any general partnership, limited partnership,
------
corporation, limited liability company, joint venture, trust, business trust,
cooperative or association.
"Exchange Act" shall mean the Securities Exchange Act of 1934, as amended
------------
from time to time.
"Maximum Number" shall having the meaning set forth in Section 5(e) hereof.
--------------
"NWI" shall have the meaning set forth in the Preamble and also shall
---
include each of NWI's successors and assigns.
"NWI Group" shall have the meaning set forth in the Preamble.
---------
"NWI Group Lock-up" shall have the meaning set forth in Section 2(a)
-----------------
hereof.
"NWI Group Lock-up Period" shall have the meaning set forth in Section
------------------------
2(a) hereof.
"Operating Partnership" shall have the meaning set forth in the Preamble
---------------------
and also shall include the Operating Partnership's successors and assigns.
"Participant" shall mean NWI Group or the Company Participants,
-----------
individually. "Participants" shall mean NWI Group and the Company Participants,
collectively.
"Partnership Agreement" shall mean the Second Amended and Restated
---------------------
Agreement of Limited Partnership of the Operating Partnership.
"Person" shall mean any individual or Entity.
------
"Piggyback Registration" shall have the meaning set forth in Section 6(a)
----------------------
hereof.
-4-
<PAGE>
"Piggyback Registration Request" shall have the meaning set forth in
------------------------------
Section 6(a) hereof.
"Private Placement" shall mean the issuance and sale of Shares and Units
-----------------
pursuant to the transactions contemplated by the Contribution Agreements.
"Registration Expenses" shall have the meaning set forth in Section 9
---------------------
hereof.
"SEC" shall mean the Securities and Exchange Commission.
---
"Securities Act" shall mean the Securities Act of 1933, as amended from
--------------
time to time.
"Selling Expenses" shall mean all underwriting discounts and selling
----------------
commissions and transfer taxes applicable to the sale of Demand Registrable
Securities and disbursements of underwriters.
"Shares" shall mean (i) any Common Stock issued to NWI Group on the date
------
hereof, (ii) any Common Stock issued to NWI Group in private placements
subsequent to the date hereof but on or prior to March 31, 1998, and (iii) any
Common Stock issued to NWI Group upon redemption of those Units which were
issued to NWI Group on, prior to, or as of March 31, 1998.
"Shelf Prospectus" shall mean the prospectus included in the Shelf
----------------
Registration Statement, including any preliminary prospectus, and any amendment
or supplement thereto, including any supplement relating to the terms of the
offering of any portion of the Shelf Registrable Securities covered by the
Shelf Registration Statement, and in each case including all material
incorporated by reference therein.
"Shelf Registration" shall mean the registration required to be effected
------------------
pursuant to Section 3 hereof.
"Shelf Registrable Securities" shall mean the Shares held by NWI Group,
----------------------------
excluding (i) Shares that have been disposed of under the Shelf Registration
Statement or any other effective registration statement, (ii) Shares sold or
otherwise transferred pursuant to Rule 144 under the Securities Act, and (iii)
Shares held by NWI Group if all of such Shares are eligible for sale pursuant
to Rule 144 under the Securities Act and could be sold in one transaction in
accordance with the volume limitations contained in Rule 144(e)(1)(i) under the
Securities Act.
"Shelf Registration Expenses" shall mean any and all expenses incident to
---------------------------
performance of or compliance with this Agreement, including, without
limitation: (i) all SEC, stock exchange and NASD registration and filing fees,
(ii) all fees and expenses incurred in connection with compliance with state
securities or "blue sky" laws (including reasonable fees and disbursements of
counsel in connection with qualification of any of the Shelf Registrable
Securities under any state securities or
-5-
<PAGE>
blue sky laws and the preparation of a blue sky memorandum) and compliance with
the rules of the NASD, (iii) all expenses of any Persons in preparing or
assisting in preparing, word processing, printing and distributing the Shelf
Registration Statement, any Shelf Prospectus, certificates and other documents
relating to the performance of and compliance with this Agreement, (iv) all
fees and expenses incurred in connection with the listing, if any, of any of
the Shelf Registrable Securities on any securities exchange or exchanges
pursuant to Section 4(l) hereof, and (v) the fees and disbursements of counsel
for the Company and of the independent public accountants of the Company,
including the expenses of any special audits or "cold comfort" letters required
by or incident to such performance and compliance. Shelf Registration Expenses
shall specifically exclude underwriting discounts and commissions, the fees and
disbursements of counsel representing NWI Group, and transfer taxes, if any,
relating to the sale or disposition of Shelf Registrable Securities by NWI
Group, all of which shall be borne by NWI Group in all cases.
"Shelf Registration Notice" shall have the meaning set forth in Section
-------------------------
4(b) hereof.
"Shelf Registration Statement" shall mean a registration statement of the
----------------------------
Company (and any other entity required to be a registrant with respect to such
registration statement pursuant to the requirements of the Securities Act) that
covers all of the Registrable Securities to be offered on a delayed or
continuous basis pursuant to Rule 415 under the Securities Act, or any similar
rule that may be adopted by the SEC, and all amendments (including post-
effective amendments) to such registration statement, and all exhibits thereto
and materials incorporated by reference therein.
"Units" shall mean the limited partnership interests of the Operating
-----
Partnership issued to NWI Group in the Private Placement, which interests are
redeemable for Common Stock, or at the Operating Partnership's option, cash.
2. Lock-up Agreement.
-----------------
(a) Lock-Up Period for NWI Group. NWI Group hereby agrees that, except as
----------------------------
set forth in Section 2(d) below, from the date of issuance to NWI Group of each
individual Unit or Share until one year after the date of each such issuance
(the "NWI Group Lock-up Period"), without the prior written consent of the
Company, NWI Group will not offer, sell, contract to sell, distribute or
otherwise dispose of (collectively, "Dispose of"), directly or indirectly, to
any partner of NWI Group or any other Person any such Shares or Units (the "NWI
Group Lock-up").
(b) Lock-up Period for Company Participants. NWI hereby agrees that,
---------------------------------------
except as set forth in Section 2(d) below, until the third anniversary of the
date hereof (the "Company Participant Lock-up Period"), without the prior
written consent of the Company, NWI will not Dispose of, directly or
indirectly, 42.722% of the Shares and/or Units held by NWI, which percentage
represents those Shares and/or Units that are beneficially owned by the Company
Participants (the "Company Participants Lock-up").
-6-
<PAGE>
(c) Lock-up Period for John W. Nelley, Jr. and Albert W. Buckley, Jr.
----------------------------------------------------------------
Each of John W. Nelley, Jr. and Albert W. Buckley, Jr. hereby agrees that until
the third anniversary of the date hereof, without the prior written consent of
the Company, such individual will not Dispose of, directly or indirectly, any
beneficial ownership interest that such individual holds in NWI or Buckley &
Co., as the case may be, except that the foregoing restriction will not be
applicable in the event of the death of either of John W. Nelley, Jr. or Albert
W. Buckley, Jr.
(d) Exceptions. The following transfers of Shares or Units shall not be
----------
subject to the NWI Group Lock-up set forth in Section 2(a) or the Company
Participants Lock-up set forth in Section 2(b):
(i) NWI Group may Dispose of Shares or Units pursuant to a pledge,
grant of security interest or other encumbrance effected in a bona fide
transaction with an unrelated and unaffiliated pledgee; and
(ii) with the prior written consent of the Company, NWI Group may
exchange its Units for shares of Common Stock;
provided, however, that in the case of any transfer of Units pursuant to
-------- -------
clauses (i) and (ii), the transferee or transferees shall each be an
"accredited investor" within the meaning of Rule 501(a) of Regulation D
under the Securities Act.
In the event NWI Group Disposes of Shares or Units described in this Section
2(d), such Shares or Units shall remain subject to this Agreement and, as a
condition of the validity of such disposition, the transferee (and any pledgee
who acquires Shares or Units upon foreclosure or any transferee thereof) shall
be required to execute and deliver a counterpart of this Agreement.
Thereafter, such transferee shall be deemed to be a Participant for purposes of
this Agreement.
3. Shelf Registration Under the Securities Act for the Benefit of NWI
------------------------------------------------------------------
Group.
-----
(a) Filing of Shelf Registration Statement. Subject to Section 3(d), the
--------------------------------------
Company shall cause to be filed on the first business day following the
expiration of the NWI Group Lock-Up, or as soon as practicable thereafter, the
Shelf Registration Statement providing for the sale by the NWI Group of all of
the Shelf Registrable Securities in accordance with the terms hereof and will
use its reasonable efforts to cause such Shelf Registration Statement to be
declared effective by the SEC as soon as practicable thereafter. The Company
agrees to use its reasonable efforts to keep the Shelf Registration Statement
with respect to the Shelf Registrable Securities continuously effective so long
as NWI Group holds Shelf Registrable Securities. Subject to Section 4(b) and
Section 4(i), the Company further agrees to amend the Shelf Registration
Statement if and as required by the rules, regulations or instructions
applicable to the registration form used by the Company for such Shelf
Registration Statement or by the Securities Act or any rules and regulations
thereunder; provided,
--------
-7-
<PAGE>
however, that the Company shall not be deemed to have used its reasonable
- -------
efforts to keep the Shelf Registration Statement effective during the applicable
period if it voluntarily takes any action that would result in NWI Group not
being able to sell Shelf Registrable Securities covered thereby during that
period, unless such action is required under applicable law or the Company has
filed a post-effective amendment to the Shelf Registration Statement and the SEC
has not declared it effective or except as otherwise permitted by the last three
sentences of Section 4(b).
(b) Expenses. The Company shall pay all Shelf Registration Expenses in
--------
connection with the registration pursuant to Section 3(a). NWI Group shall pay
all underwriting discounts and commissions, the fees and disbursements of
counsel representing NWI Group, and transfer taxes, if any, relating to the
sale or disposition of such Shelf Registrable Securities pursuant to the Shelf
Registration Statement.
(c) Inclusion in Shelf Registration Statement. If NWI Group does not
-----------------------------------------
provide the information reasonably requested by the Company in connection with
the Shelf Registration Statement as promptly as practicable after receipt of
such request, but in no event later than ten (10) days thereafter, it shall not
be entitled to have its Shelf Registrable Securities included in the Shelf
Registration Statement.
(d) Inability to File or Maintain Shelf Registration Statement. The
----------------------------------------------------------
Company shall be obligated to comply with the provisions of Sections 3 hereof
only if the Company is permitted, under the Securities Act and the rules and
regulations of the SEC then applicable, to file and maintain the Shelf
Registration Statement on a Form S-3 registration statement, or on any other
similar forms that permits the registration of the Shelf Registration
Securities and the incorporation by reference of subsequently filed documents
under the Exchange Act. In the event that the Company is unable to comply with
the provisions of Section 3 hereof in accordance with the foregoing sentence,
the Company shall become obligated to provide NWI Group with those demand and
piggyback registration rights provided for in Sections 5 and 6 hereof.
(e) Amendment to Shelf Registration Statement. If NWI Group distributes
-----------------------------------------
any Units or Shares to its beneficial owners (each, a "Distributee"), the
Company will use its best efforts to amend any Shelf Registration Statement in
order to reflect such Distributee's status as record holder of such Units or
Shares.
4. Shelf Registration Procedures.
-----------------------------
In connection with the obligations of the Company with respect to the
Shelf Registration Statement contemplated by Section 3 hereof, the Company
shall:
(a) prepare and file with the SEC, within the time period set forth
in Section 3 hereof, the Shelf Registration Statement, which Shelf Registration
Statement (i) shall be available for the sale of the Shelf Registrable
Securities in accordance with the intended method or methods of distribution by
NWI Group and (ii) shall comply as to form in all
-8-
<PAGE>
material respects with the requirements of the applicable form and include all
financial statements required by the SEC to be filed therewith;
(b) subject to the last three sentences of this Section 4(b) and
Section 4(i) hereof, (i) prepare and file with the SEC such amendments to such
Registration Statement as may be necessary to keep such Registration Statement
effective for the applicable period; (ii) cause the Shelf Prospectus to be
amended or supplemented as required and to be filed as required by Rule 424 or
any similar rule that may be adopted under the Securities Act; (iii) respond as
promptly as practicable to any comments received from the SEC with respect to
the Shelf Registration Statement or any amendment thereto; and (iv) comply with
the provisions of the Securities Act with respect to the disposition of all
securities covered by such Shelf Registration Statement during the applicable
period in accordance with the intended method or methods of distribution by NWI
Group. Notwithstanding anything to the contrary contained herein, the Company
shall not be required to take any of the actions described in clauses (i), (ii)
or (iii) in this Section 4(b), Section 4(d) or Section 4(i) with respect to the
Shelf Registrable Securities (x) to the extent that the Company is in
possession of material non-public information that it deems advisable not to
disclose or is engaged in active negotiations or planning for a merger or
acquisition or disposition transaction and it delivers written notice to NWI
Group to the effect that NWI Group may not make offers or sales under the Shelf
Registration Statement for a period not to exceed thirty (30) days from the
date of such notice; provided, however, that the Company may deliver only two
-------- -------
such notices within any twelve-month period, and (y) unless and until the
Company has received a written notice (a "Shelf Registration Notice") from NWI
Group that it intends to make offers or sales under the Shelf Registration
Statement as specified in such Shelf Registration Notice; provided, however,
-------- -------
that the Company shall have ten (10) business days to prepare and file any such
amendment or supplement after receipt of the Shelf Registration Notice. Once
NWI Group has delivered a Shelf Registration Notice to the Company, NWI Group
shall promptly provide to the Company such information as the Company
reasonably requests in order to identify the method of distribution in a post-
effective amendment to the Shelf Registration Statement or a supplement to the
Shelf Prospectus. NWI Group also shall notify the Company in writing upon
completion of such offer or sale or at such time as NWI Group no longer intends
to make offers or sales under the Shelf Registration Statement;
(c) furnish NWI Group after it has delivered a Shelf Registration
Notice to the Company, without charge, as many copies of each Shelf Prospectus
and any amendment or supplement thereto in order to facilitate the public sale
or other disposition of the Shelf Registrable Securities; the Company consents
to the use of the Shelf Prospectus and any amendment or supplement thereto by
NWI Group of Shelf Registrable Securities in connection with the offering and
sale of the Shelf Registrable Securities covered by the Shelf Prospectus or
amendment or supplement thereto;
-9-
<PAGE>
(d) use its reasonable efforts to register or qualify the Shelf
Registrable Securities by the time the Shelf Registration Statement is declared
effective by the SEC under all applicable state securities or blue sky laws of
such jurisdictions in the United States and its territories and possessions as
NWI Group shall reasonably request in writing, keep each such registration or
qualification effective during the period such Shelf Registration Statement is
required to be kept effective or during the period offers or sales are being
made by NWI Group after it has delivered a Shelf Registration Notice to the
Company, whichever is shorter; provided, however, that in connection therewith,
-------- -------
the Company shall not be required to (i) qualify as a foreign corporation to do
business or to register as a broker or dealer in any such jurisdiction where it
would not otherwise be required to qualify or register but for this Section
4(d), (ii) subject itself to taxation in any such jurisdiction, or (iii) file a
general consent to service of process in any such jurisdiction;
(e) notify NWI Group promptly and, if requested by NWI Group,
confirm in writing, (i) when the Shelf Registration Statement and any post-
effective amendments thereto have become effective, (ii) when any amendment or
supplement to the Shelf Prospectus has been filed with the SEC, (iii) of the
issuance by the SEC or any state securities authority of any stop order
suspending the effectiveness of the Shelf Registration Statement or any part
thereof or the initiation of any proceedings for that purpose, (iv) if the
Company receives any notification with respect to the suspension of the
qualification of the Shelf Registrable Securities for offer or sale in any
jurisdiction or the initiation of any proceeding for such purpose, and (v) of
the happening of any event during the period the Shelf Registration Statement
is effective as a result of which (A) such Shelf Registration Statement
contains any untrue statement of a material fact or omits to state any material
fact required to be stated therein or necessary to make the statements therein
not misleading or (B) the Shelf Prospectus as then amended or supplemented
contains any untrue statement of a material fact or omits to state any material
fact necessary in order to make the statements therein, in light of the
circumstances under which they were made, not misleading;
(f) make every reasonable effort to obtain the withdrawal of any
order suspending the effectiveness of the Shelf Registration Statement or any
part thereof as promptly as possible;
(g) furnish to NWI Group after it has delivered a Shelf Registration
Notice to the Company, without charge, at least one conformed copy of the Shelf
Registration Statement and any post-effective amendment thereto (without
documents incorporated therein by reference or exhibits thereto, unless
requested);
(h) cooperate with NWI Group to facilitate the timely preparation
and delivery of certificates representing Shelf Registrable Securities to be
sold and not bearing any Securities Act legend; and enable certificates for
such Shelf Registrable Securities to be
-10-
<PAGE>
issued for such numbers of shares as NWI Group may reasonably request at
least two business days prior to any sale of Shelf Registrable Securities;
(i) subject to the last three sentences of Section 4(b) hereof, upon
the occurrence of any event contemplated by clause (x) of Section 4(b) or
clause (v) of Section 4(e) hereof, use its reasonable efforts promptly to
prepare and file an amendment or a supplement to the Shelf Prospectus or
any document incorporated therein by reference or prepare, file and obtain
effectiveness of a post-effective amendment to the Shelf Registration
Statement, or file any other required document, in any such case to the
extent necessary so that, as thereafter delivered to the purchasers of the
Shelf Registrable Securities, such Shelf Prospectus as then amended or
supplemented will not contain any untrue statement of a material fact or
omit to state any material fact necessary in order to make the statements
therein, in the light of the circumstances under which they are made, not
misleading;
(j) make available for inspection by NWI Group after it has provided
a Shelf Registration Notice to the Company and any counsel, accountants or
other representatives retained by NWI Group all financial and other
records, pertinent corporate documents and properties of the Company and
cause the officers, directors and employees of the Company to supply all
such records, documents or information reasonably requested by NWI Group,
counsel, accountants or representatives in connection with the Shelf
Registration Statement; provided, however, that such records, documents or
-------- -------
information which the Company determines in good faith to be confidential
and notifies NWI Group, counsel, accountants or representatives in writing
that such records, documents or information are confidential shall not be
disclosed by NWI Group, counsel, accountants or representatives unless (i)
such disclosure is ordered pursuant to a subpoena or other order from a
court of competent jurisdiction, or (ii) such records, documents or
information become generally available to the public other than through a
breach of this Agreement;
(k) a reasonable time prior to the filing of any Shelf Registration
Statement or any amendment thereto, or any Shelf Prospectus or any
amendment or supplement thereto, provide copies of such document (not
including any documents incorporated by reference therein unless requested)
to NWI Group after it has provided a Shelf Registration Notice to the
Company;
(l) use its reasonable efforts to cause all Shelf Registrable
Securities to be listed on any securities exchange on which similar
securities issued by the Company are then listed;
(m) provide a CUSIP number for all Shelf Registrable Securities, not
later than the effective date of a Shelf Registration Statement; and
-11-
<PAGE>
(n) use its reasonable efforts to make available to its security
holders, as soon as reasonably practicable, an earnings statement covering
at least 12 months which shall satisfy the provisions of Section 11(a) of
the Securities Act and Rule 158 thereunder or any similar rule as may be
adopted by the SEC.
The Company may require NWI Group to furnish to the Company in writing such
information regarding the proposed distribution by NWI Group as the Company may
from time to time reasonably request in writing.
In connection with and as a condition to the Company's obligations with
respect to the Shelf Registration Statement pursuant to Section 3 hereof and
this Section 4, NWI Group covenants and agrees that (i) it will not offer or
sell any Shelf Registrable Securities under the Shelf Registration Statement
until it has provided a Shelf Registration Notice pursuant to Section 4(b) and
has received copies of the Shelf Prospectus as then amended or supplemented as
contemplated by Section 4(c) and notice from the Company that the Shelf
Registration Statement and any post-effective amendments thereto have become
effective as contemplated by Section 4(e); (ii) upon receipt of any notice from
the Company contemplated by Section 4(b) or Section 4(e) (in respect of the
occurrence of an event contemplated by clause (v) of Section 4(e)), NWI Group
shall not offer or sell any Shelf Registrable Securities pursuant to the Shelf
Registration Statement until NWI Group receives copies of the supplemented or
amended Shelf Prospectus contemplated by Section 4(i) hereof and receives notice
that any post-effective amendment has become effective, and, if so directed by
the Company, NWI Group will deliver to the Company (at the expense of the
Company) all copies in its possession, other than permanent file copies then in
NWI Group's possession, of the Shelf Prospectus as amended or supplemented at
the time of receipt of such notice; (iii) all offers and sales by NWI Group
under the Shelf Registration Statement shall be completed within sixty (60) days
after the first date on which offers or sales can be made pursuant to clause (i)
above, and upon expiration of such sixty (60) day period, NWI Group will not
offer or sell any Shelf Registrable Securities under the Shelf Registration
Statement until it has again complied with the provisions of clause (i) above;
(iv) NWI Group and any of its partners, officers, directors or affiliates, if
any, will comply with the provisions of Rule 10b-6 and 10b-7 under the Exchange
Act as applicable to them in connection with sales of Shelf Registrable
Securities pursuant to the Shelf Registration Statement; (v) NWI Group and any
of its partners, officers, directors or affiliates, if any, will comply with the
prospectus delivery requirements of the Securities Act as applicable to them in
connection with sales of Shelf Registrable Securities pursuant to the Shelf
Registration Statement; and (vi) NWI Group and any of its partners, officers,
directors or affiliates, if any, will enter into such written agreements as the
Company shall reasonably request to ensure compliance with clause (iv) and (v)
above.
5. Demand Registrations for the Benefit NWI Group.
----------------------------------------------
(a) Requests for Demand Registration. In the event that the Company is not
--------------------------------
permitted to file the Shelf Registration Statement in accordance with the
provisions of Section 3(d) hereof, NWI Group shall immediately become entitled
to the rights of this Section 5. Accordingly, NWI
-12-
<PAGE>
Group, by written request delivered to the Company on or after the first
business day following the expiration of the NWI Group Lock-Up, may request
registration under the Securities Act of all or any portion of the Demand
Registrable Securities held by NWI Group for sale in the manner specified in
such request. Each initial request for a registration pursuant to this Section 5
shall specify the number of Demand Registrable Securities requested to be
registered and sold by NWI Group, the method of disposition to be employed and
the Current Market Price of the Common Stock as of the date of such request. Any
request for registration pursuant to this Section 5(a) shall be referred to
herein as a "Demand Registration Request" and all registrations requested
pursuant to this Section 5 are referred to herein as "Demand Registrations."
(b) Number of Demand Registrations. The Company shall be required to
------------------------------
effect three (3) number of Demand Registrations pursuant to this Section 5,
provided that the Company shall not be required to register any shares for a
delayed or shelf offering pursuant to Rule 415 under the Securities Act unless
the Company consents in writing. Notwithstanding anything to the contrary
contained herein, a registration shall count as a Demand Registration only when
a registration statement covering all Demand Registrable Securities covered by
such Demand Registration Request shall have become effective (except that if,
after it has become effective, the offering of Demand Registrable Securities
pursuant to such registration statement is interfered with by any stop order,
injunction or action of the SEC not occasioned by the fault of NWI Group, such
registration shall be deemed not to have been effected unless such stop order,
injunction or other order or request shall subsequently have been vacated or
otherwise removed) and, if such method of disposition is a firm commitment
underwritten public offering, all such Demand Registrable Securities shall have
been sold pursuant thereto; provided, however, that if a registration statement
-------- -------
filed by the Company pursuant to a Demand Registration Request shall be
abandoned or withdrawn at the behest of NWI Group, then, unless NWI Group shall,
promptly upon receipt of a request by the Company therefor supported by an
invoice setting forth the expenses in reasonable detail, reimburse the Company
for the Demand Registration Expenses in respect of such registration statement
attributable to NWI Group, the Company shall be deemed to have effected a Demand
Registration.
(c) Minimum Offering Amount. The Company shall not be required to
-----------------------
register Demand Registrable Securities pursuant to this Section 5 unless the
aggregate Current Market Price of all Demand Registrable Securities covered by
the Demand Registration Request shall be $1,000,000 or more (unless and to the
extent NWI Group shall hold less than $1 million of Demand Registrable
Securities, in which case such minimum offering amount shall be equal to the
amount of Demand Registrable Securities so held).
(d) Selection of Underwriters. If the method of disposition specified by
-------------------------
NWI Group shall be an underwritten public offering, the Company may designate
the managing underwriter of such offering, subject to the approval of NWI Group,
which approval shall not be unreasonably withheld.
-13-
<PAGE>
(e) Priority on Demand Registrations. The Company shall be entitled to
--------------------------------
include in any registration statement referred to in this Section 5, for sale in
accordance with the method of disposition specified NWI Group, shares of Common
Stock to be sold by the Company for its own account or by other shareholders of
the Company for their account. Nonetheless, whether or not the Company desires
to include any such additional shares in a Demand Registration, if such method
of disposition is an underwritten public offering and the managing underwriters
advise the Company in writing that in their opinion the number of securities
requested to be included in such registration exceeds the maximum number which
can be included in such offering without adversely affecting the marketability
of the offering (the "Maximum Number"), then the Company will limit the number
of shares included in such registration to the Maximum Number, and the shares
registered shall be selected in the following order of priority: (i) first,
Demand Registrable Securities covered by the Demand Registration Request, (ii)
second, securities the Company proposes to sell and (iii) third, other
securities requested to be included in such registration.
(f) Exception. Anything in this Section 5 to the contrary notwithstanding,
---------
the Company shall not be required to file a registration statement in connection
with a Demand Registration (i) within six months after the effective date of a
Demand Registration or any registration statement of the type referred to in
Section 6, provided that, as contemplated by Section 6, NWI Group shall have
been afforded the opportunity to sell Demand Registrable Securities pursuant to
such registration statement, and all Demand Registrable Securities requested to
be registered shall have been so registered and, if such registration statement
shall relate to an underwritten public offering, shall have been included
therein to the extent requested by NWI Group and shall have been sold or (ii) if
counsel for the Company, reasonably acceptable to NWI Group shall deliver an
opinion to NWI Group to the effect that, pursuant to Rule 144 under the
Securities Act or otherwise, NWI Group can publicly offer and sell the Demand
Registrable Securities as to which registration has been requested without
registration under the Securities Act.
6. Piggyback Registrations for the Benefit of NWI Group.
----------------------------------------------------
(a) Right to Piggyback. In the event that the Company is not permitted to
------------------
file the Shelf Registration Statement in accordance with the provisions of
Section 3(d) hereof, NWI Group shall immediately become entitled to the rights
of this Section 6. Accordingly, if on or after the first business day following
the expiration of the NWI Group Lock-Up, the Company at any time proposes to
register any of its Common Stock or other securities under the Securities Act
for sale to the public, whether for its own account or for the account of other
shareholders or both (except with respect to registration statements on Form S-8
or another form not available for registering the Demand Registrable Shares for
sale to the public) (a "Piggyback Registration"), the Company will promptly (but
in any event within 30 days) give written notice to NWI Group of its intention
to effect such registration and will include in such registration all Demand
Registrable Securities with respect to which the Company has received written
requests for inclusion within 15 days after the receipt of the Company's notice
(a "Piggyback Registration Request"); provided, however, that the Company shall
-------- -------
not be required to include Demand Registrable Securities in the securities to be
registered pursuant to a registration statement on any form which limits the
amount of securities
-14-
<PAGE>
which may be registered by the issuer and/or selling security holders if, and to
the extent that, such inclusion would make the use of such form unavailable. In
the event that any Piggyback Registration shall be, in whole or in part, an
underwritten public offering of Common Stock, any Piggyback Registration Request
by NWI Group shall specify that either (i) such Demand Registrable Securities
are to be included in the underwriting on the same terms and conditions as the
shares of Common Stock otherwise being sold through underwriters under such
registration, or (ii) such Demand Registrable Securities are to be sold in the
open market without any underwriting, on terms and conditions comparable to
those normally applicable to offerings of common stock in reasonably similar
circumstances.
(b) Priority on Primary Registrations. If a Piggyback Registration is an
---------------------------------
underwritten primary registration on behalf of the Company, and the managing
underwriters advise the Company in writing that in their opinion the number of
shares requested to be included in such registration exceeds the Maximum Number,
the Company will limit the number of shares included in such registration to the
Maximum Number, and the shares registered shall be selected in the following
order of priority: (i) first, securities the Company proposes to sell, (ii)
securities requested to be included in such registration pursuant to the
Registration Rights and Lock-Up Agreement dated as of August 24, 1994, by and
among Weeks Corporation and the Company Participants Listed on Schedule A
thereof and the Other Participants Listed on Schedule B thereof, (iii) third,
(a) Demand Registrable Securities covered by Piggyback Registration Requests,
(b) securities covered by piggyback registration requests pursuant to that
certain Registration Rights and Lock-Up Agreement by and among Weeks
Corporation, Lichtin Properties, Inc., Harold S. Lichtin, Noel A. Lichtin, Marie
A. Robertson, Amy R. Ehrman, Roland G. Robertson, The Steven A. Lichtin Trust,
The Karen S. Lichtin Trust and The Adam L. Lichtin Trust dated 1996, and (c)
securities covered by piggyback registration requests pursuant to that certain
Registration Rights and Lock-Up Agreement for Post-March 31, 1997 Units by and
among Weeks Corporation, Lichtin Properties, Inc., Harold S. Lichtin, Noel A.
Lichtin, Marie A. Robertson, Amy R. Ehrman, Roland G. Robertson, The Steven A.
Lichtin Trust, The Karen S. Lichtin Trust and The Adam L. Lichtin Trust dated
1996, pro rata among the holders thereof on the basis of the number of shares
requested to be included in such registration, and (iv) fourth, other securities
requested to be included in such registration.
(c) Priority on Secondary Registrations. If a Piggyback Registration is an
-----------------------------------
underwritten secondary registration on behalf of holders of the Company's
securities, and the managing underwriters advise the Company in writing that in
their opinion the number of securities requested to be included in such
registration exceeds the Maximum Number, the Company will include in such
registration the shares requested to be included therein by the holders
requesting such registration and the Demand Registrable Securities covered by
Piggyback Registration Requests and any other securities requested to be
included in such registration, pro rata among the holders thereof on the basis
of the number of shares requested to be included in such registration;
provided, however, that if the holders requesting registration are doing so
- -------- -------
pursuant to demand registration rights of such
-15-
<PAGE>
holders, such holders' shares shall take priority over any Demand Registrable
Securities and any other securities requested to be included, which shall be
included on a pro rata basis.
7. Holdback Agreements.
-------------------
(a) NWI Group of Demand Registrable Shares. NWI Group agrees not to
--------------------------------------
effect any public sale or distribution (including sales pursuant to Rule 144) of
equity securities of the Company, or any securities convertible into or
exchangeable or exercisable for such securities, during the 7 days prior to
(provided that NWI Group receives a notice from the Company of the commencement
of such 7-day period) and the 90-day period beginning on the effective date of
any underwritten Demand Registration or any underwritten Piggyback Registration
in which Demand Registrable Securities are included (except as part of such
underwritten registration), unless the underwriters managing the registered
public offering otherwise agree.
(b) Company Officers and Directors. The Company agrees (i) not to effect
------------------------------
any public sale or distribution of its equity securities, or any securities
convertible into or exchangeable or exercisable for such securities, during the
7 days prior to (provided that the Company receives notice of the commencement
of such 7-day period) and the 90-day period beginning on the effective date of
any underwritten Demand Registration or any underwritten Piggyback Registration
(except as part of such underwritten registration or pursuant to registrations
on Form S-8 or any successor form), unless the underwriters managing the
registered public offering otherwise agree, and (ii) to use its best efforts to
cause each of the Company's officers and directors who hold Common Stock or any
securities convertible into or exercisable for Common Stock, to agree not to
effect any public sale or distribution (including sales pursuant to Rule 144) of
any such securities during such period (except as part of such underwritten
registration, if otherwise permitted), unless the underwriters managing the
registered public offering otherwise agree.
8. Demand Registration Procedures. If and whenever the Company is
------------------------------
required by the provisions of Section 5 or 6 hereof to use its reasonable
efforts to effect the registration of any of the Demand Registrable Securities
under the Securities Act, the Company shall use its reasonable efforts to effect
the registration and sale of the Demand Registrable Securities in accordance
with the intended method of disposition thereof and will, as expeditiously as
possible:
(a) and in any case within 90 days after receiving a request for a
Demand Registration, prepare and file with the SEC a registration statement
(the "Demand Registration Statement") with respect to such Demand
Registrable Securities and use its reasonable efforts to cause such Demand
Registration Statement to become and remain effective for the period of the
distribution contemplated thereby (determined as hereinafter provided).
Notwithstanding anything to the contrary contained herein, the filing of
such Demand Registration Statement may be delayed for a period not to
exceed 60 days if (i) the Company is contemplating a public offering of its
securities and, in the judgment of the managing underwriter thereof (or the
Company if such offering is not underwritten) such filing would have a
material adverse effect on the contemplated offering, (ii) the Company
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<PAGE>
is in possession of material non-public information that it deems advisable
not to disclose in a Demand Registration Statement or is engaged in active
negotiations or planning for a merger or acquisition or disposition
transaction, or (iii) the Company is engaged in any program for the
repurchase of Common Stock or other securities of the Company;
(b) prior to the filing described in paragraph (a) above, furnish to
NWI Group copies of the Demand Registration Statement and any amendments or
supplements thereto and any prospectus forming a part thereof, which
documents shall be subject to the approval of NWI Group only with respect
to any statement in the Demand Registration Statement which relates to NWI
Group;
(c) notify NWI Group promptly and, if requested by NWI Group, confirm
in writing, (i) when the Demand Registration Statement and any post-
effective amendments thereto have become effective, (ii) when any amendment
or supplement to the Demand Prospectus has been filed with the SEC, (iii)
of the issuance by the SEC or any state securities authority of any stop
order suspending the effectiveness of the Demand Registration Statement or
any part thereof or the initiation of any proceedings for that purpose,
(iv) if the Company receives any notification with respect to the
suspension of the qualification of the Demand Registrable Securities for
offer or sale in any jurisdiction or the initiation of any proceeding for
such purpose, and (v) of the happening of any event during the period the
Demand Registration Statement is effective as a result of which (A) such
Demand Registration Statement contains any untrue statement of a material
fact or omits to state any material fact required to be stated therein or
necessary to make the statements therein not misleading or (B) the Demand
Prospectus as then amended or supplemented contains any untrue statement of
a material fact or omits to state any material fact necessary in order to
make the statements therein, in light of the circumstances under which they
were made, not misleading;
(d) make every reasonable effort to obtain the withdrawal of any
order suspending the effectiveness of the Demand Registration Statement or
any part thereof as promptly as possible;
(e) furnish to NWI Group after it has delivered a Demand Registration
Request to the Company, without charge, at least one conformed copy of the
Demand Registration Statement and any post-effective amendment thereto
(without documents incorporated therein by reference or exhibits thereto,
unless requested);
(f) prepare and file with the SEC such amendments and supplements to
such Demand Registration Statement and the Demand Prospectus used in
connection therewith as may be necessary to keep such Demand Registration
Statement effective for the period specified in paragraph (a) above and to
comply with the provisions of the Securities Act
-17-
<PAGE>
with respect to the disposition of all Demand Registrable Securities
covered by such Demand Registration Statement in accordance with NWI
Group's intended method of disposition set forth in such Demand
Registration Statement for such period;
(g) furnish to NWI Group and to each underwriter such number of
copies of the Demand Registration Statement and the Demand Prospectus
included therein (including each preliminary prospectus) and such other
documents, as such persons may reasonably request in order to facilitate
the public sale or other disposition of the Demand Registrable Securities
covered by such Demand Registration Statement;
(h) use its reasonable efforts to register or qualify the Demand
Registrable Securities covered by such Demand Registration Statement under
the securities or blue sky laws of such jurisdictions as NWI Group or, in
the case of an underwritten public offering, the managing underwriter,
shall reasonably request;
(i) provide a transfer agent and registrar, which may be a single
entity, for all Demand Registrable Securities not later than the effective
date of the Demand Registration Statement;
(j) use its reasonable efforts to cause all Demand Registrable
Securities to be listed on any securities exchange on which similar
securities issued by the Company are then listed;
(k) if the offering is underwritten, to furnish, at the request of
NWI Group, on the date that Demand Registrable Securities are delivered to
the underwriters for sale pursuant to such registration: (i) an opinion
dated such date of counsel representing the Company for the purposes of
such registration, addressed to the underwriters, stating that such Demand
Registration Statement has become effective under the Securities Act and
that (A) to the best knowledge of such counsel, no stop order suspending
the effectiveness thereof has been issued and no proceedings for that
purpose have been instituted or are pending or contemplated under the
Securities Act, (B) the Demand Registration Statement, the related Demand
Prospectus, and each amendment or supplement thereto, comply as to form in
all material respects with the requirements of the Securities Act and the
applicable rules and regulations of the SEC thereunder and that such
counsel does not believe that any such Demand Registration Statement,
Demand Prospectus, amendment or supplement contains a misstatement of a
material fact or an omission to state a material fact required to be stated
therein or necessary to make the statements made therein, in light of the
circumstances under which they were made, not misleading (except that such
counsel need express no opinion as to financial statements or financial or
statistical data contained therein) and (C) to such other effects as may
reasonably be requested by counsel for the underwriters or by NWI Group or
its counsel, and (ii) a letter dated such date from the independent public
accountants retained by the Company, addressed to the underwriters, stating
that they are independent public accountants within the meaning of the
Securities
-18-
<PAGE>
Act and that, in the opinion of such accountants, the financial statements
of the Company included in the Demand Registration Statement or the Demand
Prospectus, or any amendment or supplement thereto, comply as to form in
all material respects with the applicable accounting requirements of the
Securities Act, and such letter shall additionally cover such other
financial matters (including information as to the period ending no more
than five business days prior to the date of such letter) with respect to
the registration in respect of which such letter is being given as such
underwriters may reasonably request; and
(l) make available for inspection by NWI Group after it has provided
a Demand Registration Request to the Company and any counsel, accountants
or other representatives retained by NWI Group all financial and other
records, pertinent corporate documents and properties of the Company and
cause the officers, directors and employees of the Company to supply all
such records, documents or information reasonably requested by NWI Group,
counsel, accountants or representatives in connection with the Demand
Registration Statement; provided, however, that such records, documents or
-------- -------
information which the Company determines in good faith to be confidential
and notifies NWI Group, counsel, accountants or representatives in writing
that such records, documents or information are confidential shall not be
disclosed by NWI Group, counsel, accountants or representatives unless (i)
such disclosure is ordered pursuant to a subpoena or other order from a
court of competent jurisdiction, or (ii) such records, documents or
information become generally available to the public other than through a
breach of this Agreement.
For purposes of paragraphs (a) and (f) of this Section 8, the period of
distribution of Demand Registrable Securities in a firm commitment underwritten
public offering shall be deemed to be that period during which the underwriters
in such offering require in an underwriting agreement in the form customarily
used by such underwriters for comparable transactions that the Company keep a
registration statement effective to permit each underwriter to complete the
distribution of all securities purchased by it, and the period of distribution
of Demand Registrable Securities in any other registration shall be deemed to
extend until the earlier of the sale of all Demand Registrable Securities
covered thereby or nine months after the effective date thereof.
In connection with each registration hereunder, NWI Group will furnish to
the Company in writing such information with respect to itself and the proposed
distribution by itself as shall be reasonably necessary in order to assure
compliance with federal and applicable state securities laws. Reasonable
compliance with the obligation to furnish such information shall be a condition
to the rights afforded NWI Group hereunder. In addition, NWI Group and any of
its partners, officers, directors or affiliates, if any, (i) will comply with
the provisions of Rule 10b-6 and 10b-7 under the Exchange Act as applicable to
them in connection with sales of Demand Registrable Securities pursuant to the
Demand Registration Statement; (ii) will comply with the prospectus delivery
requirements of the Securities Act as applicable to them in connection with
sales of Demand
-19-
<PAGE>
Registrable Securities pursuant to the Demand Registration Statement; and (iii)
will enter into such written agreements as the Company shall reasonably request
to ensure compliance therewith.
In connection with each registration pursuant to Sections 5 and 6 hereof
covering an underwritten public offering, the Company agrees to enter into a
written agreement with the managing underwriter selected in the manner herein
provided in such form and containing such provisions as are customary in the
securities business for such an arrangement between major underwriters and
companies of the Company's size and investment stature; provided that such
--------
agreement shall not contain any such provision applicable to the Company which
is inconsistent with the provisions hereof; provided, further that the time and
-------- -------
place of the closing under said agreement shall be as mutually agreed upon
between the Company and such managing underwriter.
9. Demand and Piggyback Registration Expenses. In connection with any
------------------------------------------
Demand Registration or Piggyback Registration, the Company shall pay all Demand
Registration Expenses and NWI Group shall pay all Selling Expenses applicable to
the shares sold by NWI Group.
10. Indemnification; Contribution.
-----------------------------
(a) Indemnification by the Company. The Company agrees to indemnify and
------------------------------
hold harmless NWI Group and its partners, officers and directors and each
Person, if any, who controls NWI Group within the meaning of Section 15 of the
Securities Act as follows:
(i) against any and all loss, liability, claim, damage and expense
whatsoever, as incurred, to which NWI Group, or any partner, officer,
director or controlling Person may become subject under the Securities Act
or otherwise (A) that arise out of or are based upon any untrue statement
or alleged untrue statement of a material fact contained in the Shelf
Registration Statement or any amendment thereto, or the omission or
alleged omission to state therein a material fact required to be stated
therein or necessary to make the statements therein not misleading, (B)
that arise out of or are based upon any untrue statement or alleged untrue
statement of a material fact contained in any Shelf Prospectus or any
amendment or supplement thereto, or the omission or alleged omission to
state therein a material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were made, not
misleading, (C) that arise out of or are based upon any untrue statement
or alleged untrue statement of a material fact contained in any Demand
Registration Statement or any amendment thereto, or the omission or
alleged omission to state therein a material fact required to be stated
therein or necessary to make the statements therein not misleading, or (D)
that arise out of or are based upon any untrue statement or alleged untrue
statement of a material fact contained in any Demand Prospectus or any
amendment or supplement thereto, or the omission or alleged omission to
state therein a material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were made, not
misleading;
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<PAGE>
(ii) against any and all loss, liability, claim, damage and expense
whatsoever, as incurred, to the extent of the aggregate amount paid in
settlement of any litigation, or investigation or proceeding by any
governmental agency or body, commenced or threatened, or of any claim
whatsoever based upon any such untrue statement or alleged untrue statement
or any omission or alleged omission, if such settlement is effected with
the written consent of the Company; and
(iii) subject to the limitations set forth in Section 10(c), against
any and all expense whatsoever, as incurred (including reasonable fees and
disbursements of counsel), reasonably incurred in investigating, preparing
or defending against any litigation, or investigation or proceeding by any
governmental agency or body, commenced or threatened, in each case whether
or not a party, or any claim whatsoever based upon any such untrue
statement or alleged untrue statement or omission or alleged omission, to
the extent that any such expense is not paid under subparagraph (i) or (ii)
above;
provided, however, that the indemnity provided pursuant to this Section 10(a)
- -------- -------
shall not apply with respect to any loss, liability, claim, damage or expense
that arise out of or are based upon any untrue statement or alleged untrue
statement or omission or alleged omission made in reliance upon and in
conformity with written information furnished to the Company by NWI Group (i)
expressly for use in the Shelf Registration Statement or any amendment thereto,
the Shelf Prospectus or any amendment or supplement thereto, the Demand
Registration Statement or any amendment thereto, or the Demand Prospectus or any
amendment or supplement thereto or (ii) pursuant to any representation, warranty
or other statement contained in any of the Contribution Agreements or any
admission amendment to the Partnership Agreement.
(b) Indemnification by NWI Group. NWI Group agrees to indemnify and hold
----------------------------
harmless the Company, and each of its respective directors and officers
(including each director and officer of the Company who signed the Shelf
Registration Statement or Demand Registration Statement), and each Person, if
any, who controls the Company within the meaning of Section 15 of the Securities
Act, to the same extent as the indemnity contained in Section 10(a) hereof, but
only insofar as such loss, liability, claim, damage or expense arises out of or
is based upon any untrue statement or alleged untrue statement or omission or
alleged omission made in the Shelf Registration Statement or any amendment
thereto, the Shelf Prospectus or any amendment or supplement thereto, the Demand
Registration Statement or any amendment thereto, or the Demand Prospectus or any
amendment or supplement thereto, in reliance upon and in conformity with written
information furnished to the Company by NWI Group expressly for use therein. In
no event, however shall the liability of NWI Group exceed the net proceeds
received by NWI Group from any offering made in connection with a Demand
Registration Statement or Shelf Registration Statement, as the case may be.
-21-
<PAGE>
(c) Conduct of Indemnification Proceedings. Each indemnified party shall
--------------------------------------
give reasonably prompt notice to each indemnifying party of any action or
proceeding commenced against it in respect of which indemnity may be sought
hereunder, but failure to so notify an indemnifying party (i) shall not relieve
it from any liability which it may have under the indemnity agreement provided
in Section 10(a) or (b) above, unless and to the extent it did not otherwise
learn of such action and the lack of notice by the indemnified party materially
prejudices the indemnifying party or results in the forfeiture by the
indemnifying party of substantial rights and defenses, and (ii) shall not, in
any event, relieve the indemnifying party from any obligations to any
indemnified party other than the indemnification obligation provided under
Section 10(a) or (b) above. After receipt of such notice, the indemnifying party
shall be entitled to participate in and, to the extent it shall wish, jointly
with any other indemnifying party so notified, to assume the defense of such
action or proceeding at such indemnifying party's own expense with counsel
chosen by such indemnifying party and approved by the indemnified party, which
approval shall not be unreasonably withheld; provided, however, that, if the
-------- -------
defendants in any such action or proceeding include both the indemnified party
and the indemnifying party and the indemnified party reasonably determines, upon
advice of counsel, that a conflict of interest exists or that there may be legal
defenses available to it or other indemnified parties that are different from or
in addition to those available to the indemnifying party, then the indemnified
party shall be entitled to one separate counsel, the reasonable fees and
expenses of which shall be paid by the indemnifying party. If the indemnifying
party does not assume the defense of any such action or proceeding, after having
received the notice referred to in the first sentence of this paragraph, the
indemnifying party will pay the reasonable fees and expenses of counsel (which
shall be limited to a single law firm) for the indemnified party. In such event,
however, the indemnifying party will be liable for any settlement effected
without the written consent of such indemnifying party. If the indemnifying
party assumes the defense of any such action or proceeding in accordance with
this paragraph, such indemnifying party shall not be liable for any fees and
expenses of counsel for the indemnified party incurred thereafter in connection
with such action or proceeding, except as set forth in the proviso in the second
sentence of this Section 10(c).
(d) Contribution. In order to provide for just and equitable contribution
------------
in circumstances in which the indemnity agreement provided for in this Section
10 is for any reason held to be unenforceable although applicable in accordance
with its terms, the Company and NWI Group shall contribute to the aggregate
losses, liabilities, claims, damages and expenses of the nature contemplated by
such indemnity agreement incurred by the Company and NWI Group, in such
proportion as is appropriate to reflect the relative fault of and benefits to
the Company on the one hand and NWI Group on the other, in connection with the
statements or omissions which resulted in such losses, claims, damages,
liabilities or expenses, as well as any other relevant equitable considerations.
The relative benefits to the indemnifying party and indemnified parties shall be
determined by reference to, among other things, the total proceeds received by
the indemnified party and indemnified parties in connection with the offering to
which such losses, claims, damages, liabilities or expenses relate. The relative
fault of the indemnifying party and indemnified parties shall be determined by
reference to, among other things, whether the action in question, including any
untrue or alleged untrue statement of a material fact or omission or alleged
omission to state a
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<PAGE>
material fact, has been made by, or relates to information supplied by, such
indemnifying party or the indemnified parties, and the parties' relative intent,
knowledge, access to information and opportunity to correct or prevent such
action.
The parties hereto agree that it would not be just or equitable if
contribution pursuant to this Section 10(d) were determined by pro rata
allocation or by any other method of allocation which does not take account of
the equitable considerations referred to in the immediately preceding paragraph.
Notwithstanding the provisions of this Section 10(d), NWI Group shall not be
required to contribute any amount in excess of the amount by which the total
price at which the Shelf Registrable Securities or the Demand Registrable
Securities, as the case may be, of NWI Group were offered to the public exceeds
the amount of any damages which NWI Group would otherwise have been required to
pay by reason of such untrue statement or omission.
Notwithstanding the foregoing, no Person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Securities Act)
shall be entitled to contribution from any Person who was not guilty of such
fraudulent misrepresentation. For purposes of this Section 10(d), each Person,
if any, who controls NWI Group within the meaning of Section 15 of the
Securities Act and partners, directors and officers of NWI Group shall have the
same rights to contribution as NWI Group, and each director of the Company, each
officer of the Company who signed the Shelf Registration Statement or the Demand
Registration Statement, as the case may be, and each Person, if any, who
controls the Company within the meaning of Section 15 of the Securities Act
shall have the same rights to contribution as the Company.
(e) In the event any sale pursuant to a Shelf Registration, Demand
Registration or Piggyback Registration is an underwritten offering, then the
Company agrees to indemnify and hold harmless each underwriter of Shelf
Registerable Securities or Demand Registerable Securities to the same extent and
on substantially similar terms as the Company's indemnification of NWI Group as
set forth in Section 10(a) above.
11. Rule 144 Sales.
--------------
(a) Compliance. The Company covenants that, so long as it is subject to
----------
the reporting requirements of the Exchange Act, it will file the reports
required to be filed by it under the Exchange Act so as to enable NWI Group to
sell Demand Registrable Securities or Shelf Registrable Securities pursuant to
Rule 144 under the Securities Act.
(b) Cooperation with NWI Group. In connection with any sale, transfer or
--------------------------
other disposition by NWI Group of any Shelf Registrable Securities or Demand
Registrable Securities pursuant to Rule 144 under the Securities Act, the
Company shall cooperate with NWI Group to facilitate the timely preparation and
delivery of certificates representing Shelf Registrable Securities or Demand
Registrable Securities to be sold and not bearing any Securities Act legend, and
enable
-23-
<PAGE>
certificates for such Shelf Registrable Securities or Demand Registrable
Securities to be for such number of shares as NWI Group may reasonably request
at least two business days prior to any sale of Shelf Registrable Securities or
Demand Registrable Securities.
12. Miscellaneous.
-------------
(a) Amendments and Waivers. The provisions of this Agreement, including
----------------------
the provisions of this sentence, may not be amended, modified, supplemented or
waived, nor may consent to departures therefrom be given, without the written
consent of the parties hereto.
(b) Notices. All notices and other communications provided for or
-------
permitted hereunder shall be made in writing by hand-delivery, registered first-
class mail, telex, telecopier, or any courier guaranteeing overnight delivery,
(i) if to NWI, at 1410 Donelson Pike, Suite A-5, Nashville, Tennessee 37217,
Attention: John W. Nelley, Jr., (ii) if to Buckley & Co., at 1410 Donelson Pike,
Suite A-5, Nashville, Tennessee 37217, Attention: Albert W. Buckley, Jr., (iii)
if to John W. Nelley, Jr., at 3801 West End Avenue, Nashville, Tennessee 37203,
(iv) if to Albert W. Buckley, Jr., at 111 Sawyer Road, Franklin, Tennessee 37064
or (v) if to the Company, at 4497 Park Drive, Norcross, Georgia 30093,
Attention: A. R. Weeks, Jr.
All such notices and communications shall be deemed to have been duly
given: at the time delivered by hand, if personally delivered; five business
days after being deposited in the mail, postage prepaid, if mailed; when
answered back, if telexed; when receipt is acknowledged, if telecopied; or at
the time delivered if delivered by an air courier guaranteeing overnight
delivery.
(c) Successors and Assigns. This Agreement shall inure to the benefit of
----------------------
and be binding upon the successors, assigns and transferees of each of the
parties. If any successor, assignee or transferee of NWI or Buckley & Co. shall
acquire Shelf Registrable Securities or Demand Registrable Securities, in any
manner, whether by operation of law or otherwise, such Shelf Registrable
Securities or Demand Registrable Securities shall be held subject to all of the
terms of this Agreement, and by taking and holding such Shelf Registrable
Securities or Demand Registrable Securities such Person shall be entitled to
receive the benefits hereof and shall be conclusively deemed to have agreed to
be bound by all of the terms and provisions hereof.
(d) Third Party Beneficiaries. There shall be no third party beneficiaries
-------------------------
or intended beneficiaries of this Agreement
(e) Counterparts. This Agreement may be executed in any number of
------------
counterparts and by the parties hereto in separate counterparts, each of which
when so executed shall be deemed to be an original and all of which taken
together shall constitute one and the same agreement.
(f) Headings. The headings in this Agreement are for convenience of
--------
reference only and shall not limit or otherwise affect the meaning hereof.
-24-
<PAGE>
(g) Governing Law. This Agreement shall be governed by and construed in
-------------
accordance with the laws of the State of Georgia without giving effect to the
conflicts of law provisions thereof.
(h) Specific Performance. The parties hereto acknowledge that there would
--------------------
be no adequate remedy at law if any party fails to perform any of its
obligations hereunder, and accordingly agree that each party, in addition to any
other remedy to which it may be entitled at law or in equity, shall be entitled
to compel specific performance of the obligations of any other party under this
Agreement in accordance with the terms and conditions of this Agreement in any
court of the United States or any State thereof having jurisdiction.
(i) Entire Agreement. This Agreement is intended by the parties as a
----------------
final expression of their agreement and intended to be a complete and exclusive
statement of the agreement and understanding of the parties hereto in respect of
the subject matter contained herein. This Agreement supersedes all prior
agreements and understandings between the parties with respect to such subject
matter.
-25-
<PAGE>
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first written above
WEEKS CORPORATION
By:________________________________
Name:
Title:
NWI WAREHOUSE GROUP, L.P.
By: NWI X, L.P., its Sole General Partner
By: _______________________
John W. Nelley, Jr.,
General Partner
By: _______________________
Albert W. Buckley, Jr.,
General Partner
BUCKLEY & COMPANY REAL ESTATE, INC.
By: _______________________
Albert W. Buckley, Jr., President
JOHN W. NELLEY, JR.
___________________________
ALBERT W. BUCKLEY, JR.
__________________________
-26-
<PAGE>
==================================
REGISTRATION RIGHTS AGREEMENT
FOR POST-MARCH 31, 1998 SHARES AND UNITS
Dated as of November 1, 1996
by and among
WEEKS CORPORATION
and
NWI WAREHOUSE GROUP, L.P. and
BUCKLEY & COMPANY REAL ESTATE, INC.,
==================================
<PAGE>
REGISTRATION RIGHTS AGREEMENT
FOR POST-MARCH 31, 1998 SHARES AND UNITS
THIS REGISTRATION RIGHTS AGREEMENT FOR POST-MARCH 31, 1998 SHARES AND UNITS
(this "Agreement") is made and entered into as of November 1, 1996, by and among
WEEKS CORPORATION, a Georgia corporation (the "Company"), NWI WAREHOUSE GROUP,
L.P. a Tennessee limited partnership, including its successors, assigns and
transferees ("NWI"), and BUCKLEY & COMPANY REAL ESTATE, INC., a Tennessee
corporation, including its successors, assigns and transferees ("Buckley &
Co."). NWI and Buckley & Co. are collectively referred to hereafter as "NWI
Group" and all references to NWI Group shall include within its meaning "Buckley
& Co." and "NWI."
WHEREAS, this Agreement is made pursuant to (i) the Contribution Agreement
for the Aspen Grove Land dated as of even date herewith , (ii) the Contribution
Agreement for the I-440 Land dated as of even date herewith (collectively, (i)
and (ii) are hereafter referred to as the "Contribution Agreements.") and (iii)
certain other agreements executed pursuant to the acquisition by Weeks of the
assets of NWI Group and its affiliates;
WHEREAS, NWI Group will become the owner of Units (as defined below) in
Weeks Realty, L.P., a Georgia limited partnership (the "Operating Partnership"),
either in connection with the transactions described in the Contribution
Agreements or in connection with the acquisition of the assets of NWI Group and
its affiliates; and
WHEREAS, in order to induce NWI Group to enter into the transactions
described in the Contribution Agreements, the Company has agreed, with respect
to the Units issued after March 31, 1998, to provide NWI Group with the
registration rights set forth in Section 2 hereof;
NOW, THEREFORE, the parties hereto, in consideration of the foregoing, the
mutual covenants and agreements hereinafter set forth, and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, agree as follows:
1. Definitions.
-----------
As used in this Agreement, the following capitalized defined terms shall
have the following meanings:
"Buckley & Co." shall have the meaning set forth in the Preamble and also
-------------
shall include each of Buckley & Co.'s successors and assigns.
"Common Stock" shall mean the Common Stock, par value $.01 per share, of
------------
the Company.
<PAGE>
"Company" shall have the meaning set forth in the Preamble and also shall
-------
include the Company's successors.
"Contribution Agreements" shall have the meaning set forth in the
-----------------------
Preamble.
"Control" shall mean the ability, whether by the direct or indirect
-------
ownership of shares or other equity interests, by contract or otherwise, to
select a majority of the directors of a corporation, to select the managing
partner of a partnership, to select the manager of a limited liability company
or otherwise to select, or have the power to remove and then select, a majority
of those persons exercising governing authority over an Entity. In the case of
a limited partnership, the sole general partner, each of the general partners
that has equal management control and authority, or the designated managing
general partner or managing general partners thereof shall be deemed to have
control of such partnership. In the case of a trust, any trustee thereof or
any Person having the right to select any such trustee shall be deemed to have
control of such trust.
"Entity" shall mean any general partnership, limited partnership,
------
corporation, limited liability company, joint venture, trust, business trust,
cooperative or association.
"Exchange Act" shall mean the Securities Exchange Act of 1934, as amended
------------
from time to time.
"Maximum Number" shall mean with respect to an underwritten public
--------------
offering, the maximum number of securities which in the opinion of the managing
underwriters can be included in such offering without adversely affecting the
marketability of the offering.
"NWI" shall have the meaning set forth in the Preamble and also shall
---
include each of NWI's successors and assigns.
"NWI Group" shall have the meaning set forth in the Preamble.
---------
"Operating Partnership" shall have the meaning set forth in the Preamble
---------------------
and also shall include the Operating Partnership's successors and assigns.
"Partnership Agreement" shall mean the Second Amended and Restated
---------------------
Agreement of Limited Partnership of the Operating Partnership.
"Person" shall mean any individual or Entity.
------
"Piggyback Registration" shall have the meaning set forth in Section 2
----------------------
hereof.
"Piggyback Registration Request" shall have the meaning set forth in
------------------------------
Section 2 hereof.
-2-
<PAGE>
"Piggyback Registrable Securities" shall mean the Shares held by NWI Group,
--------------------------------
excluding (i) Shares that have been disposed of under any other effective
registration statement, (ii) Shares sold or otherwise transferred pursuant to
Rule 144 under the Securities Act, and (iii) Shares held by NWI Group if all of
such Shares are eligible for sale pursuant to Rule 144 under the Securities Act
and could be sold in one transaction in accordance with the volume limitations
contained in Rule 144(e)(1)(i) under the Securities Act.
"Piggyback Registration Expenses" shall mean any and all expenses incurred
-------------------------------
by the Company in connection with Piggyback Registrations, including, without
limitation: (i) all SEC, stock exchange and National Association of Securities
Dealers, Inc. ("NASD") registration and filing fees, (ii) all fees and expenses
incurred in connection with compliance with state securities or "blue sky" laws
(including reasonable fees and disbursements of counsel in connection with
qualification of any of the Piggyback Registrable Securities under any state
securities or blue sky laws and the preparation of a blue sky memorandum) and
compliance with the rules of the NASD, (iii) all expenses of any Persons in
preparing or assisting in preparing, word processing, printing and distributing
the Registration Statement, any Prospectus, certificates and other documents
relating to the performance of and compliance with this Agreement, (iv) all fees
and expenses incurred in connection with the listing, if any, of any of the
Piggyback Registrable Securities on any securities exchange or exchanges
pursuant to Section 4(i) hereof, and (v) the fees and disbursements of counsel
for the Company and of the independent public accountants of the Company,
including the expenses of any special audits or "cold comfort" letters required
by or incident to such performance and compliance. Piggyback Registration
Expenses shall specifically exclude "Selling Expenses."
"Private Placement" shall mean the issuance and sale of Shares and Units
-----------------
pursuant to the transactions contemplated by the Contribution Agreements and
pursuant to any other event in which Buckley & Co. is issued Shares or Units
after March 31, 1998.
"Prospectus" shall mean the prospectus included in the Registration
----------
Statement, including any preliminary prospectus, and any amendment or supplement
thereto, including any supplement relating to the terms of the offering of any
portion of the Piggyback Registrable Securities covered by the Registration
Statement, and in each case including all material incorporated by reference
therein.
"Registration Statement" shall mean the registration statement prepared
----------------------
and filed with the SEC.
"SEC" shall mean the Securities and Exchange Commission.
---
"Securities Act" shall mean the Securities Act of 1933, as amended from
--------------
time to time.
-3-
<PAGE>
"Selling Expenses" shall mean all underwriting discounts and selling
----------------
commissions and transfer taxes applicable to the sale of Piggyback Registrable
Securities and disbursements of underwriters.
"Shares" shall mean (i) any Common Stock issued to NWI Group in private
------
placements subsequent to March 31, 1998 and (ii) any Common Stock issued to NWI
Group upon redemption of those Units which were issued to NWI Group subsequent
to March 31, 1998.
"Units" shall mean the limited partnership interests of the Operating
-----
Partnership issued to NWI Group in the Private Placement, which interests are
redeemable for Common Stock, or at the Operating Partnership's option, cash.
2. Piggyback Registrations for the Benefit of NWI Group.
----------------------------------------------------
(a) Right to Piggyback. With respect to any Units or Shares issued to
------------------
NWI Group subsequent to March 31, 1998, if the Company at any time proposes to
register any of its Common Stock or other securities under the Securities Act
for sale to the public, whether for its own account or for the account of other
shareholders or both (except with respect to registration statements on Form S-
8 or another form not available for registering the Piggyback Registrable
Shares for sale to the public) (a "Piggyback Registration"), the Company will
promptly (but in any event within 30 days) give written notice to NWI Group of
its intention to effect such registration and will include in such registration
all Piggyback Registrable Securities with respect to which the Company has
received written requests for inclusion within 15 days after the receipt of the
Company's notice (a "Piggyback Registration Request"); provided, however, that
-------- -------
the Company shall not be required to include Piggyback Registrable Securities
in the securities to be registered pursuant to a registration statement on any
form which limits the amount of securities which may be registered by the
issuer and/or selling security holders if, and to the extent that, such
inclusion would make the use of such form unavailable. In the event that any
Piggyback Registration shall be, in whole or in part, an underwritten public
offering of Common Stock, any Piggyback Registration Request by NWI Group shall
specify that either (i) such Piggyback Registrable Securities are to be
included in the underwriting on the same terms and conditions as the shares of
Common Stock otherwise being sold through underwriters under such registration,
or (ii) such Piggyback Registrable Securities are to be sold in the open market
without any underwriting, on terms and conditions comparable to those normally
applicable to offerings of common stock in reasonably similar circumstances.
(b) Priority on Primary Registrations. If a Piggyback Registration is an
---------------------------------
underwritten primary registration on behalf of the Company, and the managing
underwriters advise the Company in writing that in their opinion the number of
shares requested to be included in such registration exceeds the Maximum
Number, the Company will limit the number of shares included in such
registration to the Maximum Number, and the shares registered shall be selected
in the following order of priority: (i) first, securities the Company proposes
to sell, (ii) securities requested to be included in such registration pursuant
to the Registration Rights and Lock-Up Agreement dated as of August 24, 1994,
by and among Weeks Corporation and the Company Participants Listed on
-4-
<PAGE>
Schedule A thereof and the Other Participants Listed on Schedule B thereof,
(iii) third, (a) Piggyback Registrable Securities covered by Piggyback
Registration Requests, (b) securities covered by piggyback registration requests
pursuant to that certain Registration Rights and Lock-Up Agreement by and among
Weeks Corporation, Lichtin Properties, Inc., Harold S. Lichtin, Noel A. Lichtin,
Marie A. Robertson, Amy R. Ehrman, Roland G. Robertson, The Steven A. Lichtin
Trust, The Karen S. Lichtin Trust and The Adam L. Lichtin Trust dated 1996, and
(c) securities covered by piggyback registration requests pursuant to that
certain Registration Rights and Lock-Up Agreement for Post-March 31, 1997 Units
by and among Weeks Corporation, Lichtin Properties, Inc., Harold S. Lichtin,
Noel A. Lichtin, Marie A. Robertson, Amy R. Ehrman, Roland G. Robertson, The
Steven A. Lichtin Trust, The Karen S. Lichtin Trust and The Adam L. Lichtin
Trust dated 1996, pro rata among the holders thereof on the basis of the number
of shares requested to be included in such registration and (iv) fourth, other
securities requested to be included in such registration.
(c) Priority on Secondary Registrations. If a Piggyback Registration is
-----------------------------------
an underwritten secondary registration on behalf of holders of the Company's
securities, and the managing underwriters advise the Company in writing that in
their opinion the number of securities requested to be included in such
registration exceeds the Maximum Number, the Company will include in such
registration the shares requested to be included therein by the holders
requesting such registration and the Piggyback Registrable Securities covered
by Piggyback Registration Requests and any other securities requested to be
included in such registration, pro rata among the holders thereof on the basis
of the number of shares requested to be included in such registration;
provided, however, that if the holders requesting registration are doing so
- -------- -------
pursuant to demand registration rights of such holders, such holders' shares
shall take priority over any Piggyback Registrable Securities and any other
securities requested to be included, which shall be included on a pro rata
basis.
(d) Demand Registration Rights After Fifth Anniversary. If all of the
--------------------------------------------------
Piggyback Registrable Securities under this Agreement, which NWI Group wishes
to dispose of, have not been disposed of on or before the fifth anniversary of
this Agreement, then NWI Group shall be entitled to two (2) demand registration
right with respect to such Piggyback Registrable Securities. Such demand
registration shall be conducted in accorandance with the terms, provisions and
priorities of the demand registration provisions (including, without
limitation, the expense allocation provisions) contained in the Registration
Rights Agreement dated as of the date hereof by and among the Company, NWI,
Buckley & Co., John W. Nelley, Jr. and Albert W. Buckley, Jr.
3. Holdback Agreements.
-------------------
(a) NWI Group of Piggyback Registrable Shares. NWI Group agrees not to
-----------------------------------------
effect any public sale or distribution (including sales pursuant to Rule 144)
of equity securities of the Company, or any securities convertible into or
exchangeable or exercisable for such securities, during the 7 days prior to
(provided that NWI Group receives a notice from the Company of the commencement
of such 7-day period) and the 90-day period beginning on the effective date of
any
-5-
<PAGE>
underwritten Piggyback Registration in which Piggyback Registrable Securities
are included (except as part of such underwritten registration), unless the
underwriters managing the registered public offering otherwise agree.
(b) Company Officers and Directors. The Company agrees (i) not to effect
------------------------------
any public sale or distribution of its equity securities, or any securities
convertible into or exchangeable or exercisable for such securities, during the
7 days prior to (provided that the Company receives notice of the commencement
of such 7-day period) and the 90-day period beginning on the effective date of
any underwritten Piggyback Registration (except as part of such underwritten
registration or pursuant to registrations on Form S-8 or any successor form),
unless the underwriters managing the registered public offering otherwise
agree, and (ii) to use its best efforts to cause each of the Company's officers
and directors who hold Common Stock or any securities convertible into or
exercisable for Common Stock, to agree not to effect any public sale or
distribution (including sales pursuant to Rule 144) of any such securities
during such period (except as part of such underwritten registration, if
otherwise permitted), unless the underwriters managing the registered public
offering otherwise agree.
4. Piggyback Registration Procedures. If and whenever the Company is
---------------------------------
required to use its reasonable efforts to effect the registration of any of its
securities under the Securities Act, the Company shall use its reasonable
efforts to effect the registration and sale of the Piggyback Registrable
Securities in accordance with the intended method of disposition thereof;
provided, however, that the Company will not be under any obligation to ensure
- -------- -------
the registration of such Piggyback Registrable Securities is consummated if the
Registration Statement pursuant to which the Piggyback Registrable Securities
are being registered is canceled or withdrawn on behalf of the Company or those
persons requesting such registration. In connection with the foregoing, the
Company will, as expeditiously as possible:
(a) prior to the filing of the Registration Statement, furnish to
NWI Group copies of the Registration Statement and any amendments or
supplements thereto and any prospectus forming a part thereof, which
documents shall be subject to the approval of NWI Group only with respect
to any statement in the Registration Statement which relates to NWI Group;
(b) notify NWI Group promptly and, if requested by NWI Group,
confirm in writing, (i) when the Registration Statement and any post-
effective amendments thereto have become effective, (ii) when any amendment
or supplement to the Prospectus has been filed with the SEC, (iii) of the
issuance by the SEC or any state securities authority of any stop order
suspending the effectiveness of the Registration Statement or any part
thereof or the initiation of any proceedings for that purpose, (iv) if the
Company receives any notification with respect to the suspension of the
qualification of the Piggyback Registrable Securities for offer or sale in
any jurisdiction or the initiation of any proceeding for such purpose, and
(v) of the happening of any event during the period the Registration
Statement is effective as a result of which (A) such Registration Statement
contains any untrue
-6-
<PAGE>
statement of a material fact or omits to state any material fact required
to be stated therein or necessary to make the statements therein not
misleading or (B) the Prospectus as then amended or supplemented contains
any untrue statement of a material fact or omits to state any material fact
necessary in order to make the statements therein, in light of the
circumstances under which they were made, not misleading;
(c) make every reasonable effort to obtain the withdrawal of any
order suspending the effectiveness of the Registration Statement or any
part thereof as promptly as possible;
(d) furnish to NWI Group after it has delivered a Piggyback
Registration Request to the Company, without charge, at least one conformed
copy of the Registration Statement and any post-effective amendment thereto
(without documents incorporated therein by reference or exhibits thereto,
unless requested);
(e) prepare and file with the SEC such amendments and supplements
to such Registration Statement and the Prospectus used in connection
therewith as may be necessary to keep such Registration Statement effective
for the period specified in paragraph (a) above and to comply with the
provisions of the Securities Act with respect to the disposition of all
Piggyback Registrable Securities covered by such Registration Statement in
accordance with NWI Group's intended method of disposition set forth in
such Registration Statement for such period;
(f) furnish to NWI Group and to each underwriter such number of
copies of the Registration Statement and the Prospectus included therein
(including each preliminary prospectus) and such other documents, as such
persons may reasonably request in order to facilitate the public sale or
other disposition of the Piggyback Registrable Securities covered by such
Registration Statement;
(g) use its reasonable efforts to register or qualify the Piggyback
Registrable Securities covered by such Registration Statement under the
securities or blue sky laws of such jurisdictions as NWI Group or, in the
case of an underwritten public offering, the managing underwriter, shall
reasonably request;
(h) provide a transfer agent and registrar, which may be a single
entity, for all Piggyback Registrable Securities not later than the
effective date of the Registration Statement;
(i) use its reasonable efforts to cause all Piggyback Registrable
Securities to be listed on any securities exchange on which similar
securities issued by the Company are then listed;
-7-
<PAGE>
(j) if the offering is underwritten, to furnish, at the request of
NWI Group, on the date that Piggyback Registrable Securities are delivered
to the underwriters for sale pursuant to such registration: (i) an opinion
dated such date of counsel representing the Company for the purposes of
such registration, addressed to the underwriters, stating that such
Registration Statement has become effective under the Securities Act and
that (A) to the best knowledge of such counsel, no stop order suspending
the effectiveness thereof has been issued and no proceedings for that
purpose have been instituted or are pending or contemplated under the
Securities Act, (B) the Registration Statement, the related Prospectus, and
each amendment or supplement thereto, comply as to form in all material
respects with the requirements of the Securities Act and the applicable
rules and regulations of the SEC thereunder and that such counsel does not
believe that any such Registration Statement, Prospectus, amendment or
supplement contains a misstatement of a material fact or an omission to
state a material fact required to be stated therein or necessary to make
the statements made therein, in light of the circumstances under which they
were made, not misleading (except that such counsel need express no opinion
as to financial statements or financial or statistical data contained
therein) and (C) to such other effects as may reasonably be requested by
counsel for the underwriters or by NWI Group or its counsel, and (ii) a
letter dated such date from the independent public accountants retained by
the Company, addressed to the underwriters, stating that they are
independent public accountants within the meaning of the Securities Act and
that, in the opinion of such accountants, the financial statements of the
Company included in the Registration Statement or the Prospectus, or any
amendment or supplement thereto, comply as to form in all material respects
with the applicable accounting requirements of the Securities Act, and such
letter shall additionally cover such other financial matters (including
information as to the period ending no more than five business days prior
to the date of such letter) with respect to the registration in respect of
which such letter is being given as such underwriters may reasonably
request; and
(k) make available for inspection by NWI Group after it has
provided a Piggyback Registration Request to the Company and any counsel,
accountants or other representatives retained by NWI Group all financial
and other records, pertinent corporate documents and properties of the
Company and cause the officers, directors and employees of the Company to
supply all such records, documents or information reasonably requested by
NWI Group, counsel, accountants or representatives in connection with the
Registration Statement; provided, however, that such records, documents or
-------- -------
information which the Company determines in good faith to be confidential
and notifies NWI Group, counsel, accountants or representatives in writing
that such records, documents or information are confidential shall not be
disclosed by NWI Group, counsel, accountants or representatives unless (i)
such disclosure is ordered pursuant to a subpoena or other order from a
court of competent jurisdiction, or (ii) such records, documents or
information become generally available to the public other than through a
breach of this Agreement.
-8-
<PAGE>
For purposes of paragraph (e) of this Section 4, the period of
distribution of Piggyback Registrable Securities in a firm commitment
underwritten public offering shall be deemed to be that period during which
the underwriters in such offering require in an underwriting agreement in
the form customarily used by such underwriters for comparable transactions
that the Company keep a registration statement effective to permit each
underwriter to complete the distribution of all securities purchased by it,
and the period of distribution of Piggyback Registrable Securities in any
other registration shall be deemed to extend until the earlier of the sale
of all Piggyback Registrable Securities covered thereby or nine months
after the effective date thereof.
In connection with each registration hereunder, NWI Group will
furnish to the Company in writing such information with respect to itself
and the proposed distribution by itself as shall be reasonably necessary in
order to assure compliance with federal and applicable state securities
laws. Reasonable compliance with the obligation to furnish such information
shall be a condition to the rights afforded NWI Group hereunder. In
addition, NWI Group and any of its partners, officers, directors or
affiliates, if any, (i) will comply with the provisions of Rule 10b-6 and
10b-7 under the Exchange Act as applicable to them in connection with sales
of Piggyback Registrable Securities pursuant to the Registration Statement;
(ii) will comply with the prospectus delivery requirements of the
Securities Act as applicable to them in connection with sales of Piggyback
Registrable Securities pursuant to the Registration Statement; and (iii)
will enter into such written agreements as the Company shall reasonably
request to ensure compliance therewith.
In connection with each registration pursuant to Section 2 hereof
covering an underwritten public offering, the Company agrees to enter into
a written agreement with the managing underwriter selected in the manner
herein provided in such form and containing such provisions as are
customary in the securities business for such an arrangement between major
underwriters and companies of the Company's size and investment stature;
provided that such agreement shall not contain any such provision
--------
applicable to the Company which is inconsistent with the provisions hereof;
provided, further that the time and place of the closing under said
-------- -------
agreement shall be as mutually agreed upon between the Company and such
managing underwriter.
5. Piggyback Registration Expenses. In connection with any
-------------------------------
Piggyback Registration, the Company shall pay all Piggyback Registration
Expenses and NWI Group shall pay all Selling Expenses applicable to the
shares sold by NWI Group.
6. Indemnification; Contribution.
-----------------------------
(a) Indemnification by the Company. The Company agrees to
------------------------------
indemnify and hold harmless NWI Group and its partners, officers and
directors and each Person, if any, who controls NWI Group within the
meaning of Section 15 of the Securities Act as follows:
-9-
<PAGE>
(i) against any and all loss, liability, claim, damage and expense
whatsoever, as incurred, to which NWI Group, or any partner, officer,
director or controlling Person may become subject under the Securities Act
or otherwise (A) that arise out of or are based upon any untrue statement
or alleged untrue statement of a material fact contained in the
Registration Statement or any amendment thereto, or the omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading or (B) that arise
out of or are based upon any untrue statement or alleged untrue statement
of a material fact contained in any Prospectus or any amendment or
supplement thereto, or the omission or alleged omission to state therein a
material fact necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not misleading;
(ii) against any and all loss, liability, claim, damage and expense
whatsoever, as incurred, to the extent of the aggregate amount paid in
settlement of any litigation, or investigation or proceeding by any
governmental agency or body, commenced or threatened, or of any claim
whatsoever based upon any such untrue statement or alleged untrue statement
or any omission or alleged omission, if such settlement is effected with
the written consent of the Company; and
(iii) subject to the limitations set forth in Section 6(c), against
any and all expense whatsoever, as incurred (including reasonable fees and
disbursements of counsel), reasonably incurred in investigating, preparing
or defending against any litigation, or investigation or proceeding by any
governmental agency or body, commenced or threatened, in each case whether
or not a party, or any claim whatsoever based upon any such untrue
statement or alleged untrue statement or omission or alleged omission, to
the extent that any such expense is not paid under subparagraph (i) or (ii)
above;
provided, however, that the indemnity provided pursuant to this Section 6(a)
- -------- -------
shall not apply with respect to any loss, liability, claim, damage or expense
that arise out of or are based upon any untrue statement or alleged untrue
statement or omission or alleged omission made in reliance upon and in
conformity with written information furnished to the Company by NWI Group (i)
expressly for use in the Registration Statement or any amendment thereto, or the
Prospectus or any amendment or supplement thereto or (ii) pursuant to any
representation, warranty or other statement contained in any of the Contribution
Agreements or any admission amendment to the Partnership Agreement.
(b) Indemnification by NWI Group. NWI Group agrees to indemnify and
----------------------------
hold harmless the Company, and each of its respective directors and officers
(including each director and officer of the Company who signed the Registration
Statement), and each Person, if any, who controls the Company within the meaning
of Section 15 of the Securities Act, to the same extent as the indemnity
contained in Section 6(a) hereof, but only insofar as such loss, liability,
claim, damage or expense arises out of or is based upon any untrue statement or
alleged untrue statement or omission or alleged omission made in the
Registration Statement or any amendment thereto, or the Prospectus or any
amendment or supplement thereto, or any of the Contribution Agreements in
-10-
<PAGE>
reliance upon and in conformity with written information furnished to the
Company by NWI Group expressly for use therein. In no event, however shall the
liability of NWI Group exceed the net proceeds received by NWI Group from any
offering made in connection with a Registration Statement.
(c) Conduct of Indemnification Proceedings. Each indemnified party shall
--------------------------------------
give reasonably prompt notice to each indemnifying party of any action or
proceeding commenced against it in respect of which indemnity may be sought
hereunder, but failure to so notify an indemnifying party (i) shall not relieve
it from any liability which it may have under the indemnity agreement provided
in Section 6(a) or (b) above, unless and to the extent it did not otherwise
learn of such action and the lack of notice by the indemnified party materially
prejudices the indemnifying party or results in the forfeiture by the
indemnifying party of substantial rights and defenses, and (ii) shall not, in
any event, relieve the indemnifying party from any obligations to any
indemnified party other than the indemnification obligation provided under
Section 6(a) or (b) above. After receipt of such notice, the indemnifying
party shall be entitled to participate in and, to the extent it shall wish,
jointly with any other indemnifying party so notified, to assume the defense of
such action or proceeding at such indemnifying party's own expense with counsel
chosen by such indemnifying party and approved by the indemnified party, which
approval shall not be unreasonably withheld; provided, however, that, if the
-------- -------
defendants in any such action or proceeding include both the indemnified party
and the indemnifying party and the indemnified party reasonably determines,
upon advice of counsel, that a conflict of interest exists or that there may be
legal defenses available to it or other indemnified parties that are different
from or in addition to those available to the indemnifying party, then the
indemnified party shall be entitled to one separate counsel, the reasonable
fees and expenses of which shall be paid by the indemnifying party. If the
indemnifying party does not assume the defense of any such action or
proceeding, after having received the notice referred to in the first sentence
of this paragraph, the indemnifying party will pay the reasonable fees and
expenses of counsel (which shall be limited to a single law firm) for the
indemnified party. In such event, however, the indemnifying party will be
liable for any settlement effected without the written consent of such
indemnifying party. If the indemnifying party assumes the defense of any such
action or proceeding in accordance with this paragraph, such indemnifying party
shall not be liable for any fees and expenses of counsel for the indemnified
party incurred thereafter in connection with such action or proceeding, except
as set forth in the proviso in the second sentence of this Section 6(c).
(d) Contribution. In order to provide for just and equitable
------------
contribution in circumstances in which the indemnity agreement provided for in
this Section 6 is for any reason held to be unenforceable although applicable in
accordance with its terms, the Company and NWI Group shall contribute to the
aggregate losses, liabilities, claims, damages and expenses of the nature
contemplated by such indemnity agreement incurred by the Company and NWI Group,
in such proportion as is appropriate to reflect the relative fault of and
benefits to the Company on the one hand and NWI Group on the other, in
connection with the statements or omissions which resulted
-11-
<PAGE>
in such losses, claims, damages, liabilities or expenses, as well as any other
relevant equitable considerations. The relative benefits to the indemnifying
party and indemnified parties shall be determined by reference to, among other
things, the total proceeds received by the indemnified party and indemnified
parties in connection with the offering to which such losses, claims, damages,
liabilities or expenses relate. The relative fault of the indemnifying party and
indemnified parties shall be determined by reference to, among other things,
whether the action in question, including any untrue or alleged untrue statement
of a material fact or omission or alleged omission to state a material fact, has
been made by, or relates to information supplied by, such indemnifying party or
the indemnified parties, and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such action.
The parties hereto agree that it would not be just or equitable if
contribution pursuant to this Section 6(d) were determined by pro rata
allocation or by any other method of allocation which does not take account of
the equitable considerations referred to in the immediately preceding paragraph.
Notwithstanding the provisions of this Section 6(d), NWI Group shall not be
required to contribute any amount in excess of the amount by which the total
price at which the Piggyback Registrable Securities of NWI Group were offered to
the public exceeds the amount of any damages which NWI Group would otherwise
have been required to pay by reason of such untrue statement or omission.
Notwithstanding the foregoing, no Person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Securities Act)
shall be entitled to contribution from any Person who was not guilty of such
fraudulent misrepresentation. For purposes of this Section 6(d), each Person, if
any, who controls NWI Group within the meaning of Section 15 of the Securities
Act and partners, directors and officers of NWI Group shall have the same rights
to contribution as NWI Group, and each director of the Company, each officer of
the Company who signed the Registration Statement, and each Person, if any, who
controls the Company within the meaning of Section 15 of the Securities Act
shall have the same rights to contribution as the Company.
(e) In the event any sale pursuant to a Piggyback Registration is an
underwritten offering, then the Company agrees to indemnify and hold harmless
each underwriter of Piggyback Registerable Securities to the same extent and on
substantially similar terms as the Company's indemnification of NWI Group as set
forth in Section 6(a) above.
7. Rule 144 Sales.
--------------
(a) Compliance. The Company covenants that, so long as it is subject to
----------
the reporting requirements of the Exchange Act, it will file the reports
required to be filed by it under the Exchange Act so as to enable NWI Group to
sell Piggyback Registrable Securities pursuant to Rule 144 under the Securities
Act.
(b) Cooperation with NWI Group. In connection with any sale, transfer or
--------------------------
other disposition by NWI Group of any Piggyback Registrable Securities pursuant
to Rule 144 under the Securities Act, the Company shall cooperate with NWI
Group to facilitate the timely preparation and
-12-
<PAGE>
delivery of certificates representing Piggyback Registrable Securities to be
sold and not bearing any Securities Act legend, and enable certificates for such
Piggyback Registrable Securities to be for such number of shares as NWI Group
may reasonably request at least two business days prior to any sale of Piggyback
Registrable Securities.
8. Miscellaneous.
-------------
(a) Amendments and Waivers. The provisions of this Agreement, including
----------------------
the provisions of this sentence, may not be amended, modified, supplemented or
waived, nor may consent to departures therefrom be given, without the written
consent of the parties hereto.
(b) Notices. All notices and other communications provided for or
-------
permitted hereunder shall be made in writing by hand-delivery, registered
first-class mail, telex, telecopier, or any courier guaranteeing overnight
delivery, (i) if to NWI, at 1410 Donelson Pike, Suite A-5, Nashville, Tennessee
37217, Attention: John W. Nelley, Jr., (ii) if to Buckley & Co., at 1410
Donelson Pike, Suite A-5, Nashville, Tennessee 37217, Attention: Albert W.
Buckley, Jr., or (iii) if to the Company, at 4497 Park Drive, Norcross, Georgia
30093, Attention: A. R. Weeks, Jr.
All such notices and communications shall be deemed to have been duly
given: at the time delivered by hand, if personally delivered; five business
days after being deposited in the mail, postage prepaid, if mailed; when
answered back, if telexed; when receipt is acknowledged, if telecopied; or at
the time delivered if delivered by an air courier guaranteeing overnight
delivery.
(c) Successors and Assigns. This Agreement shall inure to the benefit of
----------------------
and be binding upon the successors, assigns and transferees of each of the
parties. If any successor, assignee or transferee of NWI or Buckley & Co.
shall acquire Piggyback Registrable Securities, in any manner, whether by
operation of law or otherwise, such Piggyback Registrable Securities shall be
held subject to all of the terms of this Agreement, and by taking and holding
such Piggyback Registrable Securities such Person shall be entitled to receive
the benefits hereof and shall be conclusively deemed to have agreed to be bound
by all of the terms and provisions hereof.
(d) Third Party Beneficiaries. There shall be no third party
-------------------------
beneficiaries or intended beneficiaries of this Agreement
(e) Counterparts. This Agreement may be executed in any number of
------------
counterparts and by the parties hereto in separate counterparts, each of which
when so executed shall be deemed to be an original and all of which taken
together shall constitute one and the same agreement.
(f) Headings. The headings in this Agreement are for convenience of
--------
reference only and shall not limit or otherwise affect the meaning hereof.
-13-
<PAGE>
(g) Governing Law. This Agreement shall be governed by and construed in
-------------
accordance with the laws of the State of Georgia without giving effect to the
conflicts of law provisions thereof.
(h) Specific Performance. The parties hereto acknowledge that there
--------------------
would be no adequate remedy at law if any party fails to perform any of its
obligations hereunder, and accordingly agree that each party, in addition to any
other remedy to which it may be entitled at law or in equity, shall be entitled
to compel specific performance of the obligations of any other party under this
Agreement in accordance with the terms and conditions of this Agreement in any
court of the United States or any State thereof having jurisdiction.
(i) Entire Agreement. This Agreement is intended by the parties as a
----------------
final expression of their agreement and intended to be a complete and exclusive
statement of the agreement and understanding of the parties hereto in respect
of the subject matter contained herein. This Agreement supersedes all prior
agreements and understandings between the parties with respect to such subject
matter.
-14-
<PAGE>
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first written above
WEEKS CORPORATION
By:
______________________________
Name:
Title:
NWI WAREHOUSE GROUP, L.P.
By: NWI X, L.P., its Sole General Partner
By: _________________________
John W. Nelley, Jr.,
General Partner
By: _________________________
Albert W. Buckley, Jr.,
General Partner
BUCKLEY & COMPANY REAL ESTATE, INC.
By: _______________________
Albert W. Buckley, Jr.,
President
-15-
<PAGE>
================================================================================
SECOND AMENDED AND RESTATED AGREEMENT OF LIMITED PARTNERSHIP
OF
WEEKS REALTY, L.P.
================================================================================
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
ARTICLE I
DEFINITIONS; ETC............................................................ 1
1.1 DEFINITIONS............................................................ 1
Accountants............................................................ 2
Acquisition Cost....................................................... 2
Act.................................................................... 2
Adjusted Capital Account Deficit....................................... 2
Administrative Expenses................................................ 2
Affiliate.............................................................. 2
Agreement.............................................................. 3
Articles of Incorporation.............................................. 3
Bankruptcy............................................................. 3
Capital Account........................................................ 3
Capital Contribution................................................... 4
Certificate............................................................ 4
Claim.................................................................. 4
Closing Price.......................................................... 4
Code................................................................... 4
Collateral............................................................. 4
Common Stock........................................................... 4
Completion of the Offering............................................. 4
Consent of the Limited Partners........................................ 4
Contributed Funds...................................................... 5
Control................................................................ 5
Current Per Share Market Price......................................... 5
Demand Notice.......................................................... 5
Depreciation........................................................... 5
Disclosure Schedule.................................................... 5
Entity................................................................. 5
Environmental Laws..................................................... 5
ERISA.................................................................. 6
Existing Property Entity Agreements.................................... 6
Existing Property Entities............................................. 6
Formation.............................................................. 6
Funding Date........................................................... 6
Funding Loan Proceeds.................................................. 6
Funding Loan(s)........................................................ 6
GAAP................................................................... 6
General Partner........................................................ 6
</TABLE>
-i-
<PAGE>
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
General Partner Loan................................................... 6
Gross Asset Value...................................................... 7
Hart Scott Act......................................................... 8
Immediate Family....................................................... 8
Incapacity" or "Incapacitated.......................................... 8
Indemnification Notice................................................. 8
Indemnitee............................................................. 8
Independent Directors.................................................. 8
Investment Entity...................................................... 8
Investment Entity Agreements........................................... 9
Investment Entity Interests............................................ 9
IRS.................................................................... 9
Land Entities.......................................................... 9
Lien................................................................... 9
Limited Partners....................................................... 9
Liquidating Trustee.................................................... 9
Major Decisions........................................................ 9
Majority-In-Interest of the Limited Partners........................... 9
Managers............................................................... 9
Minimum Gain Attributable to Partner Nonrecourse Debt.................. 9
Net Financing Proceeds................................................. 10
Net Income" or "Net Loss............................................... 10
Net Operating Cash Flow................................................ 10
Net Sale Proceeds...................................................... 11
Nonrecourse Deductions................................................. 11
Nonrecourse Liabilities................................................ 11
Notice of Breach....................................................... 11
Offering............................................................... 11
Partner Nonrecourse Deductions......................................... 11
Partners............................................................... 11
Partnership............................................................ 11
Partnership Interest................................................... 11
Partnership Minimum Gain............................................... 11
Partnership Record Date................................................ 12
Partnership Unit....................................................... 12
Percentage Interest.................................................... 12
Person................................................................. 12
Principal.............................................................. 12
Principal-Controlled Partnership....................................... 12
Prior Agreement........................................................ 12
</TABLE>
-ii-
<PAGE>
<TABLE>
<CAPTION>
Page
----
<S> <C>
Property............................................................... 12
Qualified Individual................................................... 12
Registration Statement................................................. 13
Regulations............................................................ 13
Regulatory Allocations................................................. 13
REIT................................................................... 13
REIT Expenses.......................................................... 13
REIT Requirements...................................................... 13
Requesting Party....................................................... 13
Required Funds......................................................... 13
Responding Party....................................................... 13
Restricted Period...................................................... 14
Rights................................................................. 14
SEC.................................................................... 14
Section 704(c) Tax Items............................................... 14
Tax Items.............................................................. 14
Trading Day............................................................ 14
Transfer............................................................... 14
Trust B................................................................ 14
Trust U/W.............................................................. 14
Underwriting Agreement................................................. 14
Weeks.................................................................. 14
Weeks LP Holdings, Inc................................................. 14
1.2 Exhibits, Etc.......................................................... 14
ARTICLE II
ORGANIZATION................................................................ 15
2.1 Formation.............................................................. 15
2.2 Name................................................................... 15
2.3 Character of the Business.............................................. 15
2.4 Location of the Principal Place of Business............................ 16
2.5 Registered Agent and Registered Office................................. 16
ARTICLE III
TERM........................................................................ 16
3.1 Commencement........................................................... 16
3.2 Dissolution............................................................ 16
</TABLE>
-iii-
<PAGE>
<TABLE>
<CAPTION>
Page
----
ARTICLE IV
<S> <C>
CONTRIBUTIONS TO CAPITAL.................................................... 17
4.1 General Partner Capital Contribution................................... 17
4.2 Limited Partner Initial Capital Contributions.......................... 19
4.3 Additional Funds....................................................... 19
4.4 Weeks Equity Compensation Programs..................................... 21
4.5 No Interest; No Return................................................. 22
ARTICLE V
CONDITIONS/CONCURRENT TRANSACTIONS.......................................... 22
5.1 General Partner Conditions............................................. 22
5.2 Limited Partner Conditions............................................. 22
5.3 Concurrent Transactions................................................ 22
ARTICLE VI
ALLOCATIONS AND OTHER TAX AND ACCOUNTING MATTERS............................ 22
6.1 Allocations............................................................ 22
6.2 Distributions.......................................................... 22
6.3 Books and Records...................................................... 23
6.4 Reports................................................................ 23
6.5 Tax Elections and Returns.............................................. 23
6.6 Tax Matters Partner.................................................... 23
6.7 Withholding............................................................ 25
6.8 Amounts Withheld....................................................... 26
ARTICLE VII
RIGHTS, DUTIES AND RESTRICTIONS OF THE GENERAL PARTNER...................... 26
7.1 Expenditures by Partnership............................................ 26
7.2 Powers and Duties of General Partner................................... 26
7.3 Major Decisions........................................................ 30
7.4 Actions with Respect to Certain Documents.............................. 30
7.5 General Partner Activities; Weeks Activities........................... 30
7.6 Proscriptions.......................................................... 31
7.7 Additional Partners.................................................... 32
7.8 Title Holder........................................................... 32
7.9 Compensation of the General Partner.................................... 32
7.10 Exculpation and Indemnification........................................ 32
7.11 Operation in Accordance with REIT Requirements......................... 35
7.12 Conflicts of Interest.................................................. 36
7.13 Weeks.................................................................. 36
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Page
----
ARTICLE VIII
<S> <C>
DISSOLUTION, LIQUIDATION AND WINDING-UP..................................... 37
8.1 Accounting............................................................. 37
8.2 Distribution on Dissolution............................................ 37
8.3 Sale of Partnership Assets............................................. 37
8.4 Distributions in Kind.................................................. 37
8.5 Documentation of Liquidation........................................... 37
8.6 Liability of the Liquidating Trustee................................... 37
8.7 Negative Capital Accounts.............................................. 37
ARTICLE IX
TRANSFER OF PARTNERSHIP INTERESTS........................................... 38
9.1 General Partner Transfer............................................... 38
9.2 Transfers by Limited Partners.......................................... 39
9.3 Issuance of Additional Partnership Interests........................... 40
9.4 Restrictions on Transfer............................................... 41
ARTICLE X
RIGHTS AND OBLIGATIONS OF THE LIMITED PARTNERS.............................. 42
10.1 No Participation in Management........................................ 42
10.2 Bankruptcy or Incapacity of a Limited Partner......................... 42
10.3 No Withdrawal......................................................... 42
10.4 Duties and Conflicts.................................................. 42
10.5 Meetings of the Partners.............................................. 43
ARTICLE XI
GRANT OF RIGHTS TO LIMITED PARTNERS......................................... 43
11.1 Grant of Rights....................................................... 43
ARTICLE XII
MANAGER REPRESENTATIONS, WARRANTIES AND GUARANTEE44
12.1 Representations and Warranties of the Managers........................ 44
12.2 Survival of Representations and Warranties............................ 44
12.3 Indemnification....................................................... 44
12.4 Limitations on Indemnification Obligations............................ 44
12.5 Security and Remedies................................................. 45
12.6 Non-Recourse.......................................................... 47
12.7 Restriction on Transfer............................................... 47
12.8 Build-to-Suit Guarantee............................................... 48
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Page
----
<S> <C>
12.9 Contribution Among Managers........................................... 48
ARTICLE XIII
GENERAL PARTNER REPRESENTATIONS AND WARRANTIES.............................. 48
ARTICLE XIV
ARBITRATION OF DISPUTES..................................................... 49
14.1 Arbitration........................................................... 49
14.2 Procedures............................................................ 49
14.3 Binding Character..................................................... 50
14.4 Exclusivity........................................................... 51
14.5 No Alteration of Agreement............................................ 51
ARTICLE XV
GENERAL PROVISIONS.......................................................... 51
15.1 Notices............................................................... 51
15.2 Successors............................................................ 51
15.3 Effect and Interpretation............................................. 51
15.4 Counterparts.......................................................... 51
15.5 Partners Not Agents................................................... 51
15.6 Entire Understanding, Etc............................................. 52
15.7 Amendments............................................................ 52
15.8 Severability.......................................................... 53
15.9 Trust Provision....................................................... 53
15.10 Pronouns and Headings................................................ 53
15.11 Assurances............................................................ 53
</TABLE>
-vi-
<PAGE>
EXHIBITS
- --------
A......Partners and Capital Contributions (at date of Prior Agreement)
A-1....Partners at the Date Hereof
B......Original Rights Terms
B-1....Amended Rights Terms
C......Disclosure Schedule
D......Existing Property Entities
E......Land Entities
F......Allocations
G......Current Guaranties, etc.
H......Underwriting Agreement
J......Forms of Estoppel Certificates
K-2....Certain Mortgages
K-3....Certain Mortgages
K-4....Insurance
L......Debt Repayments
M......Build-to-Suit Leases
O......Representations and Warranties
P......Commercial Arbitration Rules
Q......Complex Arbitration Rules
SCHEDULES
- ---------
1......Conversion Exercise Notice
2......Closing Notice
3......Registration Rights and Lock-Up Agreement
-vii-
<PAGE>
SECOND AMENDED AND RESTATED AGREEMENT OF LIMITED PARTNERSHIP
OF
WEEKS REALTY, L.P.
THIS SECOND AMENDED AND RESTATED AGREEMENT OF LIMITED PARTNERSHIP is made
and entered into as of the 30th day of October, 1996, by and among WEEKS
CORPORATION, a Georgia corporation, WEEKS GP HOLDINGS, INC., a Georgia
corporation, as the General Partner, and the Persons whose names are set forth
on Exhibit A-1 attached hereto, as the Limited Partners, together with any other
-----------
Persons who become Partners in the Partnership as provided herein.
RECITALS
Weeks Realty, L.P. (the "Partnership") is a Georgia limited partnership.
The Partnership's First Amended and Restated Agreement of Limited Partnership
(the "Partnership Agreement") was entered into as of August 24, 1994.
Weeks Corporation, a Georgia corporation ("Weeks"), is the General Partner
of the Partnership. The entire Partnership Interest of Weeks is held by Weeks as
a general partner of the Partnership.
The parties wish (a) to amend the Partnership Agreement to provide that the
General Partner will hold a 1% Partnership Interest as a general partner of the
Partnership, and that the remainder of Weeks' Partnership Units will be held by
Weeks as a Limited Partner, (b) to effect the transfer of all of Weeks'
Partnership Units to certain wholly owned subsidiaries of Weeks, (c) to
eliminate certain provisions of the Partnership Agreement that are no longer
applicable, and (d) to amend and restate the Partnership Agreement to reflect
such changes and to accommodate the fact that Weeks is no longer a Partner.
Weeks wishes to remain a party to the Partnership Agreement with respect to
those provisions thereof applicable to Weeks.
In consideration of the mutual covenants and agreements herein contained
and other good and valuable consideration, the receipt, adequacy and sufficiency
of which are hereby acknowledged, the parties hereto, intending legally to be
bound, hereby amend and restate the Partnership so that it is in its entirety as
set forth in this document.
ARTICLE I
---------
DEFINITIONS; ETC.
-----------------
1.1 DEFINITIONS. Except as otherwise herein expressly provided, the
-----------
following terms and phrases shall have the meanings set forth below:
<PAGE>
"Accountants" shall mean any firm or firms of independent certified
-----------
public accountants selected by the General Partner to provide accounting or
auditing services to the Partnership.
"Acquisition Cost" shall have the meaning set forth in Section 4.1
----------------
hereof.
" Act" shall mean the Georgia Revised Uniform Limited Partnership Act
----
(Official Code of Georgia Annotated, Sections 14-9-100 et seq.), as it may be
-- ---
amended from time to time. References to specific Sections of the Act refer to
the corresponding Sections of the Official Code of Georgia Annotated.
"Adjusted Capital Account Deficit" shall mean, with respect to any
--------------------------------
Partner, the deficit balance, if any, in such Partner's Capital Account as of
the end of any relevant fiscal year and after giving effect to the following
adjustments:
(a) credit to such Capital Account any amounts that such Partner is
obligated or treated as obligated to restore with respect to any deficit
balance in such Capital Account pursuant to Section 8.7 hereof or Section
1.704-1(b)(2)(ii)(c) of the Regulations, or is deemed to be obligated to
-
restore with respect to any deficit balance pursuant to the penultimate
sentences of Sections 1.704-2(g)(1) and 1.704-2(i)(5) of the Regulations;
and
(b) debit to such Capital Account the items described in Sections
1.704-1(b)(2)(ii)(d)(4), (5) and (6) of the Regulations.
- - - -
The foregoing definition of Adjusted Capital Account Deficit is intended to
comply with the requirements of the alternate test for economic effect contained
in Section 1.704-1(b)(2)(ii)(d) of the Regulations and shall be interpreted
-
consistently therewith.
"Administrative Expenses" shall mean (i) all administrative, operating
-----------------------
and other costs and expenses incurred by the Partnership, (ii) all
administrative, operating and other costs and expenses that are incurred by
Investment Entities and that are paid or assumed by the Partnership, (iii) all
administrative costs and expenses of the General Partner, Weeks LP Holdings and
Weeks (including, without limitation, salaries paid to officers and other
employees of the General Partner, Weeks LP Holdings and Weeks and accounting and
legal expenses) that are incurred by the General Partner, Weeks LP Holdings and
Weeks, and (iv) to the extent not included in clause (iii) above, REIT Expenses.
"Affiliate" shall mean, with respect to any Partner (or as to any
---------
other Person the affiliates of which are relevant for purposes of any of the
provisions of this Agreement), (i) any member of the Immediate Family of such
Partner; (ii) any trustee or beneficiary of such Partner; (iii) any legal
representative, successor, or assignee of any Person referred to in the
preceding clauses (i) and (ii); (iv) any trustee for the benefit of any Person
referred to in the preceding clauses (i) through (iii); or (v) any Entity that,
directly or indirectly through one or more
-2-
<PAGE>
intermediaries, Controls, is Controlled by, or is under common Control with,
such Partner or any Person referred to in the preceding clauses (i) through
(iv).
"Agreement" shall mean this Second Amended and Restated Agreement of
---------
Limited Partnership, as originally executed and as amended, modified,
supplemented or restated from time to time, as the context requires.
"Articles of Incorporation" means the Amended and Restated Articles of
-------------------------
Incorporation of Weeks filed with the Georgia Secretary of State on August 24,
1994, as amended or restated from time to time.
"Bankruptcy" shall mean, with respect to any Partner, (i) the
----------
commencement by such Partner of any proceeding seeking relief under any
provision or chapter of the federal Bankruptcy Code or any other federal or
state law relating to insolvency, bankruptcy or reorganization, (ii) an
adjudication that such Partner is insolvent or bankrupt, (iii) the entry of an
order for relief under the federal Bankruptcy Code with respect to such Partner,
(iv) the filing of any such petition or the commencement of any such case or
proceeding against such Partner, unless such petition and the case or proceeding
initiated thereby are dismissed within one hundred twenty (120) days from the
date of such filing, (v) the filing of an answer by such Partner admitting the
allegations of any such petition, (vi) the appointment of a trustee, receiver or
custodian for all or substantially all of the assets of such Partner unless such
appointment is vacated or dismissed within one hundred twenty (120) days from
the date of such appointment but not less than five (5) days before the proposed
sale of any assets of such Partner, (vii) the insolvency of such Partner or the
execution by such Partner of a general assignment for the benefit of creditors,
(viii) the convening by such Partner of a meeting of its creditors, or any class
thereof, for purposes of effecting a moratorium upon or extension or composition
of its debts, (ix) the failure of such Partner to pay its debts as they mature,
(x) the levy, attachment, execution or other seizure of substantially all of the
assets of such Partner where such seizure is not discharged within thirty (30)
days thereafter, or (xi) the admission by such Partner in writing of its
inability to pay its debts as they mature or that it is generally not paying its
debts as they become due.
"Capital Account" shall mean, with respect to any Partner, the
---------------
separate "book" account that the Partnership shall establish and maintain for
such Partner in accordance with Section 704(b) of the Code and Section 1.704-
1(b)(2)(iv) of the Regulations and such other provisions of Section 1.704-1(b)
of the Regulations that must be complied with in order for the Capital Accounts
to be determined in accordance with the provisions of said Regulations. In
furtherance of the foregoing, the Capital Accounts shall be maintained in
compliance with Section 1.704-1(b)(2)(iv) of the Regulations, and the provisions
hereof shall be interpreted and applied in a manner consistent therewith. In the
event that all or any part of a Partnership Interest is Transferred in
accordance with the terms of this Agreement, the Capital Account, at the time of
the Transfer, of the transferor attributable to the Transferred Partnership
Interest shall carry over to the transferee.
-3-
<PAGE>
"Capital Contribution" shall mean, with respect to any Partner, the
--------------------
amount of money and the initial Gross Asset Value of any property other than
money contributed or deemed contributed to the Partnership with respect to the
Partnership Interest held by such Partner (net of liabilities to which such
property is subject).
"Certificate" shall mean the Certificate of Limited Partnership
-----------
forming the Partnership, as filed with the Georgia Secretary of State on June 2,
1994, as it may be amended from time to time in accordance with the terms of
this Agreement and the Act.
"Claim" shall have the meaning set forth in Section 12.4 hereof.
-----
"Closing Price" on any date shall mean with respect to the Common
-------------
Stock, the last sale price, regular way, or, in case no such sale takes place on
such day, the average of the closing bid and asked prices, regular way, in
either case as reported in the principal consolidated transaction reporting
system with respect to securities listed or admitted to trading on the New York
Stock Exchange or, if the Common Stock is not listed or admitted to trading on
the New York Stock Exchange, as reported in the principal consolidated
transaction reporting system with respect to securities listed on the principal
national securities exchange on which the Common Stock is listed or admitted to
trading or, if the Common Stock is not listed or admitted to trading on any
national securities exchange, the last quoted price, or if not so quoted, the
average of the high bid and low asked prices in the over-the-counter market, as
reported by the National Association of Securities Dealers, Inc. Automated
Quotations System or, if such system is no longer in use, the principal other
automated quotations system that may then be in use, or if the Common Stock is
not quoted by any such organization, the average of the closing bid and asked
prices as furnished by a professional market maker making a market in the Common
Stock that is selected by the Board of Directors of Weeks, or, if there is no
such professional market maker, such amount as an independent investment banking
firm selected by the Board of Directors of Weeks determines to be the value of a
share of Common Stock.
"Code" shall mean the Internal Revenue Code of 1986, as amended.
----
"Collateral" shall have the meaning set forth in Section 12.5 hereof.
----------
"Common Stock" shall mean the shares of the common stock, par value
------------
$.01 per share, of Weeks.
"Completion of the Offering" shall mean the closing of the first sale
--------------------------
of Common Stock in the Offering.
"Consent of the Limited Partners" means the consent of a Majority-In-
-------------------------------
Interest of the Limited Partners, provided in writing or pursuant to a vote at a
meeting, or deemed to be given as provided herein. In soliciting the Consent of
the Limited Partners, the General Partner may require a response within a
reasonable specified time, but not less than fifteen (15) days, and
-4-
<PAGE>
failure of a Limited Partner to respond in such time period shall constitute the
consent of such Limited Partner.
"Contributed Funds" shall have the meaning set forth in Section
-----------------
4.3(b)(ii) hereof.
"Control" shall mean the ability, whether by the direct or indirect
-------
ownership of shares or other equity interests, by contract or otherwise, to
select a majority of the directors of a corporation, to select the managing
partner of a partnership, or otherwise to select, or have the power to remove
and then select, a majority of those persons exercising governing authority over
an Entity. In the case of a limited partnership, the sole general partner, each
of the general partners that has equal management control and authority, or the
designated managing general partner or managing general partners thereof shall
be deemed to have control of such partnership. In the case of a trust, any
trustee thereof or any Person having the right to select any such trustee shall
be deemed to have control of such trust.
"Current Per Share Market Price" on any date shall mean the average
------------------------------
of the Closing Price for the ten (10) consecutive Trading Days ending on such
date.
"Demand Notice" shall have the meaning set forth in Section 14.2
-------------
hereof.
"Depreciation" shall mean, with respect to any asset of the
------------
Partnership for any fiscal year or other period, the depreciation, depletion or
amortization, as the case may be, allowed or allowable for federal income tax
purposes in respect of such asset for such fiscal year or other period;
provided, however, that if there is a difference between the Gross Asset Value
and the adjusted tax basis of such asset, Depreciation shall mean "book
depreciation, depletion, or amortization" as determined under Section 1.704-
1(b)(2)(iv)(g)(3) of the Regulations.
- -
"Disclosure Schedule" shall mean that certain Disclosure Schedule
-------------------
attached as Exhibit C, which contains the exceptions to the representations and
---------
warranties made pursuant to Article XII hereof. For the convenience of the
parties, each exception noted in the Disclosure Schedule shall be numbered to
correspond to the applicable subsection of Exhibit O to which it refers;
---------
provided, however, that, where disclosure in the Disclosure Schedule of a matter
in response to one subsection is made as to the nature or character of such
matter, the failure to otherwise set forth such matter elsewhere in the
Disclosure Schedule shall not give rise to any claim or liability so long as any
such disclosure sufficiently describes its applicability to such matter and
indicates its applicability to the other subsection.
"Entity" shall mean any general partnership, limited partnership,
------
corporation, limited liability company, joint venture, trust, business trust,
cooperative or association.
"Environmental Laws" means the Resource Conservation and Recovery Act
------------------
(42 U.S.C. (S) 6901 et seq.), as amended by the Hazardous and Solid Waste
------
Amendments of 1984; the Comprehensive Environmental Response, Compensation and
Liability Act (42 U.S.C. (S) 9601 et
--
-5-
<PAGE>
seq.), as amended by the Superfund---Amendments and Reauthorization Act of 1986;
the Hazardous Materials Transportation Act (49 U.S.C. (S) 1801 et seq.); the
------
Toxic Substance Control Act (15 U.S.C. (S) 2601 et seq.); Clean Air Act (42
------
U.S.C. (S) 9402 et seq.); the Clean Water Act (33 U.S.C. (S) 1251 et seq.); the
------ ------
federal Insecticide, Fungicide and Rodenticide Act (7 U.S.C. (S) 136 et seq.);
------
the Occupational Safety and Health Act (29 U.S.C. (S) 651 et seq.) and all
------
applicable federal, state and local environmental laws, including obligations
under the common law, ordinances, rules and regulations, as any of the foregoing
may have been amended, supplemented or supplanted prior to the date hereof,
relating to regulation or control of hazardous, toxic or dangerous substances or
wastes, or their handling, storage or disposal or to environmental health and
safety.
"ERISA" shall mean the Employee Retirement Income Security Act of
-----
1974, as amended from time to time (or any corresponding provisions of
succeeding laws).
"Existing Property Entity Agreements" shall mean the agreements or
-----------------------------------
other governing instruments under which the Existing Property Entities are
constituted, as amended from time to time.
"Existing Property Entities" shall mean those Entities listed on the
--------------------------
attached Exhibit D.
---------
"Formation" shall have the meaning set forth in the prospectus
---------
included in the Registration Statement.
"Funding Date" shall have the meaning set forth in Section 4.3(a)
------------
hereof.
"Funding Loan Proceeds" shall mean the net cash proceeds received by
---------------------
Weeks, the General Partner or Weeks LP Holdings in connection with any Funding
Loan, after deduction of all costs and expenses incurred by Weeks, the General
Partner or Weeks LP Holdings in connection with such Funding Loan, which shall
be deemed to have been incurred directly by the Partnership.
"Funding Loan(s)" shall mean any borrowing or refinancing of
---------------
borrowings by or on behalf of Weeks, the General Partner or Weeks LP Holdings
from any lender for the purpose of advancing the Funding Loan Proceeds to the
Partnership as a loan pursuant to Section 4.3(b) hereof.
"GAAP" means generally accepted accounting principles.
----
"General Partner" shall mean Weeks GP Holdings, Inc., a Georgia
---------------
corporation, its duly admitted successors and assigns and any other Person who
is a general partner of the Partnership at the time of reference thereto.
-6-
<PAGE>
"General Partner Loan" shall have the meaning set forth in Section
--------------------
4.3(b) hereof.
"Gross Asset Value" shall mean, with respect to any asset of the
-----------------
Partnership, such asset's adjusted basis for federal income tax purposes, except
as follows:
(a) the initial Gross Asset Value of any asset contributed by a
Partner to the Partnership shall be (i) in the case of any asset described
on the attached Exhibit A, the gross fair market value ascribed thereto on
---------
such Exhibit and (ii) in the case of any other asset hereafter contributed
by a Partner, the gross fair market value of such asset as determined
hereunder;
(b) if the General Partner reasonably determines that an adjustment
is necessary or appropriate to reflect the relative economic interests of
the Partners, the Gross Asset Values of all Partnership assets shall be
adjusted to equal their respective gross fair market values, as reasonably
determined by the General Partner, as of the following times:
(i) a Capital Contribution (other than a de minimis Capital
----------
Contribution) to the Partnership by a new or existing Limited Partner
as consideration for a Partnership Interest;
(ii) the distribution by the Partnership to a Partner of more
than a de minimis amount of Partnership property as consideration for
----------
the redemption of a Partnership Interest; and
(iii) the liquidation of the Partnership within the meaning of
Section 1.704-1(b)(2)(ii)(g) of the Regulations;
-
(c) the Gross Asset Values of Partnership assets distributed to any
Partner shall be the gross fair market values of such assets (taking
Section 7701(g) of the Code into account) as reasonably determined by the
General Partner as of the date of distribution; and
(d) the Gross Asset Values of Partnership assets shall be increased
(or decreased) to reflect any adjustments to the adjusted basis of such
assets pursuant to Sections 734(b) or 743(b) of the Code, but only to the
extent that such adjustments are taken into account in determining Capital
Accounts pursuant to Section 1.704-1(b)(2)(iv)(m) of the Regulations;
-
provided, however, that Gross Asset Values shall not be adjusted pursuant
to this paragraph to the extent that the General Partner reasonably
determines that an adjustment pursuant to paragraph (b) above is necessary
or appropriate in connection with a transaction that would otherwise result
in an adjustment pursuant to this paragraph (d).
-7-
<PAGE>
At all times, Gross Asset Values shall be adjusted by any Depreciation taken
into account with respect to the Partnership's assets for purposes of computing
Net Income and Net Loss. Any adjustment to the Gross Asset Values of Partnership
property shall require an adjustment to the Partners' Capital Accounts; as for
the manner in which such adjustments are allocated to the Capital Accounts, see
paragraph (c) of the definition of Net Income and Net Loss in the case of
adjustment by Depreciation, and paragraph (e) of said definition in all other
cases.
"Hart Scott Act" shall mean the Hart-Scott-Rodino Antitrust
--------------
Improvements Act of 1976, as amended.
"Immediate Family" shall mean, with respect to any Person, such
----------------
Person's spouse, parents, parents-in-law, descendants, nephews, nieces,
brothers, sisters, brothers-in-law, sisters-in-law and children-in-law.
"Incapacity" or "Incapacitated" means, (i) as to any individual
---------- -------------
Partner, death, total physical disability or entry by a court of competent
jurisdiction adjudicating him incompetent to manage his person or his estate;
(ii) as to any corporation that is a Partner, the filing of a certificate of
dissolution, or its equivalent, for the corporation or the revocation of its
charter; (iii) as to any partnership that is a Partner, the dissolution and
commencement of winding up of the partnership; (iv) as to any estate that is a
Partner, the distribution by the fiduciary of the estate's entire interest in
the Partnership; or (v) as to any Partner that is a trust or is acting as a
Partner by virtue of being a trustee of a trust that is a Partner, the
termination of the trust (but not the substitution of a new trustee).
"Indemnification Notice" shall have the meaning set forth in Section
----------------------
12.5 hereof.
"Indemnitee" means (i) any Person made a party to a proceeding by
----------
reason of (A) his status as the General Partner, (B) his status as a director,
officer or Affiliate of the Partnership, the General Partner or Weeks or (C) his
liability under the guaranties and other instruments set forth on Exhibit G
---------
attached hereto, (ii) any Manager made a party to a proceeding by reason of his
liability, pursuant to a loan guarantee, capital contribution obligation, or
otherwise, for any indebtedness of the Partnership or of any Investment Entity
(including, without limitation, any indebtedness that the Partnership or
Investment Entity has assumed or taken subject to), (iii) Weeks, and (iv) such
other Persons as the General Partner may designate from time to time (whether
before or after the event giving rise to potential liability), in its sole and
absolute discretion.
"Independent Directors" means a majority of those directors of Weeks,
---------------------
each of whom is not an employee of Weeks or of an Entity controlled by Weeks, an
Affiliate of an employee of Weeks, or an Affiliate of A. Ray Weeks, Jr.
-8-
<PAGE>
"Investment Entity" shall mean and include the Existing Property
-----------------
Entities and any other Entity in which the Partnership at any time has any
interest, direct or indirect, as an investment, either as an equity owner, a
creditor, or otherwise.
"Investment Entity Agreements" shall mean and include the Existing
----------------------------
Property Entity Agreements and any partnership agreement, certificate or
articles of incorporation, bylaws, trust agreement, or other governing
agreement, instrument, or document (as any of the foregoing may be amended,
restated, modified or supplemented from time to time) under which an Investment
Entity is constituted or by which it is governed.
"Investment Entity Interests" shall mean the interest of the
---------------------------
Partnership as a shareholder, partner, other equity participant, debt holder or
otherwise in any Investment Entity.
"IRS" shall mean the Internal Revenue Service, which administers the
---
internal revenue laws of the United States.
"Land Entities" shall mean those Existing Property Entities listed on
-------------
Exhibit E hereto.
- ---------
"Lien" shall mean any liens, security interests, mortgages, deeds of
----
trust, charges, claims, encumbrances, pledges, options, rights of first offer or
first refusal and any other rights or interests of others of any kind or nature,
actual or contingent, or other similar encumbrances of any nature whatsoever.
"Limited Partners" shall mean those Persons named as Limited Partners
----------------
in Exhibit A-1 attached hereto, as such Exhibit may be amended from time to
-----------
time, their duly admitted successors and assigns, and any Persons admitted as
Limited Partners pursuant to Section 9.3.
"Liquidating Trustee" shall mean any Person that is selected as the
-------------------
Liquidating Trustee hereunder by the General Partner, which Person may include
the General Partner or an Affiliate of the General Partner or of Weeks, provided
such Liquidating Trustee agrees in writing to be bound by the terms of this
Agreement. Any Liquidating Trustee selected by the General Partner shall have
such powers as are granted by the General Partner in connection with the
dissolution, liquidation and/or winding-up of the Partnership.
"Major Decisions" shall have the meaning set forth in Section 7.3
---------------
hereof.
"Majority-In-Interest of the Limited Partners" shall mean Limited
--------------------------------------------
Partner(s) (other than Weeks LP Holdings and other than the General Partner in
its capacity, if any, as a Limited Partner) who hold in the aggregate more than
fifty percent (50%) of the Percentage Interests then allocable to and held by
the Limited Partners (other than Weeks LP Holdings and other than the General
Partner in its capacity, if any, as a Limited Partner), as a class.
-9-
<PAGE>
"Managers" shall mean A. Ray Weeks, Jr., Thomas D. Senkbeil and
--------
Forrest W. Robinson.
"Minimum Gain Attributable to Partner Nonrecourse Debt" shall mean
-----------------------------------------------------
"partner nonrecourse debt minimum gain" as determined in accordance with
Regulation Section 1.704-2(i)(2).
"Net Financing Proceeds" shall mean the cash proceeds received by the
----------------------
Partnership in connection with any borrowing or refinancing of borrowing by or
on behalf of the Partnership or by or on behalf of any Investment Entity
(whether or not secured), after deduction of all costs and expenses incurred by
the Partnership or the Investment Entity in connection with such borrowing, and
after deduction of that portion of such proceeds used to repay any other
indebtedness of the Partnership or Investment Entities, or any interest or
premium thereon.
"Net Income" or "Net Loss" shall mean, for each fiscal year or other
---------- --------
applicable period, an amount equal to the Partnership's net income or loss for
such year or period as determined for federal income tax purposes, determined in
accordance with Section 703(a) of the Code (for this purpose, all items of
income, gain, loss or deduction required to be stated separately pursuant to
Section 703(a) of the Code shall be included in taxable income or loss), with
the following adjustments: (a) by including as an item of gross income any tax-
exempt income received by the Partnership; (b) by treating as a deductible
expense any expenditure of the Partnership described in Section 705(a)(2)(B) of
the Code (including amounts paid or incurred to organize the Partnership (unless
an election is made pursuant to Code Section 709(b)) or to promote the sale of
interests in the Partnership and by treating deductions for any losses incurred
in connection with the sale or exchange of Partnership property disallowed
pursuant to Section 267(a)(1) or Section 707(b) of the Code as expenditures
described in Section 705(a)(2)(B) of the Code); (c) in lieu of depreciation,
depletion, amortization, and other cost recovery deductions taken into account
in computing total income or loss, there shall be taken into account
Depreciation; (d) gain or loss resulting from any disposition of Partnership
property with respect to which gain or loss is recognized for federal income tax
purposes shall be computed by reference to the Gross Asset Value of such
property rather than its adjusted tax basis; (e) in the event of an adjustment
of the Gross Asset Value of any Partnership asset pursuant to paragraph (b) or
(d) of the definition of Gross Asset Value, the amount of such adjustment shall
be taken into account as gain (if the adjustment increases the Gross Asset Value
of such asset) or loss (if the adjustment decreases the Gross Asset Value of
such asset) from the disposition of the asset and shall be taken into account
for purposes of computing Net Income or Net Loss; and (f) any items specially
allocated under paragraph 2 of Exhibit F shall not be taken into account.
---------
"Net Operating Cash Flow" shall mean, with respect to any fiscal
-----------------------
period of the Partnership, the excess, if any, of "Receipts" over
"Expenditures." For purposes hereof, the term "Receipts" means the sum of all
cash receipts of the Partnership from all sources for such period, including Net
Sale Proceeds and Net Financing Proceeds but excluding Capital Contributions,
-10-
<PAGE>
and any amounts held as reserves as of the last day of such period that the
General Partner in its sole and absolute discretion deems to be in excess of
necessary reserves as determined below. The term "Expenditures" means the sum
of (a) all cash costs and expenses of the Partnership for such period, (b) the
amount of all payments of principal and interest on account of any indebtedness
of the Partnership including payments of principal and interest on account of
General Partner Loans, or amounts due on such indebtedness during such period,
and (c) such additional cash reserves as of the last day of such period as the
General Partner in its sole and absolute discretion deems necessary for any
capital or operating expenditure permitted hereunder, including, without
limitation, reserves for future acquisitions, developments, and other
investments.
"Net Sale Proceeds" means the cash proceeds received by the
-----------------
Partnership in connection with a sale of any asset by or on behalf of the
Partnership or by or on behalf of an Investment Entity after deduction of any
costs or expenses incurred by the Partnership or an Investment Entity, or
payable specifically out of the proceeds of such sale (including, without
limitation, any repayment of any indebtedness required to be repaid as a result
of such sale or that the General Partner elects to repay out of the proceeds of
such sale, together with accrued interest and premium, if any, thereon and any
sales commissions or other costs and expenses due and payable to any Person in
connection with a sale, including to a Partner or its Affiliates).
"Nonrecourse Deductions" shall have the meaning set forth in
----------------------
Sections 1.704-2(b)(1) and (c) of the Regulations.
"Nonrecourse Liabilities" shall have the meaning set forth in Section
-----------------------
1.704-2(b)(3) of the Regulations.
"Notice of Breach" shall have the meaning set forth in Section 12.2
----------------
hereof.
"Offering" shall mean the initial public offering of Common Stock as
--------
contemplated by the Registration Statement.
"Partner Nonrecourse Deductions" shall have the meaning set forth in
------------------------------
Section 1.704-2(i)(2) of the Regulations.
"Partners" shall mean the General Partner and the Limited Partners,
--------
their duly admitted successors and assigns and any Person who is a partner of
the Partnership at the time of reference thereto.
"Partnership" shall mean the limited partnership hereby constituted,
-----------
as such limited partnership may from time to time be constituted.
"Partnership Interest" shall mean the ownership interest of a Partner
--------------------
in the Partnership from time to time, including each Partner's Percentage
Interest and such Partner's
-11-
<PAGE>
Capital Account. Wherever in this Agreement reference is made to a particular
Partner's Partnership Interest, it shall be deemed to refer to such Partner's
Percentage Interest and shall include the proportionate amount of such Partner's
other interests in the Partnership that are attributable to or based upon the
Partner's Partnership Interest.
"Partnership Minimum Gain" shall have the meaning set forth in
------------------------
Section 1.704-2(b)(2) of the Regulations.
"Partnership Record Date" shall mean the record date established by
-----------------------
the General Partner for the distribution of Net Operating Cash Flow pursuant to
Section 6.2 hereof, which record date shall be the same as the record date
established by Weeks for a distribution to its shareholders of some or all of
the portion of such distribution of Net Operating Cash Flow that is distributed
from the Partnership to the General Partner and to Weeks LP Holdings and then
from the General Partner and Weeks LP Holdings to Weeks.
"Partnership Unit" shall mean a share of the Partnership Interests of
----------------
all Partners. The allocation of Partnership Units to each Partner, after giving
effect to (a) Weeks' holding part of its Partnership Units as the general
partner of the Partnership and part of its Partnership Units as a Limited
Partner, and (b) the transfer by Weeks of all of its Partnership Units to the
General Partner and to Weeks LP Holdings as contemplated hereby (collectively,
the "Reorganization"), and the total number of Units allocated to all of the
Partners, are as set forth on the attached Exhibit A-1. The ownership of
-----------
Partnership Units may be evidenced by such form of certificate as the General
Partner approves from time to time, and any such certificate shall bear a legend
that shall state that the Partnership Units represented thereby are subject to
the provisions hereof, shall refer specifically to the transfer restrictions
contained herein and (if the holder thereof is a Manager) to the provision of
Article XII hereof, and shall otherwise have such form and content as the
General Partner shall determine. At the date hereof, each Partnership Unit
represents a .000000097% Percentage Interest.
"Percentage Interest" shall mean, with respect to any Partner, the
-------------------
percentage determined by dividing the number of Partnership Units held by such
Partner by the total number of Partnership Units outstanding. The Percentage
Interest of each Partner after giving effect to the Reorganization is set forth
opposite such Partner's name on the attached Exhibit A-1.
-----------
"Person" shall mean any individual or Entity.
------
"Principal" means any and each of John P. Weeks, Patricia L. Weeks,
---------
Deborah Weeks Felker, Marsha L. Weeks, Harry T. Weeks, Forrest W. Robinson,
Louis Robinson, Trust B, and Trust U/W in his, her or its respective capacity as
a Limited Partner.
"Principal-Controlled Partnership" means any of those certain general
--------------------------------
partnerships that, on August 24, 1994, had as its sole partners a Principal and
a corporation that is wholly owned by such Principal and that became a Limited
Partner at that date.
-12-
<PAGE>
"Prior Agreement" means the First Amended and Restated Agreement of
---------------
Limited Partnership of Weeks Realty, L.P., dated as of August 24, 1994, which
Prior Agreement is amended and restated in its entirety by this Agreement as of
the date hereof.
"Property" shall mean any property, of any nature whatsoever, real,
--------
personal or mixed, tangible or intangible, in which the Partnership, directly or
indirectly, acquires an interest.
"Qualified Individual" shall have the meaning set forth in Section
--------------------
14.2 hereof.
"Registration Statement" shall mean the Registration Statement No.
----------------------
33-80314 (including the prospectus contained therein) heretofore filed by Weeks
with the SEC, and any amendments at any time made thereto (other than post-
effective amendments), pursuant to which Weeks offered and sold certain Common
Stock.
"Regulations" shall mean the Income Tax Regulations promulgated under
-----------
the Code, as such regulations may be amended from time to time (including
corresponding provisions of succeeding regulations).
"Regulatory Allocations" shall have the meaning set forth in Exhibit
---------------------- -------
F.
- -
"REIT" shall mean a real estate investment trust as defined in
----
Section 856 of the Code.
"REIT Expenses" shall mean (i) costs and expenses relating to the
-------------
formation, operation and continuity of existence of Weeks, the General Partner,
and Weeks LP Holdings, including, without limitation, taxes (including, without
limitation, franchise taxes and local income taxes), fees and assessments
associated therewith, any and all costs, expenses or fees payable to directors
of Weeks, the General Partner, and Weeks LP Holdings, any and all salaries and
other benefits paid to officers and other employees of Weeks, the General
Partner, and Weeks LP Holdings, and legal and accounting costs and expenses,
(ii) costs and expenses relating to any offer or registration of securities by
Weeks and all statements, reports, fees and expenses incidental thereto,
including underwriting discounts and selling commissions applicable to any such
offer of securities and any costs and expenses associated with any claims made
by any holder of such securities or any underwriters or placement agents
thereof, (iii) costs and expenses associated with the preparation and filing of
any periodic reports by Weeks, the General Partner, and Weeks LP Holdings, under
federal, state or local laws or regulations, including filings with the SEC,
(iv) costs and expenses associated with compliance by Weeks, the General
Partner, and Weeks LP Holdings, with laws, rules and regulations promulgated by
any regulatory body, including the SEC, (v) the purchase price paid by Weeks in
connection with any purchase by it of any of its securities from the holders of
such securities, (vi) all other operating or administrative costs of Weeks, the
General Partner, and Weeks LP Holdings, and (vii) all expenses of Entities other
than the General Partner and Weeks LP Holdings in which Weeks is permitted to
have an interest pursuant to Section 7.5 hereof.
-13-
<PAGE>
"REIT Requirements" shall have the meaning set forth in Section 6.2
-----------------
hereof.
"Requesting Party" shall have the meaning set forth in Section 14.2
----------------
hereof.
"Required Funds" shall have the meaning set forth in Section 4.3
--------------
hereof.
"Responding Party" shall have the meaning set forth in Section 14.2
----------------
hereof.
"Restricted Period" shall mean, with respect to any Limited Partner,
-----------------
the period of time during which, under the terms of Article XI hereof and
Exhibit B hereto, such Limited Partner is not permitted to exercise the Rights
- ---------
held by such Limited Partner.
"Rights" shall have the meaning set forth in Section 11.1 hereof.
------
"SEC" shall mean the United States Securities and Exchange
---
Commission.
"Section 704(c) Tax Items" shall have the meaning set forth in
------------------------
Exhibit F.
- ---------
"Tax Items" shall have the meaning set forth in Exhibit F.
--------- ---------
"Trading Day" shall mean a day on which the principal national
-----------
securities exchange on which the Common Stock is listed or admitted to trading
is open for the transaction of business or, if the Common Stock is not listed or
admitted to trading on any national securities exchange, shall mean any day
other than a Saturday, a Sunday or a day on which banking institutions in the
State of New York are authorized or obligated by law or executive order to
close.
"Transfer" as a noun, shall mean any sale, assignment, conveyance,
--------
pledge, hypothecation, gift, encumbrance or other Transfer, and as a verb, shall
mean to sell, assign, convey, pledge, hypothecate, give, encumber or otherwise
Transfer.
"Trust B" shall mean Harry T. Weeks, A. Ray Weeks, Jr., and Martha
-------
Patterson Weeks, as Trustees under that certain Trust Agreement, dated October
27, 1976, as amended, for the benefit of Marsha L. Weeks, A. Ray Weeks, Jr.,
Deborah Weeks Felker, Patricia L. Weeks, and John Phillip Weeks.
"Trust U/W" shall mean A. Ray Weeks, Jr., as Trustee under the Last
---------
Will and Testament of Alvin Ray Weeks, A. Ray Weeks, Jr., Deborah Weeks Felker,
Patricia L. Weeks, and John Phillip Weeks.
"Underwriting Agreement" shall mean that certain Underwriting
----------------------
Agreement among the General Partner, the Partnership, Goldman, Sachs & Co., and
the other parties named therein, substantially in the form attached hereto as
Exhibit H [ALT: DATED AUGUST [24], 1996].
- ---------
-14-
<PAGE>
"Weeks" shall have the meaning set forth in the Recitals.
-----
"Weeks LP Holdings" shall mean Weeks LP Holdings, Inc., a Georgia
-----------------
corporation and a wholly owned subsidiary of Weeks.
1.2 EXHIBITS, ETC. Except as provided below, references to an
--------------
"Exhibit" or to a "Schedule" are, unless otherwise specified, to one of the
Exhibits or Schedules attached to this Agreement, and references to an "Article"
or a "Section" are, unless otherwise specified, to one of the Articles or
Sections of this Agreement. Each Exhibit and Schedule attached hereto and
referred to herein is hereby incorporated herein by reference. All of the
Exhibits and Schedules attached to the Prior Agreement are deemed to be
attached hereto and to be Schedules and Exhibits hereto. In addition, Exhibit
-------
A-1 and Exhibit B-1 are attached hereto and incorporated herein.
- --- -----------
ARTICLE II
----------
ORGANIZATION
------------
2.1 FORMATION. The Partnership is a limited partnership formed by
---------
the filing of the Certificate and organized pursuant to the provisions of the
Act and upon the terms and conditions set forth in the Prior Agreement. The
Partners hereby amend and restate the Prior Agreement in its entirety as of the
date hereof. The Partners agree that the rights and liabilities of the Partners
shall be as provided in the Act except as otherwise herein expressly provided.
The General Partner shall cause any such notices, instruments, documents, and
certificates (including, without limitation, amendments to the Certificate) as
may be required by applicable law, and that may be necessary to enable the
Partnership to conduct its business, and to own its properties, under the
Partnership name, and to establish and maintain its existence as a limited
partnership, to be filed or recorded in all appropriate public offices. The
Partnership Interest of each Partner shall be personal property for all
purposes.
2.2 NAME. The business of the Partnership shall be conducted under
----
the name Weeks Realty, L.P. or such other name as the General Partner may
select, and all transactions of the Partnership, to the extent permitted by
applicable law, shall be carried on and completed in such name.
2.3 CHARACTER OF THE BUSINESS. The purpose of the Partnership shall
-------------------------
be to conduct any business that may be lawfully conducted by a limited
partnership organized pursuant to the Act; provided, however, that such business
shall be limited to and conducted in such a manner as to permit Weeks at all
times to be classified as a REIT, unless Weeks elects not to qualify as a REIT,
or ceases to qualify as a REIT for reasons other than the conduct of the
business of the Partnership. Without limiting the generality of the foregoing,
it shall be within the purpose of the Partnership (i) to acquire, hold, own,
develop, construct, improve, maintain, operate, sell, lease, Transfer, encumber,
finance, convey, exchange, and otherwise dispose of or
-15-
<PAGE>
deal with Properties; (ii) to exercise all of the powers of a shareholder,
partner or other equity or debt owner or participant in Investment Entities;
(iii) to acquire, hold, own, sell, Transfer, encumber, finance, convey,
exchange, and otherwise dispose of or deal with Investment Entity Interests;
(iv) to enter into, perform, amend and otherwise take action with respect to
Investment Entity Agreements; (v) to undertake such other activities as may be
necessary, advisable, desirable or convenient to the business of the
Partnership; and (vi) to engage in such other ancillary activities as shall be
necessary or desirable to effectuate the foregoing purposes. The Partnership
shall have all powers necessary or desirable to accomplish its purposes. Without
limiting the foregoing, but subject to all of the terms, covenants, conditions
and limitations contained in this Agreement and any other agreement entered into
by the Partnership, the Partnership shall have full power and authority,
directly or through its interest in Investment Entities, to enter into, perform,
and carry out contracts of any kind, to borrow money and to issue evidences of
indebtedness, whether or not secured by mortgage, trust deed, pledge or other
lien, and, directly or indirectly, to acquire and construct additional
Properties necessary or useful in connection with its business. Without limiting
Weeks' right in its sole discretion to cease qualifying as a REIT, the Partners
acknowledge that Weeks' current status as a REIT inures to the benefit of all of
the Partners and not solely to the General Partner or to Weeks.
2.4 LOCATION OF THE PRINCIPAL PLACE OF BUSINESS. The location of the
-------------------------------------------
principal place of business of the Partnership shall be at 4497 Park Drive,
Norcross, Georgia 30093, or such other location or locations as shall be
selected from time to time by the General Partner in its sole discretion.
2.5 REGISTERED AGENT AND REGISTERED OFFICE. The registered agent of
--------------------------------------
the Partnership shall be CT Corporation System, or such other Person as the
General Partner may select in its sole discretion. The registered office of the
Partnership in the State of Georgia shall be the office of its registered agent
in Georgia, which at the date hereof is 1201 Peachtree Street, N.E., Suite 1240,
Atlanta, Georgia 30361.
ARTICLE III
-----------
TERM
----
3.1 COMMENCEMENT. The Partnership commenced business as a limited
------------
partnership upon the filing of the Certificate with the Georgia Secretary of
State.
3.2 DISSOLUTION. The Partnership shall continue until dissolved upon
-----------
the occurrence of the earliest of the following events:
(a) An event of withdrawal (within the meaning of Section 14-9-101(3)
of the Act, other than an event described in any of Sections 14-9-
602(a)(4), 14-9-602(a)(5), 14-9-602(a)(6), 14-9-602(a)(7), 14-9-602(a)(8),
14-9-602(a)(9), or 14-2-602(a)(10) of the Act) of a General Partner, or any
other event or circumstance that causes a General
-16-
<PAGE>
Partner to cease to be a General Partner, in either case if such General
Partner is the last remaining General Partner, unless, within ninety (90)
days after the event, a Majority-in-Interest of the Limited Partners agrees
in writing to continue the business of the Partnership and to the
appointment, effective as of the date of withdrawal, of a successor General
Partner;
(b) A final and non-appealable judgment is entered by a court of
competent jurisdiction ruling that the last remaining General Partner is
bankrupt or insolvent, or a final and non-appealable order for relief is
entered by a court with appropriate jurisdiction against the General
Partner, in each case under any federal or state bankruptcy or insolvency
laws as now or hereafter in effect, unless prior to the entry of such order
or judgment a Majority-in-Interest of the Limited Partners agrees in
writing to continue the business of the Partnership and to the appointment,
effective as of the date immediately prior to the date of such order or
judgment, of a substitute General Partner;
(c) The Incapacity of the last remaining General Partner, unless,
within ninety (90) days after the last remaining General Partner becomes
Incapacitated, a Majority-in-Interest of the Limited Partners agrees in
writing to continue the business of the Partnership and to the appointment,
effective as of the date of the Incapacity of the last remaining General
Partner, of a substitute General Partner;
(d) The election to dissolve the Partnership made in writing by the
General Partner with the Consent of the Limited Partners;
(e) The sale or other disposition of all or substantially all the
assets of the Partnership;
(f) Entry of a decree of judicial dissolution of the Partnership
pursuant to the provisions of the Act; or
(g) December 31, 2093, unless the General Partner, in its sole and
absolute discretion, extends such date by written notice to the Limited
Partners given prior to such date.
ARTICLE IV
----------
CONTRIBUTIONS TO CAPITAL
------------------------
4.1 GENERAL PARTNER CAPITAL CONTRIBUTION.
------------------------------------
(a) Concurrently with the execution and delivery of the Prior
Agreement, and effective at the date of the Completion of the Offering,
Weeks contributed to the Partnership, as its initial contribution to the
capital of the Partnership, (i) the amount set
-17-
<PAGE>
forth on Exhibit A, by deposit of immediately available funds in a
---------
Partnership bank account, and (ii) the assets described on Exhibit A,
---------
subject to the liabilities described on Exhibit A. The number of
---------
Partnership Units and the Percentage Interest of the General Partner with
respect to such Capital Contribution were as set forth on Exhibit A.
---------
Effective as of the date hereof, the Partners agree that the General
Partner will hold a 1% Partnership Interest as a general partner of the
Partnership, and that the remainder of Weeks' Partnership Units will be
held by Weeks as a Limited Partner. Weeks is hereby admitted to the
Partnership as a Limited Partner with respect to the Partnership Interest
represented by the Partnership Units so held by it as a Limited Partner.
Effective as of the date hereof and immediately after the effectiveness of
the matters referred to in the immediately preceding sentence, Weeks does
hereby transfer and assign to the General Partner the entire Partnership
Interest held by Weeks as a general partner of the Partnership, and does
hereby transfer and assign to Weeks LP Holdings the entire Partnership
Interest held by Weeks as a Limited Partner. Weeks LP Holdings hereby
assumes all of the obligations of Weeks as a Limited Partner under this
Agreement and agrees to be bound by all of the terms and conditions hereof.
Effective upon such transfer, Weeks is hereby relieved of its obligations
as a Limited Partner. The General Partner hereby assumes all of the
obligations of Weeks as the general partner of the Partnership and agrees
to be bound by all of the terms and conditions hereof. Weeks is not
relieved of any obligation accruing to it as the general partner of the
Partnership prior to the date hereof. The Partners hereby consent to such
transfers, to the withdrawal of Weeks as the general partner of the
Partnership, to the admission of the General Partner as the sole general
partner of the Partnership, and to the admission of Weeks LP Holdings as a
Limited Partner. The Partners agree that the withdrawal of Weeks as the
general partner of the Partnership shall not dissolve the Partnership. The
gross fair market value of any property other than money contributed by the
General Partner or Weeks LP Holdings to the Partnership after the date
hereof ("Contributed Property") shall be the Acquisition Cost of such
Contributed Property. For purposes hereof, the "Acquisition Cost" of
Contributed Property shall be (i) in the case of Contributed Property that
was acquired in exchange for shares of Common Stock, the Current Per Share
Market Price as of the closing date on which such Contributed Property was
acquired for Common Stock multiplied by the number of shares of Common
Stock issued in the acquisition, or (ii) in the case of all other
Contributed Property, the amount of such consideration plus, in either
case, any costs and expenses incurred by the General Partner, Weeks or
Weeks LP Holdings in connection with such acquisition or contribution;
provided, however, that in the event the Acquisition Cost of Contributed
-------- -------
Property is financed by any borrowings by the General Partner, Weeks or
Weeks LP Holdings, the Partnership shall assume any such obligations of the
General Partner, Weeks or Weeks LP Holdings concurrently with the
contribution of such property to the Partnership or, if such assumption is
impossible, shall obligate itself to the General Partner, Weeks or Weeks LP
Holdings in an amount and on terms equal to such indebtedness, and the
Acquisition Cost shall be reduced by the amount of the obligation assumed
by the Partnership.
-18-
<PAGE>
(b) Weeks shall not issue any additional Common Stock or other equity
securities (other than Common Stock issued pursuant to exercise of Rights
and share dividends), or rights, options, warrants or convertible or
exchangeable securities containing the right to subscribe for or purchase
Common Stock or other equity securities of Weeks (collectively, "New
Securities"), unless Weeks contributes to the capital of the General
Partner and/or Weeks LP Holdings (as determined by the General Partner in
its sole discretion), and the General Partner and/or Weeks LP Holdings (as
applicable) contributes to the capital of the Partnership, the proceeds of
the sale of the New Securities. In such event the Partnership shall issue
to the General Partner and/or Weeks LP Holdings (as applicable) Partnership
Units or other Partnership Interests having designations, preferences and
other rights, all such that their economic attributes are substantially
similar to those of the New Securities, and the provisions of Section 9.3
hereof relating to the issuance of additional Partnership Interests shall
apply, including, without limitation, the provisions of such Section that
permit the General Partner to adjust the Percentage Interests of the
Partners as necessary to reflect the terms of the issuance of additional
Partnership Interests. Notwithstanding the foregoing, if the proceeds
actually received by Weeks from the issuance of New Securities are less
than the gross proceeds of such issuance as a result of any underwriter's
discount or other expenses paid or incurred in connection with such
issuance, then Weeks shall be deemed to have made a contribution to the
capital of the General Partner and/or Weeks LP Holdings (as applicable),
and the General Partner and/or Weeks LP Holdings (as applicable) shall be
deemed to have made a Capital Contribution to the Partnership, in the
amount of the gross proceeds of such issuance and the General Partner
and/or Weeks LP Holdings (as applicable) shall be deemed simultaneously to
have reimbursed Weeks, and the Partnership shall be deemed simultaneously
to have reimbursed the General Partner and/or Weeks LP Holdings (as
applicable), for the amount of such underwriter's discount or other
expenses.
4.2 LIMITED PARTNER INITIAL CAPITAL CONTRIBUTIONS. Concurrently with
---------------------------------------------
the execution and delivery of the Prior Agreement, and effective at the date of
the Completion of the Offering, each Limited Partner made the Capital
Contribution set forth opposite such Limited Partner's name on Exhibit A. The
---------
agreed-to gross fair market value of any property other than money so
contributed by a Limited Partner, which was agreed to be such property's initial
Gross Asset Value, was as set forth on Exhibit A. To the extent the Partnership
---------
acquired at the date of the Prior Agreement any property by the merger of any
other Person into the Partnership, Persons who received Partnership Interests in
exchange for their direct or indirect interest in the Person merging into the
Partnership became Limited Partners and were deemed to have made Capital
Contributions as provided in the applicable merger agreement and as set forth in
Exhibit A.
- ---------
4.3 ADDITIONAL FUNDS.
----------------
(a) Without limiting the authority of the Partnership to issue
additional Partnership Interests, the Partnership may obtain funds
("Required Funds") that it
-19-
<PAGE>
considers necessary to meet the needs and obligations and requirements of
the Partnership, to make capital expenditures, to acquire and develop
Properties, to acquire interests in and contribute to the capital of
Investment Entities, to maintain adequate working capital, to make
distributions, to repay Partnership indebtedness, and to carry out the
Partnership's purposes, from the proceeds of any borrowing, in each case
pursuant to such terms, provisions, and conditions and in such manner
(including the engagement of brokers and/or investment bankers to assist in
providing such financing) and amounts as the General Partner shall
determine in its sole discretion. Without limiting the General Partner's
sole discretion with respect to the terms, conditions and provisions of any
borrowing, the Partners agree that any borrowing may be from (without
limitation) Weeks, the General Partner, any Limited Partner, or any
Affiliate of any of the foregoing, may be convertible in whole or in part
into Partnership Interests (to be issued in accordance with Section 9.3
hereof), may be unsecured, may be secured by a mortgage or mortgages,
deed(s) of trust, assignments, and/or other forms of security agreements or
conveyances on or in respect of all or any portion of the assets of the
Partnership or any other security made available by the Partnership, may
include or be obtained through the public or private placement of debt
and/or other instruments, domestic and foreign, may include a provision for
the option to acquire Partnership Interests (to be issued in accordance
with Section 9.3 hereof), and may include the acquisition of or provision
for interest rate swaps, credit enhancers, and/or other transactions or
items in respect of such borrowing; provided, however, that in no event may
the Partnership make any borrowing that is recourse to any Partner or to
any other Person without the consent of the affected Partner or other
Person or Persons to whom such recourse may be had.
(b) To the extent the Partnership does not borrow (or obtain through
the issuance of Partnership Interests) all of the Required Funds (and
whether or not the Partnership is able to borrow (or so obtain) all or part
of the Required Funds):
(i) to the extent the General Partner, Weeks LP Holdings or
Weeks borrows all or any portion of the Required Funds by entering
into a Funding Loan, prior to the time the Partnership requires the
Required Funds, (A) Weeks (to the extent it is the borrower) shall
lend to either the General Partner or Weeks LP Holdings or both (as
determined by the General Partner in its sole discretion), and such
party or parties shall lend to the Partnership, and (B) the General
Partner and Weeks LP Holdings (to the extent either or both are the
borrowers) shall lend to the Partnership (all of such loans to the
Partnership being referred to as "General Partner Loans"), the Funding
Loan Proceeds on the same terms and conditions, to the extent
permitted by applicable law, including interest rate, repayment
schedule and costs and expenses, as shall be applicable with respect
to or incurred in connection with the Funding Loan; or
(ii) to the extent neither Weeks, Weeks LP Holdings nor the
General Partner borrows all of the Required Funds by entering into a
Funding Loan,
-20-
<PAGE>
Weeks shall contribute to the capital of the General Partner and/or
Weeks LP Holdings (as determined by the General Partner in its sole
discretion), and the General Partner and/or Weeks LP Holdings shall
contribute to the Partnership as an additional Capital Contribution
the amount of the Required Funds not loaned to the Partnership as
General Partner Loans ("Contributed Funds").
(c) In the event the General Partner and/or Weeks LP Holdings
contributes Required Funds to the Partnership as Contributed Funds pursuant
to subparagraph (b)(ii) above, the provisions of Section 9.3 hereof
relating to the issuance of additional Partnership Interests to the General
Partner and/or Weeks LP Holdings ( as applicable) shall apply, including,
without limitation, the provisions of such Section that permit the General
Partner to adjust the Percentage Interests of the Partners as necessary to
reflect the terms of the issuance of additional Partnership Interests.
(d) In the event the General Partner and/or Weeks LP Holdings
makes a General Partner Loan from the proceeds of a Funding Loan or the
sale of a security convertible into Partnership Interests, and the lender
of such Funding Loan or holder of such security elects to convert all or a
portion of such loan or securities into Partnership Interests, then the
Partnership shall grant to the General Partner and/or Weeks LP Holdings (as
applicable) (and the General Partner and/or Weeks LP Holdings (as
applicable) shall transfer to Weeks, if Weeks entered into the applicable
Funding Loan), and the General Partner, Weeks or Weeks LP Holdings (as
applicable) shall in turn transfer to such lender or holder, the
Partnership Interests that such lender or holder is entitled to receive
pursuant to the terms of such loan or security, the portion of such General
Partner Loan so converted shall thereby be deemed paid, and the provisions
of Section 9.3 hereof relating to the issuance of additional Partnership
Interests to the General Partner or to Weeks LP Holdings shall apply,
including, without limitation, the provisions of such Section that permit
the General Partner to adjust the Percentage Interests of the Partners as
necessary to reflect the terms of the issuance of additional Partnership
Interests.
4.4 WEEKS EQUITY COMPENSATION PROGRAMS. If at any time or from time
----------------------------------
to time stock options or other equity purchase or issuance rights granted in
connection with any of Weeks' employee compensation programs are exercised in
accordance with the terms of the applicable agreement:
(a) Weeks shall, as soon as practicable after such exercise,
contribute to the capital of the General Partner and/or Weeks LP Holdings
(as determined by the General Partner in its sole discretion), and the
General Partner and/or Weeks LP Holdings (as applicable) shall contribute
to the capital of the Partnership, an amount equal to the exercise price
paid to Weeks by such exercising party in connection with the exercise of
the option or other right; and
-21-
<PAGE>
(b) The provisions of Section 9.3 hereof relating to the
issuance of additional Partnership Interests to the General Partner or to
Weeks LP Holdings shall apply, including, without limitation, the
provisions of such Section that permit the General Partner to adjust the
Percentage Interests of the Partners as necessary to reflect the terms of
the issuance of additional Partnership Interests.
If Weeks concludes in good faith that such issuance is in the interests of
Weeks, the General Partner and the Partnership, Weeks may issue New Securities
for less than fair market value (for example, and not by way of limitation, the
issuance of Common Stock pursuant to an employee stock purchase plan providing
for employee purchases of Common Stock at a discount from fair market value or
employee stock options that have an exercise price that is less than the fair
market value of Common Stock, either at the time of issuance or at the time of
exercise), and the provisions hereof relating to the issuance of New Securities
by Weeks shall apply.
4.5 NO INTEREST; NO RETURN. No Partner shall be entitled to interest
----------------------
on its Capital Contribution or on such Partner's Capital Account. Except as
provided herein or by law, no Partner shall have any right to demand or receive
the return of its Capital Contribution from the Partnership. Each Partner
hereby waives any right of partition of the Properties.
ARTICLE V
----------
CONDITIONS/CONCURRENT TRANSACTIONS
----------------------------------
5.1 GENERAL PARTNER CONDITIONS. The conditions set forth in Section
--------------------------
5.1 of the Prior Agreement were fulfilled or waived.
5.2 LIMITED PARTNER CONDITIONS. The conditions set forth in Section
--------------------------
5.2 of the Prior Agreement were fulfilled or waived.
5.3 CONCURRENT TRANSACTIONS. The events, transactions, and/or
-----------------------
documents referred to in Section 5.3 of the Prior Agreement occurred, were
consummated, or were executed and delivered, as applicable, on the date of the
Prior Agreement.
ARTICLE VI
-----------
ALLOCATIONS AND OTHER TAX AND ACCOUNTING MATTERS
------------------------------------------------
6.1 ALLOCATIONS. Net Income, Net Loss and/or other Tax Items shall
-----------
be allocated pursuant to the provisions of Exhibit F hereto.
---------
6.2 DISTRIBUTIONS. The General Partner shall cause the Partnership
-------------
to distribute all or a portion of Net Operating Cash Flow to the Partners from
time to time as determined by the General Partner, but in any event not less
frequently than quarterly, in such amounts as the
-22-
<PAGE>
General Partner shall determine in its sole and absolute discretion; provided,
however, that all such distributions shall be made pro rata in accordance with
--- ----
the then outstanding Percentage Interests of the Partners who are Partners as of
the Partnership Record Date for the quarter or other fiscal period with respect
to which such distribution is made. Notwithstanding the foregoing, the General
Partner shall cause the Partnership to distribute sufficient amounts to enable
the General Partner and Weeks LP Holdings to distribute to Weeks sufficient
amounts to enable Weeks to pay shareholder dividends that will (a) satisfy the
requirements for qualifying as a REIT under the Code and Regulations ("REIT
Requirements"), and (b) avoid any federal income or excise tax liability of
Weeks, provided, however, that the General Partner may in its sole discretion
from time to time elect not to cause the Partnership to distribute sufficient
amounts to enable Weeks to pay shareholder dividends that will avoid any federal
income or excise tax liability of Weeks so long as to do so would not be
disadvantageous to the Limited Partners. Except as set forth in the immediately
preceding sentence, nothing contained herein shall require the General Partner
to cause the Partnership to distribute any particular portion of Net Operating
Cash Flow. The Partners acknowledge that the Partnership expects in the future
to undertake the construction and development of Properties, to acquire
additional Properties and interests in Investment Entities through purchase for
cash, debt and equity securities, issuance of indebtedness, merger or other
means, to make other investments utilizing, inter alia, the Receipts of the
----- ----
Partnership, and to establish reserves for the purpose of making such future
expenditures, thereby reducing the amounts of Net Operating Cash Flow that
otherwise would be available for distribution to the Partners.
6.3 BOOKS AND RECORDS. At all times during the continuance of the
-----------------
Partnership, the General Partner shall maintain or cause to be maintained books
of account in accordance with GAAP wherein shall be entered particulars of all
monies, goods or effects belonging to or owing to or by the Partnership, or
paid, received, sold or purchased in the course of the Partnership's business,
and all of such other transactions, matters and things relating to the business
of the Partnership as are required by GAAP, subject to the provisions of any
financing agreement or arrangements to which the Partnership is a party. The
Partnership shall keep all records required to be kept pursuant to the Act.
Each Partner shall have access to the Partnership's books and records to the
extent required by the Act.
6.4 REPORTS. As soon as practicable after the close of each fiscal
-------
year of the Partnership, the General Partner shall cause to be mailed to each
Limited Partner as of the close of such year, an annual report containing
financial statements of the Partnership, or of Weeks if the Partnership's
financial statements are prepared on a consolidated basis with Weeks, for such
year, presented in accordance with GAAP (subject to such exceptions as are
agreed to by the General Partner and the Accountants auditing such financial
statements), such statements to be audited by Accountants. The Partnership
shall also cause to be prepared such reports and/or information as are necessary
for Weeks to determine its qualification as a REIT and its compliance with the
REIT Requirements.
-23-
<PAGE>
6.5 TAX ELECTIONS AND RETURNS. All elections required or permitted
-------------------------
to be made by the Partnership under any applicable tax law may be made by the
General Partner in its sole discretion; provided, however, the General Partner
shall, if requested by a transferee, file an election on behalf of the
Partnership pursuant to Section 754 of the Code to adjust the basis of the
Partnership property in the case of a Transfer of a Partnership Interest,
including Transfers made in connection with the exercise of Rights, made in
accordance with the provisions of this Agreement. The Partnership shall elect
to deduct expenses, if any, incurred by it in organizing the Partnership ratably
over a sixty (60)-month period as provided in Section 709 of the Code. The
General Partner shall cause all state and federal tax returns of the Partnership
to be prepared and filed on a timely basis. The General Partner shall use all
reasonable efforts to furnish, within ninety (90) days after the close of each
taxable year, the tax information reasonably required by Limited Partners for
federal and state income tax reporting purposes.
6.6 TAX MATTERS PARTNER.
-------------------
(a) The General Partner is hereby designated as the tax matters
partner for the Partnership within the meaning of Section 6231(a)(7) of the
Code. In exercising its authority as tax matters partner, the General
Partner shall be limited by the provisions of this Agreement affecting tax
aspects of the Partnership.
(b) The tax matters partner is authorized, but not required:
(i) to enter into any settlement with the IRS with
respect to any administrative or judicial proceedings for
the adjustment of Partnership items required to be taken
into account by a Partner for income tax purposes (such
administrative proceedings being referred to in this
paragraph (b) as a "tax audit" and such judicial proceedings
being referred to as "judicial review"), and in the
settlement agreement the tax matters partner may expressly
state that such agreement shall bind all Partners, except
that such settlement agreement shall not bind any Partner
(i) who (within the time prescribed pursuant to the Code and
Regulations) files a statement with the IRS providing that
the tax matters partner shall not have the authority to
enter into a settlement agreement on behalf of such Partner
or (ii) who is a "notice partner" (as defined in Section
6231(a)(8) of the Code) or a member of a "notice group" (as
addressed in Section 6223(b)(2) of the Code);
(ii) in the event that a notice of a final administrative
adjustment at the Partnership level of any item required to be taken
into account by a Partner for tax purposes (a "final adjustment") is
mailed to the tax matters partner, to seek judicial review of such
final adjustment, including the filing of a petition for readjustment
with the Tax Court or the United States Claims Court, or the filing
-24-
<PAGE>
of a complaint for refund with the District Court of the United States
for the district in which the Partnership's principal place of
business is located;
(iii) to intervene in any action brought by any other
Partner for judicial review of a final adjustment;
(iv) to file a request for an administrative adjustment
with the IRS at any time and, if any part of such request is not
allowed by the IRS, to file an appropriate pleading (petition or
complaint) for judicial review with respect to such request;
(v) to enter into an agreement with the IRS to extend the
period for assessing any tax that is attributable to any item required
to be taken into account by a Partner for tax purposes, or an item
affected by such item; and
(vi) to take any other action on behalf of the Partners in
connection with any tax audit or judicial review proceeding to the
extent permitted by law.
(c) The taking of any action and the incurring of any expense by
the tax matters partner in connection with any such proceeding, except to
the extent required by law, is a matter in the sole and absolute discretion
of the tax matters partner and the provisions relating to indemnification
of the General Partner set forth in Section 7.10 of this Agreement shall be
fully applicable to the tax matters partner in its capacity as such. The
tax matters partner shall receive no compensation for its services. All
third party costs and expenses incurred by the tax matters partner in
performing its duties as such (including legal and accounting fees and
expenses) shall be borne by the Partnership. Nothing herein shall be
construed to restrict the Partnership from engaging an accounting firm to
assist the tax matters partner in discharging its duties hereunder.
6.7 WITHHOLDING. Each Limited Partner hereby authorizes the
-----------
Partnership to withhold from or pay on behalf of or with respect to such Limited
Partner any amount of federal, state, local, or foreign taxes that the General
Partner determines that the Partnership is required to withhold or pay with
respect to any amount distributable or allocable to such Limited Partner
pursuant to this Agreement, including, without limitation, any taxes required to
be withheld or paid by the Partnership pursuant to Sections 1441, 1442, 1445, or
1446 of the Code or applicable state law. Any amount paid on behalf of or with
respect to a Limited Partner shall constitute a loan by the Partnership to such
Limited Partner, which loan shall be repaid by such Limited Partner within
fifteen (15) days after notice from the General Partner that such payment must
be made unless (i) the Partnership withholds such payment from a distribution
that would otherwise be made to the Limited Partner or (ii) the General Partner
determines, in its sole and absolute discretion, that such payment may be
satisfied out of the available funds of the Partnership that would, but for such
payment, be distributed to the Limited Partner. Any amounts withheld pursuant
to the foregoing clauses (i) or (ii) shall be treated as having been distributed
to such
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Limited Partner. Each Limited Partner hereby unconditionally and irrevocably
grants to the Partnership a security interest in such Limited Partner's
Partnership Interest to secure such Limited Partner's obligation to pay to the
Partnership any amounts required to be paid pursuant to this Section 6.7. In the
event that a Limited Partner fails to pay any amounts owed to the Partnership
pursuant to this Section 6.7 when due, the General Partner may, in its sole and
absolute discretion, elect to make the payment to the Partnership on behalf of
such defaulting Limited Partner, and in such event shall be deemed to have
loaned such amount to such defaulting Limited Partner and shall succeed to all
rights and remedies of the Partnership as against such defaulting Limited
Partner. Without limitation, in such event the General Partner shall have the
right to receive distributions that would otherwise be distributable to such
defaulting Limited Partner until such time as such loan, together with all
interest thereon, has been paid in full; and any such distributions so received
by the General Partner shall be treated as having been distributed to the
defaulting Limited Partner and immediately paid by the defaulting Limited
Partner to the General Partner in repayment of such loan. Any amounts payable by
a Limited Partner hereunder shall bear interest at the lesser of (a) the base
rate on corporate loans at large United States money center commercial banks, as
published from time to time in The Wall Street Journal (or, if such publication
-----------------------
is discontinued, as determined by the General Partner), plus four (4) percentage
points or (b) the maximum lawful rate of interest on such obligation, such
interest to accrue from the date such amount is due (i.e., fifteen (15) days
-----
after demand) until such amount is paid in full. Each Limited Partner shall take
such actions as the Partnership or the General Partner shall request in order to
perfect or enforce the security interest created hereunder.
6.8 AMOUNTS WITHHELD. All amounts withheld pursuant to the Code or
----------------
any provisions of any state or local tax law and Section 6.7 hereof with respect
to any allocation, payment or distribution to any Partner shall be treated as
amounts distributed to such Partner pursuant to Section 6.2 for all purposes
under this Agreement.
ARTICLE VII
------------
RIGHTS, DUTIES AND RESTRICTIONS OF THE GENERAL PARTNER
------------------------------------------------------
7.1 EXPENDITURES BY PARTNERSHIP. The General Partner is hereby
---------------------------
authorized to pay or to cause the Partnership to pay compensation for
accounting, administrative, legal, technical, management and other services
rendered to the Partnership. The Partnership shall assume, and pay when due,
all Administrative Expenses and all REIT Expenses.
7.2 POWERS AND DUTIES OF GENERAL PARTNER. The General Partner shall
------------------------------------
be responsible for the management of the Partnership's business and affairs.
The General Partner may not be removed by the Limited Partners with or without
cause. Except as otherwise herein expressly provided, and subject to the
limitations contained in Section 7.3 hereof with respect to Major Decisions, the
General Partner shall have, and is hereby granted, full and complete power,
authority and discretion to take such actions for and on behalf of the
Partnership and in its name
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as the General Partner shall, in its sole and absolute discretion, deem
necessary or appropriate to carry out the purposes for which the Partnership was
organized. The General Partner may exercise any of the powers granted to it by
this Agreement and perform any of the duties imposed upon it hereunder either
directly or by or through its agents, duly authorized officers, and duly
appointed attorneys and attorneys-in-fact. The General Partner shall not be
responsible for any misconduct or negligence on the part of any such agent,
officer, attorney, or attorney-in-fact appointed by the General Partner in good
faith. Except as otherwise expressly provided herein, and subject to Section 7.3
hereof, the General Partner shall have the right, power and authority to cause
the Partnership:
(a) To manage, control, invest, reinvest, acquire by purchase,
lease or otherwise, sell, contract to purchase or sell, grant, obtain, or
exercise options to purchase, options to sell or conversion rights, assign,
Transfer, convey, deliver, endorse, exchange, pledge, mortgage, abandon,
improve, repair, maintain, insure, lease for any term and otherwise deal
with any and all Properties in furtherance of the business or purposes of
the Partnership;
(b) To acquire, directly or indirectly, interests in real estate
of any kind and of any type, and any and all kinds of interests therein,
and to determine the manner in which title thereto is to be held; to
manage, insure against loss, protect and subdivide any of the real estate,
interests therein or parts thereof; to improve, develop or redevelop any
such real estate; to participate in the ownership and development of any
Property; to dedicate for public use, to vacate any subdivisions or parts
thereof, to resubdivide, to contract to sell, to grant options to purchase
or lease, to sell on any terms; to convey, mortgage, pledge or otherwise
encumber any Property, or any part thereof; to lease any Property or any
part thereof from time to time, upon any terms and for any period of time,
and to renew or extend leases, to amend, change or modify the terms and
provisions of any leases and to grant options to lease and options to renew
leases and options to purchase; to partition or to exchange any Property,
or any part thereof, for other Property or to grant easements or charges of
any kind; to relay, convey or assign any right, title or interest in or
about or easement appurtenant to any Property or any part thereof; to
construct and reconstruct, remodel, alter, repair, add to or take from
buildings on any real property in which the Partnership owns an interest;
to insure any Person having an interest in or responsibility for the care,
management or repair of any Property; to direct the trustee of any land
trust to mortgage, lease, convey or contract to convey the real estate held
in such land trust or to execute and deliver deeds, mortgages, notes, and
any and all documents pertaining to the property subject to such land trust
or in any matter regarding such trust; to execute assignments of all or any
part of the beneficial interest in any land trust in which the Partnership
owns a beneficial interest;
(c) To employ, engage or contract with or dismiss from
employment or engagement Persons to the extent deemed necessary by the
General Partner for the operation and management of the Partnership
business, including but not limited to,
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contractors, subcontractors, engineers, architects, surveyors, mechanics,
consultants, accountants, attorneys, insurance brokers, real estate brokers
and others;
(d) To enter into, make, amend, perform and carry out or cancel
and rescind, contracts and other obligations, including without limitation,
guarantees and indemnity agreements for any purpose pertaining to the
business of the Partnership or any Investment Entity; and to loan money to,
borrow money from and engage in transactions with Affiliates of the
Partnership or any other Person;
(e) To borrow money, procure loans and advances from any Person
for Partnership purposes, and to apply for and secure, from any Person,
credit or accommodations; to contract liabilities and obligations, direct
or contingent and of every kind and nature with or without security; and to
repay, discharge, settle, adjust, compromise, or liquidate any such loan,
advance, credit, obligation or liability;
(f) To pledge, hypothecate, mortgage, assign, deposit, deliver,
enter into sale and leaseback arrangements or otherwise give as security or
as additional or substitute security, or for sale or other disposition any
and all Property, and to make substitutions thereof, and to receive any
proceeds thereof upon the release or surrender thereof; to sign, execute
and deliver any and all assignments, deeds and other contracts and
instruments in writing; to authorize, give, make, procure, accept and
receive moneys, payments, property, notices, demands, vouchers, receipts,
releases, compromises and adjustments; to waive notices, demands, protests
and authorize and execute waivers of every kind and nature; to enter into,
make, execute, deliver and receive written agreements, undertakings and
instruments of every kind and nature; to give oral instructions and make
oral agreements; and generally to do any and all other acts and things
incidental to any of the foregoing or with reference to any dealings or
transactions that the General Partner may deem necessary, proper or
advisable to affect or accomplish any of the foregoing or to carry out the
business and purposes of the Partnership;
(g) To acquire and enter into any contract of insurance that the
General Partner deems necessary or appropriate for the protection of the
Partnership, for the conservation of the Partnership's assets or for any
purpose convenient or beneficial to the Partnership;
(h) To conduct any and all banking transactions on behalf of the
Partnership; to adjust and settle checking, savings, and other accounts
with such institutions as the General Partner shall deem appropriate; to
draw, sign, execute, accept, endorse, guarantee, deliver, receive and pay
any checks, drafts, bills of exchange, acceptances, notes, obligations,
undertakings and other instruments for or relating to the payment of money
in, into, or from any account in the Partnership's name; to execute,
procure, consent to and authorize extensions and renewals of any of the
foregoing; to make deposits into and withdrawals from the Partnership's
bank accounts and to negotiate or
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<PAGE>
discount commercial paper, acceptances, negotiable instruments, bills of
exchange and dollar drafts;
(i) To demand, sue for, receive, and otherwise take steps to
collect or recover all debt, rents, proceeds, interests, dividends, goods,
chattels, income from property, damages and all other property, to which
the Partnership may be entitled or that are or may become due the
Partnership from any Person; to commence, prosecute, enforce, defend,
answer, oppose, contest and abandon all legal proceedings in which the
Partnership is or may hereafter be interested; and to settle, compromise or
submit to arbitration any accounts, debts, claims, disputes and matters
that may arise between the Partnership and any other Person and to grant an
extension of time for the payment or satisfaction thereof on any terms,
with or without security;
(j) To make arrangements for financing, including the taking of
all action deemed necessary or appropriate by the General Partner to cause
any approved loans to be closed;
(k) To take all reasonable measures necessary to insure
compliance by the Partnership with applicable agreements, and other
contractual obligations and arrangements, entered into by the Partnership
from time to time in accordance with the provisions of this Agreement,
including periodic reports as required to be submitted to lenders;
(l) To maintain the Partnership's books and records;
(m) To prepare and deliver, or cause to be prepared and
delivered, all financial and other reports with respect to the operations
of the Partnership and all federal and state tax returns and reports;
(n) To act in any state or nation in which the Partnership may
lawfully act, for itself or as principal, agent or representative for any
person with respect to any business of the Partnership;
(o) To become a shareholder, partner, member, or other equity
owner in, and perform the obligations and exercise the rights and powers of
a shareholder, partner, member, or other equity owner of, any Entity;
(p) To apply for, register, obtain, purchase or otherwise
acquire trademarks, trade names, labels and designs relating to or useful
in connection with any business of the Partnership, and to use, exercise,
develop and license the use of the same;
(q) To pay or reimburse any and all fees, costs and expenses
incurred in the formation and organization of the Partnership;
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<PAGE>
(r) To do all acts that are necessary, customary or appropriate
for the protection and preservation of the Partnership's assets, including
the establishment of reserves;
(s) To reinvest Net Operating Cash Flow in Properties;
(t) To establish and maintain any and all reserves, working
capital accounts and other cash or similar balances in such amounts as the
General Partner, in its sole and absolute discretion, deems appropriate
from time to time;
(u) To lend or contribute funds and/or property to Investment
Entities;
(v) To adopt employee benefit plans, option plans and similar
plans funded by the Partnership for the benefit of employees of the Weeks,
the General Partner, the Partnership, any Investment Entity, or any
Affiliate of any of them;
(w) To merge with any other Entity; and
(x) In general, to exercise all of the general rights,
privileges and powers permitted to be had and exercised by the provisions
of the Act.
Except as otherwise provided herein, to the extent the duties of the General
Partner require expenditures of funds to be paid to third parties, neither the
General Partner nor Weeks shall have any obligations hereunder except to the
extent that Partnership funds are reasonably available to the General Partner
for the performance of such duties, and nothing herein contained shall be deemed
to authorize or require the General Partner, in its capacity as such, or Weeks
to expend its individual funds for payment to third parties on behalf of the
Partnership or to undertake any individual liability or obligation on behalf of
the Partnership.
7.3 MAJOR DECISIONS. The General Partner shall not, without the
---------------
prior Consent of the Limited Partners, on behalf of the Partnership, undertake
any of the following actions (the "Major Decisions"):
(a) Take title to any personal or real property, other than in
the name of the Partnership or of an Investment Entity, or pursuant to
Section 7.8 hereof.
(b) Dissolve the Partnership, except that an action shall not
constitute a Major Decision because it may lead to the dissolution of the
Partnership if it is otherwise permitted to be taken hereunder without the
Consent of the Limited Partners.
(c) Cause the Partnership to merge into another Entity if the
Partnership is not the surviving Entity.
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<PAGE>
(d) Sell or otherwise dispose of all or substantially all of the
assets of the Partnership to Weeks, the General Partner or an Affiliate of
either.
In soliciting the Consent of the Limited Partners to a Major Decision, the
General Partner may require a response within a reasonable specified time, but
not less than fifteen (15) days, and failure of a Limited Partner to respond in
such time period shall constitute the consent of such Limited Partner to the
proposed Major Decision.
7.4 ACTIONS WITH RESPECT TO CERTAIN DOCUMENTS. Whenever the consent,
-----------------------------------------
agreement, authorization or approval of the Partnership is required under any
agreement to which any Limited Partner and/or any of its Affiliates are parties
in interest other than in their capacities as Limited Partners of the
Partnership, no approval of any Limited Partner shall be required.
7.5 GENERAL PARTNER ACTIVITIES; WEEKS ACTIVITIES.
--------------------------------------------
(a) The General Partner agrees that all business activities of the
General Partner, including activities pertaining to the acquisition,
development and ownership of Properties, shall be conducted through the
Partnership. The General Partner shall not directly or indirectly enter
into or conduct any business, other than in connection with the ownership,
acquisition and disposition of Partnership Interests as a General Partner
and the management of the business of the Partnership, and such activities
as are incidental thereto. The General Partner shall not own any assets
other than Partnership Interests as a General Partner, and other than such
bank accounts or similar instruments or accounts as it deems necessary to
carry out its responsibilities contemplated under this Agreement.
Notwithstanding this Section 7.5(a), the General Partner may, to the extent
the General Partner determines such action or actions to be necessary in
furtherance of the business and purposes of the Partnership and for the
benefit of the Partnership as a whole, conduct business activities
otherwise than through the Partnership, conduct businesses not connected
with the ownership, acquisition and disposition of Partnership Interests
and the management of the business of the Partnership, and own assets other
than Partnership Interests.
(b) Weeks agrees that all business activities of Weeks, including
activities pertaining to the acquisition, development and ownership of
Properties, shall be conducted through the Partnership. Weeks shall not
directly or indirectly enter into or conduct any business, other than in
connection with the ownership, acquisition and disposition of Entities that
own Partnership Interests and the management of the business of the
Partnership through the General Partner, and such activities as are
incidental thereto. Weeks shall not own any assets other than interests in
Entities that hold Partnership Interests, and other than such bank accounts
or similar instruments or accounts as it deems necessary to carry out its
responsibilities, and to cause the General Partner to carry out its
responsibilities, contemplated under this agreement or the Articles of
Incorporation. Notwithstanding this Section 7.5(b), Weeks may, to the
extent Weeks
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determines such action or actions to be necessary in furtherance of the
business and purposes of the Partnership and for the benefit of the
Partnership as a whole, conduct business activities otherwise than through
the Partnership, conduct businesses not connected with the ownership,
acquisition and disposition of Entities that hold Partnership Interests or
the management of the business of the Partnership through the General
Partner, and own assets other than interests in Entities that hold
Partnership Interests.
7.6 PROSCRIPTIONS. The General Partner shall not have the authority
-------------
to:
(a) Do any act in contravention of this Agreement;
(b) Possess any Partnership property or assign rights in specific
Partnership property for other than Partnership purposes; or
(c) Do any act in contravention of applicable law.
Notwithstanding anything to the contrary in this Agreement, any Person dealing
with the Partnership shall be entitled to assume that the General Partner has
full power and authority, without the consent or approval of any other Partner
or Person, to encumber, sell or otherwise use in any manner any and all assets
of the Partnership and to enter into any contracts on behalf of the Partnership,
and take any and all actions on behalf of the Partnership, and such Person shall
be entitled to deal with the General Partner as if the General Partner were the
Partnership's sole party in interest, both legally and beneficially. Each
Limited Partner hereby waives any and all defenses or other remedies that may be
available against such Person to contest, negate or disaffirm any action of the
General Partner in connection with any such dealing. In no event shall any
Person dealing with the General Partner or its representatives be obligated to
ascertain that the terms of this Agreement have been complied with or to inquire
into the necessity or expedience of any act or action of the General Partner or
its representatives. Each and every certificate, document or other instrument
executed on behalf of the Partnership by the General Partner or its
representatives shall be conclusive evidence in favor of any and every Person
relying thereon or claiming thereunder that (i) at the time of the execution and
delivery of such certificate, document or instrument, this Agreement was in full
force and effect, (ii) the Person executing and delivering such certificate,
document or instrument was duly authorized and empowered to do so for and on
behalf of the Partnership, and (iii) such certificate, document or instrument
was duly executed and delivered in accordance with the terms and provisions of
this Agreement and is binding upon the Partnership.
7.7 ADDITIONAL PARTNERS. Additional partners may be admitted to the
-------------------
Partnership only as provided in Section 9.3 hereof.
7.8 TITLE HOLDER. To the extent allowable under applicable law,
------------
title to all or any part of any Property may be held in the name of the
Partnership or in the name of any other
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Person, the beneficial interest in which shall at all times be vested in the
Partnership. Any such title holder shall perform any and all of its respective
functions to the extent and upon such terms and conditions as may be determined
from time to time by the General Partner, consistent with the business purposes
of the Partnership.
7.9 COMPENSATION OF THE GENERAL PARTNER. The General Partner shall
-----------------------------------
not be entitled to any compensation for services rendered to the Partnership
solely in its capacity as General Partner, except that the foregoing shall not
limit the provisions hereof with respect to reimbursement of Administrative
Expenses and REIT Expenses.
7.10 EXCULPATION AND INDEMNIFICATION.
-------------------------------
(a) Neither the General Partner nor any Person (including, without
limitation, Weeks) acting on its behalf or on behalf of the Partnership,
pursuant hereto, shall be liable, responsible or accountable in damages or
otherwise to the Partnership or to any Partner for any acts or omissions
performed or omitted to be performed by them within the scope of the
authority conferred upon the General Partner by this Agreement and the Act,
provided that the General Partner's or such other Person's conduct or
omission to act was taken in good faith. In exercising its authority under
this Agreement, the General Partner may, but shall be under no obligation
to, take into account the tax consequences to any Partner of any action
taken by the General Partner. Neither the General Partner, nor the
Partnership nor Weeks shall have liability to a Limited Partner under any
circumstances as a result of an income tax liability incurred by such
Limited Partner as a result of an action (or inaction) by the General
Partner pursuant to its authority under this Agreement. The Limited
Partners expressly acknowledge that the General Partner is acting on behalf
of the Partnership and Weeks' shareholders collectively, that the General
Partner is under no obligation to consider the separate interest of the
Limited Partners (including, without limitation, the tax consequences to
Limited Partners) in deciding whether to cause the Partnership to take (or
decline to take) any actions, and that the General Partner shall not be
liable for monetary damages for losses sustained, liabilities incurred, or
benefits not derived by Limited Partners in connection with such decisions,
provided that the General Partner has acted in good faith. The General
Partner may rely and shall be protected in acting or refraining from acting
upon any resolution, certificate, statement, instrument, opinion, report,
notice, request, consent, order, bond, debenture, or other paper or
document believed by it in good faith to be genuine and to have been signed
or presented by the proper party or parties. The General Partner may
consult with legal counsel, accountants, appraisers, management
consultants, investment bankers, architects, engineers, environmental
consultants and other consultants and advisors selected by it, and any act
taken or omitted to be taken in reliance upon the opinion of such Persons
as to matters that the General Partner reasonably believes to be within
such Person's professional or expert competence shall be conclusively
presumed to have been done or omitted in good faith and in accordance with
such opinion.
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<PAGE>
(b) The Partnership shall, and hereby does, indemnify and hold
harmless each Indemnitee from and against any loss, damage, claim,
liability, expense, judgment, fine, and settlement (including, but not
limited to, reasonable attorneys' fees and expenses) incurred by reason of
any act performed in good faith or in enforcing the provisions of this
indemnity; provided, however, that the Partnership shall not indemnify any
such Person for any intentional misconduct or knowing violation of law or
for any transaction for which such Person received a personal benefit in
violation or breach of any provision of this Agreement.
(c) Without limitation, the foregoing indemnity shall extend to any
liability of any Person who is an Indemnitee by reason of clause (i)(C) or
clause (ii) of the definition herein of Indemnitee, pursuant to a loan
guaranty, capital contribution obligation or otherwise, for any
indebtedness of the Partnership or any Investment Entity (including,
without limitation, any indebtedness that the Partnership or any Investment
Entity has assumed or taken subject to), and the General Partner is hereby
authorized and empowered, on behalf of the Partnership, to enter into one
or more indemnity agreements consistent with the provisions of this Section
7.10 in favor of any such Indemnitee having or potentially having liability
for any such indebtedness. Notwithstanding any provision hereof to the
contrary, the foregoing indemnity shall not extend to any liability under a
loan guaranty specifically excepted from the provisions hereof by Exhibit G
---------
hereto.
(d) It is the intention of this Section 7.10 that the Partnership
indemnify each Indemnitee to the fullest extent permitted under the Act.
(e) The termination of any proceeding by judgment, order or
settlement does not create a presumption that the Indemnitee did not meet
the requisite standard of conduct set forth in this Section 7.10. The
termination of any proceeding by conviction of an Indemnitee or upon a plea
of nolo contendere or its equivalent by an Indemnitee, or an entry of an
order of probation against an Indemnitee prior to judgment, creates a
rebuttable presumption that such Indemnitee acted in a manner contrary to
that specified in this Section 7.10 with respect to the subject matter of
such proceeding. Any indemnification pursuant to this Section 7.10 shall be
made only out of the assets of the Partnership, and neither Weeks, the
General Partner nor any Limited Partner shall have any obligation to
contribute to the capital of the Partnership or otherwise provide funds to
enable the Partnership to fund its obligations under this Section 7.10.
(f) Any Person entitled to indemnification under this Agreement shall
be entitled to receive, upon application therefor, advances to cover the
costs of defending any proceeding against such Person; provided, however,
that such advances shall be repaid to the Partnership, without interest, if
such Person is found by a court of competent jurisdiction upon entry of a
final judgment not to be entitled to such indemnification. No bond or
other security shall be required in order to obtain such advancement of
expenses,
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and such advancement shall be made without regard to the credit worthiness
of the applicable Indemnitee.
(g) The indemnification provided by this Section 7.10 shall be in
addition to any other rights to which an Indemnitee or any other Person may
be entitled under any agreement, pursuant to any vote or consent of the
Partners, as a matter of law or otherwise, and shall continue as to an
Indemnitee who has ceased to serve in such capacity unless otherwise
provided in a written agreement with such Indemnitee or in the writing
pursuant to which such Indemnitee is indemnified. All rights of the
Indemnitees hereunder shall survive the dissolution of the Partnership;
provided, however, that a claim for indemnification under this Agreement
must be made by or on behalf of the Person seeking indemnification prior to
the time the Partnership is liquidated hereunder.
(h) The Partnership may, but shall not be obligated to, purchase and
maintain insurance, on behalf of any of the Indemnitees and such other
Persons as the General Partner shall determine, against any liability that
may be asserted against or expenses that may be incurred by such Person in
connection with the Partnership's activities, regardless of whether the
Partnership would have the power to indemnify such Person against such
liability under the provisions of this Agreement or the Act.
(i) Any liabilities that an Indemnitee incurs as a result of acting
on behalf of Weeks, the Partnership or the General Partner (whether as a
fiduciary or otherwise) in connection with the operation, administration or
maintenance of an employee benefit plan or any related trust or funding
mechanism (whether such liabilities are in the form of excise taxes
assessed by the Internal Revenue Service, penalties assessed by the
Department of Labor, restitutions to such a plan or trust or other funding
mechanism or to a participant or beneficiary of such plan, trust or other
funding mechanism, or otherwise) shall be treated as liabilities or
judgments or fines under this Section 7.10, unless such liabilities arise
as a result of (i) such Indemnitee's intentional misconduct or knowing
violation of the law, or (ii) any transaction in which such Indemnitee
received a personal benefit in violation or breach of any provision of this
Agreement or applicable law.
(j) An Indemnitee shall not be denied indemnification in whole or in
part under this Section 7.10 because the Indemnitee had an interest in the
transaction with respect to which the indemnification applies if the
transaction was otherwise permitted by the terms of this Agreement.
(k) The provisions of this Section 7.10 are for the benefit of the
Indemnitees, their heirs, successors, assigns and administrators and shall
not be deemed to create any rights for the benefit of any other Persons.
Any amendment, modification or repeal of this Section 7.10 or any provision
hereof shall be prospective only and shall not in any way affect the
Partnership's liability to any Indemnitee under this Section 7.10 as in
effect immediately prior to such amendment, modification or repeal with
respect to claims
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<PAGE>
arising from or relating to matters occurring, in whole or in part, prior
to such amendment, modification or repeal, regardless of when such claims
may arise or be asserted.
(l) To the extent, but only to the extent, that this Section 7.10 is
subject to the limitations on indemnification set forth in Official Code of
Georgia Annotated (S) 13-8-2(b), and indemnification of an Indemnitee
pursuant to this Section 7.10 would under the circumstances violate the
provisions of such statute (taking into account, among other things, the
availability of insurance coverage and the intention of the Partnership to
allocate to the Partnership rather than the Indemnitees the risks of
insurable claims), this Section 7.10 shall not be construed as purporting
to indemnify such Indemnitee against or to hold such Indemnitee harmless
from liability for damages arising solely out of bodily injury to persons
or damage to property resulting from the sole negligence of such
Indemnitee.
7.11 OPERATION IN ACCORDANCE WITH REIT REQUIREMENTS. The Partners
----------------------------------------------
acknowledge and agree that the General Partner has the power and authority to
operate the Partnership in a manner that will enable Weeks to (a) satisfy the
REIT Requirements and (b) avoid the imposition of any federal income or excise
tax liability. The Partnership shall avoid taking any action, or permitting any
Investment Entity to take any action, (a) that would result in Weeks ceasing to
satisfy the REIT Requirements or (b) that would result in the imposition of any
federal income or excise tax liability on Weeks; provided, however, that the
General Partner may in its sole and absolute discretion from time to time cause
the Partnership to take any action or cause the Partnership to permit any
Investment Entity to take any action in violation of clause (b) above so long as
such action would not be disadvantageous to the Limited Partners. The
determination as to whether the Partnership has operated in the manner
prescribed in this Section 7.11 shall be made without regard to any action or
inaction of the General Partner with respect to distributions and the timing
thereof.
7.12 CONFLICTS OF INTEREST. In connection with any action proposed
---------------------
to be taken by the General Partner hereunder, the General Partner shall comply
with such conflict of interest policies and procedures as the General Partner
and Weeks maintain in effect from time to time. Without limiting the generality
of the foregoing, if any individual who is an employee or director of the
General Partner or Weeks has a conflict of interest with respect to any action
proposed to be taken by the General Partner hereunder, then, to the extent
required by the General Partner's or Weeks' conflict of interest policies and
procedures as in effect from time to time, the decision whether to take such
action shall be made by action of a majority of the directors of Weeks who
neither are employees of Weeks nor have a conflict of interest with respect to
the action.
7.13 WEEKS. After giving effect to the transfers referred to in
-----
Section 4.1(a) hereof, Weeks is not a Partner. By its execution and delivery
hereof, Weeks becomes bound by and agrees to perform and comply with all
provisions hereof imposing obligations or limitations on Weeks, and guarantees
to the Limited Partners (and not to any Person that is not a party to
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this Agreement) the due and punctual performance by the General Partner of all
of the General Partner's obligations hereunder.
ARTICLE VIII
-------------
DISSOLUTION, LIQUIDATION AND WINDING-UP
---------------------------------------
8.1 ACCOUNTING. In the event of the dissolution, liquidation and
----------
winding-up of the Partnership, a proper accounting shall be made of the Capital
Account of each Partner and of the Net Profits or Net Losses of the Partnership
from the date of the last previous accounting, if any, to the date of
dissolution. Financial statements presenting such accounting shall include a
report of Accountants.
8.2 DISTRIBUTION ON DISSOLUTION. In the event of the dissolution of
---------------------------
the Partnership, the assets of the Partnership shall be liquidated for
distribution in the following rank and order:
(a) Payment of creditors of the Partnership (other than Partners) in
the order of priority as provided by law;
(b) Establishment of reserves as provided by the General Partner to
provide for contingent liabilities, if any;
(c) Payment of debts of the Partnership to Partners, if any, in the
order of priority provided by law; and
(d) To the Partners in accordance with the positive balances in their
Capital Accounts after giving effect to all contributions, distributions
and allocations for all periods, including the period in which such
distribution occurs.
Whenever the General Partner determines in its sole and absolute discretion that
any reserves established pursuant to paragraph (b) above are in excess of the
requirements of the Partnership, the amount determined to be excess shall be
distributed to the Partners in accordance with the above provisions. A
reasonable time shall be allowed for the orderly winding-up of the business and
affairs of the Partnership and the liquidation of its assets, in order to
minimize any losses otherwise attendant upon such winding-up, and the provisions
this Agreement shall remain in effect during the period of liquidation.
8.3 SALE OF PARTNERSHIP ASSETS. Subject to Section 8.4 hereof, in
--------------------------
the event of the liquidation of the Partnership, the General Partner may sell
all the Properties. The liquidation of the Partnership shall not be deemed
finally completed until the Partnership shall have received cash payments in
full with respect to obligations such as notes, installment sale contracts or
other similar receivables received by the Partnership in connection with the
sale of Partnership assets
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and all obligations of the Partnership have been satisfied or assumed by the
General Partner or Weeks. The General Partner shall continue to act to enforce
all of the rights of the Partnership pursuant to any such obligations until such
obligations are paid in full or otherwise satisfied.
8.4 DISTRIBUTIONS IN KIND. In the event that it becomes necessary or
---------------------
desirable, in the sole and absolute discretion of the General Partner, to make a
distribution of Partnership property in kind, the General Partner may Transfer
and convey such property to the distributees as tenants in common, subject to
any liabilities attached thereto, so as to vest in the distributees undivided
interests in the whole of such property in proportion to their respective rights
to share in the proceeds of the sale of such property (other than as a creditor)
in accordance with the provisions of Section 8.2 hereof.
8.5 DOCUMENTATION OF LIQUIDATION. Upon the completion of the
----------------------------
dissolution and liquidation of the Partnership, the Partnership shall terminate
and the General Partner shall have the authority to execute and record any and
all documents or instruments required or deemed advisable to effect the
dissolution, liquidation and termination of the Partnership.
8.6 LIABILITY OF THE LIQUIDATING TRUSTEE. Any Liquidating Trustee
------------------------------------
selected by the General Partner shall be indemnified and held harmless by the
Partnership from and against any and all claims, demands, liabilities, costs,
damages and causes of action of any nature whatsoever arising out of or
incidental to the Liquidating Trustee's taking of any action authorized under or
within the scope of this Agreement; provided, however, that no Liquidating
Trustee shall be entitled to indemnification, and shall not be held harmless,
where the claim, demand, liability, cost, damage or cause of action at issue
arose out of intentional misconduct, a knowing violation of law, or any
transaction from which the Liquidating Trustee received a personal benefit in
violation or breach of any provision of this Agreement.
8.7 NEGATIVE CAPITAL ACCOUNTS.
-------------------------
(a) Except as provided in this Section 8.7, no Partner, General or
Limited, shall be liable to the Partnership or to any other Partner for any
negative balance outstanding in such Partner's Capital Account, whether
such negative Capital Account results from the allocation of Net Losses or
other items of deduction and loss to such Partner or from distributions to
such Partner.
(b) Subject to Section 8.7(c), if a Principal or a Principal-
Controlled Partnership, on the date of the "liquidation" of his respective
interest in the Partnership (within the meaning of Regulations Section
1.704-1(b)(2)(ii)(g)), has a negative balance in his Capital Account, then
-
such Partner shall contribute in cash to the capital of the Partnership the
amount required to increase his Capital Account as of such date to zero.
Any such contribution required of a Partner hereunder shall be made on or
before the later of (i) the end of the Partnership fiscal year in which the
interest of such Partner is liquidated or (ii) the ninetieth (90th) day
following the date of such liquidation.
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Notwithstanding any provision hereof to the contrary, all amounts so
contributed by a Partner to the capital of the Partnership shall, upon the
liquidation of the Partnership under this Article VIII, be first paid to
any then creditors of the Partnership, including Partners that are
Partnership creditors (in the order provided in Section 8.2 hereof), and
any remaining amount shall be distributed to the other Partners then having
positive balances in their respective Capital Accounts in proportion to
such positive balances.
(c) After the death of a Principal, the executor of the estate of
such Principal may elect to reduce (or eliminate) the deficit Capital
Account restoration obligation of such Principal pursuant to Section
8.7(b). Such election may be made by such executor by delivering to the
General Partner within two hundred seventy (270) days of the death of such
Principal a written notice setting forth the maximum deficit balance in his
Capital Account that such executor agrees to restore under Section 8.7(b),
if any. If such executor does not make a timely election pursuant to this
Section 8.7(c) (whether or not the balance in his Capital Account is
negative at such time), then such Principal's estate (and the beneficiaries
thereof who receive distribution of Partnership Interests therefrom) shall
be deemed to have a deficit Capital Account restoration obligation as set
forth pursuant to the terms of Section 8.7(b). Any Principal-Controlled
Partnership may likewise elect, after the death of its respective
Principal, to reduce (or eliminate) its deficit Capital Account restoration
obligation pursuant to Section 8.7(b) by delivering a similar written
notice to the General Partner within the time period specified herein. Any
Principal-Controlled Partnership that does not make any such timely
election shall similarly be deemed to have a deficit Capital Account
restoration obligation as set forth pursuant to the terms of Section
8.7(b).
ARTICLE IX
-----------
TRANSFER OF PARTNERSHIP INTERESTS
---------------------------------
9.1 GENERAL PARTNER TRANSFER. The General Partner shall not withdraw
------------------------
from the Partnership and shall not Transfer all or any portion of its interest
in the Partnership without the Consent of the Limited Partners. No merger,
consolidation or other combination by the General Partner with or into another
Person, and no recapitalization, reclassification or change of any securities of
the General Partner, shall constitute a Transfer for purposes of this Article
IX. Upon any Transfer in accordance with the provisions of this Section 9.1, the
transferee General Partner shall become a general partner of the Partnership
under the Act and shall become vested with the powers and rights of the
transferor General Partner with respect to the transferred Partnership Interest,
and shall be liable for all obligations and responsible for all duties of the
General Partner with respect to the transferred Partnership Interest, once such
transferee has executed such instruments as may be necessary to effectuate such
admission and to confirm the agreement of such transferee to be bound by all the
terms and provisions of this Agreement with respect to the Partnership Interest
so acquired. It is a condition to any Transfer otherwise permitted hereunder
that the transferee assumes by operation of law or express agreement all of the
obligations of the
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transferor General Partner under this Agreement with respect to such Transferred
Partnership Interest and no such Transfer (other than pursuant to a statutory
merger or consolidation wherein all obligations and liabilities of the
transferor General Partner are assumed by a successor corporation or other
Entity by operation of law) shall relieve the transferor General Partner of its
obligations under this Agreement without the Consent of the Limited Partners, in
their reasonable discretion.
9.2 TRANSFERS BY LIMITED PARTNERS. In addition to any other
-----------------------------
restrictions on Transfer herein contained (including specifically the
restrictions on Transfer set forth in Section 12.7 hereof), no Limited Partner
may, during the Restricted Period applicable to such Limited Partner, Transfer
all or any portion of its Partnership Interest to any transferee without the
consent of the Independent Directors, which consent may be withheld in the
Independent Directors' sole and absolute discretion; provided, however, that
each Limited Partner may at any time (upon notice to the General Partner and
upon providing to the General Partner an opinion of counsel, which opinion and
counsel must be reasonably acceptable to the General Partner, to the effect that
such Transfer may be effected without violation of any federal or state
securities law) Transfer all of the economic attributes of all or a portion of
its Partnership Interest to an Affiliate of such Limited Partner, subject to the
provisions of this Section 9.2 and Section 9.4 hereof, so long as such Affiliate
continues to remain an Affiliate of such Limited Partner until the end of the
Restricted Period applicable to such Limited Partner; and provided further, that
each Limited Partner (other than Managers with respect to the Collateral) may at
any time, upon notice to, but without the consent of, the General Partner,
pledge all or any portion of its Partnership Interest to any third party lender
that accepts the pledge subject to the restrictions on transfer in this
Agreement. After the end of the Restricted Period applicable to a Limited
Partner, such Limited Partner may, upon notice to, but without the consent of,
the General Partner or the Independent Directors, transfer all of the economic
attributes of all or a portion of its Partnership Interest to any Person,
subject to the provisions of this Section 9.2 and Section 9.4 hereof. It is a
condition to any Transfer otherwise permitted hereunder that the transferee
assumes by operation of law or express agreement all of the obligations of the
transferor Limited Partner under this Agreement with respect to such Transferred
Partnership Interest, and no such Transfer (other than pursuant to a statutory
merger or consolidation wherein all obligations and liabilities of the
transferor Partner are assumed by a successor corporation by operation of law)
shall relieve the transferor Partner of its obligations under this Agreement
without the approval of the General Partner, in its sole discretion. Any
permitted transferee of the economic attributes of all or a portion of a
Limited Partner's Partnership Interest shall be subject to the provisions hereof
with respect to any further transfer of such Partnership Interest, shall have
(to the extent Transferred) the right to exercise the Rights held by the
Transferring Limited Partner, and shall be deemed to be a Limited Partner for
purposes of the allocation, distribution and Capital Account provisions hereof
(to the extent they relate to the Transferred economic attributes), but not
otherwise, unless and until such transferee is admitted as a substitute limited
partner. No transferee shall be admitted as a substituted Limited Partner
unless the transferor so directs and the General Partner consents, which consent
may be withheld in the General Partner's sole and absolute discretion.
Notwithstanding any of the foregoing, any transferee of any Transferred
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<PAGE>
Partnership Interest shall be subject to any and all ownership limitations
contained in the Articles of Incorporation applicable to Persons other than the
Limited Partners and/or their Affiliates that may limit or restrict such
transferee's ability to exercise the Rights.
9.3 ISSUANCE OF ADDITIONAL PARTNERSHIP INTERESTS. At any time after
--------------------------------------------
the date of the Completion of the Offering, without the consent of any Limited
Partner, the General Partner may, upon its determination that the issuance of
additional Partnership Interests is in the best interests of the Partnership,
cause the Partnership to issue additional Partnership Interests to any Person
(and to admit such Person as a Limited Partner if such Person is not already a
Limited Partner) in exchange for such Capital Contribution as is determined by
the General Partner to be appropriate in its sole discretion. Without limiting
the foregoing, the General Partner is expressly authorized to cause the
Partnership to issue additional Partnership Interests for less than fair market
value, so long as the General Partner concludes in good faith that such issuance
is in the interest of Weeks, the General Partner and the Partnership (for
example, and not by way of limitation, the issuance of Partnership Interests
pursuant to an employee purchase plan providing for employee purchases of
Partnership Interests at a discount from fair market value or employee options
that have an exercise price that is less than the fair market value of the
Partnership Interests, either at the time of issuance or at the time of
exercise). Additional Partnership Interests issued pursuant to this Section 9.3
may, without limitation, be issued in one or more classes, in one or more series
of any class, and with such designations, preferences and relative,
participating, optional or other special rights, powers and duties, including
rights, powers, and duties senior to those set forth in the Prior Agreement for
Partnership Interests at the Completion of the Offering, all as shall be
determined by the General Partner in its sole and absolute discretion and
without the approval of any of the Limited Partners, subject to Georgia law,
including, without limitation, (i) the allocation of Tax Items to such
additional Partnership Interests; (ii) the right of such additional Partnership
Interests to share in Partnership distributions; and (iii) the rights of each
such additional Partnership Interest upon dissolution and liquidation of the
Partnership; provided, however, that no such additional Partnership Interests
shall be issued to the General Partner or to Weeks LP Holdings unless either:
(a) (1) the additional Partnership Interests are issued in connection
with an issuance of New Securities, which New Securities have designations,
preferences and other rights, all such that the economic attributes are
substantially similar to the designations, preferences and other rights of
the additional Partnership Interests issued to the General Partner or to
Weeks LP Holdings in accordance with this Section 9.3, and (2) the General
Partner and Weeks LP Holdings shall make a Capital Contribution to the
Partnership in an amount equal to the proceeds raised (or other
consideration received) in connection with the issuance of such New
Securities by Weeks, or
(b) the additional Partnership Interests are issued to all Partners
in proportion to their respective Percentage Interests.
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<PAGE>
Notwithstanding anything contained herein to the contrary, a Person that
receives a Partnership Interest pursuant to this Section 9.3 shall not acquire
any interest in, and may not exercise or otherwise participate in, any Rights
pursuant to Article XI and Exhibit B hereto, but this sentence shall not prevent
---------
the issuance, in the discretion of the General Partner, of additional
Partnership Interests that include conversion rights, including conversion
rights similar to the Rights. The General Partner shall, and is authorized on
behalf of each of the Partners, and without any further act or deed of any other
Partner, to, amend this Agreement (and to execute on behalf of all Partners any
document deemed necessary by the General Partner to reflect such amendment) to
reflect the admission of any Person as a Limited Partner, and in any and all
other respects necessary to reflect the designations, preferences, rights,
Capital Contributions and other terms of any such additional Partnership
Interests, including, without limitation, the adjustment of the Percentage
Interests of the Partners. The General Partner shall promptly deliver a copy of
such amendment to each Limited Partner.
9.4 RESTRICTIONS ON TRANSFER. In addition to any other restrictions
------------------------
on Transfer herein contained, in no event may any Transfer or assignment of a
Partnership Interest by any Partner be made (i) to any Person who lacks the
legal right, power or capacity to own a Partnership Interest, (ii) in violation
of any provision of any mortgage or trust deed (or the note or bond secured
thereby) constituting a Lien against a Property or any part thereof, or other
instrument, document or agreement to which the Partnership or any Property
Partnership is a party or otherwise bound, (iii) in violation of applicable law,
including, without limitation, any federal or state securities law, (iv) if in
the judgment of the General Partner such Transfer might subject the Partnership,
the General Partner or any other Person to liability under any federal or state
securities laws, (v) of any component portion of a Partnership Interest, such as
the Capital Account, or rights to Net Operating Cash Flow, separate and apart
from all other components of the Partnership Interest (except for transfers of
all economic attributes to Affiliates as permitted by Section 9.2 hereof), (vi)
if such transfer would cause, or in the judgment of the General Partner such
Transfer might cause, Weeks to cease to comply with the REIT Requirements, (vii)
if such Transfer would cause a termination of the Partnership for federal income
tax purposes, (viii) if such Transfer would, in the opinion of counsel to the
Partnership, cause the Partnership to cease to be classified as a partnership
for federal income tax purposes, (ix) if such Transfer would cause the
Partnership to become, with respect to any employee benefit plan subject to
Title 1 of ERISA, a "party-in-interest" (as defined in Section 3(14) of ERISA)
or a "disqualified person" (as defined in Section 4975(c) of the Code), (x) if
such Transfer could, in the opinion of counsel to the Partnership, cause any
portion of the assets of the Partnership to constitute assets of any employee
benefit plan pursuant to Department of Labor Regulations Section 2510.2-101,
(xi) if such Transfer is effectuated through an "established securities market"
or a "secondary market (or the substantial equivalent thereof)" within the
meaning of Section 7704(b) of the Code, or (xii) to a lender to the Partnership
or any Person who is related (within the meaning of Section 1.752-4(b) of the
Regulations) to any lender to the Partnership whose loan constitutes a
"nonrecourse liability" (within the meaning of Section 1.752-1(a)(2) of the
Regulations) without the consent of the General Partner, in its sole and
absolute discretion.
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ARTICLE X
---------
RIGHTS AND OBLIGATIONS OF THE LIMITED PARTNERS
----------------------------------------------
10.1 NO PARTICIPATION IN MANAGEMENT. Except as expressly permitted
------------------------------
hereunder, the Limited Partners shall not take part in the management of the
Partnership's business, transact any business in the Partnership's name or have
the power to sign documents for or otherwise bind the Partnership.
10.2 BANKRUPTCY OR INCAPACITY OF A LIMITED PARTNER. The Bankruptcy
---------------------------------------------
or Incapacity of any Limited Partner shall not cause a dissolution of the
Partnership. The rights of a Limited Partner to share in the Net Profits or
Losses of the Partnership and to receive distributions of Partnership funds
shall devolve on any successors or assigns resulting from such Limited Partner's
Bankruptcy or Incapacity, subject to the terms and conditions of this Agreement,
and the Partnership shall continue as a limited partnership. However, in no
event shall such assignee(s) become a substituted Limited Partner except in
accordance with Article IX hereof.
10.3 NO WITHDRAWAL. No Limited Partner may withdraw from the
-------------
Partnership without the prior written consent of the General Partner, other than
as expressly provided in this Agreement.
10.4 DUTIES AND CONFLICTS. The General Partner recognizes that the
--------------------
Limited Partners and their Affiliates have or may have other business interests,
activities and investments, some of which may be in conflict or competition with
the business of the Partnership, and that, subject to the provisions of any
agreements among the Partnership, Weeks, the General Partner and any Limited
Partner, or between any of them, such Persons are entitled to carry on such
other business interests, activities and investments, and may engage in or
possess an interest in any other business or venture of any kind, independently
or with others, on their own behalf or on behalf of other Persons with which
they are affiliated or associated, and such Persons may engage in any
activities, whether or not competitive with the Partnership, without any
obligation to offer any interest in such activities to the Partnership or to any
Partner, and neither the Partnership nor any Partner shall have any right, by
virtue of this Agreement, in or to such activities, or the income or profits
derived therefrom, and the pursuit of such activities, even if competitive with
the business of the Partnership, shall not be deemed wrongful or improper.
10.5 MEETINGS OF THE PARTNERS.
------------------------
(a) Meetings of the Partners may be called by the General
Partner. The call shall state the nature of the business to be transacted.
Notice of any such meeting shall be given to all Partners not less than
seven (7) days nor more than thirty (30) days prior to the date of such
meeting. Partners may vote in person or by proxy at such meeting.
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Whenever any action of the Limited Partners is required under this
Agreement, such action may be taken at a meeting of Partners if so called
by the General Partner.
(b) Each Limited Partner may authorize any Person or Persons to
act for him by proxy on all matters in which a Limited Partner is entitled
to participate, including executing any written consent, waiving notice of
any meeting, or voting or participating at a meeting. Every proxy must be
signed by the Limited Partner or his attorney-in-fact. No proxy shall be
valid after the expiration of eleven (11) months from the date thereof
unless otherwise provided in the proxy. Every proxy shall be revocable at
the pleasure of the Limited Partner executing it, such revocation to be
effective upon the Partnership's receipt of written notice of such
revocation from the Limited Partner executing such proxy.
(c) Each meeting of Partners shall be conducted by the General
Partner or such other Person as the General Partner may appoint pursuant to
such rules for the conduct of the meeting as the General Partner or such
other Person deems appropriate in his sole discretion. Without limitation,
meetings of Partners may be conducted in the same manner as meetings of the
shareholders of Weeks and may be held at the same time, and as part of,
meetings of the shareholders of Weeks.
ARTICLE XI
----------
GRANT OF RIGHTS TO LIMITED PARTNERS
-----------------------------------
11.1 GRANT OF RIGHTS. At the date of the Prior Agreement, the
---------------
Partnership granted to the Limited Partners and the Limited Partners accepted,
the right, but not the obligation (herein such right being sometimes referred to
as the "Rights"), to require the Partnership to redeem all or a portion of their
Partnership Units, on the terms and subject to the conditions and restrictions
contained in Exhibit B. The Rights so granted may be exercised by any one or
---------
more of the Limited Partners (other than Weeks LP Holdings), on the terms and
subject to the conditions and restrictions contained in Exhibit B-1 hereto,
-----------
which amends and restates the terms of the Rights in certain respects as of the
date hereof, upon delivery to the Partnership of a Conversion Exercise Notice in
the form of attached Schedule 1, which notice shall specify the Partnership
----------
Units with respect to which the Rights are being exercised. Once delivered, the
Conversion Exercise Notice shall be irrevocable, subject to compliance by Weeks,
the General Partner and the Partnership with the terms of the Rights.
ARTICLE XII
-----------
MANAGER REPRESENTATIONS, WARRANTIES AND GUARANTEE
-------------------------------------------------
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12.1 REPRESENTATIONS AND WARRANTIES OF THE MANAGERS. At the date of
----------------------------------------------
the Prior Agreement, the Managers, jointly and severally, represented and
warranted to the Partnership and Weeks as to the matters set forth in the
attached Exhibit O.
---------
12.2 SURVIVAL OF REPRESENTATIONS AND WARRANTIES. All representations
------------------------------------------
and warranties referred to in this Article XII and in the attached Exhibit O
---------
survived formation of the Partnership; provided, however, that no claim for a
breach of any representation or warranty referred to in this Article XII or
attached Exhibit O may be maintained by the Partnership or Weeks unless the
---------
General Partner, the Partnership or Weeks shall have delivered a written notice
("Notice of Breach") specifying the details of such claimed breach to the
Managers on or before August 24, 1997.
12.3 INDEMNIFICATION.
---------------
Subject to the provisions of Section 12.4 hereof, the Managers,
jointly and severally, indemnify and hold harmless Weeks, the Partnership and
the General Partner against and from all liabilities, demands, claims, actions
or causes of action, assessments, losses, fines, penalties, costs, damages and
expenses (including, without limitation, reasonable attorneys' and accountants'
fees and expenses actually incurred) sustained or incurred by Weeks, the
Partnership or the General Partner as a result of or arising out of (i) any
inaccuracy in a representation or warranty set forth in Exhibit O hereto, (ii)
---------
any liability of Weeks or the Partnership arising under the Underwriting
Agreement arising from any inaccuracy in a representation or warranty made by
Weeks therein.
12.4 LIMITATIONS ON INDEMNIFICATION OBLIGATIONS.
------------------------------------------
(a) Neither Weeks, the Partnership nor the General Partner shall
be entitled to indemnification under Section 12.3 hereof unless a Notice of
Breach has been delivered by Weeks, the Partnership or the General Partner
within the time period specified in Section 12.2 hereof.
(b) Subject to the provisions of Section 12.4(c) hereof, none of
the Managers shall be liable under Section 12.3 hereof unless and until the
total amount recoverable under Section 12.3 hereof exceeds, in the
aggregate, $625,000; provided, however, that if the Managers' obligation
under Section 12.3 hereof exceeds $625,000 in the aggregate, the Managers'
obligation under Section 12.3 hereof shall be for the full amount of such
obligation. Notwithstanding anything to the contrary contained herein, the
maximum aggregate liability of all Managers collectively hereunder shall
not exceed $12,000,000.
(c) Section 12.4(b) shall not limit the liability of the
Managers hereunder for inaccuracies in the representations and warranties
set forth in paragraph 2(ad) of the attached Exhibit O (the "Prorations
---------
Representation"). None of the Managers shall be liable under Section 12.3
hereof for inaccuracies in the Prorations Representation unless
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and until the total amount recoverable under Section 12.3 hereof with
respect thereto exceeds $5,000 for an Existing Property Entity or $25,000
for all Existing Property Entities; provided, however, that if the
Managers' obligation under Section 12.3 hereof with respect to the
Prorations Representation exceeds $5,000 for an Existing Property Entity,
the Managers' obligation under Section 12.3 hereof shall be the full amount
of such obligation for such Existing Property Entity; and provided further,
however, that if the Managers' obligation under Section 12.3 hereof with
respect to the Prorations Representation exceeds $25,000 in the aggregate
for all Existing Property Entities, the Managers' obligation under Section
12.3 hereof shall be the full amount of such obligation.
(d) If a claim for indemnification is asserted by Weeks, the
Partnership or the General Partner against a Manager, such Manager shall
have the right, at his own expense, to participate in the defense of any
claim, action or proceeding ("Claim") asserted against Weeks, the
Partnership or the General Partner that resulted in the claim for
indemnification, and if such right is exercised, the parties shall
cooperate in the defense of such action or proceeding.
(e) Indemnification of Weeks, the Partnership and the General
Partner pursuant to Section 12.3 hereof and the remedies in respect thereof
as set forth in Section 12.5 hereof shall be the exclusive remedy of Weeks,
the Partnership and the General Partner for any breach of any
representation or warranty contained herein, and the only legal action that
may be asserted against a Manager under this Article XII shall be to pursue
the actions under Section 12.5 hereof.
(f) Nothing contained herein shall eliminate, limit or restrict
any right or claim any Manager might have by reason of any action or
omission of any general partner of any Existing Property Entity that
constitutes a breach of the applicable Existing Property Entity Agreement
or of any contractual standard of care set forth therein and that gives
rise to an indemnification obligation of such Manager hereunder; provided,
however, that no Manager may make any claim against any of the Collateral
to enforce any such right or claim based on any such action or omission.
12.5 SECURITY AND REMEDIES. At the date of the Prior Agreement, each
---------------------
Manager granted to the Partnership a lien upon and continuing security interest
in such portion of the Partnership Units issued to him at the execution of the
Prior Agreement, the shares of Common Stock issued to him in the Offering, and
the shares of Common Stock acquired by him upon exercise of Rights as were equal
in value at the date of the Prior Agreement (based, in the case of shares of
Common Stock, on the price per share at which shares of Common Stock were sold
in the Offering and, in the case of Partnership Units, on such price and on the
assumption that each Partnership Unit could be redeemed for one share of Common
Stock) (with respect to each Manager, the "Collateral") to $13,628,160 (in the
case of A. Ray Weeks, Jr.), $1,333,800 (in the case of Thomas D. Senkbeil), and
$638,040 (in the case of Forrest W. Robinson) (the "Collateral
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Limits"), which are security for the indemnification obligations of such
Manager under Section 12.3 hereof. At the date hereof, the Collateral consists
(in the case of A. Ray Weeks, Jr.) of 493,774 Partnership Units and no shares of
Common Stock, (in the case of Thomas D. Senkbeil) of 48,327 Partnership Units
and no shares of Common Stock, and (in the case of Forrest W. Robinson) of
23,118 Partnership Units and no shares of Common Stock. At each anniversary of
the date of the Prior Agreement, the number of shares of Common Stock and the
Partnership Units constituting each Manager's Collateral shall be increased
(with additional shares of Common Stock and/or Partnership Units not subject to
any Lien) or reduced as necessary so that the value (based, in the case of
Partnership Units, on the Current Per Share Market Price at such time of the
number of shares of Common Stock for which such Partnership Units could be
redeemed if the General Partner assumed the redemption obligation and elected to
pay the Redemption Price (as defined in Exhibit B) in shares of Common Stock
---------
(assuming the ownership limits in the Articles of Incorporation and in Exhibit B
---------
would not prohibit the issuance of any such shares of Common Stock to such
Manager), and, in the case of shares of Common Stock, on the Current Per Share
Market Price at such time) of each Manager's Collateral, as so adjusted, will be
equal to such Manager's Collateral Limit; provided, however, that the Collateral
shall never include (in the case of A. Ray Weeks, Jr.) 126,051 of the shares of
Common Stock held by him at the date of the Prior Agreement and 67,866
Partnership Units, (in the case of Thomas D. Senkbeil) 26,923 of the shares of
Common Stock held by him at the date of the Prior Agreement, and (in the case of
Forrest W. Robinson) 13,005 of the shares of Common Stock held by him at the
date of the Prior Agreement. To the maximum extent possible under the terms
hereof, each Manager's Collateral shall consist of Partnership Units, rather
than shares of Common Stock. The indemnification obligation of each Manager
hereunder shall be payable out of, and only out of, such Manager's entire
Collateral, subject to the Collateral Limits; provided, however, that the
indemnification obligation of each Manager hereunder with respect to the
Prorations Representation shall be paid in cash if the Partnership so elects;
and provided further, however, that any Manager may satisfy all or any part of
any indemnification obligation of such Manager in cash if such Manager so
elects. Any Transfer by a Manager of his Collateral shall be subject to the
lien and security interest granted hereby. In the event Weeks, the Partnership
or the General Partner asserts, within the time period set forth in Section 12.2
hereof, that a Manager has an indemnification obligation to Weeks, the
Partnership or the General Partner under this Article XII, the General Partner
shall deliver written notice (the "Indemnification Notice") to such Manager
describing in reasonable detail the circumstances giving rise to such obligation
and the amount thereof. If, within thirty (30) days after his receipt of an
Indemnification Notice, a Manager delivers written notice to the General Partner
indicating that the Manager disputes the circumstances giving rise to or the
amount of such claimed indemnification obligation, the General Partner may
submit such matter for binding arbitration in accordance with the provisions of
Article XIV hereof by delivering a Demand Notice to such Manager pursuant to
Article XIV hereof. If, after receiving timely notice of a dispute hereunder
from a Manager, the General Partner fails to so submit the matter for
arbitration within twenty (20) days after receipt of such notice from the
Manager, then the Manager shall be relieved of the claimed indemnification
obligation described in the Indemnification Notice. In the event a Manager (i)
receives an Indemnification Notice and fails to timely deliver notice to the
General
-47-
<PAGE>
Partner of his dispute as to the indemnification obligation and fails to make
payment within thirty (30) days after delivery of an Indemnification Notice or
(ii) has an indemnification obligation to the Partnership or the General Partner
under this Article XII as determined pursuant to Article XIV hereunder, and does
not satisfy such obligation within ten (10) days after the decision rendered in
the arbitration, then, in either event, the Partnership shall, to the extent
permitted by law, be deemed, without the payment of any further consideration or
the taking of any further action required by any Manager, to have acquired from
all of the Managers (in proportion, among the Managers, to their respective
Collateral Limits) such portion of the Collateral as shall be equal in value
(based, in the case of Partnership Units, on the Current Per Share Market Price
as computed as of the date immediately preceding such deemed acquisition, the
number of shares of Common Stock that such Partnership Units could be redeemed
for if the General Partner assumed the redemption obligation and elected to pay
the Redemption Price (as defined in Exhibit B) in shares of Common Stock
---------
(assuming the ownership limits in the Articles of Incorporation would not
prohibit the issuance of any such shares of Common Stock to such Manager), and,
in the case of shares of Common Stock, on the Current Per Share Common Stock
Price computed as of the date immediately preceding such deemed acquisition) to
the amount recoverable from the Managers under Sections 12.3, 12.4 and 14.2(d)
hereof. In the event the Partnership shall have acquired from a Manager any
Collateral pursuant to this Section 12.5, the General Partner shall deliver
written notice to such Manager within ten (10) days thereafter identifying the
specific Collateral acquired and, if such Collateral consists of Partnership
Units, the Percentage Interest of such Manager following such acquisition.
Unless and until the Partnership shall have acquired from a Manager any
Collateral pursuant to this Section 12.5, such Manager shall retain all rights
with respect to the Collateral not expressly limited herein, including, without
limitation, rights to distributions provided for herein and rights to dividends
on shares of Common Stock. Each Manager hereby agrees to take any and all
actions and to execute and deliver any and all documents or instruments
necessary to perfect the security interest created by this Agreement, including
delivering the certificates representing the Partnership Units or shares of
Common Stock to the General Partner.
12.6 NON-RECOURSE. Notwithstanding anything contained in this
------------
Article XII or elsewhere in this Agreement to the contrary, the sole recourse of
Weeks, the General Partner and the Partnership under this Article XII (other
than Section 12.8 hereof and other than with respect to the Prorations
Representation) shall be against the Collateral of each Manager, and no Manager
shall have any personal liability hereunder.
12.7 RESTRICTION ON TRANSFER. In connection with the security
-----------------------
interests granted by the Managers and referred to in Section 12.5 hereof, each
Manager agrees that any shares of Common Stock and any portion of such Manager's
Partnership Interest included in the Collateral shall not be Transferred without
the consent of the Independent Directors until August 24, 1997; provided,
however, that each Manager may Transfer all or any portion of such shares of
Common Stock to an Affiliate of such Manager (so long as such Affiliate remains
an Affiliate of such Limited Partner), subject to the prior security interest
granted in this Article XII; provided further, however, that the restrictions
imposed by this Section 12.7 shall be extended with respect
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<PAGE>
to any Manager if there has been delivered to such Manager a Notice of Breach
and the indemnification obligation with respect thereto remains unsatisfied, or
there is pending a dispute with respect to such obligation, until such dispute
is finally resolved or satisfied in accordance with Section 12.5.
Notwithstanding the foregoing, a Manager may, with the consent of the
Independent Directors in their sole and absolute discretion, be relieved of the
restrictions on transferability contained in this Section 12.7 by (A) consenting
to personal liability (by execution and delivery of an agreement to such effect
in form and substance reasonably satisfactory to the Independent Directors) for
any indemnification obligations secured by a Partnership Interest or Common
Stock, or (B) pledging (by execution and delivery of a pledge agreement or
amendment to this agreement in form and substance reasonably satisfactory to the
Independent Directors) substitute collateral that, in the reasonable
determination of the Independent Directors, is substantially equivalent in value
to the Partnership Interests or Common Stock described in this Section 12.7. In
the event that a Manager is relieved of the restrictions on transferability in
accordance with the terms of this Section 12.7, the security interest in such
Manager's Partnership Interest and Common Stock referred to in Section 12.5
shall terminate without further action, and the Partnership, at the request of
such Manager, shall promptly execute and deliver any document or instrument
reasonably requested by such Manager to evidence such termination. Upon exercise
of the Rights with respect to any Partnership Units included in the Collateral,
the Partnership, in perfection of the security interest herein granted, shall
retain the certificate(s) representing the portion, if any, of the Common Stock
issued upon such exercise that is included in the Collateral. If any portion of
the Partnership Interest of any Manager included in the Collateral is
represented by certificates, the Partnership shall retain such certificates in
perfection of the security interest herein granted.
12.8 BUILD-TO-SUIT GUARANTEE. The obligations of the Managers under
-----------------------
Section 12.8 of the Prior Agreement, if any, have been satisfied.
12.9 CONTRIBUTION AMONG MANAGERS. Without limiting the obligations
---------------------------
of any Manager to Weeks, the Partnership and the General Partner under this
Article XII, the Managers agree, as among themselves and only in their
individual capacities, to take any and all actions as may be necessary so that
the economic effect on each Manager resulting from the satisfaction of any
indemnification or payment obligation arising under this Article XII does not
exceed a percentage of the aggregate economic effect arising from all such
indemnification and payment obligations equal to 87.36% (in the case of A. Ray
Weeks, Jr.), 8.55% (in the case of Thomas D. Senkbeil), and 4.09% (in the case
of Forrest W. Robinson).
ARTICLE XIII
------------
GENERAL PARTNER REPRESENTATIONS AND WARRANTIES
----------------------------------------------
The General Partner represents and warrants to the Partnership and the
Limited Partners as follows:
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<PAGE>
(a) Organization. The General Partner is duly incorporated,
------------
validly existing and in good standing under the laws of the State of
Georgia.
(b) Due Authorization; Binding Agreement. The execution,
------------------------------------
delivery and performance of this Agreement by the General Partner has been
duly and validly authorized by all necessary action of the General Partner.
This Agreement has been duly executed and delivered by the General Partner,
or an authorized representative of the General Partner, and constitutes a
legal, valid and binding obligation of the General Partner, enforceable
against the General Partner in accordance with the terms hereof.
(c) Consents and Approvals. No consent, waiver, approval or
----------------------
authorization of, or filing, registration or qualification with, or notice
to, any governmental unit or any other Person is required to be made,
obtained or given by the General Partner in connection with the execution,
delivery and performance of this Agreement other than consents, waivers,
approvals or authorizations that have been obtained prior to the date
hereof.
ARTICLE XIV
-----------
ARBITRATION OF DISPUTES
-----------------------
14.1 ARBITRATION. Notwithstanding anything to the contrary contained
-----------
in this Agreement, all claims, disputes and controversies between the parties
hereto (including, without limitation, any claims, disputes and controversies
between the Partnership and any one or more of the Partners, any claims,
disputes and controversies between any one or more Partners and any claims,
disputes and controversies between Weeks and any Partner) arising out of or in
connection with this Agreement or the Partnership, relating to the validity,
construction, performance, breach, enforcement or termination hereof, or
otherwise, shall be resolved by binding arbitration in Atlanta, Georgia, in
accordance with this Article XIV, the United States Arbitration Act, 9 U.S.C.
(S)(S) 1 et seq., and, to the extent not inconsistent herewith, the Commercial
------
Arbitration Rules of the American Arbitration Association, as amended and
effective on November 1, 1993 ("Commercial Arbitration Rules"), a copy of which
is attached hereto as Exhibit P.
---------
14.2 PROCEDURES. Any arbitration called for by this Article XIV
----------
shall be conducted in accordance with the following procedures:
(a) When the combined claims, counterclaims or other disputes
and controversies do not exceed the sum of $50,000, exclusive of interest
and arbitration costs, the "Expedited Procedures" as provided in Rules 53
through 57 of the Commercial Arbitration Rules shall apply. If the combined
claims, counterclaims or other disputes and controversies exceed the sum of
$1,000,000, exclusive of interest and arbitration costs, the American
Arbitration Association Supplementary Procedures for Large,
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<PAGE>
Complex Disputes as amended herein ("Complex Arbitration Rules"), attached
hereto as Exhibit Q, shall be applied by the arbitrators in accordance with
---------
the Commercial Arbitration Rules.
(b) Weeks, the Partnership or any Partner (the "Requesting
Party") may demand arbitration pursuant to Section 14.1 hereof at any time
by giving written notice of such demand (the "Demand Notice") to all
Partners and (if the Requesting Party is not the Partnership) to the
Partnership which Demand Notice shall describe in reasonable detail the
nature of the claim, dispute or controversy.
(c) Within fifteen (15) days after the giving of a Demand
Notice, the Requesting Party, on the one hand, and each of the other
parties and/or the Partnership against whom the claim has been made or with
respect to which a dispute has arisen (collectively, the "Responding
Party"), on the other hand, shall select and designate in writing to the
other party one reputable, disinterested individual (a "Qualified
Individual") willing to act as an arbitrator of the claim, dispute or
controversy in question. Each of the Requesting Party and the Responding
Party shall use their best efforts to select a present or former partner of
a "Big 6" accounting firm having no affiliation with any of the parties as
their respective Qualified Individual to act as the second arbitrator.
Within fifteen (15) days after the foregoing selections have been made, the
arbitrators so selected shall jointly select a present or former partner of
a "Big 6" accounting firm having no affiliation with any of the parties as
the third Qualified Individual willing to act as an arbitrator of the
claim, dispute or controversy in question. In the event that the two
arbitrators initially selected are unable to agree on a third arbitrator
within the second fifteen (15) day period referred to above, then, on the
application of either party, the American Arbitration Association shall
promptly select and appoint a present or former partner of a "Big 6"
accounting firm having no affiliation with any of the parties as the
Qualified Individual to act as the third arbitrator. The three arbitrators
selected pursuant to this subsection (b) shall constitute the arbitration
panel for the arbitration in question.
(d) The presentations of the parties hereto in the arbitration
proceeding shall be commenced and completed within sixty (60) days after
the selection of the arbitration panel pursuant to subsection (c) above,
and the arbitration panel shall render its decision in writing within
thirty (30) days after the completion of such presentations. Any decision
concurred in by any two (2) of the arbitrators shall constitute the
decision of the arbitration panel, and unanimity shall not be required.
(e) The arbitration panel shall have the discretion to include
in its decision a direction that all or part of the attorneys' fees and
costs of any party or parties and/or the costs of such arbitration be paid
by any other party or parties. On the application of a party before or
after the initial decision of the arbitration panel, and proof of its
attorneys' fees and costs, the arbitration panel shall order the other
party to make any payments directed pursuant to the preceding sentence.
-51-
<PAGE>
14.3 BINDING CHARACTER. Any decision rendered by the arbitration
-----------------
panel pursuant to this Article XIV shall be final and binding on the parties
hereto, and judgment thereon may be entered by any state or federal court of
competent jurisdiction.
14.4 EXCLUSIVITY. Arbitration shall be the exclusive method
-----------
available for resolution of claims, disputes and controversies described in
Section 14.1 hereof, and Weeks, the Partnership and the Partners stipulate that
the provisions hereof shall be a complete defense to any suit, action, or
proceeding in any court or before any administrative or arbitration tribunal
with respect to any such claim, controversy or dispute. The provisions of this
Article XIV shall survive the dissolution of the Partnership.
14.5 NO ALTERATION OF AGREEMENT. Nothing contained herein shall be
--------------------------
deemed to give the arbitrators any authority, power or right to alter, change,
amend, modify, add to, or subtract from any of the provisions of this Agreement,
and the arbitrators shall, consistently with applicable law, apply and enforce
the terms, conditions and provisions of this Agreement in any arbitration
hereunder.
ARTICLE XV
----------
GENERAL PROVISIONS
------------------
15.1 NOTICES. All notices, offers or other communications required
-------
or permitted to be given pursuant to this Agreement shall be in writing and may
be personally served, telecopied or sent by United States mail and shall be
deemed to have been given when delivered in person, upon receipt of telecopy or
three business days after deposit in United States mail, registered or
certified, postage prepaid, and properly addressed, by or to the appropriate
party. For purposes of this Section 15.1, the addresses of the parties hereto
shall be as set forth on the records of the Partnership. The address of any
party hereto may be changed by a notice in writing given in accordance with the
provisions hereof.
15.2 SUCCESSORS. This Agreement and all the terms and provisions
----------
hereof shall be binding upon and shall inure to the benefit of all Partners,
and their legal representatives, heirs, successors and permitted assigns, except
as expressly herein otherwise provided.
15.3 EFFECT AND INTERPRETATION. This Agreement shall be governed by
-------------------------
and construed in conformity with the laws of the State of Georgia.
15.4 COUNTERPARTS. This Agreement may be executed in counterparts,
------------
each of which shall be an original, but all of which shall constitute one and
the same instrument.
15.5 PARTNERS NOT AGENTS. Nothing contained herein shall be
-------------------
construed to constitute any Partner the agent of another Partner, except as
specifically provided herein, or in
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<PAGE>
any manner to limit the Partners in the carrying on of their own respective
businesses or activities.
15.6 ENTIRE UNDERSTANDING, ETC. This Agreement constitutes the
-------------------------
entire agreement and understanding among the Partners and supersedes any prior
understandings and/or written or oral agreements among them respecting the
subject matter within
15.7 AMENDMENTS.
----------
(a) Amendments to this Agreement may be proposed by the General
Partner. Subject to the further provisions hereof, the General Partner
shall submit any proposed amendment to the Limited Partners. The General
Partner shall seek the written vote of the Partners on the proposed
amendment or shall call a meeting to vote thereon and to transact any other
business that it may deem appropriate. For purposes of obtaining a written
vote, the General Partner may require a response within a reasonable
specified time, but not less than fifteen (15) days, and failure to respond
in such time period shall constitute a vote that is consistent with the
General Partner's recommendation with respect to the proposal. Except as
otherwise provided in this Section 15.7, a proposed amendment shall be
adopted and be effective as an amendment hereto if it is approved by the
General Partner and receives the Consent of the Limited Partners.
(b) Notwithstanding Section 15.7(a), the General Partner shall
have the power, without any action by any Limited Partner, to amend this
Agreement as may be required to facilitate or implement any of the
following purposes:
(i) with the approval of the Independent Directors, to
add to the obligations of the General Partner or Weeks or surrender
any right or power granted to the General Partner or Weeks, or any
Affiliate of the General Partner or Weeks, for the benefit of the
Limited Partners;
(ii) to reflect the admission, substitution, termination,
or withdrawal of Partners in accordance with this Agreement;
(iii) to set forth the designations, rights, powers,
duties, and preferences of the holders of any additional Partnership
Interests issued pursuant to Section 9.3 hereof and to adjust any and
all provisions of this Agreement (including the Percentage Interests
of the existing Limited Partners) as deemed necessary or appropriate
in the General Partner's sole and absolute discretion in light of such
designations, rights, powers, duties and preferences;
(iv) to reflect a change that is of an inconsequential
nature and does not adversely affect the Limited Partners in any
material respect, or to cure any ambiguity, correct or supplement any
provision in this Agreement not inconsistent
-53-
<PAGE>
with law or with other provisions, or make other changes with respect
to matters arising under this Agreement that will not be inconsistent
with law or with the provisions of this Agreement;
(v) to satisfy any requirements, conditions, or
guidelines contained in any order, directive, opinion, ruling or
regulation of a federal or state agency or contained in federal or
state law;
(vi) to change the name of the Partnership; and
(vii) to maintain Weeks' status as a REIT.
The General Partner shall provide notice to the Limited Partners when any
action under this Section 15.7(b) is taken.
(c) Notwithstanding Sections 15.7(a) and 15.7(b) hereof, this
Agreement shall not be amended without the written consent of each Partner
adversely affected if such amendment would (i) convert a Limited Partner's
interest in the Partnership into a general partner interest, (ii) modify
the limited liability of a Limited Partner in a manner adverse to such
Limited Partner, (iii) alter or modify the Rights in a manner adverse to
such Partner, or (iv) amend this Section 15.7(c).
15.8 SEVERABILITY. If any provision of this Agreement, or the
------------
application of such provision to any person or circumstance, shall be held
invalid by a court of competent jurisdiction, the remainder of this Agreement,
or the application of such provision to persons or circumstances other than
those to which it is held invalid by such court, shall not be affected thereby.
15.9 TRUST PROVISION. This Agreement, to the extent executed by the
---------------
trustee of a trust, is executed by such trustee solely as trustee and not in a
separate capacity. Nothing herein contained shall create any liability on, or
require the performance of any covenant by, any such trustee individually, nor
shall anything contained herein subject the individual personal property of any
trustee to any liability.
15.10 PRONOUNS AND HEADINGS. As used herein, all pronouns shall
---------------------
include the masculine, feminine and neuter, and all defined terms shall include
the singular and plural thereof wherever the context and facts require such
construction. The headings, titles and subtitles herein are inserted for
convenience of reference only and are to be ignored in any construction of the
provisions hereof. Any references in this Agreement to "including" shall be
deemed to mean "including without limitation".
-54-
<PAGE>
15.11 ASSURANCES. Each of the Partners shall hereafter execute and
----------
deliver such further instruments and do such further acts and things as may be
required or useful to carry out the intent and purpose of this Agreement and as
are not inconsistent with the terms hereof.
-55-
<PAGE>
IN WITNESS WHEREOF, the parties hereto have executed this Agreement or
caused this Agreement to be executed as of the date and year first above
written.
WEEKS CORPORATION
By: ___________________________________
Thomas D. Senkbeil
Vice Chairman
WEEKS GP HOLDINGS, INC.
By: ____________________________________
Name:_______________________________
Title:______________________________
WEEKS LP HOLDINGS, INC.
By: ____________________________________
Name:_______________________________
Title:______________________________
A. Ray Weeks, Jr.
John P. Weeks
Marsha Weeks
Trust U/W
Patricia Weeks
Deborah Felker
Trust B
Weeks Horizon
Oakdale Land
Weeks Hillside
-56-
<PAGE>
Tom Senkbeil
Weeks Southridge
Forrest Robinson
Harry T. Weeks
Louis C. Robinson
HV, Inc.
Buddy Duckett
John Atwell
Bob Cutlip
Klay Simpson
Helen Weeks
Mark Flowers
Weeks Management
RTF Management
By: WEEKS CORPORATION, pursuant to the
Consent of the Limited Partners approving
the amendment and restatement of the
Prior Agreement as set forth in this Agreement
By: _________________________________
Thomas D. Senkbeil, Vice Chairman
-57-
<PAGE>
EXHIBIT A-1
-----------
PARTNERS AT THE DATE HEREOF
<TABLE>
<CAPTION>
NAME OF PARTNER NUMBER OF UNITS
--------------- ---------------
<S> <C>
Weeks LP Holdings, Inc. 11,045,349
A. Ray Weeks, Jr. 774,685
John P. Weeks 239,791
Marsha Weeks 228,047
Trust U/W 212,663
Patricia Weeks 206,607
Deborah Felker 198,339
Trust B 187,492
Weeks Horizon 116,012
Oakdale Land 110,493
Weeks Hillside 78,145
Tom Senkbeil 52,817
Weeks Southridge 42,993
Forrest Robinson 28,877
Harry T. Weeks 27,535
Louis C. Robinson 20,016
HV, Inc. 17,074
Buddy Duckett 5,627
John Atwell 5,627
Bob Cutlip 5,138
Klay Simpson 4,110
Helen Weeks 2,442
Mark Flowers 1,541
Weeks Management 1,142
RTF Management 257
</TABLE>
-58-
<PAGE>
EXHIBIT A TO FIRST AMENDMENT TO THE SECOND AMENDED
AND RESTATED AGREEMENT OF LIMITED PARTNERSHIP OF
WEEKS REALTY, L.P.
I. MASTER DOCUMENTS
----------------
A. Letter of Intent
----------------
1. Letter of Intent
2. First Amendment to Letter of Intent
II. FORMATION OF SUBSIDIARY STRUCTURE
---------------------------------
A. Formation of Weeks GP Holdings, Inc.
------------------------------------
1. Articles of Incorporation
2. Bylaws
3. Certificate of Existence from the Secretary of State of Georgia
4. Directors' Resolutions
5. Certificate of Existence issued by the Secretary of State of
Georgia
6. Qualification to do business in South Carolina
7. Certificate of Existence issued by the Secretary of State of
South Carolina
8. Qualification to do business in Tennessee
9. Certificate of Existence issued by the Secretary of State of
Tennessee
10. Qualification to do business in Florida
11. Certificate of Existence issued by the Secretary of State of
Florida
12. Subscription Agreement
B. Formation of Weeks LP Holdings, Inc.
------------------------------------
1. Articles of Incorporation
2. Bylaws
3. Certificate of Existence from the Secretary of State of Georgia
4. Directors' Resolutions
5. Subscription Agreement
C. Transfer of 1% GP Interest in Weeks Realty, L.P. from Weeks
-----------------------------------------------------------
Corporation to Weeks GP Holdings, Inc., conversion of Weeks
-----------------------------------------------------------
Corporation remaining GP Interest to LP Interest, and transfer of that
----------------------------------------------------------------------
LP Interest to Weeks LP Holdings, Inc.
--------------------------------------
1. Consent from the Limited Partners of Weeks Realty, L.P.
2. Consent from Weeks' Lenders
<PAGE>
3. Second Amended and Restated Agreement of Limited Partnership of
Weeks Realty, L.P.
4. Certificate of Amendment to Certificate of Limited Partnership
of Weeks Realty, L.P.
5. Amendment to authorization of Weeks Realty, L.P. to do business
in South Carolina
6. Amendment to authorization of Weeks Realty, L.P. to do business
in Florida
7. Qualification of Weeks Realty, L.P. to do business in Tennessee
8. Good standing certificate for Weeks Realty, L.P. issued by the
Secretary of State of Tennessee
9. Tennessee real estate brokerage license for Weeks Realty, L.P.
D. Formation of NWI Warehouse Group, LLC
-------------------------------------
1. Limited Liability Company Agreement
2. Certificate of Formation
3. Certificate of Existence issued by the Secretary of State of
Delaware
III. TRANSFER OF COMPLETED PROPERTIES FROM NWI GROUP TO NWI WAREHOUSE
----------------------------------------------------------------
GROUP, LLC
----------
A. Conveyance (for each of 17 properties)
--------------------------------------
1. Proration Statement
2. Quitclaim Deed for Contribution
3. Assignment and Assumption of Leases and Commissions Obligations
4. Blanket Bill of Sale, Assignment and Assumption
5. Certificate of Non-Foreign Status
6. Affidavit of Title
7. 1099-S Reporting
8. Tenant Estoppel Certificates
9. NWI Back-up Tenant Estoppels
10. Owner Title Insurance Commitment
11. Certified Copy of Merger Certificate (for land records)
A-2-
<PAGE>
B. Loan Documents
--------------
1. Assumption of Liability and Modification Agreement
2. UCC Statement Amendments
3. Legal Opinion of King & Spalding
4. Legal Opinion of Baker, Donelson, Bearman & Caldwell
5. Endorsements to Lender Title Insurance Policies
C. NWI Authorization Documents
---------------------------
1. Good Standing Certificate for Buckley & Company Real Estate, Inc.
issued by the Secretary of State of Tennessee
2. Good Standing Certificate for NWI Warehouse Group, L.P. issued
by the Secretary of State of Tennessee
3. Good Standing Certificate for NWI X, L.P. issued by the
Secretary of State of Tennessee
4. Copies of NWI Warehouse Group, L.P. and NWI X, L.P. partnership
documents certified by a general partner of NWI X, L.P.
5. Directors' resolutions of Buckley & Company Real Estate, Inc.
approving the transaction
6. Shareholders' resolutions of Buckley & Company Real Estate, Inc.
approving the transaction
7. Buckley & Company, Inc. Secretary's Certificate as to corporate
resolutions, articles, and bylaws, and incumbency of officers
8. Legal Opinion of NWI's and Buckley's counsel
IV. MERGER
------
A. Merger of NWI Warehouse Group, LLC with and into Weeks Realty, L.P.
-------------------------------------------------------------------
1. Agreement of Merger
2. First Amendment to Second Amended and Restated Agreement of
Limited Partnership of Weeks Realty, L.P.
3. Certificate of Merger to be filed in Georgia
4. Certificate of Merger to be filed in Delaware
B. Weeks Corporation
-----------------
1. Directors' resolutions authorizing the transaction and amending
the Bylaws
2. Directors' resolutions appointing Nelley and Buckley as
Executive Vice Presidents and Nelley as a director
A-3-
<PAGE>
3. Secretary's Certificate as to corporate resolutions, incumbency
of officers, partnership documents, and corporate articles and
bylaws
4. Certificate of Existence issued by the Secretary of State of
Georgia
5. Registration Rights and Lock-Up Agreement
6. Registration Rights Agreement for Post - March 31, 1998 Shares
and Units
7. Employment Agreement - Albert W. Buckley, Jr.
8. Employment Agreement - John W. Nelley, Jr.
9. Noncompetition Agreement - NWI
10. Noncompetition Agreement - Albert W. Buckley, Jr.
11. Noncompetition Agreement - John W. Nelley, Jr.
12. Non-Incentive Stock Option for Albert W. Buckley, Jr.
13. Non-Incentive Stock Option for John W. Nelley, Jr.
14. Indemnification Agreement for John W. Nelley, Jr.
15. K&S Legal Opinion
16 Buckley - 83(b) Election
V. AGREEMENTS FOR UNDEVELOPED LAND
-------------------------------
A. Agreement for Contribution of Development Properties
----------------------------------------------------
1. Contribution Agreement
2. Memorandum of Agreement
3. Exclusive Development, Leasing and Management Agreement with
Weeks Realty, L.P.
B. Agreement for Contribution of Aspen Grove Land
----------------------------------------------
1. Contribution Agreement
2. Memorandum of Agreement
3. First Union Letter on Releases
C. Agreement for Contribution of I-440 Land
----------------------------------------
1. Contribution Agreement
2. Memorandum of Agreement
D. Agreement for Contribution of Buckley Land
------------------------------------------
1. Contribution Agreement
2. Memorandum of Agreement
3. Estoppel on Purchase Money Loan
A-4-
<PAGE>
VI. CONTRIBUTION OF NWI GROUP OPERATING BUSINESS
--------------------------------------------
A. Contribution Agreement for NWI Operating Business
B. Contribution Agreement for Buckley Operating Business
VII. BROKER RELEASES
---------------
A. Waiver Letter - The Myrick Company
B. Waiver Letter - Berg & Schafly
A-5-
<PAGE>
FIRST AMENDMENT
TO THE
SECOND AMENDED AND RESTATED
AGREEMENT OF LIMITED PARTNERSHIP
OF
WEEKS REALTY, L.P.
THIS FIRST AMENDMENT TO THE SECOND AMENDED AND RESTATED AGREEMENT OF
LIMITED PARTNERSHIP OF WEEKS REALTY, L.P. is entered into as of the 1st day of
November, 1996, by and among NWI WAREHOUSE GROUP, L.P., a Tennessee limited
partnership ("NWI"), BUCKLEY & COMPANY REAL ESTATE, INC., a Tennessee
corporation ("Buckley & Co."), and WEEKS GP HOLDINGS, INC., a Georgia
corporation (the "General Partner").
RECITALS
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Weeks Realty, L.P. (the "Partnership") is a Georgia limited partnership.
The partnership agreement of the Partnership is that certain Second Amended and
Restated Agreement of Limited Partnership of Weeks Realty, L.P., dated as of
October 30, 1996 (the "Partnership Agreement"). Capitalized terms used herein
without definition shall have the meanings ascribed to them in the Partnership
Agreement.
Pursuant to the agreements and instruments listed or referred to on Exhibit
A hereto (the ("Transaction Documents"), and the transactions effected by the
Transaction Documents, effective as of the date hereof NWI and Buckley & Co.
have contributed certain assets, properties and businesses to the capital of the
Partnership. The assets, properties and businesses contributed by NWI to the
capital of the Partnership by the merger of NWI Warehouse Group, LLC, into the
<PAGE>
Partnership (which are further described on Exhibit G hereto) are referred to as
the "Completed Properties." NWI has agreed, subject to the terms and conditions
of the Transaction Documents, to make certain additional contributions of
properties to the capital of the Partnership at certain times in the future (in
a series of transactions similar to the merger described in the foregoing
sentence).
Pursuant to the Partnership Agreement (including, without limitation,
Section 9.3 and Section 15.7(b)(ii) thereof), the General Partner is authorized
(without the consent of any Limited Partner) to admit additional Limited
Partners to the Partnership for such Capital Contributions (including the
contribution of assets in a series of transactions similar to the merger
described in the foregoing paragraph) as are determined by the General Partner
to be appropriate, and to amend the Partnership Agreement to reflect such
admissions.
The General Partner wishes to amend the Partnership Agreement as set forth
herein to reflect the admission of NWI and Buckley & Co. as Limited Partners of
the Partnership, and NWI and Buckley & Co. wish to enter into this First
Amendment to memorialize their agreement as to certain matters relating to their
becoming Limited Partners of the Partnership.
AGREEMENT
---------
In consideration of the circumstances referred to in the Recitals, the
consummation of the transactions effected pursuant to the Transaction Documents,
the mutual covenants and agreements contained herein, and other good and
valuable consideration, the receipt, adequacy and sufficiency of which are
hereby acknowledged, the parties hereto, intending to be legally bound, hereby
agree as follows:
1. Admission. NWI and Buckley & Co. are hereby admitted to the
---------
Partnership as Limited Partners, effective as of the date hereof, and each of
NWI and Buckley & Co. hereby agrees to be bound by the Partnership Agreement,
including, but not limited to, the transfer
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<PAGE>
restrictions contained in Article IX thereof, in their respective capacities as
Limited Partners of the Partnership.
2. Capital Contributions. NWI and Buckley & Co. are agreed to have made,
---------------------
as of the date hereof, the Capital Contributions set forth on Exhibit B hereto,
which Capital Contributions by NWI and Buckley & Co. have been made pursuant to
the merger and other transactions described in the Transaction Documents listed
on Exhibit A hereto. The agreed to gross fair market values of any property
other than money contributed by each of NWI and Buckley & Co., which shall be
such property's initial Gross Asset Value, are shown on Exhibit B. The parties
acknowledge that (a) the Capital Contribution made on the date hereof by NWI
includes interests in certain parcels of land identified on Exhibit B hereto,
together with improvements thereon that are under construction or undergoing
lease-up, (b) all benefits and burdens (including, without limitation, risk of
loss generally) associated with such land and improvements (other than bare
legal title thereto) have been retained by NWI, and (c) such retained benefits
and burdens shall be contributed to the capital of the Partnership in the
future, subject to the terms and conditions of the Transaction Documents.
Accordingly, at the date hereof, there has been no credit to the Capital Account
of NWI with respect to the contribution of such land and improvements, and the
Partnership Interest and Partnership Units of NWI at the date hereof do not
reflect the value of such land and improvements. NWI will receive credit to its
Capital Account with respect to such land and improvements only if, as and when
Partnership Units are issued to NWI with respect thereto, as referred to in
paragraph 5 below. For federal, state and local income tax purposes, the
parties agree that NWI shall be treated as the tax owner of such land and
improvements until such time as the benefits and burdens of ownership thereof
are conveyed to the Partnership.
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<PAGE>
3. Initial Partnership Units; Rights.
---------------------------------
(a) The Partnership Units attributable to the Partnership Interests
of NWI and Buckley & Co., effective upon their admission as Limited
Partners at the date hereof, are as set forth on Exhibit B hereto, and the
Partnership Agreement is hereby amended to reflect NWI's and Buckley &
Co.'s having such Partnership Units.
(b) The Partnership does hereby grant to each of NWI and Buckley &
Co., and each of them does hereby accept, the right, but not the obligation
(herein such rights being sometimes referred to as the "Rights"), to
require the Partnership to redeem all or a portion of the Partnership Units
issued to them pursuant to the Transaction Documents, on the terms and
subject to the conditions and restrictions contained in Exhibit D hereto.
The Rights are governed solely by this First Amendment and Exhibit D
hereto, and neither NWI nor Buckley & Co. shall have any rights with
respect to the "Rights" provided for in Section 11.1 and Exhibit B-1 to the
Partnership Agreement. The Rights granted hereunder may be exercised by
any one or more of NWI and Buckley & Co., on the terms and subject to the
conditions and restrictions contained in Exhibit D hereto, upon delivery to
the Partnership of a Conversion Exercise Notice, in the form of Schedule 1
attached to Exhibit D, which notice shall specify the Partnership Units
with respect to which the Rights are being exercised. Once delivered, the
Conversion Exercise Notice shall be irrevocable, subject to compliance by
the General Partner and the Partnership with the terms of the Rights.
Weeks executes and delivers this First Amendment solely to become bound by
its undertakings in Exhibit D hereto.
4. Restated Percentage Interests. After giving effect to the admission
-----------------------------
of NWI and Buckley & Co. as Limited Partners at the date hereof, the Percentage
Interests of all of the Partners have been revised and are as reflected on
Exhibit C hereto, and the Partnership Agreement is hereby amended accordingly.
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<PAGE>
5. Future Contributions. The parties acknowledge that, pursuant to and
--------------------
subject to the terms and conditions of the Transaction Documents, NWI will make
additional Capital Contributions, which Capital Contributions will be made
pursuant to mergers and other transactions described in the Transaction
Documents listed on Exhibit A hereto. Concurrently with each such additional
Capital Contribution, the General Partner shall supplement this First Amendment
by executing and attaching hereto supplements to Exhibits B and C (which shall
be captioned "Exhibit B-1," "Exhibit B-2," "Exhibit C-1," "Exhibit C-2," and so
on and shall identify the Capital Contribution to which each relates) that will,
respectively, reflect (to the extent determinable at such time) the Capital
Contribution made by NWI at that time, the initial Gross Asset Value of any
property other than money included in such Capital Contribution, the additional
Partnership Units attributable to the Partnership Interest associated with such
Capital Contribution, and the resulting restated Percentage Interests of all of
the Partners. Such supplements shall be in accordance with the terms of the
Transaction Documents. The Partnership Agreement shall be deemed to be amended
as reflected in each such supplement to this First Amendment.
6. Adjustments to Partnership Units. The parties acknowledge that the
--------------------------------
Transaction Documents provide for adjustments to the Partnership Units of NWI
and Buckley & Co. in certain circumstances, and further provide that NWI's
Partnership Interest and Units, and the resulting restated Percentage Interests
of all of the Partners, may not be capable of determination at the time a
Capital Contribution is made after the date hereof. At the times of adjustment
and final determination provided for in the Transaction Documents, the General
Partner shall supplement this First Amendment by executing and attaching hereto
either additional supplements to Exhibits B and C (in the form described above),
or amended and restated versions of prior supplements to Exhibits B and C, as
applicable. Such supplements shall be in accordance with the terms of the
Transaction Documents. The Partnership Agreement shall be deemed to be amended
as reflected in each such supplement to this First Amendment.
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<PAGE>
7. Proration of Distributions. Notwithstanding any contrary provision of
--------------------------
the Partnership Agreement, including, without limitation, Section 6.2 thereof,
NWI and Buckley agree that the first distribution of Net Operating Cash Flow
made with respect to the Partnership Units issued by reason of each Capital
Contribution made pursuant to the Transaction Documents shall be equal to the
amount of Net Operating Cash Flow otherwise distributable with respect to such
Partnership Units under the terms of the Partnership Agreement, multiplied by a
fraction, the numerator of which is the number of calendar days beginning on the
date such Capital Contribution is made and ending on the last day of the
calendar quarter with respect to which such distribution is being made, and the
denominator of which is the total number of days in such calendar quarter.
8. Representations and Warranties.
------------------------------
(a) NWI Completed and Development Properties. NWI hereby represents
----------------------------------------
and warrants to the Partnership and the General Partner as to the matters
set forth on Exhibit E hereto. NWI acknowledges that it has made and will
make representations and warranties to the Partnership and the General
Partner in that certain Contribution Agreement for Development Properties,
of even date herewith (the "Contribution Agreement"), between the
Partnership and NWI.
(b) NWI Operating Business. NWI acknowledges that it has made the
----------------------
representations and warranties to the Partnership and the General Partner
set forth in that certain Contribution Agreement for NWI Operating
Business, of even date herewith, between NWI and the Partnership.
(c) No Liens. NWI represents and warrants to the Partnership and the
--------
General Partner that at the date hereof none of the Partnership Units
issued or issuable to it pursuant to the Transaction Documents, and none of
the shares of Common Stock that
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<PAGE>
may be acquired by it upon exercise of Rights, is subject to any Lien,
other than the security interest created by paragraph 11 hereof.
(d) Definition. All of the representations and warranties of NWI
----------
referred to in this paragraph 8 are referred to collectively as the
"Representations and Warranties."
(e) General Partner Representations. The General Partner represents
-------------------------------
and warrants to NWI and Buckley & Co. as follows:
(i) Organization. The General Partner is duly incorporated,
------------
validly existing and in good standing under the laws of the State of
Georgia.
(ii) Due Authorization; Binding Agreement. The execution,
------------------------------------
delivery and performance of this First Amendment by the General
Partner have been duly and validly authorized by all necessary action
of the General Partner. This First Amendment has been duly executed
and delivered by the General Partner and constitutes a legal, valid
and binding obligation of the General Partner, enforceable against the
General Partner in accordance with the terms hereof.
(iii) Consents and Approvals. No consent, waiver, approval or
----------------------
authorization of, or filing, registration or qualification with, or
notice to, any governmental unit or any other Person is required to be
made, obtained or given by the General Partner in connection with the
execution, delivery and performance of this Amendment, other than
consents, waivers, approvals or authorizations that have been obtained
prior to the date hereof.
(iv) Partnership Units. The Partnership Units issued and
-----------------
issuable pursuant to the Transaction Documents are duly authorized
and, when issued in accordance with the Transaction Documents, will be
duly issued, fully paid and
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<PAGE>
nonassessable and will be unencumbered except for the security
interest created by paragraph 11 hereof.
9. Survival of Representations and Warranties. All of the
------------------------------------------
Representations and Warranties shall survive the consummation of the
transactions contemplated by the Transaction Documents; provided, however, that
no claim for a breach of any Representation or Warranty may be maintained by the
Partnership or the General Partner unless the Partnership or the General Partner
shall have delivered a written notice ("Notice of Breach") specifying the
details of such claimed breach to NWI on or before the third anniversary of the
date hereof.
10. Indemnification.
---------------
(a) NWI indemnifies and holds harmless the Partnership and the
General Partner against and from all liabilities, demands, claims, actions
or causes of action, assessments, losses, fines, penalties, costs, damages
and expenses (including, without limitation, reasonable attorneys' and
accountants' fees and expenses actually incurred) sustained or incurred by
the Partnership or the General Partner as a result of or arising out of any
inaccuracy in a Representation or Warranty.
(b) The Partnership and the General Partner shall not be entitled to
indemnification hereunder unless a Notice of Breach has been delivered by
the Partnership or the General Partner to NWI within the time period
specified in paragraph 9 hereof.
(c) Subject to the further provisions hereof, NWI shall not be liable
under this paragraph 10 unless and until the total amount recoverable from
NWI under this paragraph 10 exceeds, in the aggregate, $350,000; provided,
however, that if NWI's obligation under this paragraph 10 exceeds, in the
aggregate, such limit, its obligation under this paragraph 10 shall be for
the full amount of such obligation. The foregoing
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<PAGE>
$350,000 threshold shall not be applicable to Representation 1.38 of
Exhibit E hereto (the "Prorations Representation"), and NWI shall not be
liable for inaccuracies in the Prorations Representation unless and until
the total amount recoverable under this paragraph 10 with respect thereto
exceeds $5,000 for a particular Completed or Development Property or
$25,000 for all Completed and Development Properties; provided, however,
that if NWI's obligation under this paragraph 10 with respect to the
Prorations Representation exceeds $5,000 for a particular Completed or
Development Property, NWI's obligation under this paragraph 10 shall be the
full amount of such obligation for such Completed or Development Property;
and provided further, however, that if NWI's obligation under this
paragraph 10 with respect to the Prorations Representation exceeds $25,000
in the aggregate for all Completed and Development Properties, NWI's
obligation under this paragraph 10 shall be the full amount of such
obligation.
(d) If a claim for indemnification is asserted by the Partnership or
the General Partner against NWI, NWI shall have the right, at its own
expense, to participate in the defense of any claim, action or proceeding
("Claim") asserted against the Partnership or the General Partner that
resulted in the claim for indemnification, and if such right is exercised,
the parties shall cooperate in the defense of such action or proceeding.
(e) Indemnification of the Partnership and the General Partner
pursuant to this paragraph 10 and the remedies in respect thereof as set
forth in paragraph 11 hereof shall be the exclusive remedy of the
Partnership and the General Partner for any breach of any Representation or
Warranty, and the only legal action that may be asserted against NWI under
this paragraph 10 for breach of a Representation or Warranty shall be to
pursue the remedies in respect thereof as set forth in paragraph 11 hereof.
Nothing contained herein shall limit any remedy the Partnership may have
under the Contribution Agreement, including, without limitation, the remedy
of specific performance for any failure by NWI to contribute a Development
Property pursuant to the Contribution Agreement.
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<PAGE>
11. Security and Remedies.
---------------------
(a) NWI grants to the Partnership a lien upon and a continuing
security interest in 280,000 of the Partnership Units issued to it pursuant
to the Transaction Documents at the date hereof and the shares of Common
Stock acquired by it upon exercise of Rights with respect to such
Partnership Units (the "Collateral"), which shall be security for the
indemnification obligations of NWI under paragraph 10 hereof. At the time
of each Capital Contribution pursuant to the Contribution Agreement, the
number of shares of Common Stock and Partnership Units constituting the
Collateral shall be increased (with additional shares of Common Stock
and/or Partnership Units not subject to any Lien) by a number of shares of
Common Stock and/or Partnership Units having a value equal to the value
provided for in Exhibit F hereto (based, in the case of Partnership Units,
on the Current Per Share Market Price at such time of the number of shares
of Common Stock for which such Partnership Units could be redeemed if the
General Partner assumed the redemption obligation and elected to pay the
Redemption Price (as defined in Exhibit D) in shares of Common Stock
(assuming the ownership limits in the Articles of Incorporation and in
Exhibit D would not prohibit the issuance of any such shares of Common
Stock to NWI), and, in the case of shares of Common Stock, on the Current
Per Share Market Price at such time). At each anniversary of the date
hereof, the number of shares of Common Stock and the Partnership Units
constituting the Collateral shall be increased or decreased so that the
value thereof (based, in the case of Partnership Units, on the Current Per
Share Market Price at such time of the number of shares of Common Stock for
which such Partnership Units could be redeemed if the General Partner
assumed the redemption obligation and elected to pay the Redemption Price
(as defined in Exhibit D) in shares of Common Stock (assuming the ownership
limits in the Articles of Incorporation and in Exhibit D would not prohibit
the issuance of any such shares of Common Stock to NWI), and, in the case
of shares of Common Stock, on the Current Per Share Market Price at such
time) is equal to $7,000,000 plus all amounts
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<PAGE>
previously taken into account from Exhibit F; provided, however, that in no
event shall the aggregate amount of NWI's Collateral at any time exceed
one-half of the total number of shares of Common Stock and Partnership
Units that NWI owns at that time. To the maximum extent possible under the
terms hereof, NWI's Collateral shall consist of Partnership Units, rather
than shares of Common Stock. The indemnification obligation of NWI
hereunder with respect to breaches of Representations and Warranties shall
be payable out of, and only out of, NWI's entire Collateral; provided,
however, that NWI may satisfy all or any part of any indemnification
obligation of NWI in cash if NWI so elects. Any Transfer by NWI of its
Collateral shall be subject to the lien and security interest granted
hereby.
(b) In the event the General Partner asserts, within the time period
set forth in paragraph 9 hereof, that NWI has an indemnification obligation
to the Partnership or the General Partner under paragraph 10 hereof, the
General Partner shall deliver written notice (the "Indemnification Notice")
to NWI describing in reasonable detail the circumstances giving rise to
such obligation and the amount thereof. If, within thirty (30) days after
its receipt of an Indemnification Notice, NWI delivers written notice to
the General Partner indicating that NWI disputes the circumstances giving
rise to or the amount of such claimed indemnification obligation, the
General Partner may submit such matter for binding arbitration in
accordance with the provisions of Article XIV of the Partnership Agreement
by delivering a Demand Notice to NWI pursuant to such Article XIV. If,
after receiving timely notice of a dispute hereunder from NWI, the General
Partner fails to so submit the matter for arbitration within twenty (20)
days after receipt of such notice from NWI, then NWI shall be relieved of
the claimed indemnification obligation described in the Indemnification
Notice. In the event NWI (i) receives an Indemnification Notice and fails
to timely deliver notice to the General Partner of its dispute as to the
indemnification obligation and fails to make payment within thirty (30)
days after delivery of an Indemnification Notice or (ii) has an
indemnification obligation to the Partnership or the General Partner under
paragraph 10 hereof as determined
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<PAGE>
pursuant to Article XIV of the Partnership Agreement, and does not satisfy
such obligation within ten (10) days after the decision rendered in the
arbitration, then, in either event, the Partnership shall have any and all
remedies of a secured creditor under the Uniform Commercial Code, and, in
addition thereto, at the election of the Partnership, the Partnership
shall, to the extent permitted by law, be deemed, without the payment of
any further consideration or the taking of any further action required by
NWI, to have acquired from NWI such portion of the Collateral as shall be
equal in value (based, in the case of Partnership Units, on the Current Per
Share Market Price as computed as of the date immediately preceding such
deemed acquisition of the number of shares of Common Stock for which such
Partnership Units could be redeemed if the General Partner assumed the
redemption obligation and elected to pay the Redemption Price (as defined
in Exhibit D) in shares of Common Stock (assuming the ownership limits in
the Articles of Incorporation would not prohibit the issuance of any such
shares of Common Stock to NWI), and, in the case of shares of Common Stock,
on the Current Per Share Common Stock Price computed as of the date
immediately preceding such deemed acquisition) to the amount recoverable
from NWI under paragraph 10 hereof. In the event the Partnership shall have
acquired from NWI any Collateral pursuant to this paragraph, the General
Partner shall deliver written notice to NWI within ten (10) days thereafter
identifying the specific Collateral acquired and, if such Collateral
consists of Partnership Units, the Percentage Interest of NWI following
such acquisition. Unless and until the Partnership shall have acquired from
NWI any Collateral pursuant to this paragraph, NWI shall retain all rights
with respect to the Collateral not expressly limited herein or in the
Partnership Agreement, including, without limitation, rights to
distributions provided for in the Partnership Agreement and rights to
dividends on shares of Common Stock. NWI hereby agrees to take any and all
actions and to execute and deliver any and all documents or instruments
necessary to perfect the security interest created by this Amendment,
including delivering the certificates representing the Partnership Units or
shares of Common Stock to the General Partner.
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<PAGE>
12. Non-Recourse. Notwithstanding anything contained in this Amendment or
------------
in the Partnership Agreement to the contrary, the sole recourse of the General
Partner or the Partnership under paragraph 10 hereof with respect to breaches of
Representations and Warranties shall be against the Collateral, and NWI shall
have no personal liability with respect thereto. Nothing contained herein shall
limit any remedy the Partnership may have under the Contribution Agreement,
including, without limitation, the remedy of specific performance for any
failure by NWI to contribute a Development Property pursuant to the Contribution
Agreement.
13. Restriction on Transfer. In connection with the security interest
-----------------------
granted by NWI to the Partnership under paragraph 11 hereof, NWI agrees that any
shares of Common Stock and any portion of NWI's Partnership Interest included in
the Collateral shall not be Transferred without the consent of the General
Partner until the third anniversary of the date hereof; provided, however, that
NWI may Transfer all or any portion of such shares of Common Stock to an
Affiliate of NWI (so long as such Affiliate remains an Affiliate of NWI),
subject to the prior security interest granted in paragraph 11 hereof and to the
restrictions contained in Article IX of the Partnership Agreement, provided
further, however, that the restrictions imposed by this paragraph shall be
extended with respect to NWI if there has been delivered to NWI a Notice of
Breach and the indemnification obligation with respect thereto remains
unsatisfied, or there is pending a dispute with respect to such obligation,
until such dispute is finally resolved or satisfied in accordance with paragraph
11 hereof. Notwithstanding the foregoing, NWI may, with the consent of the
General Partner in its sole and absolute discretion, be relieved of the
restrictions on transferability contained in this paragraph by (a) consenting to
personal liability (by execution and delivery of an agreement to such effect in
form and substance reasonably satisfactory to the General Partner) for any
indemnification obligations secured by a Partnership Interest or Common Stock,
or (b) pledging (by execution and delivery of a pledge agreement or amendment to
this agreement in form and substance reasonably satisfactory to the General
Partner) substitute collateral that, in the reasonable determination of the
General Partner, is substantially equivalent in value to the Partnership
Interests or Common Stock described in this paragraph 13. In the event that NWI
is relieved of the restrictions on transferability in
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<PAGE>
accordance with the terms of this paragraph, the security interest in NWI's
Partnership Interest and Common Stock granted to the General Partner and the
Partnership pursuant to paragraph 11 hereof shall terminate without further
action, and the Partnership, at the request of NWI, shall promptly execute and
deliver any document or instrument reasonably requested by NWI to evidence such
termination. Upon exercise of the Rights with respect to any Partnership Units
included in the Collateral, the Partnership, in perfection of the security
interest herein granted, shall retain the certificate(s) representing the
portion, if any, of the Common Stock issued upon such exercise that is included
in the Collateral. If any portion of the Partnership Interest of NWI included in
the Collateral is represented by certificates, the Partnership shall retain such
certificates in perfection of the security interest herein granted.
14. Miscellaneous. This First Amendment shall be governed by and
-------------
construed in conformity with the laws of the State of Georgia. For the purposes
of the notice provisions of the Partnership Agreement, the address of each of
NWI and Buckley & Co. is as set forth on the signature page hereof. Except as
expressly amended hereby, the Partnership Agreement shall remain in full force
and effect. This First Amendment and all the terms and provisions hereof shall
be binding upon and shall inure to the benefit of the parties, and their legal
representatives, heirs, successors and permitted assigns.
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<PAGE>
IN WITNESS WHEREOF, the parties have executed and delivered this First
Amendment as of the date first above written.
WEEKS REALTY, L.P.
By: Weeks GP Holdings, Inc., a Georgia
corporation, its Sole General Partner
By: ___________________________
Thomas D. Senkbeil
Executive Vice President
NWI WAREHOUSE GROUP, L.P.
By: NWI X, L.P., its Sole General Partner
By: ___________________________
John W. Nelley, Jr.,
General Partner
By: ___________________________
Albert W. Buckley, Jr.,
General Partner
Address: 1410 Donelson Pike
Suite A-5
Nashville, Tennessee 37217
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<PAGE>
BUCKLEY & COMPANY REAL ESTATE, INC.
By:__________________________________
Name:____________________________
Title:_____________________________
Address: 1410 Donelson Pike
Suite A-5
Nashville, Tennessee 37217
Solely to evidence its agreement to its undertakings
in Exhibit D hereto:
WEEKS CORPORATION
By:__________________________________
Name:____________________________
Title:_____________________________
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<PAGE>
Exhibit A
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TRANSACTION DOCUMENTS
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<PAGE>
Exhibit B
---------
NWI Capital Contribution: All assets, properties and businesses transferred
from NWI at November 1, 1996, to the Partnership
pursuant to the Transaction Documents (as defined
in the foregoing First Amendment)
Buckley & Co. Capital All assets, properties and businesses transferred
Contribution: from Buckley & Co. at November 1, 1996, to the
Partnership pursuant to the Transaction Documents
(as defined in the foregoing First Amendment)
Gross Fair Market Value of
properties other than money
included in NWI Capital
Contribution: Airpark Center I
Airpark Center II
Airpark Center III
Airpark Center IV
Airpark Center V
Airpark Center VI
Airpark Center VII
Airpark Center VIII
Airpark Center IX
Airpark Center XI
Airpark Center XIII
Brentwood South I
Brentwood South II
Brentwood South III
Brentwood South IV
Brentwood South V
Brentwood South VI
$69,000,000
Gross Fair Market Values of
each property other than
money included in Buckley &
Co. Capital Contribution: $500,000 (Operating Business)
NWI Partnership Units: 1,080,752
Buckley & Co. Partnership Units: 20,000
Interests in land and
improvements as to which legal
title only is being contributed: Airpark XII, 440 Business Center I
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<PAGE>
Exhibit C
---------
PERCENTAGE INTERESTS
Partner Percentage Interest
- ------- -------------------
Weeks GP Holdings, Inc. 0.926%
Weeks LP Holdings, Inc. 74.374%
NWI 7.277%
A. Ray Weeks, Jr. 5.216%
John P. Weeks 1.615%
Marsha Weeks 1.536%
Trust U/W 1.432%
Patricia Weeks 1.391%
Deborah Felker 1.336%
Trust B 1.262%
Weeks Horizon 0.781%
Oakdale Land 0.744%
Weeks Hillside 0.526%
Tom Senkbeil 0.356%
Weeks Southridge 0.289%
Forrest Robinson 0.194%
Harry T. Weeks 0.185%
Louis C. Robinson 0.135%
Buckley & Co. 0.135%
HV, Inc. 0.115%
Buddy Duckett 0.038%
John Atwell 0.038%
Bob Cutlip 0.035%
Klay Simpson 0.028%
Helen Weeks 0.016%
Mark Flowers 0.010%
Weeks Management 0.008%
RTF Management 0.002%
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<PAGE>
Exhibit D
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RIGHTS TERMS
------------
The Rights granted by the Partnership to NWI and Buckley & Co. (referred to
in this Exhibit as "Limited Partners"), pursuant to paragraph 3(b) of the
foregoing First Amendment shall be subject to the following terms and
conditions:
14. Definitions. Capitalized terms used in this Exhibit without
-----------
definition shall have the meanings given to them in the Partnership Agreement or
the foregoing First Amendment, as applicable, and the following terms and
phrases shall, for purposes of this Exhibit D, the Partnership Agreement and the
foregoing First Amendment, have the meanings set forth below:
"Cash Purchase Price" shall have the meaning set forth in Paragraph 4
-------------------
hereof.
"Closing Notice" shall mean the written notice to be given by the
--------------
General Partner to the Exercising Partner(s) in response to the receipt by the
General Partner of a Conversion Exercise Notice from such Exercising Partner(s).
The form of the Closing Notice is attached hereto as Schedule 2.
"Computation Date" shall mean the date on which a Conversion Exercise
----------------
Notice is delivered to the General Partner.
"Conversion Exercise Notice" shall have the meaning set forth in
--------------------------
Paragraph 2 hereof.
"Conversion Factor" shall mean 100%, provided that such factor shall
-----------------
be adjusted in accordance with the provisions of paragraph 10 hereof.
"Exchange Act" shall mean the Securities Exchange Act of 1934, as
------------
amended, or any successor statute.
"Exercising Partners" shall have the meaning set forth in Paragraph 2
-------------------
hereof.
"Offered Partnership Units" shall mean the Partnership Units of the
-------------------------
Exercising Partner(s) identified in a Conversion Exercise Notice that, pursuant
to the exercise of Rights, must be redeemed by the Partnership or acquired by
the General Partner and/or Weeks LP Holdings under the terms hereof.
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<PAGE>
"Redemption Price" shall mean the Cash Purchase Price or the Stock
----------------
Purchase Price.
"Rights" shall have the meaning set forth in paragraph 3(b) of the
------
foregoing First Amendment.
"Securities Act" shall mean the Securities Act of 1933, as amended, or
--------------
any successor statute.
"Stock Purchase Price" shall have the meaning set forth in Paragraph 4
--------------------
hereof.
15. Delivery of Conversion Exercise Notices. Any one or more Limited
---------------------------------------
Partners ("Exercising Partners") may, subject to the limitations set forth
herein, deliver to the General Partner written notice (the "Conversion Exercise
Notice") pursuant to which such Exercising Partners elect to exercise the
Rights. The form of Conversion Exercise Notice is attached hereto as Schedule 1.
16. Limitations on Exercise of Rights; Deemed Exercise.
--------------------------------------------------
(a) No Conversion Exercise Notice, with respect to any Unit, may be
delivered to the General Partner by a Limited Partner until the later of
(i) one year after the issuance of such Unit, or (ii) the date on which
either (A) there is a registration statement effective under the Securities
Act with respect to the issuance of any shares of Common Stock that could
be issued to such Limited Partner pursuant to such exercise of Rights and
with respect to any resale by such Limited Partner of any of such shares of
Common Stock, or (B) in the opinion of counsel to Weeks, shares of Common
Stock that could be issued to such Limited Partner pursuant to such
exercise of Rights may be issued without registration under the Securities
Act. Until the third anniversary of the date hereof neither NWI nor
Buckley & Co. shall deliver a Conversion Exercise Notice with respect to
Partnership Units if the redemption thereof would cause the aggregate
Partnership Units held by such entity to be less than 42.722% (in the case
of NWI), or 100% (in the case of Buckley & Co.), of the aggregate number of
Partnership Units issuable to such entity pursuant to the Transaction
Documents.
(b) A Limited Partner may not exercise the Rights for less than one
thousand (1,000) Partnership Units or, if such Limited Partner holds less
than one thousand (1,000) Partnership Units, all of the Partnership Units
held by such Limited Partner.
(c) Neither the General Partner nor the Partnership shall have any
obligation or authority to redeem or purchase Offered Partnership Units if
issuance of shares of Common Stock in payment of the Stock Purchase Price
for any part of the Offered Partnership Units would result (i) in the
violation of the General Ownership Limit (as such term is defined in the
Articles of Incorporation), (ii) would cause Weeks to fail the
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<PAGE>
stock ownership test of Section 856(a)(6) of the Code, or (iii) would
otherwise cause Weeks to fail to qualify as a REIT. Each Exercising Partner
shall provide to the General Partner such information as the General
Partner may request regarding such Exercising Partner's actual and
constructive ownership of Common Stock (and of individuals, and entities
related to such Exercising Partner) in order for the General Partner to
determine, in its sole discretion, whether a purchase or redemption of the
Offered Partnership Units for shares of Common Stock would result in a
violation of such restrictions.
(d) If, after complying with all applicable provisions of the
Partnership Agreement, any Person with an ownership interest in NWI or
Buckley & Co. becomes the owner of any Partnership Units previously owned
by NWI or Buckley & Co., such Person may exercise the Rights granted with
respect to such Partnership Units in accordance with the terms hereof.
17. Computation of Redemption Price/Form of Payment. The Redemption Price
-----------------------------------------------
payable by the Partnership to each Exercising Partner for the Offered
Partnership Units shall be payable, at the election of the General Partner, by
the delivery by the Partnership of the Redemption Price. Notwithstanding the
foregoing, at the election of the General Partner, the Redemption Price may be
the Stock Purchase Price for part of the Offered Partnership Units and the Cash
Purchase Price for the remainder of the Offered Partnership Units. The "Stock
Purchase Price" shall mean the number of shares of Common Stock equal to the
product, expressed as a whole number, of (i) the number of Offered Partnership
Units, multiplied by (ii) the Conversion Factor. The "Cash Purchase Price"
shall mean an amount of cash (in immediately available funds) equal to (i) the
number of shares of Common Stock that would be issued to the Exercising Partner
if the Stock Purchase Price were paid for such Offered Partnership Units,
multiplied by (ii) the Current Per Share Market Price computed as of the
Computation Date. To the extent the Partnership elects to pay the Stock
Purchase Price, it shall obtain the necessary shares of Common Stock in exchange
for the issuance of additional Partnership Interests to the General Partner,
Weeks LP Holdings, or any combination thereof, as determined by the General
Partner in its sole discretion, and the General Partner and/or Weeks LP Holdings
shall obtain the necessary shares of Common Stock in exchange for the issuance
of additional capital stock to Weeks.
18. Closing; Delivery of Closing Notice. The closing of the redemption of
-----------------------------------
Offered Partnership Units shall, unless otherwise mutually agreed, be held at
the principal office of the Partnership, as follows:
(a) Within ten (10) days after the receipt by the Partnership of the
Conversion Exercise Notice, the Partnership shall deliver a Closing Notice
to the Exercising Partner(s). The Closing Notice shall state a date for
the closing of the redemption of the Offered Partnership Units, which date
shall not be later than the later of (i) twenty (20) days after the receipt
by the Partnership of the Conversion Exercise Notice (forty-five (45) days
as to the Offered Partnership Units for which the Cash Purchase Price will
be
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<PAGE>
paid), and (ii) the first (1st) business day after the expiration or
termination of the waiting period applicable to each Exercising Partner, if
any, under the Hart-Scott Act.
(b) If applicable, the Closing Notice shall (i) specify the
Partnership's election to pay the Cash Purchase Price for some or all of
the Offered Partnership Units and (ii) set forth the computation of the
Cash Purchase Price to be paid by the Partnership to such Exercising
Partner(s). The Cash Purchase Price shall be paid by wire transfer of
immediately available funds to such account of the Exercising Partner as is
designated in the Conversion Exercise Notice.
19. Assumption by the General Partner and/or Weeks LP Holdings.
----------------------------------------------------------
Notwithstanding anything in this Exhibit D to the contrary, the General Partner,
Weeks LP Holdings or any combination thereof (an "Assumer" or, collectively, the
"Assumers") may, in the sole and absolute discretion of the General Partner,
assume directly and satisfy the exercise of a Right by paying the Electing
Partner the Redemption Price. In such event, the Assumers shall acquire the
Offered Partnership Units and shall be treated for all purposes of this
Agreement as the owner of such Partnership Units, which shall be held by the
Assumers in their respective existing capacities as general partner or Limited
Partners, as the case may be. In the event the General Partner shall exercise
the Assumers' right to satisfy a Right in the manner described in this Paragraph
6, the Partnership shall have no obligation to pay any amount to the Exercising
Partner with respect to such Exercising Partner's exercise of a Right, and each
of the Exercising Partner, the Partnership, and the Assumers shall treat the
transaction between the Assumers and the Exercising Partner as a sale of the
Exercising Partner's Partnership Units to the Assumers for federal income tax
purposes. To the extent the Assumers elect to pay the Stock Purchase Price,
they shall obtain the necessary shares of Common Stock in exchange for the
issuance of additional capital stock to Weeks. Each Exercising Partner agrees
to execute such documents as the General Partner may reasonably require in
connection with the issuance of Common Stock upon exercise of a Right.
20. Closing Deliveries. At the closing, payment of the Redemption Price
------------------
shall be accompanied by proper instruments of transfer and assignment for the
Offered Partnership Units and by the delivery of (i) representations and
warranties of (A) the Exercising Partner with respect to its due authority to
sell all of the right, title and interest in and to the Offered Partnership
Units and with respect to the status of the Offered Partnership Units being
sold, free and clear of all Liens, and (B) the Partnership or the Assumers, as
applicable, with respect to due authority for the redemption or purchase of such
Offered Partnership Units, and (ii) to the extent that shares of Common Stock
are issued in payment of the Stock Purchase Price, (A) an opinion of counsel for
Weeks, reasonably satisfactory to the Exercising Partner(s), to the effect that
such shares of Common Stock have been duly authorized, are validly issued,
fully-paid and nonassessable, and (b) a stock certificate or certificates
evidencing the Common Stock to be issued and registered in the name of the
Exercising Partner(s) or its (their) designee.
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<PAGE>
21. Covenants of Weeks. To facilitate the Partnership's and the Assumers'
------------------
ability to fully perform their obligations hereunder, Weeks covenants and agrees
as follows:
(a) At all times during the pendency of the Rights, Weeks shall
reserve for issuance such number of shares of Common Stock as may be
necessary to enable Weeks to issue shares of Common Stock in full payment
of the Stock Purchase Price in regard to all Partnership Units that are
from time to time outstanding and with respect to which Rights exist.
(b) During the pendency of the Rights, the Limited Partners shall
receive in a timely manner all communications transmitted from time to time
by Weeks to its shareholders generally.
22. Limited Partners' Covenants. Each Limited Partner covenants and
---------------------------
agrees that all Offered Partnership Units tendered in accordance with the
exercise of Rights shall be delivered free and clear of all Liens. Should any
Liens exist or arise with respect to such Offered Partnership Units, neither the
Assumers nor the Partnership shall be under any obligation to redeem or acquire
the same unless, in connection therewith, the General Partner has elected to pay
a portion of the Redemption Price in the form of the Cash Purchase Price in
circumstances in which such Cash Purchase Price will be sufficient to cause such
existing Lien to be discharged in full upon application of all or a part of the
Cash Purchase Price. The Partnership and the Assumers are expressly authorized
to apply such portion of the Cash Purchase Price as may be necessary to
discharge such Lien in full. Each Limited Partner further agrees that, in the
event any state or local property transfer tax is payable as a result of the
transfer of its Offered Partnership Units to the Partnership or the Assumers,
such Limited Partner shall assume and pay such transfer tax.
23. Antidilution Provisions
-----------------------
(a) The Conversion Factor shall be subject to adjustment from time to
time effective upon the occurrence of the following events and shall be
expressed as a percentage, calculated to the nearest one-thousandth of one
percent (.001%):
(i) In case Weeks shall pay or make a dividend or other
distribution on any class of stock of Weeks in shares of Common Stock,
the Conversion Factor in effect at the opening of business on the day
following the date fixed for the determination of shareholders
entitled to receive such dividend or other distribution shall be
increased in proportion to the increase in outstanding shares of
Common Stock resulting from such dividend or other distribution, such
increase to become effective immediately after the opening of business
on the day following the record date fixed for such dividend or other
distribution.
-24-
<PAGE>
(ii) In case outstanding shares of Common Stock shall be
subdivided into a greater number of shares, the Conversion Factor in
effect at the opening of business on the day following the day upon
which such subdivision becomes effective shall be proportionately
increased, and, conversely, in case the outstanding shares of Common
Stock shall be combined into a smaller number of shares, the
Conversion Factor in effect at the opening of business on the day
following the day upon which such combination becomes effective shall
be proportionately reduced, such increase or reduction, as the case
may be, to become effective immediately after the opening of business
on the day following the day upon which such subdivision or
combination becomes effective.
(b) In case Weeks shall issue rights, options or warrants to all
holders of its shares of Common Stock entitling them to subscribe for or
purchase Common Stock or other securities convertible into shares of Common
Stock at a price per share less than the Current Per Share Market Price as
of the day before the "ex date" with respect to the issuance or
distribution requiring such computation, each Limited Partner holding
Rights shall be entitled to receive such number of such rights, options or
warrants, as the case may be, as he would have been entitled to receive had
he exercised all of his then existing Rights immediately prior to the
record date for such issuance by Weeks. The term "ex date" shall mean the
first date on which shares of Common Stock trade regular way without the
right to receive such issuance or distribution.
(c) In case the shares of Common Stock shall be changed into the same
or a different number of shares of any class or classes of stock, whether
by capital reorganization, reclassification, or otherwise (other than
subdivision or combination of shares of a stock dividend described in
subparagraph (a) (ii) of this Paragraph), then and in each such event the
Limited Partners holding Rights shall have the right thereafter to exercise
their Rights for the kind and amount of shares and other securities and
property that would have been received upon such reorganization,
reclassification or other change by holders of the number of shares of
Common Stock with respect to which such Rights could have been exercised
immediately prior to such reorganization, reclassification or change.
(d) The General Partner may, but shall not be required to, make such
adjustments to the number of shares of Common Stock issuable upon exercise
of Rights, in addition to those required by this Paragraph 10, as the
General Partner considers to be advisable in order that any event treated
for federal income tax purposes as a dividend of stock or stock rights
shall not be taxable to the recipients. The General Partner shall have the
power to resolve any ambiguity or correct any error in the adjustments made
pursuant to this Paragraph and its actions in so doing shall be final and
conclusive.
24. Fractions of Shares. No fractional shares of Common Stock shall be
-------------------
issued upon exercise of Rights. If Rights shall be exercised with respect to
more than one Offered
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<PAGE>
Partnership Unit at one time by the same Exercising Partner, the number of full
shares of Common Stock comprising the Stock Purchase Price (or the cash
equivalent amount thereof to the extent the Cash Purchase Price is paid) shall
be computed on the basis of the aggregate number of Offered Partnership Units.
Instead of any fractional share of Common Stock that would otherwise be issuable
upon exercise of Rights, the Partnership or the Assumers shall pay a cash
adjustment in respect of such fraction in an amount equal to the Cash Purchase
Price computed hereunder for such fraction of a share.
25. Notice of Adjustments of Conversion Factor. Whenever the Conversion
------------------------------------------
Factor is adjusted as herein provided:
(a) the General Partner shall compute the adjusted Conversion Factor
in accordance with Paragraph 10 hereof and shall prepare a certificate
signed by the chief financial officer or the Treasurer of the General
Partner setting forth the adjusted Conversion Factor and showing in
reasonable detail the facts upon which such adjustment is based; and
(b) notice stating that the Conversion Factor has been adjusted and
setting forth the adjusted Conversion Factor shall forthwith be mailed by
the General Partner to all holders of Rights at their last addresses on
record under this Agreement.
26. Notice of Certain Corporate Actions.
-----------------------------------
In case:
(a) Weeks shall declare a dividend (or any other distribution) on its
Common Stock payable otherwise than in cash; or
(b) Weeks shall authorize the granting to the holders of its Common
Stock of rights, options or warrants to subscribe for or purchase any
shares of stock of any class or of any other rights; or
(c) of any reclassification of the shares of Common Stock (other than
a subdivision or combination of its outstanding Common Stock, or of any
consolidation, merger or share exchange to which Weeks is a party and for
which approval of any shareholders of Weeks is required), or of the sale or
transfer of all or substantially all of the assets of Weeks; or
(d) of the voluntary or involuntary dissolution, liquidation or
winding up of Weeks;
then the General Partner shall cause to be mailed to all holders of Rights at
their last addresses on record under this Agreement, at least 20 days (or 12
days in any case specified in clause (a) or (b) above) prior to the applicable
record date hereinafter specified, a notice stating (i) the date on
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<PAGE>
which a record is to be taken for the purpose of such dividend, distribution,
rights, options or warrants, or, if a record is not to be taken, the date as of
which the holders of shares of Common Stock of record to be entitled to such
dividend, distribution, rights, options or warrants are to be determined, or
(ii) the date on which such reclassification, consolidation, merger, share
exchange, sale, transfer, dissolution, liquidation or winding up is expected to
become effective, and the date as of which it is expected that holders of shares
of Common Stock of record shall be entitled to exchange their shares for
securities, cash or other property deliverable upon such reclassification,
consolidation, merger, share exchange, sale, transfer, dissolution, liquidation
or winding up.
27. Provisions in Case of Consolidation, Merger or Sale of Assets.
-------------------------------------------------------------
In case of any consolidation of Weeks with, or merger of Weeks into, any
other Person, any merger or consolidation of another Person into Weeks (other
than a merger that does not result in any reclassification, conversion, exchange
or cancellation of outstanding shares of Common Stock), any acquisition of the
outstanding Common Stock by share exchange, or any sale or transfer of all or
substantially all of the assets of Weeks, the Person formed by such
consolidation or resulting from such merger or that acquires the outstanding
Common Stock or such assets of Weeks as the case may be, shall execute and
deliver to each holder of Rights an agreement providing that such holder shall
have the right thereafter, during the period such rights shall be exercisable,
to exercise the Rights for the kind and amount of securities, cash and other
property receivable upon such consolidation, merger, share exchange, sale or
transfer by a holder of the number of shares of Common Stock for which the
Rights might have been exercised immediately prior to such consolidation,
merger, share exchange, sale or transfer, assuming both that (a) such holder of
shares of Common Stock is not a Person with which Weeks consolidated or into
which Weeks merged or that merged into Weeks, or that acquired the outstanding
Common Stock by share exchange, or to which such sale or transfer was made, as
the case may be (a "Constituent Person"), or an Affiliate of a Constituent
Person, and that (b) such holder does not exercise his right of election, if
any, as to the kind or amount of securities, cash or other property receivable
upon such consolidation, merger, share exchange, sale or transfer (provided that
--------
if the kind or amount of securities, cash and other property receivable upon
such consolidation, merger, share exchange, sale or transfer is not the same for
each share of Common Stock in respect of which such right of election, if any,
is not exercised ("non-electing Share"), then for the purpose of this Paragraph
14, the kind and amount of securities, cash and other property receivable upon
such consolidation, merger, share exchange, sale or transfer by each non-
electing Share shall be deemed to be the kind and amount so receivable per non-
electing Share by a plurality of the non-electing Shares). Such agreement shall
provide for adjustments that, for events subsequent to the effective date of
such agreement, shall be as nearly equivalent as may be practicable to the
adjustments provided for in this Exhibit D.
The above provisions of this Paragraph 14 shall similarly apply to
successive consolidations, mergers, sales or transfers.
-27-
<PAGE>
SCHEDULE 1
CONVERSION EXERCISE NOTICE
--------------------------
To: Weeks Realty, L.P.
Reference is made to that certain First Amendment (the "First Amendment")
to the Second Amended and Restated Agreement of Limited Partnership of Weeks
Realty, L.P. (the "Partnership"). Capitalized terms used but not defined herein
shall have the meanings set forth in First Amendment. Pursuant to Exhibit D to
the First Amendment, the undersigned, being a limited partner of the Partnership
(an "Exercising Partner"), hereby elects to exercise its Rights as to the number
of Offered Partnership Units specified opposite its name below:
Number of Offered
Exercising Limited Partner Partnership Units
- -------------------------- -----------------
________________________________
Signature of Exercising Limited Partner
Date:___________________________
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<PAGE>
SCHEDULE 2
CLOSING NOTICE
--------------
To: Exercising Limited Partner(s)
Reference is made to that certain First Amendment (the "First Amendment")
to the Second Amended and Restated Agreement of Limited Partnership of Weeks
Realty, L.P. (the "Partnership"). Capitalized terms used but not defined herein
shall have the meaning set forth in First Amendment. The closing of the
redemption of the Offered Partnership Units shall occur at _______, ________,
Georgia, on ___________. Pursuant to Exhibit D to the First Amendment, the
Partnership hereby notifies the Exercising Partner(s) that it has elected to pay
the Cash Purchase Price to the Exercising Partner(s) for the number of Offered
Partnership Units set forth below, and that the computation of the Cash Purchase
Price is set forth on an attachment hereto
NUMBER OF OFFERED CASH PURCHASE
EXERCISING PARTNER(S) PARTNERSHIP UNITS PRICE
- --------------------- ----------------- -------------
WEEKS REALTY, L.P.
By: Weeks GP Holdings, Inc., General Partner
By:___________________________
Title:____________________
Date:________________________________
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<PAGE>
Exhibit E
---------
1 REPRESENTATIONS AND WARRANTIES OF NWI.
-------------------------------------
1.1 Organization; Authority. NWI is a limited partnership duly
-----------------------
formed, validly existing and in good standing under the laws of the State of
Tennessee and has all the necessary power and authority to enter into and
perform its obligations under the Partnership Agreement, as amended by this
Amendment, and to consummate the transactions contemplated by the Transaction
Documents (the "Transactions"). NWI X, L.P., is the sole general partner of NWI
and is a limited partnership duly formed, validly existing and in good standing
under the laws of the State of Tennessee and has all the necessary power and
authority, in its capacity as the sole general partner of NWI, to enter into and
perform its obligations under the Partnership Agreement, as amended by this
Amendment, and to consummate the Transaction. John W. Nelley, Jr. and Albert W.
Buckley, Jr. are the sole general partners of NWI X, L.P.
1.2 Due Authorization; Binding Agreement. The execution, delivery
------------------------------------
and performance of this Amendment and the other Transaction Documents by NWI has
been duly and validly authorized by all necessary action of NWI. This Amendment
and each of the other Transaction Documents has been duly executed and delivered
by NWI and constitutes a legal, valid and binding obligation of NWI, enforceable
against NWI in accordance with the terms hereof (except as enforcement may be
limited by bankruptcy, insolvency or other laws affecting enforcement of
creditors' rights generally and general equity principles).
1.3 Governmental Consents. Except as has been obtained or is being
---------------------
effected as part of the consummation of the Transactions, no consent, waiver,
approval or authorization of, or filing, registration or qualification with, or
notice to, any governmental unit or any other regulatory body is required to be
made, obtained or given by NWI in connection with the execution, delivery and
performance of this Amendment and the other Transaction Documents.
1.4 Other Consents. Except for waivers and consents that have been
--------------
obtained prior to the date hereof, and except as would not have a material
adverse effect on any of the Completed Properties, no consent of any party to
any agreement, contract, mortgage, indenture, lease, reciprocal easement or
operating agreement or other arrangement, to which NWI is a party, or, by which
NWI is bound, is required in connection with the execution, delivery or
performance by NWI of this Amendment or any of the other Transaction Documents
or the consummation of the Transactions.
1.5 No Violation. Except for waivers and consents that have been
------------
obtained prior to the date hereof, none of the execution, delivery and
performance of this Amendment or any of the other Transaction Documents by NWI
does or will, with or without the giving of notice, lapse of time or both, (i)
violate, conflict with or constitute a default under any term or condition of
(A) the organizational documents of NWI, or (B) any term or provision of any
judgment, decree, order, statute, injunction, rule or regulation of a
governmental unit applicable to NWI or any agreement,
-30-
<PAGE>
contract, mortgage, indenture, lease, reciprocal easement or operating agreement
or other arrangement to which such NWI is a party or by which it is bound or to
which any of its assets or any of the Completed Properties is subject except in
the case where appropriate waivers and consents have been obtained prior to the
date hereof, and except as would not have a material adverse effect on the
Partnership, NWI or any of the Completed Properties, or (ii) result in the
creation of any lien or other encumbrance upon the assets of NWI or any of the
Completed Properties, except as may be contemplated by this Amendment or any of
the Transaction Documents and except as would not have a material adverse effect
on NWI or any of the Completed Properties.
1.6 Compliance with Laws. NWI has complied with all laws
--------------------
applicable to the conduct of the business of NWI and to the ownership, use and
operation of the Completed Properties and has obtained all licenses and permits
required for the conduct thereof, except where the failure to so comply or
obtain will not have a material adverse effect on NWI or any of the Completed
Properties. To NWI's knowledge ("NWI's knowledge" shall hereafter mean the
knowledge of either John W. Nelley, Jr. or Albert W. Buckley, Jr.), such
licenses and permits are in full force and effect, NWI has not taken any action
that would (or failed to take any action the omission of which would) result in
the revocation of such licenses or permits, and NWI has not received any notice
of violation from any federal, state or municipal entity or written notice of an
intention by any such government entity to revoke any certificate of occupancy
or other certificate, license or permit issued by it in connection with the use
of any of the Completed Properties, that in each case has not been cured or
otherwise resolved to the satisfaction of such government entity, except where
such failure or such action will not have a material adverse effect on NWI or
any of the Completed Properties.
1.7 Investment.
----------
1.7.1 NWI is acquiring Partnership Units for its own account and
not with a view to, or for sale in connection with, the
"distribution," as such term is used in Section 2(11) of the
Securities Act of 1933, as amended (the "Securities Act"),
of any of the Partnership Units in violation of the
Securities Act.
1.7.2 NWI is an "accredited investor," as that term is defined in
Rule 501(a) of Regulation D promulgated under the Securities
Act.
1.7.3 NWI understands that the Partnership Units have not been
registered under the Securities Act by reason of a specific
exemption from the registration provisions of the Securities
Act which depends upon, among other things, the nature of
the investment intent and the accuracy of such NWI's
representations as expressed herein.
1.8 Access to Data. NWI has had an opportunity to discuss the
--------------
Partnership's business, management and financial affairs with the Partnership's
management and the opportunity to review the Partnership's financial records.
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<PAGE>
1.9 No Public Market. NWI understands and acknowledges that no
----------------
public market now exists for any of the securities issued by the Partnership and
that there can be no assurance that a public market will ever exist for the
Partnership Units.
1.10 Experience; Risk. NWI has such knowledge and experience in
----------------
financial and business matters that NWI is capable of evaluating the merits and
risks of the purchase of the Partnership Units pursuant to this Amendment and of
protecting NWI's interests in connection herewith.
1.11 Environmental. NWI has not knowingly caused or permitted any
-------------
Hazardous Material to be improperly maintained or disposed of on, under or at
any of the Completed Properties or any part thereof. To NWI's knowledge, and
except as may be revealed in the Environmental Reports (which are identified in
Exhibit E-11.1 attached hereto and by this reference made a part hereof) and
- --------------
except for tenants who handle hazardous materials in the ordinary course of
business (which are identified in Exhibit E-11.2 attached hereto and by this
--------------
reference made a part hereof): (i) no liability under or violation of any
Environmental Laws exists with respect to the Completed Properties, (ii) NWI
has not received any written notice from any governmental agency or
instrumentality having jurisdiction thereof of any violation of any
Environmental Laws that remains uncured as of the date hereof or that it has any
material liability with respect thereto, (iii) there are no administrative,
regulatory or judicial proceedings pending or threatened against NWI pursuant
to, or alleging any material violation of, or material liability under any
Environmental Laws, (iv) none of the properties (including without limitation
the Completed Properties) now or heretofore owned, leased or used by NWI or any
of its predecessors has been used as a storage or disposal site (whether
temporary or permanent) for any hazardous, toxic or dangerous materials the
storage or disposal of which is governed by any Environmental Laws and (v)
except for Brentwood VI, there are no underground storage tanks located on,
under or about the Completed Properties, and there is no facility located on or
at the Completed Properties that is subject to the reporting requirements of
Section 312 of the Federal Emergency Planning and Community Right to Know Act of
1986 and the federal regulations promulgated thereunder (42 U.S.C. (S) 11022).
In connection with the representations and warranties in this Section 1.11, the
Partnership acknowledges that NWI disclaims any professional expertise with
respect to Environmental Laws.
1.12 Ownership of the Completed Properties. With respect to each
-------------------------------------
of the Completed Properties, NWI (i) is the sole owner and (ii) has good, valid
and marketable title, free and clear of all Liens other than the following:
1.12.1 Liens, or deposits made to secure the release of such Liens,
securing taxes, the payment of which is at the time not
delinquent or the payment of which is actively being
contested in good faith by appropriate proceedings
diligently pursued, and for which appropriate reserves shall
have been established by NWI for the Partnership.
-32-
<PAGE>
1.12.2 Attachments, judgments and other similar Liens arising in
connection with court or administrative proceedings,
provided, that the execution or other enforcement of such
Liens is effectively stayed or secured and the claims
secured by such Liens are actively being contested in good
faith by appropriate proceedings diligently pursued, and for
which appropriate reserves shall have been established by
NWI.
1.12.3 Zoning laws and ordinances; provided that none of the
Completed Properties are in violation thereof, in any
material respect and that such laws and ordinances do not
require the demolition, vacation or cessation of the use for
industrial or office purposes (as applicable) of any portion
of the improvements material to any of the Completed
Properties or require the discontinuance of the use of all
or any material portion of any of the Completed Properties
as industrial facilities or office buildings.
1.12.4 Any laws, ordinances, deeds of trust, mortgages, Liens,
easements, rights of way, restrictions, exemptions,
reservations, conditions, limitations, covenants,
encumbrances, adverse rights or interests and other matters
identified on Exhibit E-1.12.4; provided that none of the
----------------
Completed Properties are not in violation thereof in any
material respect and the same do not require the demolition,
vacation or cessation of the use of for industrial or office
purpose of any portion of the improvements material to any
of the Completed Properties or require the discontinuance of
the use of all or any material portion of any of the
Completed Properties as industrial facilities or office
buildings.
1.12.5 Any other easements, rights of way, restrictions,
exceptions, reservations, conditions, limitations,
covenants, adverse rights or interests, licenses, minor
irregularities in title and other similar encumbrances which
do not in the aggregate materially impair the use of any of
the Completed Properties in the operation of the business of
NWI.
1.12.6 Any law or governmental regulation or other right of any
governmental unit, which (i) requires the person to maintain
certain facilities or perform certain acts as a condition of
its occupancy or use of its assets and properties, or (ii)
condemns, appropriates or recaptures the person's assets or
property.
1.12.7 Liens imposed by laws, such as carriers', warehousemen's and
mechanics' Liens and other similar Liens arising in the
ordinary course of business which secure payment of
obligations not more than sixty (60) days past due or which
are being contested in good faith by appropriate proceedings
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<PAGE>
diligently pursued, and for which appropriate reserves shall
have been established by NWI for the Partnership.
1.13 Zoning; Other Laws. NWI has not received any written or
------------------
other actual notice of any violation of any applicable zoning regulation or
ordinance, or of any employment, environmental or other regulatory law, order,
regulation or requirement relating to NWI's operations, practices, properties or
assets that remain uncured as of the date hereof, and, to NWI's knowledge, there
are no such violations that, individually or in the aggregate, will have a
material adverse effect on any of the Completed Properties.
1.14 Absence of Undisclosed Liabilities and Contractual
--------------------------------------------------
Obligations. NWI has no liabilities of any nature, whether matured or
- -----------
unmatured, fixed or contingent, regardless of whether the disclosure thereof
would otherwise be required by GAAP, which would have, individually or in the
aggregate, a material adverse effect upon any of the Completed Properties,
except for (i) the Prudential Loan Documents identified on Exhibit E-1.15, (ii)
--------------
the Permitted Exceptions identified on Exhibit E-1.12.4, (iii) the Leases
----------------
identified on the Rent Roll attached hereto as Exhibit E-1.19, (iv) the
--------------
Commission Obligations identified on Exhibit E-1.34, (v) the Service Contracts
--------------
identified on Exhibit E-1.33 (collectively, the "Significant Agreements") and
--------------
(vi) the liabilities disclosed in the most recent audited financial statements
of NWI dated as of December 31, 1995, and the liabilities disclosed in the
financial statements of NWI dated as of June 30, 1996.
1.15 Prudential Loans. The Completed Properties are encumbered by
----------------
term loans (the "Loans") in favor of the Prudential Insurance Company of America
("Prudential"). With respect to the Loans, NWI represents and warrants as
follows:
1.15.1 The loan documents identified Exhibit E-1.15.1 (the
----------------
"Prudential Loan Documents") hereto constitute all of the
documents that evidence or secure the Loans; and such
documents have not been amended or modified except as
expressly identified on Exhibit E-1.15.1 hereto. NWI has
----------------
delivered to the Partnership true, correct and complete
copies of all of the Prudential Loan Documents.
1.15.2 All payments due and payable on or before the date of this
Amendment under the Prudential Loan Documents by NWI, or any
of its predecessor entities, have been paid, and no monetary
default exists as of the date of this Amendment.
1.15.3 As of the date of this Amendment, no written notice of a
default is outstanding and, to the knowledge of NWI, no
condition exists which with the giving of notice or the
passage of time or both would constitute an Event of Default
under the Prudential Loan Documents.
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<PAGE>
1.16 Significant Agreements; Binding Agreements. Each of the
------------------------------------------
Significant Agreements referred to in Subsection 1.14 above is (to NWI's
knowledge, with respect to parties thereto other than NWI) valid and binding and
in full force and effect, enforceable against the parties thereto in accordance
with its terms (except as enforcement may be limited by bankruptcy, insolvency
or other laws affecting enforcement of creditors' rights generally and general
equitable principles).
1.17 Litigation. Other than as set forth in Exhibit E-1.17,
---------- --------------
attached hereto and by this reference made a part hereof, there are no claims,
actions, suits, proceedings or investigations pending, or, to NWI's knowledge,
threatened, before any court, governmental unit or arbitrator with respect to
NWI or any of the Completed Properties (either filed against NWI or filed by NWI
against third parties), and, to NWI's knowledge, none of the claims or other
matters set out in said Exhibit E-1.17, will have a material adverse effect on
--------------
NWI or any of the Completed Properties.
1.18 Tangible Personal Property. The Tangible Personal property
--------------------------
located at the Completed Properties is sufficient to permit the full operation
of the improvements for their intended purpose.
1.19 Rent Roll. The rent roll for the Completed Properties
---------
attached hereto as Exhibit E-1.19 (the "Rent Roll") is true, correct and
--------------
complete with respect to the categories described therein as of October 28,
1996, and there are no tenant cancellation rights, renewal or extension options
or rent abatements or tenant concessions, except to the extent any inaccuracies
would not, individually or in the aggregate, have a material adverse effect on
the value of any of the Completed Properties.
1.20 Leases. The Rent Roll lists each of the leases ("Leases")
------
in effect as of the date of the Rent Roll with respect to the Completed
Properties. NWI represents and warrants to the Partnership that it has
delivered to the Partnership true, correct and complete copies of the Leases
identified on the Rent Roll and any and all amendments thereto. In the case of
any sublease or assignment of any such Lease, the tenant listed in such Rent
Roll remains liable for the performance of said Lease.
1.21 Improvements. Except as disclosed in the Engineering
------------
Reports listed in Exhibit E-1.21, attached hereto and by this reference made a
--------------
part hereof, the improvements on each of the Completed Properties are in good
condition and repair and have not suffered any material casualty or, to NWI's
knowledge, other material damage that has not been repaired in all material
respects. To NWI's knowledge, there is no material latent or patent structural,
mechanical or other significant defect or deficiency in the Improvements, other
than as disclosed in said Engineering Reports.
1.22 Condemnation. No proceedings have been commenced, or, to
------------
NWI's knowledge, threatened, by any authority having the power of eminent domain
to condemn any part of the Completed Properties or any Improvements thereon
that, if successful, would have a material adverse effect on any of the
Completed Properties.
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<PAGE>
1.23 Bankruptcy and Insolvency. To NWI's knowledge, none of the
-------------------------
tenants now occupying the Completed Properties or having a Lease affecting the
Completed Properties is the subject of any bankruptcy, reorganization,
insolvency or similar proceedings.
1.24 [Intentionally Omitted]
1.25 Full Disclosure. No representation or warranty by NWI
---------------
herein contains any untrue statement of a material fact or omits to state a
material fact necessary in order to make the statements contained herein, in
light of the circumstances under which they were made, not misleading.
1.26 Ownership Interest in Tenants. None of NWI, its general
-----------------------------
partner or any of its limited partners owns, directly or indirectly, (i) one
percent (1%) or more of the total combined voting power of all classes of stock
entitled to vote, or one percent (1%) or more of the total number of shares of
all classes of stock, of any corporation that is a Tenant or (ii) an interest
of one percent (1%) or more in the assets or net profits of any Tenant.
1.27 Tenant Operations. NWI has not received written notice that
-----------------
any Tenant intends either to cease such operations (other than temporarily due
to casualty, remodeling, renovation or any similar cause) or to cease operating
under the name under which it was operating as of the date hereof.
1.28 Lease Defaults. To NWI's knowledge, no condition exists
--------------
which, with the giving of notice or the passage of time, or both, would permit
any party to cancel its obligations under any reciprocal easement agreement or
Lease.
1.29 Incomplete Improvements. Except for routine repairs and
-----------------------
maintenance, all alterations, improvements or other work required to have been
completed by NWI under any reciprocal easement agreements and Leases to which it
is a party, including, without limitation, all alterations, improvements and
other work required to prepare space for the initial occupancy of each tenant
under a Lease, has heretofore been completed and paid for in full. To the
extent such alterations, improvements and other work has not been completed and
paid for in full, NWI shall be obligated to complete and pay for such items,
except that tenant improvement costs and items incurred for leases entered into
after May 22, 1996, shall be prorated, as provided in paragraph 2(e) of the
Letter of Intent dated May 22, 1996, between NWI and Weeks.
1.30 Integrated Facilities. Except for Airparks IV - IX which
---------------------
are served by a single-loop fire and water protection system, each of the
Completed Properties is an independent unit that does not now rely on any
facilities (other than facilities covered by Permitted Exceptions including,
without limitations, any reciprocal easement agreements or facilities of
municipalities or public utility and water companies and other than parking
areas which the Completed Properties make use of under any reciprocal easement
agreements) located on any property not included in the
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<PAGE>
Completed Properties to fulfill any municipal or governmental requirement or for
the furnishings to the Completed Properties of any essential building systems or
utilities.
1.31 Agreement Violations. NWI has not received any written
--------------------
notice that is still in effect that there is, and, to NWI's knowledge, there
does not exist, any violation of a condition or agreement contained in any
easement, restrictive covenant or any similar instrument or agreement affecting
the Completed Properties or any portion thereof, if such violation would have a
material adverse effect on any of the Completed Properties.
1.32 Radius Restrictions. NWI is not in violation of any radius
-------------------
restrictions, exclusive or similar provisions contained in any reciprocal
easement agreements, Leases or any other agreements to which NWI is a party or
is bound, if such violation would have a material adverse effect on the
Partnership, NWI or any of the Completed Properties.
1.33 Financial Status. NWI is solvent, has not made a general
----------------
assignment for the benefit of its creditors, and has not admitted in writing its
inability to pay its debts as they become due, nor has NWI filed, nor does it
contemplate the filing of, any bankruptcy, reorganization, arrangement,
insolvency or liquidation proceedings, or any other proceeding for the relief of
debtors in general, nor has any such proceeding been instituted by or against
NWI, nor is any such proceeding to NWI's knowledge threatened or contemplated.
1.34 Service Contracts. Attached hereto as Exhibit D-1.34 is a
----------------- --------------
schedule of the Service Contracts now in effect to which NWI and/or the
Completed Properties are subject. No notice of default has been received by NWI
from any of the parties to the Service Contracts and, to NWI's knowledge, no
event has occurred which, with notice or lapse of time, or both, will constitute
any such default. There are no Service Contracts affecting the Completed
Properties other than as listed on Exhibit E-1.34, and the Service Contracts are
--------------
in full force and effect. Each of the Services Contracts can be canceled upon
not more than thirty (30) days written notice and without the payment of any
penalty or termination fee.
1.35 Lease Commissions. All leasing commissions payable in
-----------------
connection with the Leases now in occupancy have been paid-in-full, including
leasing commissions payable with respect to extensions, expansions and renewals
which have not been exercised as of the date hereof or payable in the event a
Tenant does not exercise a cancellation right under its Lease, except for lease
commission obligations identified on Exhibit E-1.35.
--------------
1.36 No NWI-Leased Space. Except for leases with Telco, Inc. and
-------------------
Matrix Exhibits, NWI does not lease space at any of the Completed Properties,
and no tenant at the Completed Properties is "related" to NWI within the meaning
of Section 267(b) or Section 707(b) of the Internal Revenue Code of 1986, as
amended.
1.37 ERISA. Except for Buckley & Company Real Estate, Inc.
-----
Defined Benefit Pension Plan, Crook's Supermarkets, Inc. Profit Sharing Plan,
Gardner Parts & Services Profit
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<PAGE>
Sharing Plan, Graham Lumber Company Money Purchase Pension Plan, John W. Nelley,
Jr. IRA Rollover Account, J. Robert Schweikert, M.D., P.C. Pension & Profit
Sharing Plan, Massmark Companies, Inc. Defined Benefit Pension Plan, Parthenon
Metal Works Profit Sharing Plan and Ralph L. Dupps, Jr., IRA, no interest in the
Completed Properties is or is deemed to be, directly or indirectly, an asset of
a "Plan" (as defined in the next sentence). "Plan" means an "employee benefit
----
plan" as defined in Section 3(3) of the Employee Retirement Income Security Act
of 1974, as amended, or a "plan" within the meaning of Section 4975(e)(1) of the
Internal Revenue Code of 1986, as amended.
1.38 Prorations. Prorations made for each contribution of a
----------
Completed or Development Property will be true and correct on the date of
contribution.
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<PAGE>
Exhibit F
---------
Amount by which the value (determined as provided in the foregoing First
Amendment) of NWI's Collateral is to be increased upon the contribution of each
Development Property:
Airpark Center X $364,782
Airpark Center XII $414,192
Aspen Grove I $282,873
Aspen Grove II $264,601
Aspen Grove V $363,279
440 Business Center I $310,273
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<PAGE>
Exhibit G
---------
All those properties recorded in that certain Quitclaim Deed for
Contribution, dated as of even date herewith and recorded in Deed Book ______,
page _____, in the Register's Offices in Davidson or Williamson County,
Tennessee.
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<PAGE>
EXHIBIT 23.1
CONSENT OF INDEPENDENT AUDITORS
-------------------------------
We consent to the incorporation by reference into the previously filed
Registration Statements of Weeks Corporation on Form S-3 (File No. 33-96534),
Form S-3 (File No. 33-96536), Form S-3 (File No. 333-1106) and Form S-8 (File
No. 333-1088), of our report dated September 27, 1996 with respect to the
combined financial statements of NWI Warehouse Group included in this Form 8-K.
Ernst & Young LLP
Atlanta, Georgia
November 5, 1996
