<PAGE>
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON SEPTEMBER 15, 1997
FILE NO. 333-32755
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
--------------
PRE-EFFECTIVE
AMENDMENT NO. 1
TO
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
--------------
WEEKS CORPORATION AND WEEKS REALTY, L.P.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
--------------
WEEKS CORPORATION--GEORGIA WEEKS CORPORATION--58-1525322
WEEKS REALTY, L.P.--GEORGIA WEEKS REALTY, L.P.--58-2121388
(STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER IDENTIFICATION NO.)
INCORPORATION OR ORGANIZATION)
4497 PARK DRIVE
NORCROSS, GEORGIA 30093
(770) 923-4076
(ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE, OF
REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES)
--------------
A. RAY WEEKS, JR.
WEEKS CORPORATION
4497 PARK DRIVE
NORCROSS, GEORGIA 30093
(770) 923-4076
(NAME, ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE,
OF AGENT FOR SERVICE)
--------------
WITH A COPY TO:
JOHN J. KELLEY III, ESQ.
KING & SPALDING
191 PEACHTREE STREET
ATLANTA, GEORGIA 30303-1763
(404) 572-4600
--------------
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: From time
to time after the effective date of this Registration Statement.
--------------
If the only securities being registered on this form are being offered
pursuant to dividend or interest reinvestment plans, please check the
following box. [_]
If any of the securities being registered on this form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or
interest reinvestment plans, check the following box. [X]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following
box and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [_]
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [_]
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [_]
THE REGISTRANTS HEREBY AMEND THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANTS
SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS
REGISTRATION STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH
SECTION 8(A) OF THE SECURITIES ACT OF 1933 OR UNTIL THIS REGISTRATION
STATEMENT SHALL BECOME EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING
PURSUANT TO SAID SECTION 8(A), MAY DETERMINE.
--------------
CALCULATION OF REGISTRATION FEE
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PROPOSED MAXIMUM
AGGREGATE AMOUNT OF
TITLE OF EACH CLASS OF AMOUNT TO BE OFFERING REGISTRATION
SECURITIES TO BE REGISTERED REGISTERED(1) PRICE(2)(3) FEE(4)
- --------------------------------------------------------------------------------
<S> <C> <C> <C>
Weeks Corporation
- --------------------------------------------------------------------------------
Preferred Stock(5)................
- --------------------------------------------------------------------------------
Common Stock(5)................... $300,000,000 $300,000,000
- --------------------------------------------------------------------------------
Common Stock Warrants(5)..........
- --------------------------------------------------------------------------------
Weeks Realty, L.P.
- --------------------------------------------------------------------------------
Debt Securities................... $300,000,000 $300,000,000
- --------------------------------------------------------------------------------
Total.............................. $600,000,000 $600,000,000 $181,819
</TABLE>
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
(Footnotes continued on following page)
--------------
THE PROSPECTUS CONTAINED IN THIS REGISTRATION STATEMENT RELATES TO AND
CONSTITUTES A POST-EFFECTIVE AMENDMENT TO THE REGISTRATION STATEMENT ON FORM
S-3 (NO. 333-18307) OF WEEKS CORPORATION, AND IT IS INTENDED TO BE THE
COMBINED PROSPECTUS REFERRED TO IN RULE 429 UNDER THE SECURITIES ACT OF 1933,
AS AMENDED.
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
<PAGE>
EXPLANATORY NOTE
This Registration Statement relates to securities which may be offered from
time to time by Weeks Corporation (the "Company") and Weeks Realty, L.P., a
majority-owned subsidiary of the Company (the "Operating Partnership"). This
Registration Statement contains a form of basic prospectus relating to both
the Company and the Operating Partnership which will be used in connection
with an offering of securities by the Company and/or the Operating
Partnership. The specific terms of the securities to be offered will be set
forth in a Prospectus Supplement relating to such securities.
<PAGE>
++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
+INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A +
+REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE +
+SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY +
+OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT +
+BECOMES EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR +
+THE SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE +
+SECURITIES IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE +
+UNLAWFUL PRIOR TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF +
+ANY SUCH STATE. +
++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
SUBJECT TO COMPLETION, DATED SEPTEMBER 15, 1997
PROSPECTUS
$300,000,000
WEEKS CORPORATION
PREFERRED STOCK, COMMON STOCK AND
COMMON STOCK WARRANTS
$300,000,000
WEEKS REALTY, L.P.
DEBT SECURITIES
----------
Weeks Corporation (the "Company") may offer from time to time, together or
separately, in one or more series (i) shares of the Company's preferred stock,
par value $.01 per share ("Preferred Stock"), (ii) shares of the Company's
common stock, par value $.01 per share ("Common Stock"), and (iii) warrants to
purchase shares of Common Stock ("Common Stock Warrants") at an aggregate
initial offering price not to exceed U.S. $300,000,000, in amounts, at prices
and on terms to be determined at the time of sale. Weeks Realty, L.P. (the
"Operating Partnership") may offer from time to time, together or separately,
in one or more series, unsecured non-convertible investment grade debt
securities (the "Debt Securities", and, together with the Preferred Stock, the
Common Stock and the Common Stock Warrants, collectively referred to herein as
the "Securities"), at an aggregate initial public offering price not to exceed
$300,000,000, in amounts, at prices and on terms to be determined at the time
of sale.
The specific terms of any Securities offered pursuant to this Prospectus will
be set forth in an accompanying supplement to this Prospectus (a "Prospectus
Supplement"), together with the terms of the offering of such Securities and
the initial price and the net proceeds to the Company from the sale thereof.
The Prospectus Supplement will include, with regard to the particular
Securities, where applicable, the following information: (i) in the case of
Preferred Stock, the designation, number of shares, liquidation preference per
share, initial offering price, dividend rate (or method of calculation
thereof), dates on which dividends shall be payable and dates from which
dividends shall accrue, any redemption or sinking fund provision, any
conversion rights, any voting or other rights, and the terms of the offering
and sale thereof; (ii) in the case of Common Stock, the number of shares and
the terms of the offering and sale thereof; (iii) in the case of Common Stock
Warrants, the designation and aggregate number thereof, the number of shares of
Common Stock purchasable upon exercise, the exercise price, the terms of the
offering and sale thereof, and where applicable, the duration and detachability
thereof; (iv) in the case of Debt Securities, the specific title, aggregate
principal amount, form (which may be registered or bearer, or certificated or
global), authorized denominations, maturity, rate and time of payment of
interest, terms for redemption at the option of the Operating Partnership or
repayment at the option of the holder, terms for sinking fund payments,
covenants and any initial public offering price; and (v) in the case of all
Securities, whether such Securities will be offered separately or as a unit
with other Securities. The Company's Common Stock is subject to certain
restrictions on ownership designed to preserve the Company's status as a real
estate investment trust for federal income tax purposes. See "Description of
Capital Stock."
The Company's Common Stock is listed on the New York Stock Exchange (the
"NYSE") under the symbol "WKS." Any Common Stock offered pursuant to a
Prospectus Supplement will be listed on such exchange, subject to official
notice of issuance.
The Company and the Operating Partnership may sell the Securities in or
outside the United States through underwriters or dealers, directly to one or
more purchasers, or through agents. If any agents, underwriters or dealers are
involved in the sale of the Securities, the names of such agents, underwriters
or dealers and any applicable commissions or discounts will be set forth in the
applicable Prospectus Supplement. See "Plan of Distribution."
THIS PROSPECTUS MAY NOT BE USED TO CONSUMMATE SALES OF SECURITIES UNLESS
ACCOMPANIED BY A PROSPECTUS SUPPLEMENT.
----------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY
IS A CRIMINAL OFFENSE.
----------
THE ATTORNEY GENERAL OF THE STATE OF NEW YORK HAS NOT PASSED ON OR
ENDORSED THE MERITS OF THIS OFFERING. ANY REPRESENTATION
TO THE CONTRARY IS UNLAWFUL.
----------
THE DATE OF THIS PROSPECTUS IS SEPTEMBER , 1997
<PAGE>
AVAILABLE INFORMATION
The Company is subject to the informational requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and in accordance
therewith files reports, proxy statements and other information with the
Securities and Exchange Commission (the "Commission"), pursuant to the
Exchange Act. Such reports, proxy statements and other information filed by
the Company may be examined without charge at, or copies obtained upon payment
of prescribed fees from, the Public Reference Section of the Commission at
Judiciary Plaza, 450 Fifth Street, N.W., Washington, D.C. 20549 and are also
available for inspection and copying at the regional offices of the Commission
located at Seven World Trade Center, New York, New York 10048 and at 500 West
Madison Street, Chicago, Illinois 60661. The Commission maintains a Web site
that contains reports, proxy and information statements and other information
regarding registrants that file electronically with the Commission. The
address of the Commission's Web site is: http://www.sec.gov. The Common Stock
of the Company is listed on the NYSE, and such material can also be inspected
and copied at the offices of the NYSE, 20 Broad Street, New York, New York
10005.
The Company and the Operating Partnership have filed with the Commission a
Registration Statement on Form S-3 under the Securities Act of 1933, as
amended (the "Securities Act"), with respect to the Securities offered hereby
(together with all amendments and exhibits and schedules thereto, the
"Registration Statement"). As permitted by the rules and regulations of the
Commission, this Prospectus does not contain all of the information set forth
in the Registration Statement. For further information concerning the Company
and the Operating Partnership and the Securities offered hereby, reference is
made to the Registration Statement, which may be examined without charge at,
or copies obtained upon payment of prescribed fees from, the Commission and
its regional offices at the locations listed above. Any statements contained
herein concerning the provisions of any document are not necessarily complete,
and, in each instance, reference is made to the copy of such document filed as
an exhibit to the Registration Statement or otherwise filed with the
Commission. Each such statement is qualified in its entirety by such
reference.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents filed by the Company (File No. 001-13254) or the
Operating Partnership (File No. ) with the Commission are incorporated herein
by reference:
(i) The Company's Annual Report on Form 10-K for the year ended December
31, 1996;
(ii) The Company's Quarterly Report on Form 10-Q for the quarter ended
March 31, 1997;
(iii) The Company's Quarterly Report on Form 10-Q for the quarter ended
June 30, 1997;
(iv) The Company's Current Report on Form 8-K dated May 7, 1997 filed
with the Commission on May 12, 1997;
(v) The Company's Current Report on Form 8-K dated May 2, 1997 filed with
the Commission on May 2, 1997;
(vi) The Company's Current Report on Form 8-K dated March 25, 1997 filed
with the Commission on March 26, 1997;
(vii) The Company's Current Report on Form 8-K dated December 31, 1996
filed with the Commission on January 15, 1997 (as amended by the Company's
Current Report on Form 8-K/A dated December 31, 1996 filed with the
Commission on March 14, 1997);
(viii) The Company's Current Report on Form 8-K dated November 5, 1996
filed with the Commission on November 6, 1996;
(ix) The Company's Current Report on Form 8-K dated November 1, 1996
filed with the Commission on November 6, 1996 (as amended by the Company's
Current Report on Form 8-K/A dated November 1, 1996 filed with the
Commission on November 8, 1996);
(x) The Company's Registration Statement on Form 8-A dated August 12,
1994, registering the Company's Common Stock under Section 12(b) of the
Exchange Act; and
(xi) The Operating Partnership's Registration Statement on Form 10 dated
August 1, 1997 filed with the Commission on August 4, 1997, registering the
Operating Partnership's partnership interests under Section 12(g) of the
Exchange Act.
2
<PAGE>
All documents and reports filed by the Company or the Operating Partnership
pursuant to Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act from the
date of this Prospectus and prior to the termination of the offering of the
Securities shall be deemed to be incorporated by reference herein and shall be
deemed to be a part hereof from the date of the filing of such reports and
documents (provided, however, that the information referred to in Item
402(a)(8) of Regulation S-K of the Commission shall not be deemed specifically
incorporated by reference herein). Any statement contained in a document
incorporated or deemed to be incorporated by reference herein shall be deemed
to be modified or superseded for purposes of this Prospectus to the extent
that a statement contained herein or in any subsequently filed document which
also is or is deemed to be incorporated by reference herein modifies or
supersedes such statement. Any such statement so modified or superseded shall
not be deemed, except as so modified or superseded, to constitute a part of
this Prospectus.
The Company will provide without charge to each person, including any
beneficial owner, to whom a copy of this Prospectus or any Prospectus
Supplement is delivered, on written or oral request of such person, a copy of
any or all documents which are incorporated herein by reference (not including
the exhibits to such documents, unless such exhibits are specifically
incorporated by reference in the document which this Prospectus incorporates).
Requests should be directed to: Vice President-Investor Relations, Weeks
Corporation, 4497 Park Drive, Norcross, Georgia 30093, telephone number (770)
923-4076.
3
<PAGE>
THE COMPANY AND THE OPERATING PARTNERSHIP
The Company is a self-administered, self-managed, geographically focused
real estate investment trust ("REIT") that was organized in 1994 to continue
and expand the fully integrated real estate business previously conducted by
Weeks Corporation and its affiliates. The Company, together with its
affiliates and predecessors, has developed, owned, managed, constructed and
acquired primarily institutional-quality industrial properties in metropolitan
Atlanta, Georgia and certain other southeastern United States markets since
1965. The Company is one of the largest industrial real estate companies in
the Southeast based on square footage owned and managed.
The Company's portfolio is comprised of 264 properties totaling
approximately 19.8 million square feet (the "Properties"), including 40
Properties and one Property expansion (totaling approximately 4.3 million
square feet) under development and/or under agreement to acquire. The Company
also owns or controls approximately 1,768 net usable acres of undeveloped land
that the Company believes may ultimately support the development of up to 19.0
million square feet of industrial and suburban office properties. The Company
currently manages, or expects to manage upon completion or acquisition, all of
the Properties. Industrial Properties represent approximately 90% of the
square footage of all of the Properties, and suburban office Properties
represent approximately 10%. As used herein, the term "Properties" includes
the completed properties currently in the Company's portfolio, as well as
properties under development and/or under agreement to acquire.
The Company conducts all of its business through the Operating Partnership
and its subsidiaries. As of June 30, 1997, the Company owned approximately 78%
of the outstanding interests in the Operating Partnership, and the remaining
approximately 22% of the partnership interests in the Operating Partnership
were owned by various individuals and entities (including certain officers and
directors of the Company) (i) that previously owned the properties, land and
other assets contributed to the Operating Partnership and its subsidiaries in
connection with the Company's initial public offering in August 1994 (the
"IPO") and (ii) that have contributed, directly or indirectly, certain assets,
properties and businesses to the capital of the Operating Partnership
(collectively, the "Limited Partners"). Of the approximately 78% interest in
the Operating Partnership held by the Company, the Company currently owns the
sole approximately 1% general partnership interest in the Operating
Partnership through Weeks GP Holdings, Inc., a wholly owned Georgia
corporation ("Weeks GP"), and an approximately 77% limited partnership
interest in the Operating Partnership through Weeks LP Holdings, Inc., a
wholly owned Georgia corporation ("Weeks LP"). Both Weeks GP and Weeks LP are
qualified REIT subsidiaries within the meaning of Section 856(i)(2) of the
Internal Revenue Code of 1986, as amended (the "Code"), and their existence
will be disregarded for federal income tax purposes.
Weeks Realty Services, Inc. ("Weeks Realty Services") and Weeks Construction
Services, Inc. ("Weeks Construction Services") were organized as subsidiaries
of the Operating Partnership to provide real estate related services to third
parties. Weeks Realty Services generally provides property management, leasing
and landscaping services, and Weeks Construction Services generally provides
general contracting services, to third parties.
The Operating Partnership owns 1% of the voting common stock and 100% of the
nonvoting common stock of each of Weeks Realty Services and Weeks Construction
Services. The voting and nonvoting common stock of Weeks Realty Services and
Weeks Construction Services held by the Operating Partnership represents
approximately 99% of the economic interests in these corporations. Ninety-nine
percent of the voting common stock of Weeks Realty Services and Weeks
Construction Services is held by executive officers of the Company.
Weeks Development Partnership ("Weeks Development") is a Georgia general
partnership owned 25% by Weeks Realty Services and 75% by Weeks Construction
Services. Weeks Development holds certain development land that is or may be
used for build-to-suit for sale projects, and interests in certain joint
ventures that own interests in certain development land. The Operating
Partnership may purchase sites for development from Weeks Development.
4
<PAGE>
The Operating Partnership owns five of its industrial Properties in Atlanta,
Georgia through its 99% ownership of Weeks Financing Limited Partnership (the
"Financing Partnership"). The Financing Partnership Properties are encumbered
by mortgage indebtedness assumed in connection with the IPO. The remaining 1%
ownership interest in the Financing Partnership is held by Weeks Realty
Services.
In order to maintain its qualification as a REIT for Federal income tax
purposes, the Company is required to distribute at least 95% of its taxable
income each year. Dividends on any Preferred Stock offered pursuant to a
Prospectus Supplement would be included as distributions for this purpose.
The Common Stock is listed on the NYSE under the symbol "WKS." The Company
was incorporated in Georgia in 1983, and the Operating Partnership is a
Georgia limited partnership that was formed in June, 1994. The Company's
principal executive offices are located at 4497 Park Drive, Norcross, Georgia
30093, and its telephone number is (770) 923-4076.
USE OF PROCEEDS
Unless otherwise indicated in the applicable Prospectus Supplement, the
Company intends to contribute the proceeds from the sale of the Securities to
the Operating Partnership, of which the Company's wholly owned subsidiary,
Weeks GP, is the sole general partner, in exchange for additional units
representing general and/or limited partnership interests in the Operating
Partnership. The Operating Partnership will use the proceeds for general
corporate purposes including, without limitation, the acquisition and
development of industrial and office properties and the repayment of
outstanding indebtedness.
CONSOLIDATED RATIO OF EARNINGS TO FIXED CHARGES
AND PREFERRED STOCK DIVIDENDS
The following table sets forth the Company's and the Operating Partnership's
consolidated ratios of earnings to fixed charges for the six months ended June
30, 1997, and for each of the last five fiscal years. With respect to periods
prior to August 24, 1994, the Company's consolidated ratios of earnings to
fixed charges reflect the operating results from the businesses previously
conducted by Weeks Corporation and its affiliates and predecessors. There was
no preferred stock outstanding for any of the periods shown below.
Accordingly, the ratio of earnings to fixed charges and preferred stock
dividends is identical to the ratio of earnings to fixed charges.
<TABLE>
<CAPTION>
YEAR ENDED
DEC. 31, JAN 1, 1994 AUG. 24, 1994 SIX MONTHS
------------- TO TO YEAR ENDED YEAR ENDED ENDED
1992 1993 AUG. 24, 1994 DEC. 31, 1994 DEC. 31, 1995 DEC. 31, 1996 JUNE 30, 1997
------- ----- ------------- ------------- ------------- ------------- -------------
<S> <C> <C> <C> <C> <C> <C> <C>
Ratio of earnings to
fixed charges:(1)...... .86x(2) 1.09x 1.06x 2.69x 1.99x 1.90x 1.78x
</TABLE>
- --------
(1) For purposes of computing these ratios, earnings have been calculated by
adding fixed charges (excluding capitalized interest) to income (loss)
before minority interest and extraordinary items. Fixed charges consist of
interest costs, whether expensed or capitalized, and amortization of debt
discounts and issue costs, whether expensed or capitalized.
(2) Earnings were inadequate to cover fixed charges by $1,551,000 in 1992.
This deficiency occurred in a year prior to the Company's IPO in August,
1994.
5
<PAGE>
DESCRIPTION OF CAPITAL STOCK
GENERAL
Under the Company's Amended and Restated Articles of Incorporation (the
"Articles"), the authorized capital stock of the Company consists of
100,000,000 shares of Common Stock, par value $.01 per share, and 20,000,000
shares of Preferred Stock, par value $.01 per share.
COMMON STOCK
The following description of the Common Stock sets forth certain general
terms and provisions of the Common Stock to which any Prospectus Supplement
may relate, including a Prospectus Supplement providing that Common Stock will
be issuable upon conversion of Preferred Stock or upon the exercise of Common
Stock Warrants issued by the Company. This description is in all respects
subject to and qualified in its entirety by reference to the applicable
provisions of the Articles and the Company's Bylaws.
The holders of Common Stock are entitled to one vote per share on all
matters voted on by shareholders, including elections of directors. The
Articles do not provide for cumulative voting in the election of directors.
The shares of Common Stock offered hereby will, when issued, be fully paid
and nonassessable and will not be subject to preemptive or similar rights.
Subject to such preferential rights as may be granted by the Board of
Directors in connection with the future issuance of Preferred Stock, the
holders of Common Stock are entitled to such distributions as may be declared
from time to time by the Board of Directors from assets available for
distribution to such holders.
In the event of a liquidation, dissolution or winding up of the Company, the
holders of Common Stock are entitled to receive ratably the assets remaining
after satisfaction of all liabilities and payment of liquidation preferences
and accrued dividends, if any, on Preferred Stock. The rights of holders of
Common Stock are subject to the rights and preferences established by the
Board of Directors for any class or series of Preferred Stock that may
subsequently be issued by the Company.
The Common Stock is listed on the NYSE under the symbol "WKS." Wachovia Bank
of North Carolina, N.A. is the Company's transfer agent and registrar.
PREFERRED STOCK
Subject to limitations prescribed by Georgia law and the Articles, the Board
of Directors is authorized to designate and issue, from the authorized but
unissued capital stock of the Company, one or more classes or series of
Preferred Stock without shareholder approval. The Board of Directors may affix
and determine the preferences, limitations and relative rights of each class
or series of Preferred Stock so issued. Because the Board of Directors has the
power to establish the preferences, limitations and relative rights of each
class or series of Preferred Stock, it may afford the holders in any class or
series of Preferred Stock preferences and relative rights, voting or
otherwise, senior to the rights of holders of Common Stock. The issuance of
Preferred Stock could have the effect of delaying, deferring or preventing a
change in control of the Company.
Preferred Stock offered hereby will, when issued, be fully paid and
nonassessable and will not be subject to preemptive or similar rights. The
specific terms of a particular class or series of Preferred Stock will be
described in the Prospectus Supplement relating to that class or series. The
description of Preferred Stock set forth below and the description of the
terms of a particular class or series of Preferred Stock set forth in a
Prospectus Supplement do not purport to be complete and are qualified in their
entirety by reference to the articles of amendment relating to such class or
series.
The preferences, limitations and relative rights of each class or series of
Preferred Stock will be fixed by the articles of amendment relating to such
class or series. The applicable Prospectus Supplement will describe
6
<PAGE>
the terms of the Preferred Stock in respect of which this Prospectus is being
delivered, including, where applicable, the following:
(1) The designation of such Preferred Stock;
(2) The number of shares of such Preferred Stock offered, the liquidation
preferences per share and the initial offering price of such Preferred
Stock;
(3) The dividend rate(s), period(s), and/or payment date(s) or method(s)
of calculation thereof applicable to such Preferred Stock;
(4) Whether dividends on such Preferred Stock are cumulative or not and,
if cumulative, the date from which dividends on such Preferred Stock shall
accumulate;
(5) The procedures for any auction and remarketing, if any, for such
Preferred Stock;
(6) The provision for a sinking fund, if any, for such Preferred Stock;
(7) The provision for redemption, if applicable, of such Preferred Stock;
(8) Any listing of such Preferred Stock on any securities exchange;
(9) The terms and conditions, if applicable, upon which such Preferred
Stock will be convertible into Common Stock or other securities of the
Company, including the conversion price (or manner of calculation thereof);
(10) A discussion of the material Federal income tax considerations
applicable to such Preferred Stock;
(11) Any limitations on direct or beneficial ownership and restrictions
on transfer, in each case as may be appropriate to preserve the status of
the Company as a REIT;
(12) The relative ranking and preferences of such Preferred Stock as to
dividend rights and rights upon liquidation, dissolution or winding up of
the Company;
(13) Any limitations on issuance of any class or series of preferred
stock ranking senior to or on a parity with such class or series of
Preferred Stock as to dividend rights and rights upon liquidation,
dissolution or winding up of the affairs of the Company;
(14) Any voting rights of such Preferred Stock; and
(15) Any other specific terms, preferences, limitations or relative
rights of such Preferred Stock.
Unless otherwise specified in the Prospectus Supplement, the Preferred Stock
will, with respect to dividend rights and rights upon liquidation, dissolution
or winding up of the Company, rank (i) senior to Common Stock and to all other
equity securities ranking junior to such Preferred Stock with respect to
dividend rights or rights upon liquidation, dissolution or winding up of the
Company; (ii) on a parity with all equity securities issued by the Company the
terms of which specifically provide that such equity securities rank on a
parity with the Preferred Stock with respect to dividend rights or rights upon
liquidation, dissolution or winding up of the Company; and (iii) junior to all
equity securities issued by the Company the terms of which specifically
provide that such equity securities rank senior to the Preferred Stock with
respect to dividend rights or rights upon liquidation, dissolution or winding
up of the Company.
The terms and conditions, if any, upon which shares of any class or series
of Preferred Stock are convertible into Common Stock or other securities of
the Company will be set forth in the applicable Prospectus Supplement relating
thereto. Such terms will include the number of shares of Common Stock or other
securities of the Company into which the Preferred Stock is convertible, the
conversion price (or manner of calculation thereof), the conversion period,
provisions as to whether conversion will be at the option of the holders of
the Preferred Stock or the Company, the events requiring an adjustment of the
conversion price and provisions affecting conversion in the event of the
redemption of such Preferred Stock.
7
<PAGE>
RESTRICTIONS ON TRANSFER
The Articles contain certain restrictions on the number of shares of capital
stock that individual shareholders may own. For the Company to qualify as a
REIT under the Code, no more than 50% in value of its outstanding shares of
capital stock may be owned, directly or indirectly, by five or fewer
individuals (as defined in the Code to include certain entities) during the
last half of a taxable year (other than the first taxable year) or during a
proportionate part of a shorter taxable year. The capital stock must also be
beneficially owned by 100 or more persons during at least 335 days of a
taxable year (other than the first taxable year) or during a proportionate
part of a shorter taxable year. To enable the Company to continue to qualify
as a REIT, the Articles contain restrictions on the acquisition of capital
stock intended to ensure compliance with these requirements (collectively, the
"Ownership Limit").
The Ownership Limit provides that, subject to certain exceptions specified
in the Articles, no person (excluding the Weeks Family and the Weeks Siblings,
as defined below) may own, actually and constructively under the applicable
attribution provisions of the Code, more than 7.5% of the outstanding shares
of any class of capital stock of the Company. The Ownership Limit also
provides that the sisters and brother of A. Ray Weeks, Jr., Chairman and Chief
Executive Officer of the Company (the "Weeks Family"), as well as all
individuals (other than A. Ray Weeks, Jr.) from whom shares of capital stock
would be attributed to such persons under the applicable attribution
provisions of the Code, may not actually and constructively own, in the
aggregate, more than 10% of the outstanding shares of any class of capital
stock of the Company. The Ownership Limit further provides that A. Ray Weeks,
Jr. and the Weeks Family (collectively, the "Weeks Siblings"), as well as all
individuals from whom shares of capital stock would be attributed to such
persons under the applicable attribution provisions of the Code, may not
actually and constructively own, in the aggregate, more than 19% of the
outstanding shares of any class of capital stock of the Company.
The Board of Directors may (but in no event will be required to) waive the
Ownership Limit with respect to a holder if it determines that such holder's
ownership will not then or in the future jeopardize the Company's status as a
REIT. The Board of Directors has granted waivers with respect to the Ownership
Limit after making such a determination. As a condition to the grant of any
such waiver, the Board of Directors may require opinions of counsel
satisfactory to it and/or an undertaking or other information from the
applicant with respect to preserving the REIT status of the Company.
If any purported transfer of capital stock of the Company or any other event
would otherwise result in any person or entity holding shares of capital stock
of the Company in excess of the applicable Ownership Limit, then any such
purported transfer will be null and void as to that number of shares in excess
of such Ownership Limit and the purported transferee (the "Prohibited
Transferee") shall acquire no right or interest (or, in the case of any event
other than a purported transfer, the person or entity holding record title to
any such shares in excess of the Ownership Limit (the "Prohibited Owner")
shall cease to own any right or interest) in such excess shares. In addition,
if any purported transfer of capital stock or any other event would result in
the Company's failing to qualify as a REIT under the Code (other than as a
result of a violation of the requirement that a REIT have at least 100
shareholders), then any such purported transfer will be null and void as to
that number of shares in excess of the number that could have been transferred
without such result, and the Prohibited Transferee shall acquire no right or
interest (or, in the case of any event other than a transfer, the Prohibited
Owner shall cease to own any right or interest) in such excess shares.
Any such excess shares described above will be transferred automatically, by
operation of law, to a trust, the beneficiary of which will be a qualified
charitable organization selected by the Company (the "Beneficiary"). The
trustee of the trust will be empowered to sell such excess shares to a
qualified person or entity and distribute to a Prohibited Transferee an amount
equal to the lesser of the price paid by the Prohibited Transferee for such
excess shares or the sales proceeds received by the trust for such excess
shares. In the case of any excess shares resulting from any event other than a
transfer, or from a transfer for no consideration, the trustee will be
empowered to sell such excess shares to a qualified person or entity and
distribute to the Prohibited Owner an amount equal to the lesser of the fair
market value of such excess shares on the date of such event or the sales
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proceeds received by the trust for such excess shares. Prior to a sale of any
such excess shares by the trust, the trustee will be entitled to receive, in
trust for the benefit of the Beneficiary, all dividends and other
distributions paid by the Company with respect to such excess shares, and also
will be entitled to exercise all voting rights with respect to such excess
shares. Any sales proceeds received by the trust in excess of the amount that
must be distributed to a Prohibited Transferee or Prohibited Owner, as the
case may be, will be distributed to the Beneficiary.
Any purported transfer of capital stock of the Company that would otherwise
cause the Company to be beneficially owned by fewer than 100 persons will be
null and void in its entirety, and the intended transferee will acquire no
rights in such stock.
All certificates representing shares of capital stock will bear a legend
referring to the restrictions described above.
Every owner of more than 1% (or such lower percentage as may be required by
the Code or regulations promulgated thereunder) of the outstanding shares of
capital stock of the Company must file a written notice with the Company
containing the information specified in the Articles within 30 days after
December 31 and June 30 of each year. In addition, each shareholder shall upon
demand be required to disclose to the Company in writing such information as
the Company may request in order to determine the effect, if any, of such
shareholder's actual and constructive ownership on the Company's status as a
REIT and to ensure compliance with the Ownership Limit.
The Ownership Limit may have the effect of precluding an acquisition of
control of the Company without the approval of the Board of Directors.
LIMITATION OF DIRECTORS' LIABILITY
The Articles eliminate, subject to certain exceptions, the personal
liability of a director to the Company or its shareholders for monetary
damages for breaches of such director's duty of care or other duties as a
director. The Articles do not provide for the elimination of, or any
limitation on, the personal liability of a director for (i) any appropriation,
in violation of the director's duties, of any business opportunity of the
Company, (ii) acts or omissions which involve intentional misconduct or a
knowing violation of law, (iii) approving or assenting to unlawful corporate
distributions or (iv) any transaction from which the director received an
improper personal benefit. The Articles further provide that if the Georgia
Business Corporation Code (the "GBCC") is amended to authorize corporate
action further eliminating or limiting the personal liability of directors,
then the liability of a director of the Company shall be eliminated or limited
to the fullest extent permitted by the GBCC, as amended. These provisions of
the Articles will limit the remedies available to a shareholder in the event
of breaches of any director's duties to such shareholder or the Company.
Under the Company's Bylaws, the Company is required to indemnify to the
fullest extent permitted by the GBCC any individual made a party to a
proceeding (as defined in the GBCC) because he is or was a director or officer
of the Company, against liability (as defined in the GBCC) incurred in such
proceeding, if he acted in a manner he believed in good faith to be in or not
opposed to the best interests of the Company and, in the case of any criminal
proceeding, he had no reasonable cause to believe his conduct was unlawful.
The Company is required to pay for or reimburse the reasonable expenses
incurred by a director or officer who is party to a proceeding in advance of
final disposition thereof if (i) such director or officer furnishes the
Company a written affirmation of his good faith belief that he has met the
standard of conduct set forth above, and (ii) such director or officer
furnishes the Company a written undertaking, executed personally or in his
behalf, to repay any advances if it is ultimately determined that he is not
entitled to indemnification. The Company may not indemnify a director (i) in
connection with a proceeding by or in the right of the Company, except for
reasonable expenses incurred in connection with the proceeding if it is
determined that the director has met the standard of conduct set forth above,
or (ii) in connection with any other proceeding in which he was adjudged
liable on the basis that personal benefit was improperly received by him,
whether or not involving action in his official capacity.
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INDEMNIFICATION AGREEMENTS
The Company has entered into indemnification agreements with each of the
Company's directors. The indemnification agreements require, among other
things, that the Company indemnify its directors to the fullest extent
permitted by applicable law as enacted or amended, and advance to directors
all reasonable expenses incurred in a proceeding in which the director was
made a party because he is or was a director of the Company, subject to
reimbursement if it is subsequently determined that indemnification is not
permitted. The Company also must indemnify and advance all reasonable expenses
incurred by directors seeking to enforce their rights under the
indemnification agreements, and cover directors under the Company's directors'
and officers' liability insurance. Although the indemnification agreements
offer substantially the same scope of coverage afforded by provisions in the
Company's Bylaws, they provide greater assurance to directors that
indemnification will be available, because, as contracts, they cannot be
modified unilaterally in the future by the Board of Directors or by the
shareholders to eliminate the rights provided thereunder.
GEORGIA ANTI-TAKEOVER STATUTES
The GBCC restricts certain business combinations with "interested
shareholders" (as defined below) (the "Business Combination Statute"), and
contains fair price requirements applicable to certain mergers with certain
interested shareholders (the "Fair Price Statute"). In accordance with the
provisions of these statutes, the Company must elect in its Articles or Bylaws
to be covered by the restrictions imposed by these statutes. The Company has
not elected to be covered by such restrictions; however, the Company, by
action of its Board of Directors without shareholder approval, may in the
future amend its Bylaws to make such an election. If such an election is made,
the applicable Bylaw provision may only be repealed by the affirmative vote of
at least two-thirds of the continuing directors and a majority of the votes
entitled to be cast by the holders of voting shares of the Company.
Furthermore, shareholders may amend or repeal the Company's Bylaws or adopt
new Bylaws (even though the Bylaws may also be amended or repealed by the
Board of Directors) and may also expressly provide that any Bylaw so amended
or repealed by them may not be amended or repealed by the Board of Directors.
The Business Combination Statute regulates business combinations such as
mergers, consolidations, share exchanges and asset purchases where the
acquired business has at least 100 shareholders residing in Georgia and has
its principal office in Georgia, as the Company does, and where the acquiror
became an interested shareholder of the corporation, unless either (i) the
transaction resulting in such acquiror becoming an interested shareholder or
the business combination received the approval of the corporation's board of
directors prior to the date on which the acquiror became an interested
shareholder, or (ii) the acquiror became the owner of at least 90% of the
outstanding voting shares of the corporation (excluding shares held by
directors, officers and affiliates of the corporation and shares held by
certain other persons) in the same transaction in which the acquiror became an
interested shareholder. For purposes of the Business Combination Statute and
the Fair Price Statute, an "interested shareholder" generally is any person
who directly or indirectly, alone or in concert with others, beneficially owns
or controls 10% or more of the voting power of the outstanding voting shares
of the corporation. The Business Combination Statute prohibits business
combinations with an unapproved interested shareholder for a period of five
years after the date on which such person became an interested shareholder.
The Business Combination Statute is broad in its scope and is designed to
inhibit unfriendly acquisitions.
The Fair Price Statute prohibits certain business combinations between a
Georgia business corporation and an interested shareholder. The Fair Price
Statute would permit the business combination to be effected if (i) certain
"fair price" criteria are satisfied, (ii) the business combination is
unanimously approved by the continuing directors, (iii) the business
combination is recommended by at least two-thirds of the continuing directors
and approved by a majority of the votes entitled to be cast by holders of
voting shares, other than voting shares beneficially owned by the interested
shareholder, or (iv) the interested shareholder has been an interested
shareholder for at least three years and has not increased his ownership
position in such three-year period by more than one percent in any twelve
month period. The Fair Price Statute is designed to inhibit unfriendly
acquisitions that do not satisfy the specified "fair price" requirements.
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Pursuant to the GBCC, the Company cannot, subject to certain exceptions,
merge with or sell all or substantially all of the assets of the Company,
except pursuant to a resolution approved by shareholders holding a majority of
the shares entitled to vote on the resolution. In addition, the agreement of
limited partnership of the Operating Partnership (the "Partnership Agreement")
requires that any merger of the Operating Partnership into another entity if
the Operating Partnership is not the surviving entity or any sale of all or
substantially all of the assets of the Operating Partnership to the Company or
an affiliate of the Company be approved by a majority in interest of the
limited partners (excluding any limited partner interests in the Operating
Partnership owned by the Company and its subsidiaries).
CERTAIN OTHER PROVISIONS OF THE COMPANY'S ARTICLES AND BYLAWS
Certain provisions of the Company's Articles and Bylaws might discourage
certain types of transactions that involve an actual or threatened change in
control of the Company. The Ownership Limit may delay or impede a transaction
or a change in control of the Company that might involve a premium price for
the Company's capital stock or otherwise be in the best interest of the
shareholders. See "--Restrictions on Transfer." Pursuant to the Articles, the
Company's Board of Directors is divided into three classes of directors, each
class serving staggered three-year terms. The staggered terms of directors may
reduce the possibility of a tender offer or an attempt to change control of
the Company. Under the GBCC, unless otherwise set forth in the articles of
incorporation or in a bylaw adopted by the shareholders, directors serving on
a classified board may only be removed by the shareholders for cause. In
addition, the Bylaws of the Company provide that, subject to the right of the
holders of any Preferred Stock then outstanding to elect additional directors
under specified circumstances, directors may be removed only for cause upon
the affirmative vote of holders of a majority of the shares present and
voting. These provisions may render more difficult a change in control of the
Company or removal of incumbent management. The issuance of Preferred Stock by
the Board of Directors also may have the effect of delaying, deferring or
preventing a change in control of the Company. See "--Preferred Stock."
DESCRIPTION OF COMMON STOCK WARRANTS
The Company may issue Common Stock Warrants, which may be issued
independently or together with any other Securities and may be attached to or
separate from any such Securities. Each series of Common Stock Warrants will
be issued under a separate warrant agreement (a "Warrant Agreement") to be
entered into between the Company and a warrant agent specified in the
applicable Prospectus Supplement (the "Warrant Agent"). The Warrant Agent will
act solely as an agent of the Company in connection with the Common Stock
Warrants of such series and will not assume any obligation or relationship of
agency or trust for or with any holders or beneficial owners of Common Stock
Warrants. The following summary of certain provisions of the Common Stock
Warrants does not purport to be complete and is subject to, and qualified in
its entirety by reference to, the applicable Prospectus Supplement and the
provisions of the Warrant Agreement that will be filed with the Commission in
connection with the offering of such Common Stock Warrants.
The applicable Prospectus Supplement will describe the terms of the Common
Stock Warrants in respect of which this Prospectus is being delivered,
including, where applicable, the following:
(1) The designation of such Common Stock Warrants;
(2) The aggregate number of such Common Stock Warrants;
(3) The price or prices at which such Common Stock Warrants will be
issued;
(4) The number of shares of Common Stock purchasable upon exercise of a
Common Stock Warrant and the price at which such shares may be purchased
upon exercise (which price may be payable in cash, securities or other
property);
(5) If applicable, the designation and terms of the Securities with which
such Common Stock Warrants are issued and the number of such Common Stock
Warrants issued with each such Security;
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(6) The date, if any, from and after which such Common Stock Warrants and
any Securities issued therewith will be separately transferable;
(7) The date on which the right to exercise such Common Stock Warrants
shall commence and the date on which such right shall expire;
(8) The minimum or maximum amount of such Common Stock Warrants which may
be exercised at any one time;
(9) The antidilution provisions of such Common Stock Warrants, if any;
(10) A discussion of the material Federal income tax considerations
applicable to such Common Stock Warrants; and
(11) Any other specific terms of such Common Stock Warrants, including
terms, procedures and limitations relating to the exercise of such Common
Stock Warrants.
Reference is made to the section captioned "Description of Capital Stock"
for a general description of the Common Stock to be acquired upon the exercise
of the Common Stock Warrants, including a description of certain restrictions
on the ownership of Common Stock.
DESCRIPTION OF DEBT SECURITIES
The following description sets forth certain general terms and provisions of
the Debt Securities to which any Prospectus Supplement may relate. The
particular terms of the Debt Securities being offered and the extent to which
such general provisions may apply will be described in a Prospectus Supplement
relating to such Debt Securities.
The Debt Securities will be issued under an indenture, dated as of a date
prior to the issuance of the Debt Securities, as amended or supplemented from
time to time (the "Indenture"), between the Operating Partnership and a
trustee (the "Trustee") chosen by the Operating Partnership and qualified to
act as Trustee under the Trust Indenture Act of 1939, as amended (the "TIA").
The form of Indenture has been filed as an exhibit to the Registration
Statement of which this Prospectus is a part and is available for inspection
as described above under "Available Information." The Indenture is subject to,
and governed by, the TIA. The statements made hereunder relating to the
Indenture and the Debt Securities to be issued thereunder are summaries of
certain provisions thereof and do not purport to be complete and are subject
to, and are qualified in their entirety by reference to, all provisions of the
Indenture and such Debt Securities. Capitalized terms used but not defined
herein shall have the respective meanings set forth in the Indenture. All
Section references appearing herein are to sections of the Indenture.
Wherever particular Sections or defined terms of the Indenture are referred
to herein or in a Prospectus Supplement, such Sections or defined terms are
incorporated by reference herein or therein, as the case may be.
GENERAL
The Debt Securities will be direct, unsecured obligations of the Operating
Partnership and will rank pari passu with all other unsecured and
unsubordinated indebtedness of the Operating Partnership. The Debt Securities
are non-convertible and will be effectively subordinated to any secured
indebtedness of the Operating Partnership and its Subsidiaries. At least one
nationally-recognized statistical rating organization will have assigned an
investment grade rating to the Debt Securities at the time of sale. At June
30, 1997, the Operating Partnership and its Subsidiaries had $169.1 million of
secured indebtedness and $105.7 million of unsecured indebtedness outstanding.
The Debt Securities may be issued without limit as to aggregate principal
amount, in one or more series, in each case as established from time to time
in or pursuant to authority granted by a resolution of the Board of Directors
of Weeks GP as sole general partner of the Operating Partnership or as
established in the Indenture or in one or more indentures supplemental to the
Indenture. All Debt Securities of
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one series need not be issued at the same time and, unless otherwise provided,
a series may be reopened, without the consent of the holders of the Debt
Securities of such series, for issuances of additional Debt Securities of such
series (Section 301).
The Indenture provides that there may be more than one Trustee thereunder,
each with respect to one or more series of Debt Securities. Any Trustee under
the Indenture may resign or be removed with respect to one or more series of
Debt Securities, and a successor Trustee may be appointed to act with respect
to such series (Section 610). In the event that two or more persons are acting
as Trustee with respect to different series of Debt Securities, each such
trustee shall be a Trustee of a trust under the applicable Indenture separate
and apart from the trust administered by any other Trustee (Section 609) and,
except as otherwise indicated herein, any action described herein to be taken
by a Trustee may be taken by each such Trustee with respect to, and only with
respect to, the one or more series of Debt Securities for which it is Trustee
under the applicable Indenture.
The applicable Prospectus Supplement will set forth the price or prices at
which the Debt Securities to be offered will be issued and will describe the
following terms of such Debt Securities:
(1) the title of such Debt Securities;
(2) any limit on the aggregate principal amount of such Debt Securities
or the series of which they are a part;
(3) the Person to whom any interest on a Debt Security shall be payable,
if other than the Person in whose name the Debt Security is registered;
(4) the date or dates on which the principal of any of such Debt
Securities will be payable;
(5) the rate or rates at which any of such Debt Securities will bear
interest, if any, the date or dates from which any such interest will
accrue, the Interest Payment Dates on which any such interest will be
payable and the Regular Record Date for any such interest payable on any
Interest Payment Date;
(6) the place or places where the principal of and any premium and
interest on any of such Debt Securities will be payable;
(7) the period or periods within which, the price or prices at which and
the terms and conditions on which any of such Debt Securities may be
redeemed, in whole or in part, at the option of the Operating Partnership;
(8) the obligation, if any, of the Operating Partnership to redeem or
purchase any of such Debt Securities pursuant to any sinking fund or
analogous provision or at the option of the Holder thereof, and the period
or periods within which, the price or prices at which, and the terms and
conditions on which, any of such Debt Securities will be redeemed or
purchased, in whole or in part, pursuant to any such obligation;
(9) the denominations in which any of such Debt Securities will be
issuable, if other than denominations of $1,000 and any integral multiple
thereof;
(10) if the amount of principal of or any premium or interest on any of
such Debt Securities may be determined with reference to an index or
pursuant to a formula, the manner in which such amounts will be determined;
(11) if other than the entire principal amount thereof, the portion of
the principal amount of any of such Debt Securities which will be payable
upon declaration of acceleration of the Maturity thereof;
(12) if the principal amount payable at the Stated Maturity of any of
such Debt Securities will not be determinable as of any one or more dates
prior to the Stated Maturity, the amount which will be deemed to be such
principal amount as of any such date for any purpose, including the
principal amount thereof which will be due and payable upon any Maturity
other than the Stated Maturity or which will be deemed to be Outstanding as
of any such date (or, in any such case, the manner in which such deemed
principal amount is to be determined);
(13) if applicable, that such Debt Securities, in whole or any specified
part, are defeasible pursuant to the provisions of the Indenture described
under "--Defeasance and Covenant Defeasance--Defeasance and
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Discharge" or "--Defeasance and Covenant Defeasance--Defeasance of Certain
Covenants," or under both such captions;
(14) whether any of such Debt Securities will be issuable in whole or in
part in the form of one or more Global Debt Securities and, if so, the
respective Depositaries for such Global Debt Securities, the form of any
legend or legends to be borne by any such Global Debt Security in addition
to or in lieu of the legend referred to under "--Global Debt Securities"
and, if different from those described under such caption, any
circumstances under which any such Global Debt Security may be exchanged in
whole or in part for Debt Securities registered, and any transfer of such
Global Debt Security in whole or in part may be registered, in the names of
Persons other than the Depositary for such Global Debt Security or its
nominee;
(15) any addition to or change in the Events of Default applicable to any
of such Debt Securities and any change in the right of the Trustee or the
Holders thereof to declare the principal amount of any of such Debt
Securities due and payable;
(16) any addition to or change in the covenants in the Indenture
described under "--Certain Covenants" applicable to any of such Debt
Securities; and
(17) any other terms of such Debt Securities not inconsistent with the
provisions of the Indenture (Section 301 ).
Debt Securities, including Original Issue Discount Securities, may be sold
at a substantial discount below their principal amount. Certain special United
States federal income tax considerations (if any) applicable to Debt
Securities sold at an original issue discount may be described in the
applicable Prospectus Supplement.
Except as described under "--Merger, Consolidation or Sale" or "--Certain
Covenants" or as may be set forth in any Prospectus Supplement, the Indenture
does not contain any provisions that would limit the ability of the Operating
Partnership to incur indebtedness or that would afford Holders of the Debt
Securities protection in the event of (i) a highly leveraged or similar
transaction involving the Operating Partnership, the management of the
Operating Partnership or any affiliate of any such party, (ii) a change of
control or (iii) a reorganization, restructuring, merger or similar
transaction involving the Operating Partnership that may adversely affect the
Holders of the Debt Securities. In addition, subject to the limitations set
forth under "--Merger, Consolidation or Sale," the Operating Partnership may,
in the future, enter into certain transactions, such as the sale of all or
substantially all of its assets or the merger or consolidation of the
Operating Partnership, that would increase the amount of the Operating
Partnership's indebtedness or substantially reduce or eliminate the Operating
Partnership's assets, which may have an adverse effect on the Operating
Partnership's ability to service its indebtedness, including the Debt
Securities. However, restrictions on ownership and transfers of the Company's
Common Stock designed to preserve its status as a REIT may act to prevent or
hinder a change of control. Reference is made to the applicable Prospectus
Supplement for information with respect to any deletions from, modifications
of or additions to the events of default or covenants that are described
below, including any addition of a covenant or other provision providing event
risk or similar protection.
DENOMINATIONS, REGISTRATION AND TRANSFER
The Debt Securities of each series will be issuable only in fully registered
form, without coupons, and, unless otherwise specified in the applicable
Prospectus Supplement, only in denominations of $1,000 and integral multiples
thereof (Section 302).
At the option of the Holder, subject to the terms of the Indenture and the
limitations applicable to Global Debt Securities, Debt Securities of each
series will be exchangeable for other Debt Securities of the same series of
any authorized denomination and of a like tenor and aggregate principal amount
(Section 305).
Subject to the terms of the Indenture and the limitations applicable to
Global Debt Securities, Debt Securities may be presented for exchange as
provided above or for registration of transfer (duly endorsed or with the form
of transfer endorsed thereon duly executed) at the office of the Security
Registrar or at the office of any transfer agent designated by the Operating
Partnership for such purpose. No service charge will be made for any
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registration of transfer or exchange of Debt Securities, but the Operating
Partnership may require payment of a sum sufficient to cover any tax or other
governmental charge payable in connection therewith. Such transfer or exchange
will be effected upon the Security Registrar or such transfer agent, as the
case may be, being satisfied with the documents of title and identity of the
person making the request. The Operating Partnership has appointed the Trustee
as Security Registrar. Any transfer agent (in addition to the Security
Registrar) initially designated by the Operating Partnership for any Debt
Securities will be named in the applicable Prospectus Supplement (Section
305).
The Operating Partnership may at any time designate additional transfer
agents or rescind the designation of any transfer agent or approve a change in
the office through which any transfer agent acts, except that the Operating
Partnership will be required to maintain a transfer agent in each Place of
Payment for the Debt Securities of each series (Section 1002).
If the Debt Securities of any series (or of any series and specified terms)
are to be redeemed in part, the Operating Partnership will not be required to
(i) issue, register the transfer of or exchange any Debt Security of that
series (or of that series and specified terms, as the case may be) during a
period beginning at the opening of business 15 days before the day of mailing
of a notice of redemption of any such Debt Security that may be selected for
redemption and ending at the close of business on the day of such mailing,
(ii) register the transfer of or exchange any Debt Security so selected for
redemption, in whole or in part, except the unredeemed portion of any such
Debt Security being redeemed in part or (iii) issue, register the transfer of
or exchange any Debt Security that has been surrendered for payment at the
option of the Holder, except the portion, if any, of such Debt Security not to
be so repaid (Section 305).
GLOBAL DEBT SECURITIES
Some or all of the Debt Securities of any series may be represented, in
whole or in part, by one or more Global Debt Securities which will have an
aggregate principal amount equal to that of the Debt Securities represented
thereby. Each Global Debt Security will be registered in the name of a
Depositary or a nominee thereof identified in the applicable Prospectus
Supplement, will be deposited with such Depositary or nominee or a custodian
therefor and will bear a legend regarding the restrictions on exchanges and
registration of transfer thereof referred to below and any such other matters
as may be provided for pursuant to the Indenture (Section 305).
Notwithstanding any provision of the Indenture or any Debt Security
described herein, no Global Debt Security may be exchanged in whole or in part
for Debt Securities registered, and no transfer of a Global Debt Security in
whole or in part may be registered, in the name of any Person other than the
Depositary for such Global Debt Security or any nominee of such Depositary
unless (i) the Depositary has notified the Operating Partnership that it is
unwilling or unable to continue as Depositary for such Global Debt Security or
has ceased to be qualified to act as such as required by the Indenture, (ii)
there shall have occurred and be continuing an Event of Default with respect
to the Debt Securities represented by such Global Debt Security or (iii) there
shall exist such circumstances, if any, in addition to or in lieu of those
described above as may be described in the applicable Prospectus Supplement
(Section 305). All securities issued in exchange for a Global Debt Security or
any portion thereof will be registered in such names as the Depositary may
direct (Sections 204 and 305).
As long as the Depositary, or its nominee, is the registered Holder of a
Global Debt Security, the Depositary or such nominee, as the case may be, will
be considered the sole owner and Holder of such Global Debt Security and the
Debt Securities represented thereby for all purposes under the Debt Securities
and the Indenture (Section 308). Except in the limited circumstances referred
to above, owners of beneficial interests in a Global Debt Security will not be
entitled to have such Global Debt Security or any Debt Securities represented
thereby registered in their names, will not receive or be entitled to receive
physical delivery of certificated Debt Securities in exchange therefor and
will not be considered to be the owners or Holders of such Global Debt
Security or any Debt Securities represented thereby for any purpose under the
Debt Securities or the Indenture. All payments of principal of and any premium
and Interest on a Global Debt Security will be made to the Depositary or its
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nominee, as the case may be, as the Holder thereof. The laws of some
jurisdictions require that certain purchasers of securities take physical
delivery of such securities in definitive form. These laws may impair the
ability to transfer beneficial interests in a Global Debt Security.
Ownership of beneficial interests in a Global Debt Security will be limited
to institutions that have accounts with the Depositary or its nominee
("participants") and to persons that may hold beneficial interests through
participants. In connection with the issuance of any Global Debt Security, the
Depositary will credit, on its book-entry registration and transfer system,
the respective principal amounts of Debt Securities represented by the Global
Debt Security to the accounts of its participants. Ownership of beneficial
interests in a Global Debt Security will be shown only on, and the transfer of
those ownership interests will be effected only through, records maintained by
the Depositary (with respect to participants' interests) or any such
participant (with respect to interests of persons held by such participants on
their behalf). Payments, transfers, exchanges and other matters relating to
beneficial interests in a Global Debt Security may be subject to various
policies and procedures adopted by the Depositary from time to time. None of
the Operating Partnership, the Trustee or any agent of the Operating
Partnership or the Trustee will have any responsibility or liability for any
aspect of the Depositary's or any participant's records relating to, or for
payments made on account of, beneficial interests in a Global Debt Security,
or for maintaining, supervising or reviewing any records relating to such
beneficial interests.
Secondary trading in notes and debentures of corporate issuers is generally
settled in clearing-house or next-day funds. In contrast, beneficial interests
in a Global Debt Security, in all cases, will trade in the Depositary's
settlement system, in which secondary market trading activity in those
beneficial interests will be required by the Depositary to settle in
immediately available funds. The Operating Partnership cannot predict the
effect, if any, that settlement in immediately available funds would have on
trading activity in such beneficial interests. Also, settlement for purchases
of beneficial interests in a Global Debt Security upon the original issuance
thereof will be required to be made in immediately available funds.
PAYMENT AND PAYING AGENTS
Unless otherwise indicated in the applicable Prospectus Supplement, payment
of interest on a Debt Security on any Interest Payment Date will be made to
the Person in whose name such Debt Security (or one or more Predecessor Debt
Securities) is registered at the close of business on the Regular Record Date
for such interest (Section 307).
Unless otherwise indicated in the applicable Prospectus Supplement,
principal of and any premium and interest on the Debt Securities of a
particular series will be payable at the office of such Paying Agent or Paying
Agents as the Operating Partnership may designate for such purpose from time
to time, except that at the option of the Operating Partnership payment of any
interest may be made by check mailed to the address of the Person entitled
thereto as such address appears in the Security Register. Unless otherwise
indicated in the applicable Prospectus Supplement, the corporate trust office
of the Trustee will be designated as the Operating Partnership's sole Paying
Agent for payments with respect to Debt Securities of each series. Any other
Paying Agents initially designated by the Operating Partnership for the Debt
Securities of a particular series will be named in the applicable Prospectus
Supplement. The Operating Partnership may at any time designate additional
Paying Agents or rescind the designation of any Paying Agent or approve a
change in the office through which any Paying Agent acts, except that the
Operating Partnership will be required to maintain a Paying Agent in each
Place of Payment for the Debt Securities of a particular series (Section
1002).
All moneys paid by the Operating Partnership to a Paying Agent for the
payment of the principal of, or any premium or interest on, any Debt Security
that remain unclaimed at the end of two years after such principal, premium or
interest has become due and payable will be repaid to the Operating
Partnership, and the Holder of such Debt Security thereafter may look only to
the Operating Partnership for payment thereof (Section 103).
Any interest not punctually paid or duly provided for on any Interest
Payment Date with respect to a Debt Security ("Defaulted Interest") will
forthwith cease to be payable to the Holder on the applicable regular record
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date and may either be paid to the person in whose name such Debt Security is
registered at the close of business on a special record date (the "Special
Record Date") for the payment of such Defaulted Interest to be fixed by the
Trustee, notice whereof shall be given to the Holder of such Debt Security not
less than 10 days prior to such Special Record Date, or may be paid at any
time in any other lawful manner, all as more completely described in the
applicable Prospectus Supplement (Section 307).
MERGER, CONSOLIDATION OR SALE
The Operating Partnership may not consolidate with or merge into, or convey,
transfer or lease its properties and assets substantially as an entirety to,
any Person (a "successor Person"), and may not permit any Person to merge
into, or convey, transfer or lease its properties and assets substantially as
an entirety to, the Operating Partnership, unless (i) the successor Person (if
any) is a corporation, partnership or trust organized and validly existing
under the laws of any domestic jurisdiction and assumes, by a supplemental
indenture, the Operating Partnership's obligations on the Debt Securities and
under the Indenture, (ii) immediately after giving effect to the transaction,
and treating any indebtedness which becomes an obligation of the Operating
Partnership or any Subsidiary as a result of the transaction as having been
incurred by it at the time of the transaction, no Event of Default, and no
event which, after notice or lapse of time or both, would become an Event of
Default, shall have occurred and be continuing and (iii) certain other
conditions are met (Section 801).
CERTAIN COVENANTS
Existence. Except as permitted under "--Merger, Consolidation or Sale," the
Operating Partnership will be required to do or cause to be done all things
necessary to preserve and keep in full force and effect its existence, rights
and franchises; provided, however, that the Operating Partnership shall not be
required to preserve any right or franchise if it determines that the
preservation thereof is no longer desirable in the conduct of its business and
that the loss thereof is not disadvantageous in any material respect to the
Holders of the Debt Securities (Section 1005).
Maintenance of Properties. The Operating Partnership will be required to
cause all properties used or useful in the conduct of its business or the
business of any Subsidiary to be maintained and kept in good condition, repair
and working order and supplied with all necessary equipment and to cause to be
made all necessary repairs, renewals, replacements, betterments and
improvements thereof, all as in the judgment of the Operating Partnership may
be necessary so that the business carried on in connection therewith may be
properly and advantageously conducted at all times; provided, however, that
the Operating Partnership shall not be prevented from discontinuing the
operation or maintenance of any of its properties if such discontinuance is,
in the judgment of the Operating Partnership, desirable in the conduct of its
business or the business of any Subsidiary and not disadvantageous in any
material respect to the Holders (Section 1006).
Insurance. The Operating Partnership will be required to, and to cause each
of its Subsidiaries to, keep all of its insurable properties insured against
loss or damage with insurers of recognized responsibility in commercially
reasonable amounts and types (Section 1008).
Payment of Taxes and Other Claims. The Operating Partnership will be
required to pay or discharge or cause to be paid or discharged, before the
same shall become delinquent, (i) all taxes, assessments and governmental
charges levied or imposed upon the Operating Partnership or any Subsidiary or
upon the income, profits or property of the Operating Partnership or any
Subsidiary, and (ii) all lawful claims for labor, materials and supplies
which, if unpaid, might by law become a lien upon the property of the
Operating Partnership or any Subsidiary; provided, however, that the Operating
Partnership shall not be required to pay or discharge or cause to be paid or
discharged any such tax, assessment, charge or claim whose amount,
applicability or validity is being contested in good faith by appropriate
proceedings (Section 1007).
Provision of Financial Information. Whether or not the Operating Partnership
is subject to Section 13 or Section 15(d) of the Exchange Act and for so long
as any Debt Securities are outstanding, the Operating
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Partnership will, to the extent permitted under the Exchange Act, file with
the Commission the annual reports, quarterly reports and other documents which
the Operating Partnership would have been required to file with the Commission
pursuant to such Section 13 or Section 15(d) (the "Financial Statements") if
the Operating Partnership were so subject, such documents to be filed with the
Commission on or prior to the respective dates (the "Required Filing Dates")
by which the Operating Partnership would have been required so to file such
documents if the Operating Partnership were so subject. The Operating
Partnership will also in any event (x) within 15 days of each Required Filing
Date (i) transmit by mail to all Holders of Debt Securities whose names appear
in the Security Register for such Debt Securities, as their names and
addresses appear in the Security Register for such Debt Securities, without
cost to such Holders, copies of the annual reports and quarterly reports which
the Operating Partnership would have been required to file with the Commission
pursuant to Section 13 or Section 15(d) of the Exchange Act if the Operating
Partnership were subject to such Sections and (ii) file with any Trustee
copies of the annual reports, quarterly reports and other documents which the
Operating Partnership would have been required to file with the Commission
pursuant to Section 13 or Section 15(d) of the Exchange Act if the Operating
Partnership were subject to such Sections and (y) if filing such documents by
the Operating Partnership with the Commission is not permitted under the
Exchange Act, promptly upon written request and payment of the reasonable cost
of duplication and delivery, supply copies of such documents to any
prospective Holder (Section 1010).
Limitations on Incurrence of Indebtedness. The Operating Partnership will
not, and will not permit any Subsidiary to, incur any Indebtedness (as defined
below), other than intercompany debt representing Indebtedness to which the
only parties are the Company, the Operating Partnership and any of their
Subsidiaries (but only so long as such Indebtedness is held solely by any of
the Company, the Operating Partnership and any Subsidiary) that is subordinate
in right of payment to Outstanding Debt Securities, if, immediately after
giving effect to the incurrence of such additional Indebtedness, the aggregate
principal amount of all outstanding Indebtedness of the Operating Partnership
and its Subsidiaries on a consolidated basis is greater than 60% of the sum of
(i) Total Assets (as defined below) as of the end of the calendar quarter
covered in the Operating Partnership's Annual Report on Form 10-K or Quarterly
Report on Form 10-Q, as the case may be, most recently filed with the Trustee
(or such reports of the Company if filed by the Operating Partnership with the
Trustee in lieu of filing its own reports) prior to the incurrence of such
additional Indebtedness and (ii) the increase in Total Assets from the end of
such quarter including, without limitation, any increase in Total Assets
resulting from the incurrence of such additional Indebtedness (such increase,
together with the Total Assets, is referred to as "Adjusted Total Assets")
(Section 1009).
In addition to the foregoing limitation on the incurrence of Indebtedness,
the Operating Partnership will not, and will not permit any Subsidiary to,
incur any Indebtedness if the ratio of Consolidated Income Available for Debt
Service to the Annual Service Charge (in each case as defined below) for the
four consecutive fiscal quarters most recently ended prior to the date on
which such additional Indebtedness is to be incurred shall have been less than
1.5 to 1, on a pro forma basis, after giving effect to the incurrence of such
Indebtedness and to the application of the proceeds therefrom and calculated
on the assumption that (i) such Indebtedness and any other Indebtedness
incurred by the Operating Partnership or its Subsidiaries since the first day
of such four-quarter period and the application of the proceeds therefrom,
including to refinance other Indebtedness, had occurred at the beginning of
such period, (ii) the repayment or retirement of any other Indebtedness by the
Operating Partnership or its Subsidiaries since the first day of such four-
quarter period had occurred at the beginning of such period (except that, in
making such computation, the amount of Indebtedness under any revolving credit
facility shall be computed based upon the average daily balance of such
Indebtedness during such period), (iii) the income earned on any increase in
Adjusted Total Assets since the end of such four-quarter period had been
earned on an annualized basis, during such period, and (iv) in the case of any
acquisition or disposition by the Operating Partnership or any Subsidiary of
any asset or group of assets since the first day of such four-quarter period,
including, without limitation, by merger, stock purchase or sale, or asset
purchase or sale, such acquisition or disposition or any related repayment of
Indebtedness had occurred as of the first day of such period with appropriate
adjustments with respect to such acquisition or disposition being included in
such pro forma calculation (Section 1009). Further, the Operating Partnership
will not, and will not permit any Subsidiary to,
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incur any Secured Indebtedness of the Operating Partnership or any Subsidiary
if, immediately after giving effect to the incurrence of such additional
Secured Indebtedness, the aggregate principal amount of all outstanding
Secured Indebtedness of the Operating Partnership and its Subsidiaries on a
consolidated basis would be greater than 40% of Adjusted Total Assets. As used
herein, "Secured Indebtedness" means Indebtedness secured by any mortgage,
lien, charge, encumbrance, trust, deed, deed of trust, deed to secure debt,
security agreement, pledge, conditional sale or other title retention
agreement, capitalized lease, or other like agreement granting or conveying
security title to or a security interest in real property or other tangible
assets.
For purposes of the foregoing provisions regarding the limitation on the
incurrence of Indebtedness, Indebtedness shall be deemed to be "incurred" by
the Operating Partnership or a Subsidiary whenever the Operating Partnership
and its Subsidiary shall create, assume, guarantee or otherwise become liable
in respect thereof (Section 1009).
Maintenance of Total Unencumbered Assets. For so long as there are
Outstanding any Debt Securities (other than Debt Securities that are not, by
their terms, entitled to the benefit of this covenant), the Operating
Partnership is required to maintain Total Unencumbered Assets (as defined
below) of not less than 150% of the aggregate outstanding principal amount of
all outstanding Unsecured Indebtedness (as defined below) (Section 1009).
As used herein:
"Annual Service Charge" as of any date means the amount which is expensed in
any 12-month period for interest on Indebtedness of the Operating Partnership
and its Subsidiaries.
"Consolidated Income Available for Debt Service" for any period means
Consolidated Net Income (i) plus amounts which have been deducted for (a)
interest on Indebtedness of the Operating Partnership and its Subsidiaries,
(b) provision for taxes of the Operating Partnership and its Subsidiaries
based on income, (c) amortization of Indebtedness discount, (d) losses and
provisions for losses on properties, (e) depreciation and amortization, (f)
the effect of any noncash charge resulting from a change in accounting
principles in determining Consolidated Net Income for such period, (g)
amortization of deferred charges and (h) the effect of net losses of joint
ventures in which the Operating Partnership or any Subsidiary owns an interest
to the extent not requiring a use of cash, and (ii) less amounts which have
been included for (a) gains from sales or dispositions of properties and (b)
the effect of net income of joint ventures in which the Operating Partnership
or any Subsidiary owns an interest to the extent not providing a source of
cash.
"Consolidated Net Income" for any period means the amount of consolidated
net income (or loss) of the Partnership and its Subsidiaries for such period
determined on a consolidated basis in accordance with generally accepted
accounting principles.
"Indebtedness" of the Operating Partnership or any Subsidiary means any
indebtedness of the Operating Partnership or such Subsidiary, as applicable,
whether or not contingent, in respect of (i) borrowed money evidenced by
bonds, notes, debentures or similar instruments, (ii) indebtedness secured by
a mortgage, pledge, lien, charge, encumbrance of any security interest
existing on property owned by the Operating Partnership or such Subsidiary,
(iii) the reimbursement obligations, contingent or otherwise, in connection
with any letters of credit actually issued or amounts representing the balance
that constitutes an accrued expense or trade payable or (iv) any lease of
property by the Operating Partnership or such Subsidiary as lessee which is
reflected in the Operating Partnership's consolidated balance sheet as a
capitalized lease in accordance with generally accepted accounting principles,
in the case of items of indebtedness under (i) through (iii) above to the
extent that any such items (other than letters of credit) would appear as a
liability on the Operating Partnership's consolidated balance sheet in
accordance with generally accepted accounting principles, and also includes,
to the extent not otherwise included, any obligation by the Operating
Partnership or such Subsidiary to be liable for, or to pay, as obligor,
guarantor or otherwise (other than for purposes of collection in the ordinary
course of business), indebtedness of another person (other than the Operating
Partnership or any Subsidiary).
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"Subsidiary" means Weeks Realty Services, Weeks Construction Services and
any other corporation, partnership or limited liability company more than 50%
of the outstanding voting stock, partnership interests or membership
interests, as the case may be, of which is owned or controlled, directly or
indirectly, by the Operating Partnership or by one or more other Subsidiaries,
or by the Operating Partnership and one or more other Subsidiaries. For the
purposes of this definition, "voting stock" means stock which ordinarily has
voting power for the election of directors, whether at all times or only so
long as no senior class of stock has such voting power by reason of any
contingency.
"Total Assets" as of any date means the sum of (i) Undepreciated Real Estate
Assets and (ii) all other assets of the Operating Partnership and its
Subsidiaries on a consolidated basis determined in accordance with generally
accepted accounting principles (but excluding intangibles and straight-line
rents receivable).
"Total Unencumbered Assets" means the sum of (i) those Undepreciated Real
Estate Assets which have not been pledged, mortgaged or otherwise encumbered
by the owner thereof to secure Indebtedness, excluding infrastructure
assessment bonds and (ii) all other assets of the Operating Partnership and
its Subsidiaries determined in accordance with generally accepted accounting
principles (but excluding intangibles and straight-line rents receivable)
which have not been pledged, mortgaged or otherwise encumbered by the owner
thereof to secure Indebtedness.
"Undepreciated Real Estate Assets" as of any date means the cost (original
cost plus capital improvements) of real estate assets of the Operating
Partnership and its Subsidiaries on such date, before depreciation and
amortization, determined on a consolidated basis in accordance with generally
accepted accounting principles.
"Unsecured Indebtedness" means Indebtedness which is (i) not subordinated to
any other Indebtedness and (ii) not secured by any mortgage, lien, charge,
pledge, encumbrance or security interest of any kind upon any of the
properties of the Operating Partnership or any Subsidiary.
Additional Covenants. Any additional or different covenants of the Operating
Partnership with respect to any series of Debt Securities will be set forth in
the applicable Prospectus Supplement.
EVENTS OF DEFAULT
Each of the following will constitute an Event of Default under the
Indenture with respect to Debt Securities of any series: (i) failure to pay
any interest on any Debt Securities of that series when due, and continuance
of such failure for a period of 30 days; (ii) failure to pay principal of or
any premium on any Debt Security of that series when due; (iii) failure to
deposit any sinking fund payment, when due, in respect of any Debt Security of
that series; (iv) failure to perform any other covenant of the Operating
Partnership in the Indenture (other than a covenant included in the Indenture
solely for the benefit of a series other than that series), that has continued
for 60 days after written notice has been given by the Trustee, or the Holders
of at least 25% in aggregate principal amount of the Outstanding Debt
Securities of that series, as provided in the Indenture; (v) failure to pay
when due (subject to any applicable grace period) the principal of, or
acceleration of, any Indebtedness for money borrowed by the Operating
Partnership, if, in the case of any such failure, such Indebtedness has not
been discharged or, in the case of any such acceleration, such Indebtedness
has not been discharged or such acceleration has not been rescinded or
annulled, in each case within 10 days after written notice has been given by
the Trustee, or the Holders of at least 25% in aggregate principal amount of
the Outstanding Debt Securities of that series, as provided in the Indenture,
if the aggregate outstanding principal amount of indebtedness under the
instrument with respect to which such default or acceleration has occurred
exceeds $10 million; (vi) certain events of bankruptcy, insolvency or
reorganization of the Operating Partnership or any Significant Subsidiary or
any of their respective property; and (vii) any other event of default
provided with respect to a particular series of Debt Securities (Section 501).
If an Event of Default (other than an Event of Default described in clause
(vi) above) with respect to the Debt Securities of any series at the time
Outstanding shall occur and be continuing, either the Trustee or the
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Holders of at least 25% in aggregate principal amount of the Outstanding Debt
Securities of that series by notice as provided in the Indenture may declare
the principal amount of the Debt Securities of that series (or, in the case of
any Debt Security that is an Original Issue Discount Security or the principal
amount of which is not then determinable, such portion of the principal amount
of such Debt Security, or such other amount in lieu of such principal amount,
as may be specified in the terms of such Debt Security) to be due and payable
immediately. If an Event of Default described in clause (vi) above with
respect to the Debt Securities of any series at the time Outstanding shall
occur, the principal amount of all the Debt Securities of that series (or, in
the case of any such Original Issue Discount Security or other Debt Security,
such specified amount) will automatically, and without any action by the
Trustee or any Holder, become immediately due and payable. After any such
acceleration, but before a judgment or decree based on acceleration, the
Holders of a majority in aggregate principal amount of the Outstanding Debt
Securities of that series may, under certain circumstances, rescind and annul
such acceleration if all Events of Default, other than the non-payment of
accelerated principal (or other specified amount), have been cured or waived
as provided in the Indenture (Section 502). For information as to waiver of
defaults, see "--Modification and Waiver."
Subject to the provisions of the Indenture relating to the duties of the
Trustee in case an Event of Default shall occur and be continuing, the Trustee
will be under no obligation to exercise any of its rights or powers under the
Indenture at the request or direction of any of the Holders, unless such
Holders shall have offered to the Trustee reasonable indemnity (Section 603).
Subject to such provisions for the indemnification of the Trustee, the Holders
of a majority in aggregate principal amount of the Outstanding Debt Securities
of any series will have the right to direct the time, method and place of
conducting any proceeding for any remedy available to the Trustee or
exercising any trust or power conferred on the Trustee with respect to the
Debt Securities of that series (Section 512).
No Holder of a Debt Security of any series will have any right to institute
any proceeding with respect to the Indenture, or for the appointment of a
receiver or a trustee, or for any other remedy thereunder, unless (i) such
Holder has previously given to the Trustee written notice of a continuing
Event of Default with respect to the Debt Securities of that series, (ii) the
Holders of at least 25% in aggregate principal amount of the Outstanding Debt
Securities of that series have made written request, and such Holder or
Holders have offered reasonable indemnity, to the Trustee to institute such
proceeding as trustee and (iii) the Trustee has failed to institute such
proceeding, and has not received from the Holders of a majority in aggregate
principal amount of the Outstanding Debt Securities of that series a direction
inconsistent with such request, within 60 days after such notice, request and
offer (Section 507). However, such limitations do not apply to a suit
instituted by a Holder of a Debt Security for the enforcement of payment of
the principal of or any premium or interest on such Debt Security on or after
the applicable due date specified in such Debt Security (Section 508).
Within 120 days after the close of each fiscal year, the Operating
Partnership will be required to furnish to the Trustee a statement by certain
of the Company's officers as to whether the Operating Partnership, to their
knowledge, is in default in the performance or observance of any of the terms,
provisions and conditions of the Indenture and, if so, specifying all such
known defaults (Section 1004).
MODIFICATION AND WAIVER
Modifications and amendments of the Indenture may be made by the Operating
Partnership and the Trustee with the consent of the Holders of a majority in
principal amount of the Outstanding Debt Securities of each series affected by
such modification or amendment; provided, however, that no such modification
or amendment may, without the consent of the Holder of each Outstanding Debt
Security affected thereby, (i) change the Stated Maturity of the principal of,
or any installment of principal of or interest on, any Debt Security, (ii)
reduce the principal amount of, or any premium or interest on, any Debt
Security, (iii) reduce the amount of principal of an Original Issue Discount
Security or any other Debt Security payable upon acceleration of the Maturity
thereof, (iv) change the place or currency of payment of principal of, or any
premium or interest on, any Debt Security, (v) impair the right to institute
suit for the enforcement of any payment on or with respect to any Debt
Security, (vi) reduce the percentage in principal amount of Outstanding Debt
Securities of any series, the consent of whose
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Holders is required for modification or amendment of the Indenture, (vii)
reduce the percentage in principal amount of Outstanding Debt Securities of
any series necessary for waiver of compliance with certain provisions of the
Indenture or for waiver of certain defaults or (viii) modify such provisions
with respect to modification and waiver (Section 902).
The Holders of a majority in principal amount of the Outstanding Debt
Securities of any series may waive compliance by the Operating Partnership
with certain restrictive provisions of the Indenture (Section 1011). The
Holders of a majority in principal amount of the Outstanding Debt Securities
of any series may waive any past default under the Indenture, except a default
in the payment of principal, premium or interest and certain covenants and
provisions of the Indenture that cannot be amended without the consent of the
Holder of each Outstanding Debt Security of such series affected (Section
513).
The Indenture provides that in determining whether the Holders of the
requisite principal amount of the Outstanding Debt Securities have given or
taken any direction, notice, consent, waiver or other action under the
Indenture as of any date (i) the principal amount of an Original Issue
Discount Security that will be deemed to be Outstanding will be the amount of
the principal thereof that would be due and payable as of such date upon
acceleration of the Maturity thereof to such date and (ii) if, as of such
date, the principal amount payable at the Stated Maturity of a Debt Security
is not determinable (for example, because it is based on an index), the
principal amount of such Debt Security deemed to be Outstanding as of such
date will be an amount determined in the manner prescribed for such Debt
Security. Certain Debt Securities, including those for whose payment or
redemption money has been deposited or set aside in trust for the Holders and
those that have been fully defeased pursuant to Section 1302, will not be
deemed to be Outstanding (Section 101).
Except in certain limited circumstances, the Operating Partnership will be
entitled to set any day as a record date for the purpose of determining the
Holders of Outstanding Debt Securities of any series entitled to give or take
any direction, notice, consent, waiver or other action under the Indenture, in
the manner and subject to the limitations provided in the Indenture. In
certain limited circumstances, the Trustee will be entitled to set a record
date for action by Holders. If a record date is set for any action to be taken
by Holders of a particular series, such action may be taken only by persons
who are Holders of Outstanding Debt Securities of that series on the record
date. To be effective, such action must be taken by Holders of the requisite
principal amount of such Debt Securities within a specified period following
the record date. For any particular record date, this period will be 180 days
or such shorter period as may be specified by the Operating Partnership (or
the Trustee, if it set the record date), and may be shortened or lengthened
(but not beyond 180 days) from time to time (Section 104).
Modifications and amendments of the Indenture may be made by the Operating
Partnership and the Trustee without the consent of any Holders of Debt
Securities for any of the following purposes: (i) to evidence the succession
of another person to the Operating Partnership and the assumption by such
successor of the covenants of the Operating Partnership in the Indenture and
the Debt Securities; (ii) to add to the covenants of the Operating Partnership
for the benefit of the Holders of all or any series of Debt Securities or to
surrender any right or power conferred upon the Operating Partnership in the
Indenture; (iii) to add events of default for the benefit of the Holders of
all or any series of Debt Securities; (iv) to add to or change any provisions
of the Indenture as necessary to permit or facilitate the issuance of Debt
Securities in uncertificated form; (v) to add to, change or eliminate any of
the provisions of the Indenture with respect to one or more series of Debt
Securities, so long as the changes (A) do not (1) apply to any Debt Securities
of any series created prior to such modification or amendment and entitled to
the benefit of such provision or (2) modify the rights of the holder of any
such Debt Security with respect to such provision, or (B) will only become
effective when there is no such Debt Security Outstanding; (vi) to secure the
Debt Securities; (vii) to establish the form or terms of Debt Securities of
any series as permitted in the Indenture; or (viii) to provide for the
acceptance of appointment by a successor Trustee (Section 901).
DEFEASANCE AND COVENANT DEFEASANCE
If and to the extent indicated in the applicable Prospectus Supplement, the
Operating Partnership may elect, at its option at any time, to have the
provisions of Section 1302 of the Indenture, relating to defeasance and
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discharge of indebtedness, or Section 1303, relating to defeasance of certain
restrictive covenants in the Indenture, applied to the Debt Securities of any
series, or to any specified part of a series (Section 1301).
DEFEASANCE AND DISCHARGE
The Indenture provides that, upon the Operating Partnership's exercise of
its option (if any) to have Section 1302 applied to any Debt Securities, the
Operating Partnership will be discharged from all its obligations with respect
to such Debt Securities (except for certain obligations to exchange or
register the transfer of Debt Securities, to replace stolen, lost or mutilated
Debt Securities, to maintain paying agencies and to hold moneys for payment in
trust) upon the deposit in trust for the benefit of the Holders of such Debt
Securities of money or U.S. Government Obligations, or both, which, through
the payment of principal and interest in respect thereof in accordance with
their terms, will provide money in an amount sufficient to pay the principal
of and any premium and interest on such Debt Securities on the respective
Stated Maturities in accordance with the terms of the Indenture and such Debt
Securities. Such defeasance or discharge may occur only if, among other
things, the Operating Partnership has delivered to the Trustee an Opinion of
Counsel to the effect that the Operating Partnership has received from, or
there has been published by, the United States Internal Revenue Service a
ruling, or there has been a change in tax law, in either case to the effect
that Holders of such Debt Securities will not recognize gain or loss for
federal income tax purposes as a result of such deposit, defeasance and
discharge and will be subject to federal income tax on the same amount, in the
same manner and at the same times as would have been the case if such deposit,
defeasance and discharge were not to occur (Sections 1302 and 1304).
DEFEASANCE OF CERTAIN COVENANTS
The Indenture provides that, upon the Operating Partnership's exercise of
its option (if any) to have Section 1303 applied to any Debt Securities, the
Operating Partnership may omit to comply with certain restrictive covenants,
including those described under "Certain Covenants," in the last sentence
under "--Merger, Consolidation or Sale" and any that may be described in the
applicable Prospectus Supplement, and the occurrence of certain Events of
Default, which are described above in clause (iv) (with respect to such
restrictive covenants) and clauses (v) and (vii) under "--Events of Default"
and any that may be described in the applicable Prospectus Supplement, will be
deemed not to be or result in an Event of Default, in each case with respect
to such Debt Securities. The Operating Partnership, in order to exercise such
option, will be required to deposit, in trust for the benefit of the Holders
of such Debt Securities, money or U.S. Government Obligations, or both, which,
through the payment of principal and interest in respect thereof in accordance
with their terms, will provide money in an amount sufficient to pay the
principal of and any premium and interest on such Debt Securities on the
respective Stated Maturities in accordance with the terms of the Indenture and
such Debt Securities. The Operating Partnership will also be required, among
other things, to deliver to the Trustee an Opinion of Counsel to the effect
that Holders of such Debt Securities will not recognize gain or loss for
federal income tax purposes as a result of such deposit and defeasance of
certain obligations and will be subject to federal income tax on the same
amount, in the same manner and at the same times as would have been the case
if such deposit and defeasance were not to occur. In the event the Operating
Partnership exercised this option with respect to any Debt Securities and such
Debt Securities were declared due and payable because of the occurrence of any
Event of Default, the amount of money and U.S. Government Obligations so
deposited in trust would be sufficient to pay amounts due on such Debt
Securities at the time of their respective Stated Maturities but may not be
sufficient to pay amounts due on such Debt Securities upon any acceleration
resulting from such Event of Default. In such case, the Operating Partnership
would remain liable for such payments (Sections 1303 and 1304).
"U.S. Government Obligations" means securities which are (i) direct
obligations of the United States of America for the payment of which its full
faith and credit is pledged or (ii) obligations of a person controlled or
supervised by and acting as a agency or instrumentality of the United States
of America, the payment of which is unconditionally guaranteed as a full faith
and credit obligation by the United States of America, which, in either case,
are not callable or redeemable at the option of the issuer thereof, and shall
also include a depository receipt issued by a bank or trust company as
custodian with respect to any such U.S. Government Obligation or
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a specific payment of interest on or principal of any such U.S. Government
Obligation held by such custodian of the account of the holder of a depository
receipt, provided that (except as required by law) such custodian is not
authorized to make any deduction from the amount payable to the holder of such
depository receipt from any amount received by the custodian in respect of the
U.S. Government Obligation or the specific payment of interest on or principal
of the U.S. Government Obligation evidenced by such depository receipt
(Section 1304).
NOTICES
Notices to Holders of Debt Securities will be given by mail to the addresses
of such Holders as they may appear in the Security Register (Sections 101 and
106).
TITLE
The Operating Partnership, the Trustee and any agent of the Operating
Partnership or the Trustee may treat the Person in whose name a Debt Security
is registered as the absolute owner thereof (whether or not such Debt Security
may be overdue) for the purpose of making payment and for all other purposes
(Section 308).
NO CONVERSION RIGHTS
The Debt Securities will not be convertible into or exchangeable for any
capital stock of the Company or equity interest in the Operating Partnership.
FEDERAL INCOME TAX CONSIDERATIONS
INTRODUCTORY NOTES
The following discussion summarizes the United States federal income tax
considerations material to a prospective holder of Common Stock. The Company
has received a legal opinion from King & Spalding, which has acted as tax
counsel to the Company, to the effect that the following discussion fairly
summarizes the United States federal income tax considerations that are
material to a holder of Common Stock and, to the extent such discussion
contains statements of law or legal conclusions, such statements and
conclusions are the opinion of King & Spalding. If the Company offers
Securities other than Common Stock pursuant to this Prospectus, a discussion
of the United States federal income tax considerations relevant to such
Securities will be included in the Prospectus Supplement relating thereto.
This discussion is based on current law. It is not exhaustive of all
possible tax considerations and does not give a detailed discussion of any
state, local or foreign tax considerations. Nor does it discuss all of the
aspects of federal income taxation that may be relevant to a prospective
shareholder in light of his or her particular circumstances or to certain
types of shareholders (including insurance companies, tax-exempt entities,
financial institutions or broker-dealers, foreign corporations, and persons
who are not citizens or residents of the United States) who are subject to
special treatment under the federal income tax laws. As used in this section,
the term "Subsidiaries" refers to Weeks Realty Services and Weeks Construction
Services.
EACH PROSPECTIVE PURCHASER IS ADVISED TO CONSULT WITH HIS OWN TAX ADVISOR
REGARDING THE SPECIFIC TAX CONSEQUENCES TO HIM OR HER OF THE PURCHASE,
OWNERSHIP, AND SALE OF SECURITIES, INCLUDING THE FEDERAL, STATE, LOCAL,
FOREIGN, AND OTHER TAX CONSEQUENCES OF SUCH PURCHASE, OWNERSHIP, SALE, AND
ELECTION AND OF POTENTIAL CHANGES IN APPLICABLE TAX LAWS.
TAXATION OF THE COMPANY
General. The Company has made an election to be taxed as a REIT under
Sections 856 and 860 of the Code commencing with its taxable year that ended
on December 31, 1994. The Company has received a legal opinion from King &
Spalding to the effect that the Company was organized and has operated in
conformity with the requirements for qualification and taxation as a REIT for
its taxable years ended December 31, 1994, 1995, and 1996, and that its
current organization and method of operation should enable it to continue to
qualify as a REIT. Investors should be aware, however, that opinions of
counsel are not binding upon the Internal
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Revenue Service ("IRS") or any court. Further, King & Spalding's opinion is
based on various assumptions and is conditioned upon certain representations
made by the Company as to certain relevant factual matters relating to the
organization and the past, current and expected future manner of operation of
the Company, the Operating Partnership and the Financing Partnership.
Moreover, the Company's continued qualification and taxation as a REIT depends
upon the Company's ability to meet on a continuing basis, through actual
annual operating results, distribution levels and diversity of stock
ownership, the various qualification tests imposed by the Code and discussed
below. King & Spalding will not review compliance with these tests on a
continuing basis. No assurance can be given that the Company will satisfy such
tests on a continuing basis. See "--Failure to Qualify" below.
The following is a general summary of the Code provisions that govern the
U.S. federal income tax treatment of a REIT and its shareholders. These
provisions of the Code are highly technical and complex. This summary is
qualified in its entirety by the applicable Code provisions, the regulations
promulgated thereunder ("Treasury Regulations"), and administrative and
judicial interpretations thereof.
As a REIT, the Company generally is not subject to U.S. federal corporate
income tax on net income that it currently distributes to shareholders. This
treatment substantially eliminates the "double taxation" (at the corporate and
shareholder levels) that generally results from investment in a corporation.
Notwithstanding its REIT election, however, the Company is still subject to
U.S. federal income tax in the following circumstances. First, the Company is
taxed at regular corporate rates on any undistributed taxable income,
including undistributed net capital gains. Second, under certain
circumstances, the Company may be subject to the "alternative minimum tax" on
its items of tax preference. Third, if the Company has (i) net income from the
sale or other disposition of "foreclosure property" (which is, in general,
property acquired by foreclosure or otherwise on default of a loan or lease
secured by the property) which is held primarily for sale to clients in the
ordinary course of business or (ii) other non-qualifying income from
foreclosure property, it will be subject to tax at the highest corporate rate
on such income. Fourth, if the Company has net income from prohibited
transactions (which are, in general, certain sales or other dispositions of
property (other than foreclosure property) held primarily for sale to clients
in the ordinary course of business), such income will be subject to a 100%
tax. Fifth, if the Company should fail to satisfy the 75% gross income test or
the 95% gross income test (as discussed below), and has nonetheless maintained
its qualification as a REIT because certain other requirements have been met,
it will be subject to a 100% tax on the net income attributable to the greater
of the amount by which the Company fails the 75% or 95% test. Sixth, if the
Company should fail to distribute during each calendar year at least the sum
of (i) 85% of its REIT ordinary income for such year, (ii) 95% of its REIT
capital gain net income for such year, and (iii) any undistributed taxable
income from prior years, the Company would be subject to a 4% excise tax on
the excess of such required distribution over the amounts actually
distributed. Seventh, if the Company acquires any asset from a C corporation
(i.e., a corporation generally subject to full corporate level tax) in a
transaction in which the basis of the asset in the Company's hands is
determined by reference to the basis of the asset (or any other property) in
the hands of the C corporation, and the Company recognizes gain on the
disposition of such asset during the 10-year period beginning on the date on
which such asset was acquired by the Company, then, to the extent of such
property's "built-in" gain (the excess of the fair market value of such
property at the time of acquisition by the Company over the adjusted basis of
such property at such time), and assuming the Company will make an election
pursuant to Notice 88-19, such gain will be subject to tax at the highest
regular corporate rate applicable (as provided in IRS regulations that have
not yet been promulgated).
Requirements for Qualification. The Code defines a REIT as a corporation,
trust or association (1) which is managed by one or more trustees or
directors; (2) the beneficial ownership of which is evidenced by transferable
shares or by transferable certificates of beneficial interest; (3) which would
be taxable as a domestic corporation but for Sections 856 through 859 of the
Code; (4) which is neither a financial institution nor an insurance company
subject to certain provisions of the Code; (5) the beneficial ownership of
which is held by 100 or more persons; (6) during the last half of each taxable
year not more than 50% in value of the outstanding stock of which is owned,
directly or indirectly, by five or fewer individuals (as defined in the Code
to include
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certain entities); and (7) which meets certain other tests, described below,
regarding the nature of its income and assets. The Code provides that
conditions (1) through (4), inclusive, must be met during the entire taxable
year and that condition (5) must be met during at least 335 days of a taxable
year of twelve months, or during a proportionate part of a taxable year of
less than twelve months. The Company has issued sufficient shares of Common
Stock with sufficient diversity of ownership to allow the Company to satisfy
requirements (5) and (6). In addition, the Company's Articles provide
restrictions regarding the transfer of its shares that are intended to assist
the Company in continuing to satisfy the share ownership requirements
described in (5) and (6) above. See "Capital Stock of the Company--
Restrictions on Transfer". In addition, a corporation may not elect to become
a REIT unless its taxable year is the calendar year. The Company's taxable
year is a calendar year.
In the case of a REIT that owns the stock of a corporation that is a
"qualified REIT subsidiary" within the meaning of Section 856(i)(2) of the
Code, the subsidiary will not be treated as a separate corporation, and the
assets, liabilities, and items of income, deduction, and credit of the
subsidiary will be treated as assets, liabilities, and such items of the REIT.
Weeks GP and Weeks LP are "qualified REIT subsidiaries" of the Company, so the
separate existence of these corporations will be ignored for U.S. federal tax
purposes, and the Company will be treated as directly holding the assets and
liabilities and receiving the tax items of these subsidiaries. Further, in the
case of a REIT that is a partner in a partnership, Treasury Regulations
provide that the REIT will be deemed to own its proportionate share of the
assets of the partnership and will be deemed to be entitled to the income of
the partnership attributable to such share. In addition, the character of the
assets and gross income of the partnership will retain the same character in
the hands of the REIT for purposes of Section 856 of the Code, including
satisfying the gross income tests and asset tests (as discussed below). Thus,
the Company's proportionate share of the assets, liabilities, and items of
income of the Operating Partnership and the Financing Partnership will be
treated as assets, liabilities, and items of income of the Company for
purposes of applying the requirements described herein.
Income Tests. In order to maintain qualification as a REIT, three gross
income requirements must be satisfied annually. First, at least 75% of the
REIT's gross income (excluding gross income from prohibited transactions) for
each taxable year must be derived directly or indirectly from investments
relating to real property or mortgages on real property (including "rents from
real property" and, in certain circumstances, interest) or from certain types
of temporary investments. Second, at least 95% of the REIT's gross income
(excluding gross income from prohibited transactions) for each taxable year
must be derived from such real property investments described above, and from
dividends, interest, and gain from the sale or disposition of stock or
securities, or from any combination of the foregoing. Third, short-term gain
from the sale or other disposition of stock or securities, gain from
prohibited transactions, and gain on the sale or other disposition of real
property held for less than four years (apart from involuntary conversions and
sales of foreclosure property) must represent less than 30% of the REIT's
gross income (including gross income from prohibited transactions) for each
taxable year. Under the 30% gross income test, where a REIT holds an interest
in a partnership that sells real property or where the REIT sells its interest
in a partnership that holds real property, the gross income derived from such
sale, to the extent attributable to real property, is deemed to be derived
from the sale of real property held for the shorter of the period the
partnership held the property or the REIT held its partnership interest.
Therefore, for purposes of applying the 30% gross income test, the holding
period of Properties held by the Operating Partnership on the closing date of
the IPO will be deemed to have commenced on such date so that if the Operating
Partnership sells one or more of the Properties prior to the expiration of
four years after such closing date, income from the sale of those Properties
will not qualify under the 30% gross income test even though the Operating
Partnership has held such Properties for more than four years.
Rents received by the Company will qualify as "rents from real property" in
satisfying the above gross income tests only if several conditions are met.
First, the amount of rent must not be based in whole or in part on the income
or profits of any person. However, an amount received or accrued generally
will not be excluded from "rents from real property" solely by reason of being
based on a fixed percentage or percentages of receipts or sales. Second, rents
received from a tenant will not qualify as "rents from real property" if the
Company, or an owner of 10% or more of the Company, directly or constructively
owns 10% or more of such tenant (a
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"Related Party Tenant"). Third, if rent attributable to personal property that
is leased in connection with a lease of real property is greater than 15% of
the total rent received under the lease, then the portion of rent attributable
to such personal property will not qualify as "rents from real property".
Finally, for rents received to qualify as "rents from real property," the
Company generally must not operate or manage the property or furnish or render
services to tenants, other than through an "independent contractor" from whom
the Company derives no revenue. The "independent contractor" requirement,
however, does not apply to the extent the services provided by the Company are
"usually or customarily rendered" in the relevant geographic region in
connection with the rental of space for occupancy only and are not otherwise
considered "rendered to the occupant". The Company believes that, except in
certain circumstances that are not believed to be material, it provides only
usual and customary services to the tenants of the Properties and that any
noncustomary services are provided by independent contractors.
The Operating Partnership receives rents from a company controlled by Ray
Weeks' spouse that may under certain circumstances qualify as a Related Party
Tenant. The Company also receives certain other types of non-rent income,
including its allocable share of any dividends and interest paid by the
Subsidiaries to the Operating Partnership (which will qualify under the 95%
gross income test but not under the 75% gross income test). The Company
believes, however, that the aggregate amount of such income and other non-
qualifying income in any taxable year will not cause the Company to exceed the
limits on non-qualifying income under the 75% and 95% gross income tests.
Any gross income derived from a prohibited transaction is taken into account
in applying the 30% income test necessary to qualify as a REIT (and the net
income from the transaction is subject to 100% tax). The term "prohibited
transaction" generally includes a sale or other disposition of property (other
than foreclosure property) that is held primarily for sale to customers in the
ordinary course of a trade or business. The Company believes that no asset
owned by the Operating Partnership or the Financing Partnership is held for
sale to customers and that the sale of any Property or Development Land by
such partnerships is not in its ordinary course of business. Whether property
is held "primarily for sale to customers in the ordinary course of a trade or
business" depends, however, on the facts and circumstances in effect from time
to time, including those related to a particular property. Nevertheless, the
Company and such partnerships will attempt to comply with the terms of safe-
harbor provisions in the Code prescribing when assets sales will not be
characterized as prohibited transactions. Complete assurance cannot be given,
however, that the Company or such partnerships will comply with the safe-
harbor provisions of the Code or avoid owning property that may be
characterized as property held "primarily for sale to customers in the
ordinary course of business".
If the Company fails to satisfy one or both of the 75% or 95% gross income
tests for any taxable year, it may nevertheless qualify as a REIT for such
year if it is entitled to relief under certain provisions of the Code. These
relief provisions generally are available if the Company's failure to meet
such tests was due to reasonable cause and not due to willful neglect, the
Company attaches a schedule of the sources of its income to its return, and
any incorrect information on the schedules was not due to fraud with intent to
evade tax. It is not possible, however, to state whether in all circumstances
the Company would be entitled to the benefit of these relief provisions. As
discussed above in "General," even if these relief provisions were to apply, a
tax would be imposed with respect to the Company's excess net income. The
foregoing relief provisions do not apply in the case of a failure to satisfy
the 30% gross income test.
Asset Tests. At the close of each quarter of its taxable year, the Company
must also satisfy three tests relating to the nature of its assets. First, at
least 75% of the value of the Company's total assets must be represented by
real estate assets (including (i) its allocable share of real estate assets
held by the Operating Partnership and the Financing Partnership and (ii) stock
or debt instruments held for not more than one year purchased with the
proceeds of a stock offering or long-term (at least five years) debt offering
of the Company), cash, cash items, and government securities. Second, not more
than 25% of the Company's total assets may be represented by securities other
than those in the 75% asset class. Third, of the investments included in the
25% asset class, the value of any one issuer's debt and equity securities
owned by the Company may not exceed 5% of the value of the Company's total
assets, and the Company may not own more than 10% of any one issuer's
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outstanding voting securities. Debt of an issuer that is secured by real
estate assets does not constitute a "security" for purposes of the 5% asset
test. The 5% asset test must generally be met for any quarter in which a REIT
acquires securities of an issuer or other property. Thus, this requirement
must be satisfied not only on the date that the Company initially acquires
securities in a Subsidiary, but also each time the Company increases its
ownership of securities of a Subsidiary (including as a result of increasing
its interest in the Operating Partnership as limited partners exercise their
Exchange Rights).
As described above, the Operating Partnership owns 100% of the nonvoting
stock and 1% of the voting stock of Weeks Realty Services, Inc. and Weeks
Construction Services, Inc. (the "Subsidiaries"). The Operating Partnership
does not own more than 10% of the voting securities of the Subsidiaries. In
addition, based upon its analysis of the estimated value of the debt and
equity securities of the Subsidiaries owned by the Operating Partnership
relative to the estimated value of the other assets owned by the Operating
Partnership, the Company believes that its pro rata share of the debt and
equity securities of each Subsidiary held by the Operating Partnership does
not exceed 5% of the total value of the Company's assets, although no
independent appraisals have been obtained to support this conclusion. Although
the Company plans to take steps to ensure that it satisfies the 5% value test
for any quarter in which it acquires securities of the Subsidiaries or other
property, there can be no assurance that such steps will always be successful
or will not require a reduction in the Operating Partnership's overall
interest in the Subsidiaries.
Annual Distribution Requirements. As a REIT, the Company is required to
distribute dividends (other than capital gain dividends) to its shareholders
in an amount at least equal to (A) the sum of (i) 95% of the Company's "REIT
taxable income" (computed without regard to the dividends paid deduction and
the REIT's net capital gain) and (ii) 95% of the net income (after tax), if
any, from "foreclosure property" (as defined above under "--Taxation of the
Company (General)"), minus (B) the sum of certain items of noncash income.
Such distributions must be paid in the taxable year to which they relate, or
in the following taxable year if declared before the Company timely files its
tax return for such year and if paid on or before the first regular dividend
payment after such declaration. To the extent that the Company does not
distribute all of its net capital gain or distributes at least 95%, but less
than 100%, of its "REIT taxable income," as adjusted, it will be subject to
tax on the undistributed amount at regular capital gains and ordinary
corporate tax rates. Furthermore, if the Company should fail to distribute
during each calendar year at least the sum of (i) 85% of its REIT ordinary
income for such year, (ii) 95% of its REIT capital gain income for such year,
and (iii) any undistributed taxable income from prior periods, the Company
will be subject to a 4% excise tax on the excess of such required distribution
over the amounts actually distributed.
The Company intends to make timely distributions sufficient to satisfy the
annual distribution requirements. In this regard, the Partnership Agreement
authorizes the Company, as general partner, to take such steps as may be
necessary to cause the Operating Partnership to distribute to its partners an
amount sufficient to permit the Company to meet these distribution
requirements. It is possible, however, that the Company, from time to time,
may not have sufficient cash or other liquid assets to meet the distribution
requirements due to timing differences between the actual receipt of income
and actual payment of deductible expenses and the inclusion of such income and
deduction of such expenses in arriving at taxable income of the Company, or if
the amount of nondeductible expenses (such as principal amortization or
capital expenditures) exceed the amount of noncash deductions. In the event
that such timing differences occur, in order to meet the distribution
requirements, the Company may cause the Operating Partnership to arrange for
short-term, or possibly long-term, borrowing to permit the payment of required
dividends. If the amount of nondeductible expenses exceeds noncash deductions,
the Operating Partnership may refinance its indebtedness to reduce principal
payments and borrow funds for capital expenditures.
Under certain circumstances, the Company may be able to rectify a failure to
meet the distribution requirement for a year by paying "deficiency dividends"
to shareholders in a later year that may be included in the Company's
deduction for dividends paid for the earlier year. Thus, the Company may be
able to avoid paying income tax (but not excise tax) on amounts distributed as
deficiency dividends; however, the Company will be required to pay interest to
the IRS based upon the amount of any deduction taken for deficiency dividends.
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Information Regarding Stock Ownership. Pursuant to applicable Treasury
Regulations, in order to maintain its qualification as a REIT, the Company
must maintain certain records and request certain information from its
shareholders designed to disclose the actual ownership of its stock. The
Company intends to comply with such requirements.
FAILURE TO QUALIFY
If the Company fails to qualify for taxation as a REIT in any taxable year
and no relief provisions apply, the Company will be subject to tax (including
any applicable alternative minimum tax) on its taxable income at regular
corporate rates. Any distributions made by the Company to shareholders in any
year in which the Company fails to qualify will not be deductible by the
Company. In such event, to the extent of the Company's current and accumulated
earnings and profits, all distributions to shareholders will be taxable as
ordinary income, and, subject to certain limitations in the Code, corporate
distributees may be eligible for the dividends received deduction. Unless
entitled to relief under specific statutory provisions, the Company also would
be disqualified from taxation as a REIT for the four taxable years following
the year during which qualification was lost. It is not possible to state
whether in all circumstances the Company would be entitled to such statutory
relief.
TAXATION OF SHAREHOLDERS
Taxation of Taxable Domestic Shareholders. As long as the Company continues
to qualify as a REIT, distributions made to the Company's taxable domestic
shareholders out of current or accumulated earnings and profits (and not
designated as capital gain dividends) are taken into account by them as
ordinary income, and corporate shareholders are not eligible for the dividends
received deduction as to such amounts. Distributions that are designated as
capital gain dividends are taxed as long-term capital gains (to the extent
they do not exceed the Company's actual net capital gain for the taxable year)
without regard to the period for which the shareholder has held his shares.
However, corporate shareholders are required to treat up to 20% of certain
capital gain dividends as ordinary income.
Distributions in excess of current and accumulated earnings and profits are
not taxable to a shareholder to the extent that they do not exceed the
adjusted basis of the shareholder's Common Stock, but rather reduce the
adjusted basis of such shares. To the extent that such distributions exceed
the adjusted basis of a shareholder's Common Stock, they are included in
income as long-term capital gain (or short-term capital gain if the shares
have been held for one year or less), assuming the shares are a capital asset
in the hands of the shareholder.
Any dividend declared by the Company in October, November, or December of
any year payable to a shareholder of record on a specific date in any such
month are treated as both paid by the Company and received by the shareholder
on December 31 of such year, provided that the dividend is actually paid by
the Company during January of the following calendar year. Shareholders do not
include in their individual income tax returns any net operating losses or
capital losses of the Company.
In general, any loss upon a sale or exchange of Common Stock by a
shareholder who has held such shares for six months or less (after applying
certain holding period rules) are treated as a long-term capital loss to the
extent of distributions from the Company required to be treated by such
shareholder as long-term capital gain.
Backup Withholding. The Company reports to its domestic shareholders and the
IRS the amount of dividends paid during each calendar year, and the amount of
tax withheld, if any, with respect thereto. Under the backup withholding
rules, a shareholder may be subject to backup withholding at the rate of 31%
with respect to dividends paid unless such holder (a) is a corporation or
comes within certain other exempt categories and, when required, demonstrates
this fact, or (b) provides a taxpayer identification number, certifies as to
no loss of exemption from backup withholding, and otherwise complies with
applicable requirements of the backup withholding rules. A shareholder who
does not provide the Company with its correct taxpayer identification number
may also be subject to penalties imposed by the IRS. Any amount paid as backup
withholding will be creditable against the shareholder's income tax liability.
In addition, the Company may be required to withhold a
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portion of capital gain distributions made to any shareholders who fail to
certify their non-foreign status to the Company. See "Taxation of Foreign
Shareholders" below.
Taxation of Tax-Exempt Shareholders. The IRS has ruled that amounts
distributed by a REIT to a tax-exempt employees' pension trust do not
constitute "unrelated business taxable income" ("UBTI"). The Revenue
Reconciliation Act of 1993 (the "1993 Act") has partially preempted this
revenue ruling (as discussed below). In those circumstances in which the
ruling still applies, distributions by the Company to a shareholder that is a
tax-exempt entity should not constitute UBTI, provided that the tax-exempt
entity has not financed the acquisition of its shares with "acquisition
indebtedness" within the meaning of the Code and the Common Stock is not
otherwise used in an unrelated trade or business of the tax-exempt entity.
Revenue rulings are interpretative in nature and subject to revocation or
modification by the IRS.
In applying the stock ownership test of Section 856(h) of the Code, the 1993
Act treats beneficiaries of certain pension trusts as holding the shares of a
REIT in proportion to their actuarial interests in such trust, thus permitting
affected pension trusts to acquire more concentrated ownership of a REIT.
However, a pension trust that owns more than 10% of a REIT must now treat a
percentage of the dividends as UBTI (the "UBTI Percentage") under certain
circumstances. The UBTI Percentage is determined by dividing (i) the gross
income of a REIT, less related direct expenses, that would be considered to be
derived from an unrelated trade or business if the REIT were a pension trust
by (ii) the gross income of the REIT, less related direct expenses, for the
year in which the dividends are paid. The UBTI rule would apply to a pension
trust that owns more than 10% of the value of the REIT's stock only if (a) the
UBTI Percentage is at least 5%, (b) the REIT qualifies as a REIT by reason of
the above modification of the stock ownership test, and (c) either one pension
trust owns more than 25% of the value of the REIT's stock or a group of
pension trusts individually owning more than 10% of the value of the REIT's
stock collectively own more than 50% of the value of the REIT's stock.
Taxation of Foreign Shareholders. The rules governing U.S. federal income
taxation of nonresident alien individuals, foreign corporations, foreign
partnerships, and other foreign shareholders (collectively, "Non-U.S.
Shareholders") are complex, and no attempt is made herein to provide more than
a limited summary of such rules. Prospective Non-U.S. Shareholders should
consult with their own tax advisors to determine the impact of U.S. federal,
state, and local income tax laws with regard to an investment in Common Stock,
including any reporting requirements.
Distributions that are not attributable to gain from sales or exchanges by
the Company of U.S. real property interests and not designated by the Company
as capital gain dividends are treated as dividends of ordinary income to the
extent that they are made out of current or accumulated earnings and profits
of the Company. Such distributions, ordinarily, are subject to a withholding
tax equal to 30% of the gross amount of the distribution unless an applicable
tax treaty reduces that tax. However, if income from the investment in the
shares of capital stock is treated as effectively connected with the Non-U.S.
Shareholder's conduct of a U.S. trade or business, the Non-U.S. Shareholder
generally is subject to a tax at graduated rates, in the same manner as U.S.
shareholders are taxed with respect to such dividends (and may also be subject
to the 30% branch profits tax if the shareholder is a foreign corporation).
The Company withholds U.S. income tax at the rate of 30% on the gross amount
of any dividends paid to a Non-U.S. Shareholder that are not designated as
capital gain dividends unless (i) a lower treaty rate applies and the required
form evidencing eligibility for that reduced rate is filed with the Company or
(ii) the Non-U.S. Shareholder files an IRS Form 4224 with the Company claiming
that the distribution is "effectively connected" income. The IRS issued
proposed regulations in April 1996 that would modify the manner in which the
Company complies with the withholding requirements.
Distributions in excess of current and accumulated earnings and profits of
the Company are not taxable to a shareholder to the extent that they do not
exceed the adjusted basis of the shareholder's shares of capital stock, but
rather will reduce the adjusted basis of such shares. To the extent that such
distributions exceed the adjusted basis of a Non-U.S. Shareholder's shares,
they give rise to tax liability if the Non-U.S. Shareholder is otherwise
subject to tax on any gain from the sale or disposition of his shares of
capital stock as described below. If it cannot be determined at the time a
distribution is made whether or not such distribution is in excess of current
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and accumulated earnings and profits, the distribution is subject to
withholding at the rate applicable to dividends. The Small Business Job
Protection Act of 1996 requires the Company to withhold 10% of any
distribution to a Non-U.S. Shareholder in excess of the Company's current and
accumulated earnings and profits. Accordingly, although the Company intends to
withhold at a rate of 30% on the entire amount of the distribution, to the
extent that the Company does not do so, any portion of the distribution not
subject to withholding at a rate of 30% will be subject to withholding at a
rate of 10%. The Non-U.S. Shareholder may seek a refund of such amounts from
the IRS to the extent that the amount withheld from such distribution was, in
fact, in excess of the U.S. income tax due with respect to such distribution.
For any year in which the Company qualifies as a REIT, distributions that
are attributable to gain from sales or exchanges by the Company of U.S. real
property interests will be taxed to a Non-U.S. Shareholder under the FIRPTA
provisions as if such gain were effectively connected with a U.S. business.
Thus, Non-U.S. Shareholders will be taxed on such distributions at the normal
capital gain rates applicable to U.S. shareholders (subject to applicable
alternative minimum tax and a special alternative minimum tax in the case of
nonresident alien individuals). Also, distributions that are attributable to
gain from sales or exchanges by the Company of U.S. real property interests
may be subject to a 30% branch profits tax in the hands of a corporate Non-
U.S. Shareholder not entitled to treaty relief or exemption. The Company is
required by applicable Treasury Regulations to withhold 35% of any
distribution that could be designated by the Company as a capital gain
dividend. The amount withheld is creditable against the Non-U.S. Shareholder's
U.S. federal income tax liability.
Gain recognized by a Non-U.S. Shareholder upon the sale or exchange of
Common Stock generally will not be subject to U.S. tax unless the capital
stock constitutes a "United States real property interest" within the meaning
of the Foreign Investment in Real Property Tax Act of 1980 ("FIRPTA"). The
capital stock will not constitute a "United States real property interest" so
long as the Company qualifies as a "domestically controlled REIT." A
"domestically controlled REIT" is a REIT in which at all times during a
specified testing period less than 50% in value of its stock is held, directly
or indirectly, by Non-U.S. Shareholders. Because the Company is publicly
traded, there can be no assurance that the Company will qualify as a
domestically controlled REIT. If the Company does not qualify (or ceases to
qualify) as a "domestically controlled REIT," whether gain arising from the
sale or exchange of capital stock by a Non-U.S. Shareholder would be subject
to U.S. tax under FIRPTA will depend on whether the capital stock is
"regularly traded" (as defined by applicable Treasury Regulations) on an
established securities market (e.g., the New York Stock Exchange) and on the
size of the selling Non-U.S. Shareholders interest in the Company.
If gain on the sale or exchange of capital stock were subject to tax under
FIRPTA, then (i) the Non-U.S. Shareholder would be subject to regular U.S.
income tax with respect to such gain in the same manner as a U.S. shareholder
(subject to any applicable alternative minimum tax and a special alternative
minimum tax in the case of nonresident alien individuals), and (ii) the
purchaser of the capital stock would be required to withhold and remit to the
IRS 10% of the purchase price unless the purchased capital stock was
"regularly traded" on an established securities market.
Notwithstanding the foregoing, gain from the sale or exchange of capital
stock not otherwise taxable under FIRPTA will be subject to U.S. tax if (i)
the investment in capital stock is treated as effectively connected with a
U.S. trade or business of a Non-U.S. Shareholder, in which case the Non-U.S.
Shareholder will be subject to the same treatment as U.S. shareholders with
respect to such gain, or (ii) the Non-U.S. Shareholder is a nonresident alien
individual who is present in the United States for 183 days or more during the
taxable year and has a "tax home" in the United States, in which case the
individual will be subject to a 30% tax on the individual's capital gains.
OTHER TAX CONSIDERATIONS
Tax Status of Operating Partnership; Effect on REIT Qualification. All of
the Company's investments are made through the Operating Partnership, which in
turn owns substantially all of the interests in the Financing Partnership. The
Company has received a legal opinion from King & Spalding to the effect that
the Operating
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Partnership and the Financing Partnership will be treated for U.S. federal
income tax purposes as partnerships (and not as associations taxable as a
corporation). If the Operating Partnership were treated as an association
taxable as a corporation, the Company would fail the 75% asset test (in
addition to the 5% asset test and, likely, the 10% voting securities test).
Further, if the Financing Partnership were treated as a taxable corporation,
then the Company would likely fail to qualify as a REIT under the 10% voting
securities test, and would also fail to qualify under the 5% test if the value
of the Company's interest in the Financing Partnership (through the Operating
Partnership) exceeded 5% of the value of the Company's assets. Furthermore, in
such a situation, distributions from such partnerships would be treated as
dividends, which are not taken into account in satisfying the 75% gross income
test described above and which could therefore make it more difficult for the
Company to meet such test, and the Company would not be able to deduct its
share of any losses generated by such partnerships in computing its taxable
income. See "--Failure to Qualify" above for a discussion of the effect of the
Company's failure to meet such tests for a taxable year.
Depreciation. The Partnership's initial income tax basis in the Properties
acquired in exchange for Units generally is the same as the transferor's basis
in such Property on the date of acquisition by the Partnership, except to the
extent that gain is recognized by the transferor in connection with the
transfer. The Partnership generally depreciates such Properties under the
alternative depreciation system of depreciation ("ADS"), using a 40-year
recovery period and the straight-line method with respect to the building and
structural components of such Properties. The Partnership's tax depreciation
deductions will be allocated among the Partners in accordance with their
respective percentage interests in the Partnership, except as otherwise
required pursuant to Section 704(c) of the Code.
State and Local Taxes. The Company and its shareholders may be subject to
state or local taxation in various state or local jurisdictions, including
those in which it or they transact business or reside. The state and local tax
treatment of the Company and its shareholders may not conform to the Federal
income tax consequences discussed above. Consequently, prospective
shareholders should consult their own tax advisors regarding the effect of
state and local tax laws on an investment in the Common Stock.
PLAN OF DISTRIBUTION
The Company and the Operating Partnership may sell the Securities in or
outside the United States through underwriters or dealers, directly to one or
more purchasers, through agents or through a combination of any such methods
of sale. The Prospectus Supplement with respect to the Securities will set
forth the terms of the offering of the Securities, including the name or names
of any underwriters, dealers or agents, the initial public offering price, any
delayed delivery arrangements, any underwriting discounts and other items
constituting underwriters compensation, any discounts or concessions allowed
or reallowed or paid to dealers, and any securities exchanges on which the
Securities may be listed.
If underwriters are used in the sale of the Securities, the Securities may
be acquired by the underwriters for their own accounts and may be resold from
time to time in one or more transactions, including negotiated transactions,
at a fixed public offering price or at varying prices determined at the time
of sale. The Securities may be offered to the public either through
underwriting syndicates represented by one or more managing underwriters or
directly by one or more firms acting as underwriters. The underwriter or
underwriters with respect to a particular underwritten offering of Securities
will be named in the Prospectus Supplement relating to such offering, and if
an underwriting syndicate is used, the managing underwriter or underwriters
will be set forth on the cover of such Prospectus Supplement. Unless otherwise
set forth in the Prospectus Supplement relating thereto, the obligations of
the underwriters or agents to purchase the Securities will be subject to
conditions precedent and the underwriters will be obligated to purchase all
the Securities if any are purchased. The initial public offering price and any
discounts or concessions allowed or reallowed or paid to dealers may be
changed from time to time.
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If dealers are used in the sale of the Securities, the Company or the
Operating Partnership will sell such Securities to the dealers as principals.
The dealers may then resell such Securities to the public at varying prices to
be determined by such dealers at the time of resale. The names of the dealers
and the terms of the transaction will be set forth in the Prospectus
Supplement relating thereto.
Securities may be sold directly by the Company or the Operating Partnership
through agents designated by the Company or the Operating Partnership from
time to time at fixed prices, which may be changed, or at varying prices
determined at the time of sale. Any agent involved in the offer or sale of the
Securities will be named, and any commissions payable by the Company or the
Operating Partnership to such agent will be set forth, in the Prospectus
Supplement relating thereto. Unless otherwise indicated in the Prospectus
Supplement, any such agent will be acting on a best efforts basis for the
period of its appointment.
In connection with the sale of the Securities, underwriters, dealers or
agents may receive compensation from the Company, from the Operating
Partnership or from purchasers of Securities for whom they may act as agents
in the form of discounts, concessions or commissions. Underwriters, dealers
and agents participating in the distribution of the Securities may be deemed
to be underwriters and any discounts or commissions received by them from the
Company or the Operating Partnership and any profit on the resale of the
Securities by them may be deemed to be underwriting discounts or commissions
under the Securities Act.
If so indicated in the Prospectus Supplement, the Company or the Operating
Partnership, as the case may be, will authorize dealers or agents to solicit
offers from certain types of institutions to purchase Securities from the
Company or the Operating Partnership, as the case may be, at the public
offering price set forth in the Prospectus Supplement pursuant to delayed
delivery contracts providing for payment and delivery on a specified date in
the future. Such contracts will be subject only to those conditions set forth
in the Prospectus Supplement, and the Prospectus Supplement will set forth the
commission payable for solicitation of such contracts.
Underwriters, dealers and agents may be entitled under agreements entered
into with the Company and the Operating Partnership to indemnification by the
Company or the Operating Partnership against certain civil liabilities,
including liabilities under the Securities Act, or to contribution with
respect to payments that such agents, dealers or underwriters may be required
to make with respect thereto. Underwriters, agents and dealers may engage in
transactions with, or perform services for, the Company or the Operating
Partnership in the ordinary course of business.
If underwriters, dealers or agents are used in the sale of the Securities,
such underwriters may include Goldman, Sachs & Co., or a group of underwriters
represented by firms including Goldman, Sachs & Co. Goldman, Sachs & Co. also
may act as an agent in connection with the sale of the Securities.
The Preferred Stock, the Common Stock Warrants and the Debt Securities may
or may not be listed on a national securities exchange. The Common Stock
currently trades on the NYSE, and any Common Stock offered hereby will be
listed on the NYSE, subject to an official notice of issuance. No assurances
can be given that there will be a market for the Securities.
LEGAL MATTERS
The validity of the Securities will be passed upon for the Company by King &
Spalding, Atlanta, Georgia. George D. Busbee, a director of the Company, is of
counsel to King & Spalding.
EXPERTS
The consolidated and combined financial statements and related financial
statement schedule of the Company included in the Company's Annual Report on
Form 10-K for the year ended December 31, 1996, incorporated by reference in
this Prospectus and the Registration Statement, have been audited by Arthur
Andersen LLP, independent public accountants, as indicated in their reports
with respect thereto, and have been incorporated herein in reliance upon the
authority of such firm as experts in giving such reports.
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The consolidated and combined financial statements and related financial
statement schedule of the Operating Partnership included in the Operating
Partnership's Registration Statement on Form 10 dated August 1, 1997 and filed
with the Commission on August 4, 1997, as amended by Pre-Effective Amendment
No. 1 to Form 10, incorporated by reference in this Prospectus and the
Registration Statement, have been audited by Arthur Andersen LLP, independent
public accountants, as indicated in their reports with respect thereto, and
have been incorporated herein in reliance upon the authority of such firm as
experts in giving such reports.
The combined financial statements of Lichtin Properties included in the
Company's Current Report on Form 8-K dated November 5, 1996 and filed November
6, 1996, incorporated by reference in the Company's Current Report on Form 8-K
dated December 31, 1996 and filed on January 15, 1997, as amended by
Form 8-K/A dated December 31, 1996 and filed on March 14, 1997, all
incorporated by reference in this Prospectus and the Registration Statement,
have been audited by Arthur Andersen LLP, independent public accountants, as
indicated in their report with respect thereto, and have been incorporated
herein in reliance upon the authority of such firm as experts in giving such
report.
The combined financial statements of NWI Warehouse Group included in the
Company's Current Report on Form 8-K dated November 1, 1996 and filed on
November 6, 1996, as amended by Form 8-K/A dated November 1, 1996 and filed on
November 8, 1996, incorporated by reference in the Company's Current Report on
Form 8-K dated March 25, 1997 and filed on March 26, 1997, all incorporated by
reference in this Prospectus and the Registration Statement, have been audited
by Ernst & Young LLP, independent auditors, as indicated in their report with
respect thereto, and have been incorporated herein in reliance upon the
authority of such firm as experts in giving such report.
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NO PERSON HAS BEEN AUTHORIZED IN CONNECTION WITH THE OFFERING MADE HEREBY TO
GIVE ANY INFORMATION OR TO MAKE ANY REPRESENTATION NOT CONTAINED IN THIS
PROSPECTUS AND, IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATION MUST NOT
BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE COMPANY OR ANY OTHER PERSON.
THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL OR A SOLICITATION OF AN
OFFER TO BUY ANY OF THE SECURITIES OFFERED HEREBY TO ANY PERSON OR BY ANYONE IN
ANY JURISDICTION IN WHICH IT IS UNLAWFUL TO MAKE SUCH OFFER OR SOLICITATION.
NEITHER THE DELIVERY OF THIS PROSPECTUS NOR ANY SALE MADE HEREUNDER SHALL,
UNDER ANY CIRCUMSTANCES, CREATE ANY IMPLICATION THAT THE INFORMATION CONTAINED
HEREIN IS CORRECT AS OF ANY DATE SUBSEQUENT TO THE DATE HEREOF.
----------------------------
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Available Information.................................................... 2
Incorporation of Certain Documents by Reference.......................... 2
The Company and the Operating Partnership................................ 4
Use of Proceeds.......................................................... 5
Consolidated Ratio of Earnings to Fixed Charges and Preferred Stock
Dividends.............................................................. 5
Description of Capital Stock............................................. 6
Description of Common Stock Warrants..................................... 11
Description of Debt Securities........................................... 12
Federal Income Tax Considerations........................................ 24
Plan of Distribution..................................................... 32
Legal Matters............................................................ 33
Experts.................................................................. 33
</TABLE>
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<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
The following table sets forth the various expenses in connection with the
issuance and distribution of the Securities, other than underwriting discounts
and commissions. All of the amounts shown are estimated except the Securities
and Exchange Commission registration fee and the NASD fee.
<TABLE>
<S> <C>
SEC Registration Fee............................................. $181,819
NASD Fee......................................................... 30,500
NYSE Listing Fee................................................. 60,000
Legal fees and expenses.......................................... 150,000
Accounting fees and expenses..................................... 50,000
Blue Sky Fees and Expenses (including fees of counsel)........... 20,000
Printing and distribution........................................ 100,000
Miscellaneous.................................................... 50,000
--------
Total.......................................................... $642,319
========
</TABLE>
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
As permitted by the Georgia Business Corporation Code (the "GBCC"), the
Company's Amended and Restated Articles of Incorporation (the "Articles")
provide that a director shall not be personally liable to the Company or its
shareholders for monetary damages for breach of duty of care or any other duty
owed to the Company as a director, except that such provision shall not
eliminate or limit the liability of a director (a) for any appropriation, in
violation of his duties, of any business opportunity of the Company, (b) for
acts or omissions that involve intentional misconduct or a knowing violation
of law, (c) for approving or assenting to unlawful corporate distributions or
(d) for any transaction from which the director received an improper personal
benefit. The Articles further provide that if the GBCC is amended to authorize
corporate action further eliminating or limiting the personal liability of
directors, then the liability of a director of the Company shall be eliminated
or limited to the fullest extent permitted by the GBCC, as amended. The full
text of the applicable provisions of the GBCC is provided below.
Under Article VI of the Company's Bylaws, the Company is required to
indemnify to the fullest extent permitted by the GBCC any individual made a
party to a proceeding (as defined in the GBCC) because he is or was a director
or officer, against liability (as defined in the GBCC) incurred in the
proceeding, if he acted in a manner he believed in good faith to be in or not
opposed to the best interests of the Company and, in the case of any criminal
proceeding, he had no reasonable cause to believe his conduct was unlawful.
The Company is required to pay for or reimburse the reasonable expenses
incurred by a director or officer who is a party to a proceeding in advance of
final disposition of the proceeding if:
(a) Such person furnishes the Company a written affirmation of his good
faith belief that he has met the standard of conduct set forth above; and
(b) Such person furnishes the Company a written undertaking, executed
personally or 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.
The right to indemnification and the payment of expenses incurred in
defending a proceeding in advance of its final disposition conferred in
Article VI of the Company's Bylaws are not exclusive of any other right which
any person may have under any statute, provision of the Company's Articles,
provision of the Company's Bylaws, agreement, vote of shareholders or
disinterested directors or otherwise. The Partnership Agreement of
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the Operating Partnership also provides for indemnification of the Company and
its officers and directors so long as they acted in good faith, except that
the Operating 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 the Partnership Agreement, and limits the liability of the
Company and its officers and directors to the Operating Partnership and its
partners except for matters for which they are not indemnified.
The Company's directors and officers are insured against losses arising from
any claim against them as such for wrongful acts or omissions, subject to
certain limitations. The Company's directors and officers are insured against
damages from actions and claims incurred in the course of their duties, and
the Company is insured against expenses incurred in defending lawsuits arising
from certain alleged acts of its directors and officers.
The Company has entered into indemnification agreements with each of the
Company's directors. The indemnification agreements require, among other
things, that the Company indemnify its directors to the fullest extent
permitted by applicable law as enacted or amended, and advance to directors
all reasonable expenses incurred in a proceeding in which the director was
made a party because he is or was a director of the Company, subject to
reimbursement if it is subsequently determined that indemnification is not
permitted. The Company also must indemnify and advance all reasonable expenses
incurred by directors seeking to enforce their rights under the
indemnification agreements, and cover directors under the Company's directors'
and officers' liability insurance. Although the indemnification agreements
offer substantially the same scope of coverage afforded by provisions in the
Company's Bylaws, they provide greater assurance to directors that
indemnification will be available, because, as contracts, they cannot be
modified unilaterally in the future by the Board of Directors or by the
shareholders to eliminate the rights provided thereunder.
Part 5 of Article 8 of the Georgia Business Corporation Code states:
14-2-850. Part definitions.
As used in this part, the term:
(1) "Corporation" includes any domestic or foreign predecessor entity of a
corporation in a merger or other transaction in which the predecessor's
existence ceased upon consummation of the transaction.
(2) "Director" or "officer" means an individual who is or was a director or
officer, respectively, of a corporation or who, while a director or officer of
the corporation, is or was serving at the corporation's request as a director,
officer, partner, trustee, employee, or agent of another domestic or foreign
corporation, partnership, joint venture, trust, employee benefit plan, or
other entity. A director or officer is considered to be serving an employee
benefit plan at the corporation's request if his or her duties to the
corporation also impose duties on, or otherwise involve services by, the
director or officer to the plan or to participants in or beneficiaries of the
plan. Director or officer includes, unless the context otherwise requires, the
estate or personal representative of a director or officer.
(3) "Disinterested director" means a director who at the time of a vote
referred to in subsection (c) of Code Section 14-2-853 or a vote or selection
referred to in subsection (b) or (c) of Code Section 14-2-855 or subsection
(a) of Code Section 14-2-856 is not:
(A) A party to the proceeding; or
(B) An individual who is a party to a proceeding having a familial,
financial, professional, or employment relationship with the director whose
indemnification or advance for expenses is the subject of the decision
being made with respect to the proceeding, which relationship would, in the
circumstances, reasonably be expected to exert an influence on the
director's judgment when voting on the decision being made.
(4) "Expenses" includes counsel fees.
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(5) "Liability" means the obligation to pay a judgment, settlement, penalty,
fine (including an excise tax assessed with respect to an employee benefit
plan), or reasonable expenses incurred with respect to a proceeding.
(6) "Official capacity" means:
(A) When used with respect to a director, the office of director in a
corporation; and
(B) When used with respect to an officer, as contemplated in Code Section
14-2-857, the office in a corporation held by the officer.
Official capacity does not include service for any other domestic or foreign
corporation or any partnership, joint venture, trust, employee benefit plan,
or other entity.
(7) "Party" means an individual who was, is, or is threatened to be made a
named defendant or respondent in a proceeding.
(8) "Proceeding" means any threatened, pending or completed action, suit, or
proceeding, whether civil, criminal, administrative, arbitrative, or
investigative and whether formal or informal.
14-2-851. Authority to indemnify.
(a) Except as otherwise provided in this Code section, a corporation may
indemnify an individual who is a party to a proceeding because he or she is
or was a director against liability incurred in the proceeding if:
(1) Such individual conducted himself or herself in good faith; and
(2) Such individual reasonably believed:
(A) In the case of conduct in his or her official capacity, that
such conduct was in the best interests of the corporation;
(B) In all other cases, that such conduct was at least not opposed
to the best interests of the corporation; and
(C) In the case of any criminal proceeding, that the individual
had no reasonable cause to believe such conduct was unlawful.
(b) A director's conduct with respect to an employee benefit plan for a
purpose he or she believed in good faith to be in the interests of the
participants in and beneficiaries of the plan is conduct that satisfies the
requirement of subparagraph (a)(2)(B) of this Code section.
(c) The termination of a proceeding by judgment, order, settlement, or
conviction, or upon a plea of nolo contendere or its equivalent is not, of
itself, determinative that the director did not meet the standard of
conduct described in this Code section.
(d) A corporation may not indemnify a director under this Code section:
(1) In connection with a proceeding by or in the right of the
corporation, except for reasonable expenses incurred in connection with
the proceeding if it is determined that the director has met the
relevant standard of conduct under this Code section; or
(2) In connection with any proceeding with respect to conduct for
which he or she was adjudged liable on the basis that personal benefit
was improperly received by him or her, whether or not involving action
in his or her official capacity.
14-2-852. Mandatory indemnification.
A corporation shall indemnify a director who was wholly successful, on the
merits or otherwise, in the defense of any proceeding to which he or she was a
party because he or she was a director of the corporation against reasonable
expenses incurred by the director in connection with the proceeding.
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<PAGE>
14-2-853. Advance for expenses.
(a) A corporation may, before final disposition of a proceeding, advance
funds to pay for or reimburse the reasonable expenses incurred by a director
who is a party to a proceeding because he or she is a director if he or she
delivers to the corporation:
(1) A written affirmation of his or her good faith belief that he or she
has met the relevant standard of conduct described in Code Section 14-2-851
or that the proceeding involves conduct for which liability has been
eliminated under a provision of the articles of incorporation as authorized
by paragraph (4) of subsection (b) of Code Section 14-2-202; and
(2) His or her written undertaking to repay any funds advanced if it is
ultimately determined that the director is not entitled to indemnification
under this part.
(b) The undertaking required by paragraph (2) of subsection (a) of this Code
section must be an unlimited general obligation of the director but need not
be secured and may be accepted without reference to the financial ability of
the director to make repayment.
(c) Authorizations under this Code section shall be made:
(1) By the board of directors:
(A) When there are two or more disinterested directors, by a majority
vote of all the disinterested directors (a majority of whom shall for
such purpose constitute a quorum) or by a majority of the members of a
committee of two or more disinterested directors appointed by such a
vote; or
(B) When there are fewer than two disinterested directors, by the
vote necessary for action by the board in accordance with subsection
(c) of Code Section 14-2-824, in which authorization directors who do
not qualify as disinterested directors may participate; or
(2) By the shareholders, but shares owned or voted under the control of a
director who at the time does not qualify as a disinterested director with
respect to the proceeding may not be voted on the authorization.
14-2-854. Court-ordered indemnification and advances for expenses.
(a) A director who is a party to a proceeding because he or she is a
director may apply for indemnification or advance for expenses to the court
conducting the proceeding or to another court of competent jurisdiction. After
receipt of an application and after giving any notice it considers necessary,
the court shall:
(1) Order indemnification or advance for expenses if it determines that
the director is entitled to indemnification under this part; or
(2) Order indemnification or advance for expenses if it determines, in
view of all the relevant circumstances, that it is fair and reasonable to
indemnify the director or to advance expenses to the director, even if the
director has not met the relevant standard of conduct set forth in
subsections (a) and (b) of Code Section 14-2-851, failed to comply with
Code Section 14-2-853, or was adjudged liable in a proceeding referred to
in paragraph (1) or (2) of subsection (d) of Code Section 14-2-851, but if
the director was adjudged so liable, the indemnification shall be limited
to reasonable expenses incurred in connection with the proceeding.
(b) If the court determines that the director is entitled to indemnification
or advance for expenses under this part, it may also order the corporation to
pay the director's reasonable expenses to obtain court-ordered indemnification
or advance for expenses.
14-2-855. Determination and authorization of indemnification.
(a) A corporation may not indemnify a director under Code Section 14-2-851
unless authorized thereunder and a determination has been made for a specific
proceeding that indemnification of the director is permissible
II-4
<PAGE>
in the circumstances because he or she has met the relevant standard of
conduct set forth in Code Section 14-2-851.
(b) The determination shall be made:
(1) If there are two or more disinterested directors, by the board of
directors by a majority vote of all the disinterested directors (a majority
of whom shall for such purpose constitute a quorum) or by a majority of the
members of a committee of two or more disinterested directors appointed by
such a vote;
(2) By special legal counsel:
(A) Selected in the manner prescribed in paragraph (1) of this
subsection; or
(B) If there are fewer than two disinterested directors, selected by
the board of directors (in which selection directors who wish do not
qualify as disinterested directors may participate); or
(3) By the shareholders, but shares owned by or voted under the control
of a director who at the time does not qualify as a disinterested director
may not be voted on the determination.
(c) Authorization of indemnification or an obligation to indemnify and
evaluation as to reasonableness of expenses shall be made in the same manner
as the determination that indemnification is permissible, except that if there
are fewer than two disinterested directors or if the determination is made by
special legal counsel, authorization of indemnification and evaluation as to
reasonableness of expenses shall be made by those entitled under subparagraph
(b)(2)(B) of this Code section to select special legal counsel.
14-2-856. Shareholder approved indemnification.
(a) If authorized by the articles of incorporation or a bylaw, contract, or
resolution approved or ratified by the shareholders by a majority of the votes
entitled to be cast, a corporation may indemnify or obligate itself to
indemnify a director made a party to a proceeding including a proceeding
brought by or in the right of the corporation, without regard to the
limitations in other Code sections of this part, but shares owned or voted
under the control of a director who at the time does not qualify as a
disinterested director with respect to any existing or threatened proceeding
that would be covered by the authorization may not be voted on the
authorization.
(b) The corporation shall not indemnify a director under this Code section
for any liability incurred in a proceeding in which the director is adjudged
liable to the corporation or is subjected to injunctive relief in favor of the
corporation:
(1) For any appropriation, in violation of the director's duties, of any
business opportunity of the corporation;
(2) For acts or omissions which involve intentional misconduct or a
knowing violation of law;
(3) For the types of liability set forth in Code Section 14-2-832; or
(4) For any transaction from which he or she received an improper
personal benefit.
(c) Where approved or authorized in the manner described in subsection (a)
of this Code section, a corporation may advance or reimburse expenses incurred
in advance of final disposition of the proceeding only if:
(1) The director furnishes the corporation a written affirmation of his
or her good faith belief that his or her conduct does not constitute
behavior of the kind described in subsection (b) of this Code section; and
(2) The director furnishes the corporation a written undertaking,
executed personally or on his or her behalf, to repay any advances if it is
ultimately determined that the director is not entitled to indemnification
under this Code section.
II-5
<PAGE>
14-2-857. Indemnification of officers, employees, and agents.
(a) A corporation may indemnify and advance expenses under this part to an
officer of the corporation who is a party to a proceeding because he or she is
an officer of the corporation:
(1) To the same extent as a director; and
(2) If he or she is not a director, to such further extent as may be
provided by the articles of incorporation, the bylaws, a resolution of the
board of directors, or contract except for liability arising out of conduct
that constitutes:
(A) Appropriation, in violation of his or her duties, of any business
opportunity of the corporation;
(B) Acts or omissions which involve intentional misconduct or a
knowing violation of law;
(C) The types of liability set forth in Code Section 14-2-832; or
(D) Receipt of an improper personal benefit.
(b) The provisions of paragraph (2) of subsection (a) of this Code section
shall apply to an officer who is also a director if the sole basis on which he
or she is made a party to the proceeding is an act or omission solely as an
officer.
(c) An officer of a corporation who is not a director is entitled to
mandatory indemnification under Code Section 14-2-852, and may apply to a
court under Code Section 14-2-854 for indemnification or advances for
expenses, in each case to the same extent to which a director may be entitled
to indemnification or advances for expenses under those provisions.
(d) A corporation may also indemnify and advance expenses to an employee or
agent who is not a director to the extent, consistent with public policy, that
may be provided by its articles of incorporation, bylaws, general or specific
action of its board of directors, or contract.
14-2-858. Insurance.
A corporation may purchase and maintain insurance on behalf of an individual
who is a director, officer, employee, or agent of the corporation or who,
while a director, officer, employee, or agent of the corporation, serves at
the corporation's request as a director, officer, partner, trustee, employee,
or agent of another domestic or foreign corporation, partnership, joint
venture, trust, employee benefit plan, or other entity against liability
asserted against or incurred by him or her in that capacity or arising from
his or her status as director, officer, employee, or agent, whether or not the
corporation would have power to indemnify or advance expenses to him or her
against the same liability under this part.
14-2-859. Application of part.
(a) A corporation may, by a provision in its articles of incorporation or
bylaws or in a resolution adopted or a contract approved by its board of
directors or shareholders, obligate itself in advance of the act or omission
giving rise to a proceeding to provide indemnification or advance funds to pay
for or reimburse expenses consistent with this part. Any such obligatory
provision shall be deemed to satisfy the requirements for authorization
referred to in subsection (c) of Code Section 14-2-853 or subsection (c) of
Code Section 14-2-855. Any such provision that obligates the corporation to
provide indemnification to the fullest extent permitted by law shall be deemed
to obligate the corporation to advance funds to pay for or reimburse expenses
in accordance with Code Section 14-2-853 to the fullest extent permitted by
law, unless the provision specifically provides otherwise.
(b) Any provision pursuant to subsection (a) of this Code section shall not
obligate the corporation to indemnify or advance expenses to a director of a
predecessor of the corporation, pertaining to conduct with
II-6
<PAGE>
respect to the predecessor, unless otherwise specifically provided. Any
provision for indemnification or advance for expenses in the articles of
incorporation, bylaws, or a resolution of the board of directors or
shareholders, partners, or, in the case of limited liability companies,
members or managers of a predecessor of the corporation or other entity in a
merger or in a contract to which the predecessor is a party, existing at the
time the merger takes effect, shall be governed by paragraph (3) of subsection
(a) of Code Section 14-2-1106.
(c) A corporation may, by a provision in its articles of incorporation,
limit any of the rights to indemnification or advance for expenses created by
or pursuant to this part.
(d) This part does not limit a corporation's power to pay or reimburse
expenses incurred by a director or an officer in connection with his or her
appearance as a witness in a proceeding at a time when he or she is not a
party.
(e) Except as expressly provided in Code Section 14-2-857, this part does
not limit a corporation's power to indemnify, advance expenses to, or provide
or maintain insurance on behalf of an employee or agent.
ITEM 16. EXHIBITS.
<TABLE>
<CAPTION>
EXHIBIT
NO. DESCRIPTION
------- -----------
<C> <S>
4.1+ Form of Indenture
4.2+ Form of Debt Security
5.1+ Opinion of King & Spalding regarding the validity of the securities
being registered
8.1 Opinion of King & Spalding regarding tax matters
12.1 Computation of ratio of earnings to fixed charges
23.1 Consent of King & Spalding (included as part of Exhibits 5.1 and
8.1 hereto)
23.2 Consent of Arthur Andersen LLP
23.3 Consent of Ernst & Young LLP
24.1+ Power of Attorney
</TABLE>
- --------
+ Previously filed.
ITEM 17. UNDERTAKINGS.
(a) The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made, a
post-effective amendment to this registration statement;
(i) To include any prospectus required by Section 10(a) (3) of the
Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events arising after
the effective date of the registration statement (or the most recent
post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set forth
in the registration statement. Notwithstanding the foregoing, any
increase or decrease in volume of securities offered (if the total
dollar value of securities offered would not exceed that which was
registered) and any deviation from the low or high and of the estimated
maximum offering range may be reflected in the form of prospectus filed
with the Commission pursuant to Rule 424(b) if, in the aggregate, the
changes in
II-7
<PAGE>
volume and price represent no more than 20 percent change in the
maximum aggregate offering price set forth in the "Calculation of
Registration Fee" table in the effective registration statement; and
(iii) To include any material information with respect to the plan of
distribution not previously disclosed in the registration statement or
any material change to such information in the registration statement;
provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii) herein do
not apply if the information required to be included in a post-
effective amendment by those paragraphs is contained in periodic
reports filed by the undersigned registrant pursuant to Section 13 or
Section 15(d) of the Exchange Act that are incorporated by reference in
the registration statement.
(2) That, for the purpose of determining any liability under the
Securities Act of 1933 (the "Securities Act"), each such post-effective
amendment shall be deemed to be a new registration statement relating to
the securities offered therein, and the offering of such securities at that
time shall be deemed to be the initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the
termination of the offering.
(b) The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act, each filing of the
registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
Securities Exchange Act of 1934 (and, where applicable, each filing of an
employee benefit plan's annual report pursuant to Section 15(d) of the
Securities Exchange Act of 1934) that is incorporated by reference in the
registration statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such
securities at that time shall be deemed to be the initial bona fide offering
thereof.
(c) Insofar as indemnification for liabilities arising under the Securities
Act may be permitted to directors, officers and controlling persons of the
registrant pursuant to the foregoing provisions or otherwise, the registrant
has been advised that in the opinion of the Securities and Exchange Commission
such indemnification is against public policy as expressed in the Act and is,
therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the registrant of expenses
incurred or paid by a director, officer or controlling person of the
registrant in the successful defense of any action, suit or proceeding) is
asserted by such director, officer or controlling person in connection with
the securities being registered, the registrant will, unless in the opinion of
its counsel the matter has been settled by controlling precedent, submit to a
court of appropriate jurisdiction the question whether such indemnification by
it is against public policy as expressed in the Securities Act and will be
governed by the final adjudication of such issue.
(d) The undersigned registrant further undertakes that:
(1) For purposes of determining any liability under the Securities Act,
the information omitted from the form of prospectus filed as part of this
registration statement in reliance upon Rule 430A and contained in a form
of prospectus filed by the registrant pursuant to Rule 424(b) (1) or (4) or
497(h) under the Securities Act shall be deemed to be part of this
registration statement as of the time it was declared effective.
(2) For the purpose of determining any liability under the Securities
Act, each post-effective amendment that contains a form of prospectus shall
be deemed to be a new registration statement relating to the securities
offered herein, and the offering of such securities at that time shall be
deemed to be the initial bona fide offering thereof.
(e) The undersigned registrant hereby undertakes to file an application for
the purpose of determining the eligibility of the trustee to act under
subsection (a) of Section 310 of the Trust Indenture Act in accordance with
the rules and regulations prescribed by the Commission under Section 305(b)(2)
of the Act.
II-8
<PAGE>
SIGNATURES
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THE REGISTRANT
CERTIFIES THAT IT HAS REASONABLE GROUNDS TO BELIEVE THAT IT MEETS ALL OF THE
REQUIREMENTS FOR FILING ON FORM S-3 AND HAS DULY CAUSED THIS PRE-EFFECTIVE
AMENDMENT NO. 1 TO FORM S-3 TO BE SIGNED ON ITS BEHALF BY THE UNDERSIGNED,
THEREUNTO DULY AUTHORIZED, IN NORCROSS, GEORGIA ON THE 15TH DAY OF SEPTEMBER,
1997.
Weeks Corporation
/s/ David P. Stockert
By: _________________________________
DAVID P. STOCKERT
SENIOR VICE PRESIDENT AND CHIEF
FINANCIAL OFFICER
Weeks Realty, L.P.
Weeks GP Holdings, Inc.,
By: _________________________________
as General Partner
/s/ David P. Stockert
By: _________________________________
DAVID P. STOCKERT
SENIOR VICE PRESIDENT AND CHIEF
FINANCIAL OFFICER
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, AS AMENDED, THIS
PRE-EFFECTIVE AMENDMENT NO. 1 TO FORM S-3 HAS BEEN SIGNED BY THE FOLLOWING
PERSONS IN THE CAPACITIES INDICATED BELOW AS OF THE 31ST DAY OF JULY, 1997.
<TABLE>
<CAPTION>
SIGNATURE TITLE
--------- -----
<S> <C>
* Chairman of the Board and Chief Executive
_________________________________ Officer and a Director (Principal Executive
A. RAY WEEKS, JR. Officer)
* Vice Chairman of the Board and Chief Investment
_________________________________ Officer and a Director
THOMAS D. SENKBEIL
* President and a Director
_________________________________
FORREST W. ROBINSON
* Managing Director and a Director
_________________________________
JOHN W. NELLEY, JR.
* Managing Director and a Director
_________________________________
HAROLD S. LICHTIN
* Vice President and Controller (Principal
_________________________________ Accounting Officer)
ARTHUR J. QUIRK
* Director
_________________________________
BARRINGTON H. BRANCH
* Director
_________________________________
GEORGE D. BUSBEE
*- Director
_________________________________
CHARLES R. EITEL
</TABLE>
II-9
<PAGE>
<TABLE>
<S> <C>
* Director
_________________________________
WILLIAM O. MCCOY
* Director
_________________________________
WILLIAM CAVANAUGH III
</TABLE>
<TABLE>
<S> <C>
*By: /s/ David P. Stockert Senior Vice President and Chief Financial
Officer
DAVID P. STOCKERT
</TABLE>
II-10
<PAGE>
INDEX OF EXHIBITS
<TABLE>
<CAPTION>
EXHIBIT
NO. DESCRIPTION PAGE
------- ----------- ----
<C> <S> <C>
4.1+ Form of Indenture..............................................
4.2+ Form of Debt Security..........................................
5.1+ Opinion of King & Spalding regarding the validity of the
securities being registered....................................
8.1 Opinion of King & Spalding regarding tax matters...............
12.1 Computation of ratio of earnings to fixed charges..............
23.1 Consent of King & Spalding (included as part of Exhibits 5.1
and 8.1 hereto)................................................
23.2 Consent of Arthur Andersen LLP.................................
23.3 Consent of Ernst & Young LLP...................................
24.1+ Power of Attorney..............................................
</TABLE>
- --------
+ Previously filed
<PAGE>
Exhibit 8.1
September 15, 1997
Weeks Corporation
Weeks Realty, L.P.
4497 Park Drive
Norcross, Georgia 30093
Re: Weeks Corporation/Weeks Realty, L.P.-- Shelf Registration
Gentlemen:
We have acted as counsel to Weeks Corporation (the "Company") and Weeks
Realty, L.P. (the "Operating Partnership") in connection with that certain
Registration Statement on Form S-3 (File No. 333-32755) filed with the
Securities and Exchange Commission relating to $300 million of an indeterminate
amount of Preferred Stock, Common Stock, and Common Stock Warrants to be offered
by the Company, and $300 million of Debt Securities to be offered by the
Operating Partnership (the "Registration Statement"). In connection therewith,
you have requested our opinion with respect to the following matters:
(i) the qualification of the Company as a real estate investment
trust ("REIT") under the Internal Revenue Code of 1986, as amended (the
"Code");
(ii) the status of the Operating Partnership and the Financing
Partnership as partnerships for federal income tax purposes; and
(iii) the accuracy of the discussion included in the Registration
Statement under the heading "Federal Income Tax Considerations."
<PAGE>
Weeks Corporation
September 15, 1997
Page 2
All defined terms used herein shall have the same meaning as in the
Registration Statement.
FACTS AND ASSUMPTIONS RELIED UPON
---------------------------------
In rendering the opinions expressed herein, we have examined such documents
as we have deemed appropriate, including (but not limited to) the following: (1)
the Registration Statement (including all Exhibits thereto); (2) the Second
Amended and Restated Agreement of Limited Partnership of Weeks Realty, L.P., as
amended; (3) the respective Articles of Incorporation of Weeks Corporation,
Weeks Realty Services, Inc., Weeks Construction Services, Inc., Weeks GP
Holdings, Inc., and Weeks LP Holdings, Inc., and bylaws of such corporations;
(4) the Limited Partnership Agreement of Weeks Financing Limited Partnership;
(5) the Employee Sharing, Occupancy, and Administrative Services Agreement
entered into by Weeks Realty, L.P., Weeks Realty Services, Inc. and Weeks
Construction Services, Inc.; and (6) the Company's analyses relating to the
Company's compliance with the REIT gross income and asset tests.
In our examination of documents, we have assumed, with your consent, that
all documents submitted to us are authentic originals, or if submitted as
photocopies, that they faithfully reproduce the originals thereof, that all such
documents have been or will be duly executed to the extent required, that all
representations and statements set forth in such documents are true and correct,
and that all obligations imposed by any such documents on the parties thereto
have been or will be performed or satisfied in accordance with their terms. We
also have obtained such additional information and representations as we have
deemed relevant and necessary through consultation with the officers of the
Company and with the Company's advisors.
OPINIONS
--------
Based upon and subject to the foregoing, we are of the following opinions.
(1) The Company was organized and has operated in conformity with the
requirements for qualification and taxation as a REIT under Sections 856-860 of
the Code for its initial taxable year beginning August 23, 1994 and ending
December 31, 1994 as well as its taxable years ending December 31, 1995 and
December 31, 1996, and its current organization and method of operation should
allow it to continue to qualify as a REIT.
(2) The discussion contained under the heading "Federal Income Tax
Considerations" in the Registration Statement fairly summarize the federal
income tax considerations that are material to a holder of Common Stock and,
to the extent such discussion contains statements of law or legal conclusions,
such statements and conclusions are the opinion of King & Spalding.
<PAGE>
Weeks Corporation
September 15, 1997
Page 3
(3) The Operating Partnership and the Financing Partnership each have
qualified as a partnership for federal income tax purposes and not as a
"publicly traded partnership" under Section 7704 of the Code.
The opinions expressed herein are based upon the Code, the U.S. Treasury
Regulations promulgated thereunder, current administrative positions of the U.S.
Internal Revenue Service, and existing judicial decisions, any of which could be
changed at any time, possibly on a retroactive basis. Any such changes could
adversely affect the opinions rendered herein and the tax consequences to the
Company. In addition, as noted above, our opinions are based solely on the
documents that we have examined, the additional information that we have
obtained, and the representations that have been made to us, and cannot be
relied upon if any of the facts contained in such documents or in such
additional information is, or later becomes, inaccurate or if any of the
representations made to us is, or later becomes, inaccurate. We are not,
however, aware of any facts or circumstances contrary to or inconsistent with
the information, assumptions, and representations upon which we have relied for
purposes of this opinion. To the extent that such representations and
information set forth legal conclusions with respect to factual matters relevant
to the qualification of the Company as a REIT, we have reviewed with the
individuals making such representations or providing such information the
relevant provisions of the Code, applicable Treasury Regulations and published
administrative interpretations thereof.
We consent to the filing of this opinion as an Exhibit to the Registration
Statement and to the reference to us under the caption "Federal Income Tax
Considerations" in the Prospectus that is included in the Registration
Statement.
Finally, our opinion is limited to the tax matters specifically covered
thereby, and we have not been asked to address, nor have we addressed, any other
tax consequences of an investment in the Securities of the Company or the
Operating Partnership.
Very truly yours,
/s/ KING & SPALDING
<PAGE>
Exhibit 12.1
Weeks Corporation/1/
Ratio Of Earnings To Fixed Charges
(in thousands)
<TABLE>
<CAPTION>
Weeks Group Weeks Corporation
------------------------------------ ----------------------------------------------------------------
Year Ended Dec. 31, Jan. 1, 1994 Aug. 24, 1994 Six Months
-------------------- To To Year Ended Year Ended Ended
1992 1993 Aug. 23, 1994 Dec. 31, 1994 Dec. 31, 1995 Dec. 31, 1996 Jun. 30, 1997
------------------------------------ ----------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Earnings Computation
- ------------------------
Net income (Loss) ($1,394) $998 $516 $798 $8,426 $12,745 $8,906
Extraordinary Loss - - - 1,993 - - -
Minority Interests - - - 943 2,681 3,064 2,850
------------------------------------ ----------------------------------------------------------------
Income (Loss) Before
Minority Interests (1,394) 998 516 3,734 11,107 15,809 11,756
Add:
Interest Expense 10,635 10,254 6,682 1,958 8,106 11,779 9,554
Amortization Of Deferred
Financing Costs 363 372 322 252 691 864 452
------------------------------------ ----------------------------------------------------------------
Earnings For Purposes
Of Computation $9,604 $11,624 $7,520 $5,944 $19,904 $28,452 $21,762
------------------------------------ ----------------------------------------------------------------
<CAPTION>
Fixed Charges Computation
- --------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Interest Expense $10,635 $10,254 $6,682 $1,958 $8,106 $11,779 $9,554
Capitalized Interest 157 70 89 - 1,198 2,358 2,222
Amortization Of Deferred
Financing Costs 363 372 322 252 691 864 452
------------------------------------ ----------------------------------------------------------------
Fixed Charges for Purposes
Of Computation $11,155 $10,696 $7,093 $2,210 $9,995 $15,001 $12,228
------------------------------------ ----------------------------------------------------------------
Ratio Of Earnings To
Fixed Charges 0.86 1.09 1.06 2.69 1.99 1.90 1.78
==================================== ================================================================
</TABLE>
/1/ The ratio of earnings to fixed charges for Weeks Realty, L.P. is identical
to that of Weeks Corporation.
<PAGE>
Exhibit 23.2
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the incorporation by
reference in this registration statement of our reports dated February 21, 1997
included in Weeks Corporation's Annual Report on Form 10-K for the year ended
December 31, 1996, our reports dated February 21, 1997 included in Weeks Realty,
L.P.'s Registration Statement on Form 10 dated August 1, 1997 and filed on
August 4, 1997, as amended by Pre-Effective Amendment No. 1 to Form 10, our
report dated September 24, 1996 included in the Company's Current Report on Form
8-K dated November 5, 1996 and filed on November 6, 1996, and to all references
to our firm included in this registration statement.
/s/ ARTHUR ANDERSEN LLP
Atlanta, Georgia
September 12, 1997
<PAGE>
EXHIBIT 23.3
CONSENT OF INDEPENDENT AUDITORS
-------------------------------
We consent to the reference to our firm under the caption "Experts" in
Pre-effective Amendment No. 1 to the Registration Statement on Form S-3 No.
333-32755 and related Prospectus of Weeks Corporation and Weeks Realty, L.P. and
to the incorporation by reference therein of our report dated September 27,
1996, with respect to the combined financial statements of NWI Warehouse Group
as of December 31, 1995 and 1994 and for each of the years then ended included
in the Form 8-K/A of Weeks Corporation dated November 1, 1996, filed with the
Securities and Exchange Commission.
/s/ Ernst & Young LLP
ERNST & YOUNG LLP
Atlanta, Georgia
September 12, 1997
