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SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
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FORM 10-K
FOR ANNUAL TRANSITION REPORTS
PURSUANT TO SECTIONS 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
(Mark One)
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 1998
OR
[_] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from _____ to ______
Commission file number 001-13254
WEEKS CORPORATION
(Exact name of registrant as specified in its charter)
Georgia 58-1525322
(State of incorporation) (I.R.S. Employer Identification No.)
4497 Park Drive 30093
Norcross, Georgia (Zip Code)
(Address of principal executive
offices)
Registrant's telephone number, including area code: (770) 923-4076
Securities registered pursuant to Section 12(b) of the Act:
Title of each class Name of exchange on which registered
Common Stock, $.01 par value; New York Stock Exchange
8.0% Series A Cumulative Redeemable New York Stock Exchange
Preferred Stock, $.01 par value
Securities registered pursuant to Section 12(g) of the Act: None
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes X No
Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained to the
best of Registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to
this Form 10-K.
The aggregate market value of the shares of common stock held by non-
affiliates (based upon the closing sale price on the New York Stock Exchange on
March 15, 1999) was approximately $560,019,000. As of March 15, 1999, there
were 19,743,235 shares of common stock, $.01 par value, outstanding.
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TABLE OF CONTENTS
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Item No. FINANCIAL INFORMATION Page No.
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PART I
1. Business.................................................. 3
2. Properties................................................ 13
3. Legal Proceedings......................................... 24
4. Submission of Matters to a Vote of Security Holders....... 24
PART II
Market for Registrant's Common Equity and Related
5. Shareholder Matters....................................... 25
6. Selected Financial Data................................... 27
7. Management's Discussion and Analysis of Financial
Condition and Results of Operations....................... 29
Quantitative and Qualitative Disclosures about Market
7A Risks..................................................... 43
8. Financial Statements and Supplementary Data............... 43
9. Changes in and Disagreements with Accountants on
Accounting and Financial Disclosure....................... 43
PART III
10. Directors and Executive Officers of the Registrant........ 44
11. Executive Compensation.................................... 48
Security Ownership of Certain Beneficial Owners and
12. Management................................................ 56
13. Certain Relationships and Related Transactions............ 60
PART IV
Exhibits, Financial Statement Schedule and Reports on Form
14. 8-K....................................................... 63
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PART I
ITEM 1. BUSINESS
THE COMPANY
Weeks Corporation (the "Company" or "Registrant") 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 the Company and its affiliates. Since 1965,
the Company, together with its affiliates and predecessors, has developed,
owned, managed, constructed and acquired primarily institutional-quality
industrial and suburban office properties in select suburban markets in the
southeast United States and Texas.
As of December 31, 1998, the Company's in-service property portfolio
consisted of 282 industrial properties, 32 suburban office properties and five
retail/ground leased properties comprising 25,797,000 square feet. In-service
properties exclude properties under development which are not yet stabilized
(i.e., substantially leased) and properties under agreement to acquire. As of
December 31, 1998, the Company's primary markets and the concentration of the
Company's portfolio (based on square footage of in-service properties) are
Atlanta, Georgia (56.8%), Nashville, Tennessee (10.5%), Raleigh-Durham-Chapel
Hill (the "Research Triangle"), North Carolina (9.8%), Miami, Florida (9.5%),
Dallas, Texas (5.4%), Orlando, Florida (3.3%), Jacksonville, Florida (2.5%),
Spartanburg, South Carolina (1.5%), and Tampa, Florida (0.7%). In addition, 54
industrial, suburban office and retail properties were under development, in
lease-up or under agreement to acquire at December 31, 1998, comprising an
additional 5,923,000 square feet (see "Properties" below).
As used herein, the term "Company" includes Weeks Corporation and its
subsidiaries, including Weeks Realty, L.P. (the "Operating Partnership"),
unless the context indicates otherwise. The Company, through its wholly owned
subsidiaries, is the general partner of and owns a majority interest in the
Operating Partnership which, including the operations of its subsidiaries,
conducts substantially all of the on-going operations of the Company. The
Company has elected to qualify and operate as a self-administered and self-
managed REIT under the Internal Revenue Code of 1986, as amended (the "Code").
As a REIT, the Company will not generally be subject to corporate federal
income taxes as long as it satisfies certain technical requirements of the Code
relating to the composition of its income and assets, and the requirement to
distribute 95% of its taxable income to its shareholders.
As of December 31, 1998, the Company had outstanding 19,674,412 shares of
common stock and owned the same number of units of common limited partnership
interest ("Common Units") in the Operating Partnership, representing a 72.9%
ownership interest in the Operating Partnership. Common Units held by persons
other than the Company totaled 7,314,001 as of December 31, 1998, and
represented a 27.1% minority interest in the Operating Partnership. Common
Units are convertible by their holders into shares of the Company's common
stock on a one-for-one basis, or into cash, at the Company's option, subject to
certain restrictions discussed under "Security Ownership of Certain Beneficial
Owners and Management" in Item 12. The Company's weighted average ownership
interest in the Operating Partnership was 73.7% and 76.5% for the years ended
December 31, 1998 and 1997, respectively. Of the 72.9% interest in the
Operating Partnership held by the Company as of December 31, 1998, the Company
owned the sole 1.3% general partnership interest in the Operating Partnership
through Weeks GP Holdings, Inc., a wholly owned Georgia corporation ("Weeks
GP"), and a 71.6% 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 Code and their existence is disregarded for
federal income tax purposes.
The Company conducts its third-party service businesses through two
companies (the "Service Companies"): Weeks Realty Services, Inc. ("Weeks Realty
Services"), conducts third-party landscape, property management and leasing
services, and Weeks Construction Services, Inc. ("Weeks Construction
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Service"), conducts third-party construction services. The Company holds 100%
of the nonvoting and 1% of the voting common stock of these Subsidiaries. The
remaining voting common stock is held by three executive officers of the
Company. The ownership of the common stock of the Service Companies entitles
the Company to substantially all (99%) of the economic benefits from the
results of the Service Companies' operations (see Notes 2 and 5 to the
consolidated financial statements).
Certain of the Company's operating real estate assets are owned through
subsidiary limited liability companies and partnerships. At December 31, 1998,
the Company owned 23 operating buildings totaling approximately 2,446,000
square feet and approximately five acres of land subject to ground leases
located in Miami, Florida and owned four operating buildings totaling
approximately 241,000 square feet located in the Research Triangle area of
North Carolina through such entities. The Company also owns a 50% interest in
an 86,000 square foot building in Atlanta, Georgia through a 50% owned limited
liability company.
In addition, the Company owns or owns indirect interests in certain
buildings under development through limited liability companies and
partnerships. At December 31, 1998, the Company owned five buildings in
Miami/Ft. Lauderdale, Florida, one building in Orlando, Florida and one
building in Atlanta, Georgia totaling approximately 900,000 square feet through
such entities.
The Operating Partnership will terminate on the earlier of a sale of all or
substantially all of its assets, the election of the general partner (with the
consent of the limited partners) to dissolve the Operating Partnership, or
December 31, 2093.
Based on shares of common stock outstanding on February 28, 1999, executive
officers and directors of the Company own approximately 14% of the common stock
of the Company, assuming an exchange for common stock of all of the Common
Units that are not currently held by the Company.
The Annual Report on Form 10-K, including documents incorporated herein by
reference, contains forward-looking statements within the meaning of Section
27A of the Securities Act of 1933, as amended (the "Securities Act"), and
Section 21E of the Securities Exchange Act of 1934, as amended (the "Exchange
Act"). Forward-looking statements are inherently subject to risks and
uncertainties, many of which cannot be predicted with accuracy and some of
which might not even be anticipated. Future events and actual results,
financial and otherwise, may differ materially from the events and results
discussed in the forward-looking statements. Factors that might cause such a
difference include, but are not limited to, the general economic climate,
competition and the supply of and demand for industrial and suburban office
properties in the Company's markets, interest rate levels, the availability of
financing, potential environmental liability and other risks associated with
the ownership, development and acquisition of properties, including risks that
tenants will not take or remain in occupancy or pay rent, or that construction
or operating costs may be greater than anticipated, and those discussed in
"Management's Discussion and Analysis of Results of Operations and Financial
Condition" appearing elsewhere herein.
Company History
The Company was founded in 1965 by A.R. Weeks, Sr., the father of A. Ray
Weeks, Jr., the Company's Chairman of the Board and Chief Executive Officer.
Under the leadership of A. Ray Weeks, Jr. and Forrest W. Robinson, the
Company's President and Chief Operating Officer, the Company operated as a
private real estate company until August 1994, when it completed an initial
public offering and elected to be taxed as a REIT. Thomas D. Senkbeil joined
the Company as Vice Chairman of the Board and Chief Investment Officer in
October 1992. Prior to joining the Company, Mr. Senkbeil had been a principal
in another real estate development and management firm in Atlanta, Georgia.
On August 24, 1994, the Company completed a business combination and an
initial public offering of common stock resulting in the organizational and
operating structure described above. The Company and its subsidiaries,
including the Service Companies, succeeded to substantially all of the
interests in certain land and
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industrial and suburban office buildings under common ownership and to the
development, construction, landscape and management businesses of the
predecessors to the Company referred to herein as the "Weeks Group."
In November 1996, the Company completed the initial phase of the acquisition
of the properties and related operations of NWI Warehouse Group, L.P. ("NWI"),
and Buckley & Company Real Estate, Inc. ("Buckley"), each of Nashville,
Tennessee (see Note 3 to the consolidated financial statements). Through that
transaction, the Company established a presence in Nashville, Tennessee, and
both of the principals of NWI and Buckley, John W. Nelley, Jr., and Albert W.
Buckley, Jr., joined the Company as Managing Directors with responsibility for
the Company's activities in Nashville, Tennessee. In December 1996, the Company
completed the initial phase of its acquisition of the properties and related
operations of Lichtin Properties, Inc. ("Lichtin"), of the Research Triangle
area of North Carolina (see Note 3 to the consolidated financial statements).
Through that transaction, the Company established a presence in the Research
Triangle, and Harold S. Lichtin, the President of Lichtin, joined the Company's
Board of Directors. John W. Nelley, Jr., and Harold S. Lichtin currently serve
on the Company's Board of Directors.
In January 1998, the Company acquired a 2,477,000 square foot, 24-building
property portfolio in Miami, Florida (see Note 3 to the consolidated financial
statements) and in February 1998, one of the Service Companies acquired a one-
third interest in Codina Group, Inc., a South Florida commercial and industrial
real estate services company that developed the portfolio (see Note 5 to the
consolidated financial statements). St. Joe Corporation, a publicly traded
company which, through its subsidiaries, is the largest single private
landowner in the State of Florida, also purchased a one-third interest in
Codina Group, Inc. Through these combined transactions, the Company established
a presence in South Florida with the intention of pursuing development and
acquisition opportunities in the area.
In June 1998, the Company entered into the Dallas/Ft. Worth market through
the acquisition of real estate properties. During 1998, the Company established
an office presence in Dallas, Texas for the purpose of expanding the Company's
real estate holdings and operations in Texas. The establishment of a local
office in Dallas, Texas is similar to the Company's strategy of establishing
local offices in Orlando, Tampa and Jacksonville, Florida.
The Company was incorporated in Georgia as A. R. Weeks & Associates Inc. in
1983. The Company changed its name to Weeks Corporation in June 1994. The
Company's executive offices are located at 4497 Park Drive, Norcross, Georgia,
30093 and its telephone number is (770) 923-4076. The Company, the Operating
Partnership and the Service Companies currently employ approximately 576 full-
time employees.
Recent Developments
On March 1, 1999, the Company announced that it had entered into an
Agreement and Plan of Merger with Duke Realty Investments, Inc., an Indiana
based REIT specializing in industrial and office building development and
ownership whose common stock is traded on the New York Stock Exchange under the
trading symbol "DRE" ("Duke"), and that the Operating Partnership had entered
into an Agreement and Plan of Merger with Duke Realty Limited Partnership, the
operating partnership through which Duke owns and manages its properties ("Duke
OP"). These agreements provide for the merger of the Company with and into Duke
and the merger of the Operating Partnership with and into Duke OP. After the
effective time of the mergers, Duke will change its name to Duke-Weeks Realty
Corporation.
The consummation of the transactions contemplated by the merger agreements
is expected to occur in the second or third quarter of 1999, and is subject to
approval by the stockholders of Duke and the shareholders of the Company and
satisfaction of certain other customary closing conditions. There can be no
assurance that the transactions contemplated by the merger agreements will be
consummated. For a more complete description of the pending merger
transactions, see "Management's Discussion and Analysis of Financial Condition
and Results of Operations."
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Competition
Numerous properties compete with the Company's properties in attracting
tenants and corporate users. Some of these competing properties may be newer or
better located than the Company's properties. The number of competitive
industrial or suburban office properties and the availability of land suitable
for industrial or suburban office development in a particular area could have a
material effect on the Company's ability to lease or develop space. The Company
may be competing with other developers that have greater resources than the
Company. In addition, in order to maintain its qualification as a REIT, the
Company will be required under the Code to distribute annually significant
amounts of cash from operations, while some of its competitors may be able to
retain more of their working capital to finance projects.
The Company competes for tenants based on its high level of client service,
the quality of its properties and business parks, and its ability to
successfully develop a wide range of industrial and suburban office properties.
Leases at the Company's properties are priced competitively based on market
conditions, supply and demand characteristics, and the quality of the Company's
properties and services. The Company does not seek to compete solely on the
basis of providing the low-cost solution for all tenants.
Real Estate Investments
The Company's real estate investments are subject to varying degrees of
risk. Income from the Company's properties and the demand for new development
properties may be adversely affected by the general economic climate; local
conditions such as oversupply of industrial or office properties or a reduction
in demand for industrial or office properties in the markets where the Company
owns properties; the attractiveness of the Company's properties; the ability of
the Company to provide adequate maintenance and insurance; and increased
operating costs (including real estate taxes). In addition, income from the
Company's properties and the value of its real estate are also affected by such
factors as the cost of regulatory compliance, interest rate levels and the
availability of financing. The Company's income and operations would be
adversely affected if a significant number of tenants were unable to pay rent
or the Company's properties could not be rented on favorable terms. Certain
significant expenditures associated with the Company's investments in real
estate (such as mortgage payments, if any, real estate taxes and maintenance
costs) are generally not reduced when circumstances cause a reduction in income
from the property.
Environmental Liabilities
Under various federal, state and local laws and regulations, an owner or
operator of real estate may be held liable for the costs of removal or
remediation of hazardous or toxic substances located on or in the property.
These laws often impose such liability without regard to whether the owner
knows of, or was responsible for, the presence of such hazardous or toxic
substances. The costs of any required remediation or removal of such substances
may be substantial. In addition, the owner's liability as to any property is
generally not limited under such laws and regulations and could exceed the
value of the property and/or the aggregate assets of the owner. The presence of
such substances, or the failure to remediate such substances properly, may also
adversely affect the owner's ability to sell or lease the property or to borrow
using the property as collateral. Under such laws and regulations, an owner or
entity that arranges for the disposal or treatment of hazardous or toxic
substances at a disposal or treatment facility may also be liable for the costs
of removal or remediation of all such substances at such facility, whether or
not such facility is owned or operated by such person. Certain tenants of the
Company handle and store hazardous substances at the Company's properties. As a
result, in connection with the ownership of the Company's properties or land
held for development and a tenant's improper handling, storage, disposal or
treatment of such hazardous or toxic substances, the Company may be liable for
such costs, including the removal or remediation of all such substances from
such properties. Some laws and regulations impose liability for the release of
certain materials into the air or water from a property, including asbestos,
and such release can form the basis for liability to third parties for personal
injury or other damages. Other laws and regulations can limit the development
of and impose liability for the disturbance of wetlands or the habitats of
threatened or endangered species.
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The Company regularly makes capital expenditures and reviews the conditions
of its properties and its land held for development in order to maintain
compliance with applicable environmental laws. Based on facts currently known
to it, the Company does not believe it will be required under existing
environmental laws to expend amounts that would have a material adverse effect
on its results of operations, financial condition or liquidity. However, no
assurance can be given that material environmental liabilities do not exist,
that any prior owner or operator of a property or land held for development did
not create any material environmental condition not known to the Company, that
a material environmental condition does not otherwise exist as to any one or
more of the properties or land held for development, or that future uses and
conditions (including changes in applicable environmental laws and regulations
and the uses and conditions of properties in the vicinity, such as leaking
underground storage tanks and the activities of the tenants) will not result in
the imposition of environmental liability. No material expenditures were made
by the Company in 1998, 1997 or 1996 relating to environmental matters.
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INVESTMENT OBJECTIVES AND OPERATING STRATEGIES
The Company's primary investment objectives are to increase shareholder
value and to increase per share cash available for distribution by (1)
developing institutional-quality, functional multi-tenant and build-to-suit
industrial and suburban office properties, (2) acquiring industrial and
suburban office properties in strategic locations where the Company can
establish or enhance its market presence, (3) maximizing cash flow through
active leasing and management of its properties, and (4) expanding
strategically into new geographic markets. The Company has structured its
operations, as discussed in more detail below, to meet these investment
objectives.
Fully Integrated Real Estate Company
The Company is a fully integrated real estate company with resources
dedicated to:
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. landscaping
. marketing
. property management
. development
. civil engineering
. construction
. legal
. investment analysis
. design
. asset management
. information systems
. financing
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The Company believes that by providing a full range of services it can
control quality and provide greater client service, improve timely delivery of
its industrial and suburban office developments and promote cost savings.
Development of Business Park Environments
The Company develops and owns its properties primarily in business park
environments (see discussion under "Properties"). Alone or with its joint
venture partners, the Company controls all aspects of the development process
in a majority of the business parks in which it operates, including site
selection and project concept, master planning and zoning, design and
construction, leasing and property management. Each business park is in
proximity to an interstate highway interchange and retail and residential
amenities.
The Company's business parks emphasize flexible land plans, extensive
landscaping and protective covenants which restrict the uses and control the
architecture and signage. In addition to its properties, the Company provides
landscaping services for other corporate users in its controlled business
parks. The Company will continue to emphasize business park development in
future years.
Product Focus
The Company develops or acquires industrial and suburban office properties,
primarily in suburban locations (see related discussion of product types under
"Properties"). The Company's properties can include both single-tenant (build-
to-suit) buildings and multi-tenant buildings. The Company designs properties
that can be modified economically to meet the needs of various clients and that
can often function as either multi-tenant or single-tenant buildings.
The Company develops institutional-quality, general purpose properties that
are designed to be architecturally attractive and to serve the needs of a
variety of tenants in a particular submarket. The Company attempts to limit
tenant improvement expenditures to those which are in demand by, and adaptable
with moderate modification to, a high number of users in a market. The Company
controls tenant improvement expenditures by utilizing its in-house interior
finish department to supervise the construction process and by
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compensating its marketing representatives based on a formula which takes into
account the cost of tenant finish requirements. The Company uses standard
finish materials for most of its tenants. The Company's annual purchase
programs allow it to procure these materials on a volume discount basis.
Market Focus
The Company focuses its activities in what it believes are some of the
fastest growing markets in the southeast United States and Texas. As detailed
below, the states where the Company focuses its activities have generally
experienced greater percentage growth in population and employment than the
United States as a whole.
Population and Employment Growth
(percentage change)
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Non-Farm
Population Growth Employment Growth
Jul '97--Jul Jan '98--Jan
'98(a) '99(b)
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Florida.................................. 1.6% 4.0%
Georgia.................................. 2.0% 3.1%
North Carolina........................... 1.6% 3.2%
South Carolina........................... 1.3% 3.3%
Tennessee................................ 1.1% 1.5%
Texas.................................... 1.9% 3.1%
U.S. Average............................. 1.0% 2.2%
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(a) Source: U.S. Census Bureau.
(b) Source: Bureau of Labor Statistics.
Metropolitan Atlanta, Georgia. The Company was founded and is currently
headquartered in metropolitan Atlanta, and is one of metropolitan Atlanta's
largest industrial property owners. Metropolitan Atlanta's rapid growth in both
employment and population is due in part to its role as a business and
distribution center for the entire Southeast.
According to Jamison Research, Inc. ("Jamison"), which publishes data on
metropolitan Atlanta's industrial and office real estate markets, the
metropolitan area in 1998 recorded industrial net absorption of approximately
11.0 million square feet, and over the past five years, metropolitan Atlanta's
industrial net absorption has totaled more than 60.0 million square feet. Also
according to Jamison, metropolitan Atlanta's office market recorded net
absorption of approximately 5.6 million square feet during 1998. The
approximately 16.6 million square feet of combined industrial and office net
absorption in metropolitan Atlanta in 1998, compares with approximately 17.0
million square feet in 1997.
The Company's completed and in-service properties located in metropolitan
Atlanta comprised approximately 93% industrial properties and approximately 7%
suburban office properties at December 31, 1998, and had an average occupancy
rate on such date of 95.4%, nearly four percentage points better than the
overall market occupancy, according to figures published by Jamison.
The Company believes that one of the reasons that the occupancy rate of its
metropolitan Atlanta properties is higher than the overall market is that it
generally focuses its activities on the submarkets that are among the
metropolitan area's strongest. According to Jamison, the major submarkets where
the Company generally focuses its activities accounted for less than 60% of
metropolitan Atlanta's approximately 441 million square feet of industrial and
office space at December 31, 1998, but recorded more than 85% of the
metropolitan area's net absorption in 1998. The Company allocates its
development activity in metropolitan Atlanta among all four of its primary
industrial and suburban office property types and among a number of distinct
submarkets, based on its determination of supply and demand conditions.
Nashville, Tennessee. The Company entered the Nashville market in November
1996 with its acquisition of NWI (see Note 3 to the consolidated financial
statements). Like Atlanta, Nashville is the state capital and
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has a well-developed transportation infrastructure. Nashville is also well
located as a point of distribution. According to the Nashville Area Chamber of
Commerce, Nashville lies within a 600 mile radius of 50% of the United States
population.
At December 31, 1998, all of the Company's completed and in-service
properties in Nashville are industrial properties and had an average occupancy
rate on such date of 96.5%.
Research Triangle, North Carolina. The Company entered the Research Triangle
area of North Carolina in December 1996 with its acquisition of Lichtin (see
Note 3 to the consolidated financial statements). The Research Triangle market
is characterized as a center for high technology, communications, research and
development and health care, and attracts many of its employees from its three
universities: Duke University, The University of North Carolina and North
Carolina State University. Research Triangle Park, which is located adjacent to
most of the Company's portfolio, is one of the nation's largest planned
research parks, with more than 70 national and international research
organizations employing over 35,000 people. Research Triangle Park generally
consists of corporate-owned facilities devoted to research and development.
Many of the Company's properties house administrative, technology and service
functions that complement the activities of businesses with facilities located
within Research Triangle Park.
The Company's completed and in-service properties in the Research Triangle
comprised 23 industrial properties and 11 suburban office properties at
December 31, 1998, and had an average occupancy rate on such date of 93.2%.
Orlando, Florida. The Company entered the Orlando market in April 1995 with
the purchase of an approximately 190,000 square foot portfolio of industrial
properties. The Company's decision to expand into Orlando was based in part on
the city's geographic location as a point of distribution for the state of
Florida, the most highly populated state in the Southeast. Since entering
Orlando in 1995, the Company has increased its portfolio of in-service
properties to approximately 858,000 square feet as of December 31, 1998, and
has opened a local office. All of the Company's 12 completed and in-service
properties in Orlando at December 31, 1998, are industrial properties, and
these properties had an average occupancy rate on such date of 97.5%.
Tampa, Florida. The Company entered the Tampa market in 1997, with plans to
develop two new business parks, totaling approximately 1.5 million square feet.
At year-end, the Company's 174,000 square foot in-service industrial property
was 100% occupied. The Company currently maintains a local office in Tampa and
also uses personnel located in the Company's Orlando, Florida office to support
its Tampa operations.
Jacksonville, Florida. The Company entered the Jacksonville market in 1997
by acquiring the rights to the remaining land at Jacksonville International
Tradeport, the only industrial park in a tax increment financing district,
located near the Jacksonville International Airport. The Company estimates that
the development potential of this land at December 31, 1998, may total more
than 2.0 million square feet. The Company's Jacksonville office is lead by two
local market officers who have primary responsibility for developing
Jacksonville International Tradeport. The Company's 10 in-service properties in
Jacksonville were 93.5% occupied as of December 31, 1998.
Miami, Florida. The Company entered the Miami market in early 1998 through
the acquisition of Beacon Centre, a 24-building, 2.5 million square foot mixed
use industrial, office and retail development, located near the Miami
International Airport. In connection with the acquisition of Beacon Centre, the
Company also acquired a one-third interest in Codina Group, Inc., a South
Florida commercial and industrial real estate services company that developed
the property (see notes 3 and 5 to the consolidated financial statements). St.
Joe Corporation, a publicly traded company which, through its subsidiaries, is
the largest single private landowner in the State of Florida, also purchased a
one-third interest in Codina Group, Inc. Through these combined transactions,
the Company is pursuing additional development and acquisition activity
throughout South Florida.
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Dallas/Ft. Worth, Texas. The Company entered the Dallas/Ft. Worth market in
1998 through the acquisition of nine industrial buildings totaling
approximately 1.9 million square feet and approximately 68.0 acres of
undeveloped land. The Company hired a local market officer whose primary
responsibilities are to manage the existing portfolio and expand the Company's
operations in Texas through both development and acquisition of properties.
Spartanburg, South Carolina. Spartanburg is the Company's smallest market
and is served out of the Company's Atlanta headquarters. The Company's
activities in Spartanburg consist of properties owned and developed at Hillside
business park. Hillside is located one exit north on I-85 from BMW's automobile
production facility that opened in 1995. The occupancy rate of the Company's
approximately 386,000 square feet of three completed and in-service industrial
properties in Spartanburg was 100% as of December 31, 1998.
BUSINESS GROWTH STRATEGY
Development
The Company is an experienced developer of institutional-quality, general
purpose industrial and suburban office multi-tenant and build-to-suit
properties, and has personnel engaged in all phases of the development process,
including market analysis, site selection, zoning, design, civil engineering,
construction and landscaping. The Company currently has adequate sources for
raw materials needed to construct its new properties, including access to
qualified labor and subcontractors. In 1998 and 1997, the Company completed and
stabilized 45 development properties and three property expansions totaling
approximately 5.3 million square feet.
Acquisitions
The Company balances its development activity by making opportunistic
acquisitions in strategic locations that establish or enhance the Company's
market position, or where the Company's skills and market knowledge can enhance
value through additional development, property management or physical upgrades.
In 1998 and 1997, the Company acquired 85 properties totaling approximately 7.0
million square feet.
Risks of Development and Acquisitions
New project development is subject to a number of risks, including risks of
construction delays or cost overruns that may increase project costs, risks
that the project will not achieve anticipated occupancy levels or sustain
anticipated rent levels, and new project commencement risks such as the failure
to obtain zoning, occupancy and other required government permits and
authorizations, and the incurrence of development costs in connection with
projects that are not pursued to completion.
Acquisitions entail risks that (i) existing agreements to acquire properties
may fail to close, (ii) acquired properties may not perform in accordance with
management's expectations, including projected occupancy and rental rates,
(iii) the senior executives and employees of an acquired business will not be
successfully integrated into the Company, or (iv) the Company may have
underestimated the cost of improvements required to bring an acquired property
up to standards established for the market position intended for that property.
Although the Company has successfully acquired properties and effectively
integrated their operations in the past, there can be no assurance that the
Company will be able to continue to make successful acquisitions in the future
or that any such acquisitions will be successfully integrated into the
Company's operations. Furthermore, there can be no assurance that an
acquisition will not have an adverse effect upon the Company's operating
results, particularly in the fiscal quarters immediately following the
consummation of such acquisition, or that the Company will be able to continue
to operate an acquired business in a profitable manner.
Both development and acquisitions also involve risks that the Company will
fail to obtain adequate sources of financing (see "Management's Discussion and
Analysis of Financial Condition and Results of Operations--Liquidity and
Capital Resources").
11
<PAGE>
Land Control
An important part of the Company's development strategy is to own or control
land sufficient to allow it to develop exclusive business park environments and
to accommodate the expansion and relocation needs of its tenants. The Company
employs a number of ownership and control arrangements in its land strategy,
including outright purchases, joint ventures, staged acquisitions, options and
exclusive marketing and development agreements. By doing so, the Company
believes that it can control sufficient land acreage, while mitigating the
negative impact of land carrying costs.
At December 31, 1998, the Company owned or controlled (through agreements to
purchase, joint ventures, options and marketing and development agreements)
approximately 1,871 net usable acres of undeveloped land, located primarily in
existing business parks with zoning and infrastructure in place. The Company
believes the development potential of this land may total approximately 19.6
million square feet (see "Properties").
Internal Growth
The Company attempts to maximize its available cash flow by increasing the
occupancy rate of those properties that are not fully leased, maintaining high
occupancy rates, raising effective rental rates and controlling operating
expenses and capital expenditures. The occupancy rate of the Company's in-
service properties (i.e., those having reached substantial lease-up) was 94.7%
as of December 31, 1998. The Company believes that its emphasis on providing
quality facilities and client service has resulted in a high retention of its
tenants and low turnover. Of the leases that expired in 1998 (representing
approximately 4.0 million square feet), tenants occupying approximately 70% of
such space renewed their leases with the Company or expanded into larger spaces
under new leases with the Company. These expansions totaled approximately
1,800,000 square feet. The Company believes that this high retention of its
tenants results in lower re-leasing costs and decreased potential loss due to
vacancy.
The leases for the Company's properties have terms ranging from one to
fifteen years, with terms for multi-tenant properties typically between three
and five years and for build-to-suit properties typically between seven and ten
years. Typically, the tenant in a multi-tenant property pays for increases in
taxes, operating costs and insurance above a base year level. For build-to-suit
properties, the tenant typically pays for all taxes, insurance and operating
costs. Approximately 69% of the Company's leases (based on leased square
footage as of December 31, 1998) contain contractual rent escalations.
The high average occupancy of the Company's in-service properties reflects
the generally strong supply and demand conditions in its markets. As a result,
the Company continues to be able to increase average rents and generally to
avoid offering tenant concessions. During 1998, the Company renewed or re-
leased approximately 4.0 million square feet of second-generation space in its
properties. Cash-basis rental rates on a comparable space basis increased by an
average of 5.9%, calculated by comparing the initial cash-basis rent to be paid
by the tenant under the new or renewed lease with the ending cash-basis rent
paid by the tenant under the previous lease on the same space.
As shown in the table provided under "Properties--Tenants," no single tenant
accounted for more than 1.9% of annualized base rent from leases under which
tenants were paying rent as of December 31, 1998.
Geographic Expansion
From the Company's base in metropolitan Atlanta, Georgia, the Company
intends to continue expanding carefully into new markets. The Company expands
into other markets only when it believes it can achieve over time a significant
market presence. The Company's geographic expansion activities to date have
included the 1990 expansion into Spartanburg, South Carolina, the 1995
expansion into Orlando, Florida, the 1996 expansions into Nashville, Tennessee
and the Research Triangle area of North Carolina, the 1997 expansions
12
<PAGE>
into Tampa and Jacksonville, Florida and the 1998 expansions into Miami and the
greater South Florida markets and the Dallas, Texas market. As a result of its
geographic expansion, the Company has reduced its concentration of properties
in metropolitan Atlanta, Georgia, to 56.8% at December 31, 1998 (based on
square footage of in-service properties, excluding properties under development
and/or under agreement to acquire), from 95% at December 31, 1995 (calculated
on the same basis). The Company's concentration in metropolitan Atlanta,
Georgia is expected to continue to decline with the expansions into additional
markets. For a breakdown of the Company's properties by market, including
properties under development or in lease-up or under agreement to acquire, see
"Properties".
ITEM 2. PROPERTIES
As of December 31, 1998, the Company owned or had agreements to acquire 373
properties, including 52 properties that were under development or in lease-up
and two properties which were under agreement to acquire. Four of these
properties were held in 50% owned entities and one property under development
was held in an 85% owned joint venture. Of these 373 properties, 322 were
industrial buildings, 46 were office buildings and five were retail buildings.
The Company's 319 completed and in-service properties (i.e., excluding
properties under development or in lease-up or under agreement to acquire) were
94.7% occupied at December 31, 1998.
The following table sets forth, as of December 31, 1998, the location and
type of property by square feet for the 373 properties discussed above.
Location and Type of Properties
(by square feet)
<TABLE>
<CAPTION>
Percent
Business Bulk Business Total Suburban of
Location Distribution Warehouse Service Industrial Office Retail Total Total
- -------- ------------ --------- --------- ---------- --------- ------- ---------- -------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Atlanta, GA............. 7,763,742 5,380,898 1,731,487 14,876,127 1,374,740 48,977 16,299,844 51.4%
Nashville, TN........... 2,030,751 731,886 633,199 3,395,836 174,436 -- 3,570,272 11.3%
Research Triangle, NC... 867,175 -- 1,092,418 1,959,593 1,308,313 -- 3,267,906 10.3%
Miami, FL............... 2,310,596 -- 105,980 2,416,576 63,240 415,855 2,895,671 9.1%
Dallas/Ft. Worth, TX.... 241,029 1,682,217 -- 1,923,246 152,000 -- 2,075,246 6.5%
Orlando, FL............. 394,657 689,883 288,487 1,373,027 109,021 -- 1,482,048 4.7%
Jacksonville, FL........ -- 732,130 -- 732,130 72,205 -- 804,335 2.5%
Spartanburg, SC......... 198,000 293,200 -- 491,200 -- -- 491,200 1.5%
Tampa, FL............... 160,680 173,514 -- 334,194 125,000 -- 459,194 1.4%
Ft. Lauderdale, FL...... 275,336 -- -- 275,336 99,000 -- 374,336 1.3%
---------- --------- --------- ---------- --------- ------- ---------- -----
Total................... 14,241,966 9,683,728 3,851,571 27,777,265 3,477,955 464,832 31,720,052 100.0%
========== ========= ========= ========== ========= ======= ========== =====
Percent of Total........ 44.9% 30.5% 12.1% 87.5% 11.0% 1.5% 100.0%
========== ========= ========= ========== ========= ======= ==========
</TABLE>
Included in the 373 properties discussed above are 21 industrial properties
totaling approximately 1,181,000 square feet that were sold in January 1999. In
addition, the properties discussed above include five other industrial
properties, included one property under development, totaling approximately
1,255,000 square feet that are under agreement to be sold in 1999. All of these
properties are located in Atlanta, Georgia.
Industrial Properties
The Company owned, had under development or in lease-up or had agreements to
acquire 322 industrial buildings as of December 31, 1998. These buildings can
be characterized by their use: business distribution, bulk warehouse or
business service. The Company owned, had under development or in lease-up or
had agreements to acquire 191 business distribution buildings, 58 bulk
warehouse buildings, and 73 business service buildings at year-end.
13
<PAGE>
The Company's business distribution buildings are generally 20,000 to
200,000 square feet in size, have warehouse clear ceiling heights of 18 to 24
feet, building depths of 100 to 240 feet, office finish of 10% to 55% and dock-
high truck doors (which are designed to accommodate tractor-trailers). These
buildings may function as headquarters, sales and administration, research and
development and light manufacturing facilities in addition to distribution
facilities.
The Company's bulk warehouse buildings are generally 75,000 to 360,000
square feet in size, have clear ceiling heights of 24 to 30 feet, building
depths of 200 to 500 feet, office finish of 2% to 20% and dock-high truck
doors. These buildings generally function as regional or local distribution and
warehouse facilities.
The Company's business service buildings are generally 20,000 to 110,000
square feet in size, have clear ceiling heights of 14 to 16 feet, building
depths of 80 to 160 feet, office finish of 35% to 100% and drive-in truck doors
(which are designed to accommodate delivery vans). These buildings are used by
tenants primarily for clerical, administrative and executive offices.
Office Properties
At December 31, 1998, the Company owned, had under development or in lease-
up or had agreements to acquire 46 suburban office buildings. The Company's
typical suburban office building ranges in size from approximately 30,000 to
150,000 square feet, with grade-level parking with an average of 4.5 parking
spaces per 1,000 square feet of leasable space.
Occupancy Rate of In-Service Properties by Property Type
The occupancy rate of the Company's in-service properties as of December 31,
1998 (by property type) was as follows:
Occupancy Rate of In-Service Properties
as of December 31, 1998
(by property type)
<TABLE>
<S> <C>
Business distribution.................................................. 94.3%
Bulk warehouse......................................................... 95.4%
Business service....................................................... 95.9%
----
Total industrial average.............................................. 94.9%
----
Suburban office........................................................ 92.8%
Retail................................................................. 90.7%
----
Total average......................................................... 94.7%
====
</TABLE>
Business Parks
A key to the Company's success has been the development of properties within
business parks where the Company controls virtually all aspects of the
development process, including site selection and project concept, master
planning and zoning, design and construction, leasing and property management.
For developments of land held in joint ventures, the Company must obtain
certain approvals from its joint venture partners.
The Company's business parks are generally in proximity to an interstate
highway interchange and are close to retail and residential amenities. The
business parks are generally master planned to accommodate a variety of uses.
The business parks are generally well landscaped with protective covenants
which restrict the
14
<PAGE>
14-18 uses and control the architecture and signage. The majority of the
Company's properties and land held for development are located in business
parks. The Company's ability to develop both multi-tenant buildings for lease
and build-to-suit buildings for lease or sale results in more rapid development
of the business parks. The Company's control of land in business parks also
generates revenues from various sources including land sales, building
construction, landscape installation and maintenance, lease commissions and
property management fees.
The buildings within business parks typically have a mix of uses ranging
from distribution and service to office and light manufacturing. The Company
facilitates the coexistence of these diverse functions within business parks
through controlled signage and architecture, landscaping and building
placement.
The information provided in the table set forth below reflects information
regarding the Company's properties (summarized by submarket and business park)
as of December 31, 1998, including properties under development or in lease-up,
or under agreement to acquire.
Properties and Business Parks
(as of December 31, 1998)
<TABLE>
<CAPTION>
Total
Number of Square Office Occupancy
Market and Business Park Buildings Feet Finish(1) Rate(2)
- ------------------------ --------- --------- --------- ---------
<S> <C> <C> <C> <C>
IN-SERVICE PROPERTIES
METROPOLITAN ATLANTA, GA
Northeast/I-85 Submarket
Gwinnett Park............ 39 2,416,538 37.8% 87.1%
Horizon (3).............. 9 1,937,127 7.6% 97.0%
Northwoods............... 16 709,625 48.0% 100.0%
Berkeley Lake Distribu-
tion Center (4)......... 4 666,442 5.9% 100.0%
Gwinnett Pavilion........ 8 538,713 38.9% 99.8%
The Business Park at Sug-
arloaf (5).............. 4 505,110 52.1% 100.0%
Peachtree Corners Busi-
ness Center............. 4 356,355 11.2% 95.8%
Pinebrook................ 3 346,402 13.9% 100.0%
Northbrook............... 2 308,480 7.9% 83.1%
Druid Chase Office Park.. 4 281,198 100.0% 79.5%
Meadowbrook.............. 4 249,767 34.8% 100.0%
Park Creek............... 3 183,927 71.0% 98.9%
Crestwood Pointe......... 1 105,295 100.0% 93.1%
Peachtree Corners Tech-
nology Center........... 2 102,800 40.5% 100.0%
River Green.............. 2 59,138 80.0% 100.0%
Other Northeast/I-85..... 9 606,834 33.8% 96.7%
--- --------- ----- -----
Total Northeast/I-85
Submarket.............. 114 9,373,751 31.2% 94.4%
--- --------- ----- -----
North Central Submarket
Northmeadow.............. 12 652,279 79.1% 100.0%
Hembree Park............. 7 410,304 62.0% 97.0%
Hembree Crest............ 4 285,247 16.3% 100.0%
Mansell Commons.......... 9 223,762 61.5% 100.0%
Northwinds Pointe........ 2 213,490 100.0% 98.7%
Brookside Office Park.... 1 106,631 100.0% 100.0%
Other North Central...... 2 128,693 55.7% 100.0%
--- --------- ----- -----
Total North Central
Submarket.............. 37 2,020,406 66.7% 99.2%
--- --------- ----- -----
</TABLE>
15
<PAGE>
Properties and Business Parks
(as of December 31, 1998)
<TABLE>
<CAPTION>
Total
Number of Square Office Occupancy
Market and Business Park Buildings Feet Finish(1) Rate(2)
- ------------------------ --------- ---------- --------- ---------
<S> <C> <C> <C> <C>
Airport/South Atlanta Submarket
Southridge (6)....................... 9 560,241 19.0% 98.2%
Liberty Distribution Center.......... 1 300,600 1.0% 100.0%
Sullivan International (6)........... 4 78,168 39.4% 100.0%
Other Airport/South Atlanta (7)...... 1 253,890 1.2% 100.0%
--- ---------- ----- -----
Total Airport/South Atlanta
Submarket.......................... 15 1,192,899 12.0% 99.2%
--- ---------- ----- -----
Northwest/I-75 Submarket
Northwest Business Center............ 12 473,348 65.4% 95.2%
Franklin Forest...................... 9 306,321 69.7% 88.6%
Town Point........................... 3 305,200 21.7% 100.0%
Other Northwest/I-75 (8)............. 2 385,551 15.0% 100.0%
--- ---------- ----- -----
Total Northwest/I-75 Submarket...... 26 1,470,420 44.0% 96.1%
--- ---------- ----- -----
Stone Mountain Submarket
Park North (6)....................... 8 542,470 37.0% 86.9%
--- ---------- ----- -----
Total Stone Mountain Submarket...... 8 542,470 37.0% 86.9%
--- ---------- ----- -----
Chattahoochee Submarket
Other Chattahoochee.................. 1 48,007 21.9% 100.0%
--- ---------- ----- -----
Total Chattahoochee Submarket....... 1 48,007 21.9% 100.0%
--- ---------- ----- -----
TOTAL METROPOLITAN ATLANTA, GA...... 201 14,647,953 36.0% 95.4%
--- ---------- ----- -----
NASHVILLE, TN
Airpark Business Center.............. 13 1,160,212 39.2% 94.4%
Brentwood South Business Center...... 6 504,264 25.2% 95.5%
Aspen Grove Business Center.......... 3 394,713 23.9% 98.2%
Four-Forty Business Center........... 2 269,502 18.8% 100.0%
Metro Center......................... 3 234,552 63.6% 100.0%
Royal Parkway Center................. 2 146,031 92.9% 100.0%
--- ---------- ----- -----
TOTAL NASHVILLE, TN................. 29 2,709,274 37.3% 96.5%
--- ---------- ----- -----
RESEARCH TRIANGLE, NC
Perimeter Park West.................. 8 591,736 92.9% 95.1%
Perimeter Park....................... 8 473,574 96.8% 97.2%
Enterprise Center.................... 4 425,234 74.7% 89.1%
Metro Center......................... 3 271,219 19.8% 94.5%
Woodlake Center...................... 2 205,500 63.5% 100.0%
Research Triangle Industrial Center.. 3 154,056 8.0% 69.1%
Spring Forest Business Center........ 2 109,965 100.0% 81.4%
Interchange Plaza.................... 2 106,781 49.1% 100.0%
Regency Forest....................... 1 103,340 100.0% 100.0%
Other Research Triangle.............. 1 93,990 95.1% 100.0%
--- ---------- ----- -----
TOTAL RESEARCH TRIANGLE, NC......... 34 2,535,395 74.0% 93.2%
--- ---------- ----- -----
</TABLE>
16
<PAGE>
Properties and Business Parks
(as of December 31, 1998)
<TABLE>
<CAPTION>
Total
Number of Square Office Occupancy
Market and Business Park Buildings Feet Finish(1) Rate(2)
- ------------------------ --------- ---------- --------- ---------
<S> <C> <C> <C> <C>
MIAMI, FL
Beacon Centre....................... 23 2,446,071 38.9% 93.4%
--- ---------- ----- -----
TOTAL MIAMI, FL.................... 23 2,446,071 38.9% 93.4%
--- ---------- ----- -----
DALLAS/FT. WORTH, TX
Northgate International ............ 2 434,800 3.8% 88.4%
Water's Ridge....................... 2 359,515 4.2% 100.0%
Freeport North...................... 1 280,000 33.0% 100.0%
CentrePort Distribution Cen-
ter (10)........................... 1 310,000 0.0% 50.0%
--- ---------- ----- -----
TOTAL DALLAS/FT. WORTH, TX......... 6 1,384,315 8.9% 85.1%
--- ---------- ----- -----
ORLANDO, FL
Parksouth Distribution Center....... 4 486,883 12.5% 97.7%
Airport Commerce Center............. 7 310,007 36.2% 96.9%
Technology Park..................... 1 60,892 93.2% 100.0%
--- ---------- ----- -----
TOTAL ORLANDO, FL.................. 12 857,782 26.8% 97.5%
--- ---------- ----- -----
JACKSONVILLE, FL
Jacksonville International
Tradeport.......................... 6 585,030 19.0% 93.5%
Centurion Square.................... 4 72,205 98.6% 100.0%
--- ---------- ----- -----
TOTAL JACKSONVILLE, FL............. 10 657,235 27.7% 94.2%
--- ---------- ----- -----
SPARTANBURG, SC
Hillside............................ 3 385,600 15.2% 100.0%
--- ---------- ----- -----
TOTAL SPARTANBURG, SC.............. 3 385,600 15.2% 100.0%
--- ---------- ----- -----
TAMPA, FL
Fairfield Distribution Center....... 1 173,514 6.3% 100.0%
--- ---------- ----- -----
TOTAL TAMPA, FL.................... 1 173,514 6.3% 100.0%
--- ---------- ----- -----
TOTAL PROPERTIES IN SERVICE........ 319 25,797,139 37.7% 94.7%
--- ---------- ----- -----
PROPERTIES UNDER DEVELOPMENT OR IN
LEASE-UP
METROPOLITAN ATLANTA, GA
Northeast/I-85 Submarket
Horizon............................. 1 247,700 5.0% 0.0%
The Business Park at Sugarloaf...... 2 158,898 52.0% 62.5%
Crestwood Pointe.................... 1 105,295 100.0% 75.5%
Peachtree Corners Technology Cen-
ter................................ 1 59,200 25.0% 19.6%
Other Northeast/I-85................ 1 35,100 15.0% 100.0%
--- ---------- ----- -----
Total Northeast/I-85 Submarket..... 6 606,193 36.4% 37.2%
--- ---------- ----- -----
North Central Submarket
Hembree Park........................ 2 196,950 25.0% 54.0%
Brookside........................... 1 128,355 100.0% 0.0%
Ridgeland Corporate Center.......... 1 125,000 24.0% 100.0%
Northmeadow......................... 2 109,790 100.0% 93.8%
--- ---------- ----- -----
Total North Central Submarket ..... 6 560,095 56.7% 59.7%
--- ---------- ----- -----
</TABLE>
17
<PAGE>
Properties and Business Parks
(as of December 31, 1998)
<TABLE>
<CAPTION>
Total
Number of Square Office Occupancy
Market and Business Park Buildings Feet Finish(1) Rate(2)
- ------------------------ --------- --------- --------- ---------
<S> <C> <C> <C> <C>
Airport/South Atlanta Submarket
Liberty Distribution Center........... 1 210,000 5.0% 0.0%
Southridge (9)........................ 1 182,400 15.0% 0.0%
--- --------- ----- -----
Total Airport/South Atlanta
Submarket........................... 2 392,400 9.6% 0.0%
--- --------- ----- -----
Northwest/I-75 Submarket
Town Point............................ 1 93,203 100.0% 0.0%
--- --------- ----- -----
Total Northwest/I-75 Submarket....... 1 93,203 100.0% 0.0%
--- --------- ----- -----
TOTAL METROPOLITAN ATLANTA, GA....... 15 1,651,891 40.5% 33.9%
--- --------- ----- -----
NASHVILLE, TN
Aspen Grove Business Center........... 4 278,113 60.4% 3.5%
Nashville Business Center............. 1 194,750 10.0% 37.5%
Four-Forty Business Center............ 2 174,444 28.7% 75.1%
Cumberland Business Center at Metro
Center............................... 1 166,441 10.0% 3.0%
Airpark Business Center............... 1 47,250 100.0% 29.0%
--- --------- ----- -----
TOTAL NASHVILLE, TN.................. 9 860,998 35.0% 27.0%
--- --------- ----- -----
RESEARCH TRIANGLE, NC
Perimeter Park West................... 3 332,914 100.0% 86.1%
Woodlake Center....................... 2 236,400 15.9% 0.0%
Regency Forest........................ 1 103,597 100.0% 100%
Enterprise Center..................... 1 59,600 100.0% 0.0%
--- --------- ----- -----
TOTAL RESEARCH TRIANGLE, NC.......... 7 732,511 72.9% 53.3%
--- --------- ----- -----
DALLAS/FT. WORTH, TX
Freeport North........................ 2 423,005 24.2% 70.4%
Texas Plaza........................... 1 115,926 70.0% 53.3%
Legacy Business Park.................. 1 100,000 100.0% 100.0%
--- --------- ----- -----
TOTAL DALLAS/FT. WORTH, TX........... 4 638,931 44.4% 71.9%
--- --------- ----- -----
ORLANDO, FL
Parksouth Distribution Center......... 1 203,000 10.0% 0.0%
Technology Park....................... 2 121,775 75.0% 71.2%
Northpoint............................ 1 109,021 100.0% 81.0%
Celebration Service Center............ 2 105,820 75.0% 37.9%
Lee Vista............................. 1 84,650 25.0% 30.8%
--- --------- ----- -----
TOTAL ORLANDO, FL.................... 7 624,266 51.4% 38.6%
--- --------- ----- -----
FORT LAUDERDALE, FL
Port-95............................... 2 275,336 13.5% 69.5%
Beacon Pointe at Weston............... 1 99,000 100.0% 0.0%
--- --------- ----- -----
TOTAL FORT LAUDERDALE, FL............ 3 374,336 36.4% 51.1%
--- --------- ----- -----
MIAMI, FL
Beacon Station at Gran Park........... 2 359,600 5.0% 0.0%
--- --------- ----- -----
TOTAL MIAMI, FL...................... 2 359,600 5.0% 0.0%
--- --------- ----- -----
</TABLE>
18
<PAGE>
Properties and Business Parks
(as of December 31, 1998)
<TABLE>
<CAPTION>
Total
Number of Square Office Occupancy
Market and Business Park Buildings Feet Finish(1) Rate(2)
- ------------------------ --------- ---------- --------- ---------
<S> <C> <C> <C> <C>
TAMPA, FL
Fairfield Distribution Center........ 2 160,680 16.4% 39.8%
Highland Oaks........................ 1 125,000 100.0% 0.0%
--- ---------- ----- -----
TOTAL TAMPA, FL..................... 3 285,680 53.0% 22.4%
--- ---------- ----- -----
JACKSONVILLE, FL
Jacksonville International
Tradeport........................... 1 147,100 10.0% 41.7%
--- ---------- ----- -----
TOTAL JACKSONVILLE, FL.............. 1 147,100 10.0% 41.7%
--- ---------- ----- -----
SPARTANBURG, SC
Hillside............................. 1 105,600 20.0% 0.0%
--- ---------- ----- -----
TOTAL SPARTANBURG, SC............... 1 105,600 20.0% 0.0%
--- ---------- ----- -----
TOTAL PROPERTIES UNDER DEVELOPMENT
OR IN LEASE-UP..................... 52 5,780,913 42.4% 38.1%
--- ---------- ----- -----
PROPERTIES UNDER AGREEMENT TO ACQUIRE
MIAMI, FL
Beacon Centre........................ 1 90,000 15.0% 79.8%
--- ---------- ----- -----
TOTAL MIAMI, FL..................... 1 90,000 15.0% 79.8%
--- ---------- ----- -----
DALLAS/FT. WORTH, TX
Legacy Business Park................. 1 52,000 100.0% 100.0%
--- ---------- ----- -----
TOTAL DALLAS/FT. WORTH, TX.......... 1 52,000 100.0% 100.0%
--- ---------- ----- -----
TOTAL PROPERTIES UNDER AGREEMENT TO
ACQUIRE............................ 2 142,000 46.1% 87.2%
--- ---------- ----- -----
TOTAL PORTFOLIO .................... 373 31,720,052 38.6% 84.3%
=== ========== ===== =====
</TABLE>
- --------
(1) Represents the percentage of rentable square feet that is built out as
office space rather than as warehouse or distribution space. For properties
under development represents current budgeted office finish.
(2) Occupancy or leasing rate includes percentage occupancy for completed and
in service properties at December 31, 1998. For properties under
development or in lease-up represents leasing or pre-leasing as of February
15, 1999.
(3) Includes one building totaling 356,000 square feet under agreement to sell.
(4) Includes one building totaling 240,000 square feet under agreement to sell.
(5) Includes two buildings totaling 336,000 square feet held in unconsolidated
entities.
(6) Business park was sold in January 1999.
(7) Includes one building totaling 253,890 square feet under agreement to sell.
(8) Includes one building totaling 222,900 square feet under agreement to sell
and one building totaling 162,651 square feet leased under a direct
financing lease.
(9) Includes one building totaling 182,400 square feet under agreement to sell.
(10) Includes one building totaling 310,000 square feet held in an
unconsolidated entity.
19
<PAGE>
Development Land
The following schedule details the Company's undeveloped land interests at
December 31, 1998. The land detailed below is located primarily in existing
business parks with zoning and infrastructure in place. The Company estimates
that the total development potential of the development land could ultimately
total approximately 19.6 million square feet.
Development Land
as of December 31, 1998
(in net usable acres)
<TABLE>
<CAPTION>
Research Ft.
Atlanta Orlando Jacksonville Nashville Triangle Miami Lauderdale Tampa Spartanburg Dallas
--------- --------- ------------ --------- --------- ------ ---------- --------- ----------- ---------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Company owned... 296.7 48.9 9.5 44.0 104.9 -- -- 43.4 -- 67.9
Owned in joint
ventures(1).... 112.6 -- -- -- -- -- -- -- 335.6 --
Under agreement
to acquire(2).. 66.5 -- 16.0 85.9 9.8 9.3 16.9 23.4 -- --
Optioned........ -- 102.0 177.6 -- 110.3 -- 50.0 18.6 -- --
Marketing/ development
agreements(3).. 98.1 -- -- -- -- -- -- 23.4 -- --
--------- --------- --------- --------- --------- ------ ------- --------- --------- ---------
Total........... 573.9 150.9 203.1 129.9 225.0 9.3 66.9 108.8 335.6 67.9
========= ========= ========= ========= ========= ====== ======= ========= ========= =========
Estimated
development
potential
(square
feet)(4)....... 6,557,500 1,730,000 2,132,000 1,483,000 2,310,000 85,000 675,000 1,290,000 2,340,000(5) 1,040,000
========= ========= ========= ========= ========= ====== ======= ========= ========= =========
<CAPTION>
Total
----------
<S> <C>
Company owned... 615.3
Owned in joint
ventures(1).... 448.2
Under agreement
to acquire(2).. 227.8
Optioned........ 458.5
Marketing/ development
agreements(3).. 121.5
----------
Total........... 1,871.3
==========
Estimated
development
potential
(square
feet)(4)....... 19,642,500
==========
</TABLE>
- -------
(1) The Company's interests in its undeveloped land held in joint ventures
range from 0% to 30%.
(2) The Company has agreed to purchase this land over various periods ranging
up to approximately five years, subject to the completion of due diligence
and customary closing conditions.
(3) Under the terms of the development agreements, the Company will generally
either develop properties for a fee, or have certain rights to acquire land
for development or to acquire developed properties upon their completion.
The marketing agreements generally provide for the Company or its
subsidiaries to be paid marketing or management fees in conjunction with
services provided. Both the development and marketing agreements generally
contain certain non-competition provisions covering a limited geographic
area.
(4) Based upon the Company's estimate of the appropriate density and
anticipated building types that may be developed, net of land necessary to
provide for adequate infrastructure. There can be no assurance that the
Company's estimate of development potential will be realized.
(5) The Company estimates it will eventually develop approximately one-half the
acreage in Spartanburg it owns in joint ventures and that the remainder
will be sold to third parties. Estimated development potential reflects
only that land which is not currently expected to be sold.
20
<PAGE>
Tenants
The Company believes that its emphasis on developing quality properties and
providing a high level of client service has resulted in increased tenant
retention. As of December 31, 1998, the Company's properties were leased to
1,016 tenants including local, regional, national and international companies.
The Company's 30 largest tenants (measured by annualized base rent at December
31, 1998) occupy a total of approximately 5.5 million square feet and represent
25.2% of the Company's total annualized base rent as shown in the table below.
<TABLE>
<CAPTION>
30 Largest Tenants Measured by Annualized Base Rent
------------------------------------------------------
% of Total
Square Number Annualized Annualized
Tenant Feet of Leases Base Rent(1) Base Rent(1) Location
------ --------- --------- ----------- ----------- --------
<S> <C> <C> <C> <C> <C>
1Northern Telecom,
Inc.(2)................ 401,349 8 $ 3,002,853 1.9% NC,TN
2Scientific Atlanta,
Inc.................... 573,951 11 2,621,439 1.7% GA
3United States Postal
Service................ 409,026 5 2,336,893 1.5% FL,TX
4Interpath
Communications, Inc.... 178,456 3 2,128,010 1.4% NC
5Hussmann Corporation... 374,045 1 1,984,687 1.3% GA
6PPD Pharmaco, Inc. .... 164,495 5 1,888,173 1.2% NC
7Radiant Systems,
Inc. .................. 106,631 1 1,609,789 1.0% GA
8Alltel................. 114,476 7 1,539,758 1.0% NC
9Honeywell, Inc. ....... 119,961 4 1,501,052 1.0% GA
10 Ikon Office
Solutions, Inc......... 177,000 4 1,468,400 0.9% GA
11GTE Mobilnet Service
Corporation............ 126,124 3 1,351,146 0.9% NC,GA
12United Healthcare
Services, Inc. ........ 110,000 2 1,208,000 0.8% GA,SC
13Radian International
LLC.................... 90,159 2 1,173,802 0.8% GA
14Innotrac Corporation.. 303,481 2 1,124,905 0.7% GA
15Moore U.S.A., Inc..... 274,951 2 1,085,266 0.7% TX,FL
16AIG Claim Services,
Inc. .................. 52,372 1 1,050,059 0.7% GA
17Tech Data
Corporation............ 138,996 1 1,049,492 0.7% FL
18Square D Company...... 102,262 2 1,000,749 0.6% TN,FL
19DeVry Inc............. 64,981 1 928,269 0.6% GA
20The Athlete's Foot
Group, Inc. ........... 162,651 1 924,069 0.6% GA
21Anixter, Inc.......... 167,460 2 913,150 0.6% GA
22Ingram-Micro, Inc. ... 193,973 4 909,466 0.6% GA,FL
23Merisel, Inc.......... 142,487 2 900,147 0.6% FL
24Fisher Scientific
Company................ 223,219 1 875,019 0.6% GA
25Reckitt & Colman,
Inc.................... 356,000 2 871,840 0.6% GA
26Tekelec............... 98,210 3 842,303 0.5% NC
27Data General
Corporation............ 89,680 2 817,304 0.5% GA
28National Data
Corporation............ 50,283 4 786,777 0.4% GA
29Saab Cars U.S.A.,
Inc. .................. 63,625 3 749,509 0.4% GA
30Vanstar Corporation... 86,880 4 740,446 0.4% GA
--------- --- ----------- ----
5,517,184 93 $39,382,772 25.2%
========= === =========== ====
</TABLE>
- --------
(1) Annualized cash base rent net of rental concessions, if any, based on
leases in place for stabilized properties and properties in lease-up where
tenants were paying rent as of December 31, 1998.
(2) Leases with Northern Telecom, totaling 370,824 square feet, expire on June
30, 2005, but are subject to an early-termination right that permits
Northern Telecom to terminate any of the leases on June 30, 2000, by
delivering an early-termination notice to the Company on or before June 30,
1999. In the event it exercises its early-termination option, Northern
Telecom will be obligated to make certain termination payments to the
Company.
21
<PAGE>
Lease Expirations
The following tables show scheduled lease expirations for the Company's
total property portfolio, for its industrial property portfolio and for its
office property portfolio based on leases under which tenants were paying rent
as of December 31, 1998, assuming no exercise of renewal options or termination
rights, if any:
<TABLE>
<CAPTION>
Annualized % of Total
Year of Square Feet % of Total Base Rent(1) Annualized
Expiration (in thousands) Square Feet (in thousands) Base Rent
---------- -------------- ----------- -------------- ----------
<S> <C> <C> <C> <C> <C>
Total Portfolio 1999 3,871 15.6% $ 22,550 13.8%
2000 3,770 15.2% 23,119 14.2%
2001 3,066 12.3% 18,784 11.5%
2002 2,942 11.8% 23,672 14.5%
2003 3,417 13.8% 27,148 16.6%
2004 1,307 5.3% 8,276 5.1%
2005 1,417 5.7% 4,927 3.0%
2006 769 3.1% 3,977 2.4%
2007 1,335 5.4% 8,528 5.2%
2008 1,622 6.5% 13,772 8.4%
2009 149 0.6% 1,095 0.7%
2010 65 0.3% 90 0.1%
2011 405 1.6% 2,201 1.3%
2012 152 0.6% 1,744 1.1%
2013 and later 544 2.2% 3,238 2.1%
------ ----- -------- -----
24,831(2) 100.0% $163,121 100.0%
====== ===== ======== =====
<CAPTION>
Annualized % of Total
Year of Square Feet % of Total Base Rent(1) Annualized
Expiration (in thousands) Square Feet (in thousands) Base Rent
---------- -------------- ----------- -------------- ----------
<S> <C> <C> <C> <C> <C>
Industrial Properties 1999 3,600 16.0% $ 19,112 14.9%
2000 3,525 15.7% 19,658 15.3%
2001 2,932 13.1% 16,900 13.2%
2002 2,521 11.2% 16,580 12.9%
2003 2,965 13.2% 19,239 15.0%
2004 1,191 5.3% 6,304 4.9%
2005 1,386 6.2% 4,467 3.5%
2006 748 3.3% 3,608 2.8%
2007 1,271 5.7% 7,936 6.2%
2008 1,336 6.0% 8,319 6.5%
2010 149 0.7% 1,095 0.9%
2009 0 0.0% 0 0.0%
2011 349 1.6% 2,121 1.7%
2012 87 0.4% 580 0.5%
2013 and later 392 1.6% 2,158 1.7%
------ ----- -------- -----
22,452 100.0% $128,077 100.0%
====== ===== ======== =====
</TABLE>
22
<PAGE>
<TABLE>
<CAPTION>
Annualized
Square Feet Base Rent(1) % of Total
Year of (in % of Total (in Annualized
Expiration thousands) Square Feet thousands) Base Rent
---------- ----------- ----------- ------------ ----------
<S> <C> <C> <C> <C> <C>
Suburban Office
Properties 1999 222 11.3% $ 3,011 9.4%
2000 194 9.9% 2,916 9.1%
2001 129 6.6% 1,784 5.6%
2002 418 21.4% 7,033 22.0%
2003 435 22.2% 7,549 23.6%
2004 108 5.5% 1,796 5.6%
2005 26 1.3% 382 1.2%
2006 17 0.9% 309 1.0%
2007 56 2.9% 592 1.9%
2008 286 14.6% 5,453 17.0%
2009 0 0.0% 0 0.0%
2010 0 0.0% 0 0.0%
2011 0 0.0% 0 0.0%
2012 66 3.4% 1,166 3.6%
2013 and later 0 0.0% 0 0.0%
----- ----- ------- -----
1,957 100.0% $31,991 100.0%
===== ===== ======= =====
</TABLE>
- --------
(1) Annualized base rent represents the annualized monthly base rental at the
time of lease expiration.
(2) The total square footage expiring as of December 31, 1998 is comprised of
24,425,840 square feet of leases in stabilized properties and 405,523
square feet of leases in development properties where tenants were paying
rent as of December 31, 1998.
Re-leasing Costs
Although re-leasing costs may vary from year-to-year depending on conditions
in the Company's real estate markets and the mix of leasing between property
types, the Company endeavors to control re-leasing costs by:
. acting as general contractor with respect to construction of tenant
improvements, thereby saving the fees paid to outside contractors and
enabling the Company to control the quality and timely completion of the
work;
. constructing general purpose improvements that can be adapted to
different tenants' requirements at relatively low cost;
. paying leasing commissions to its in-house marketing representatives
that take into account the cost of tenant improvements thereby providing
an incentive to minimize cost; and
. using its in-house marketing representatives to negotiate directly with
tenants when possible, thereby saving the cost of commissions to outside
brokers.
23
<PAGE>
The following table summarizes by year the Company's capitalized tenant
improvement and leasing costs incurred in the renewal or re-leasing of
previously occupied space.
Capitalized Tenant Improvements and Leasing Costs
<TABLE>
<CAPTION>
1998 1997 1996
------ ------ ------
(In thousands,
except per square
foot information)
<S> <C> <C> <C>
Industrial Properties
Re-leasing
Square feet leased..................................... 1,843 1,073 678
Capitalized tenant improvements and leasing
commissions........................................... $3,826 $2,276 $1,395
Capitalized tenant improvements and leasing commissions
per square foot....................................... $ 2.08 $ 2.12 $ 2.06
Renewal
Square feet renewed.................................... 2,173 2,358 1,027
Capitalized tenant improvements and leasing
commissions........................................... $1,582 $1,392 $1,055
Capitalized tenant improvements and leasing commissions
per square foot....................................... $ 0.73 $ 0.59 $ 1.03
Total
Square feet............................................ 4,016 3,431 1,705
Capitalized tenant improvements and leasing
commissions........................................... $5,408 $3,668 $2,450
Capitalized tenant improvements and leasing commissions
per square foot....................................... $ 1.35 $ 1.07 $ 1.44
Suburban Office Properties
Re-leasing
Square feet leased..................................... 103 69 16
Capitalized tenant improvements and leasing
commissions........................................... $ 347 $ 493 $ 45
Capitalized tenant improvements and leasing commissions
per square foot....................................... $ 3.36 $ 7.11 $ 2.80
Renewal
Square feet renewed.................................... 92 134 106
Capitalized tenant improvements and leasing
commissions........................................... $ 160 $ 267 $ 290
Capitalized tenant improvements and leasing commissions
per square foot....................................... $ 1.74 $ 1.99 $ 2.74
Total
Square feet............................................ 195 203 122
Capitalized tenant improvements and leasing
commissions........................................... $ 507 $ 760 $ 335
Capitalized tenant improvements and leasing commissions
per square foot....................................... $ 2.60 $ 3.74 $ 2.75
</TABLE>
ITEM 3. LEGAL PROCEEDINGS
The Company is not currently involved in any material litigation other than
litigation which is expected to be covered by liability insurance or which is
not expected to have a material adverse effect on the Company's results of
operations or financial condition.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
No matters were submitted to security holders for a vote during the fourth
quarter of 1998.
24
<PAGE>
PART II
ITEM 5. MARKET FOR THE REGISTRANT'S COMMON EQUITY AND RELATED
SHAREHOLDER MATTERS
The common stock of the Company trades on the New York Stock Exchange
("NYSE") under the symbol "WKS." The following table reflects the quarterly
high and low closing prices per share of the common stock and its per share
quarterly cash dividends for 1997 and 1998, respectively:
<TABLE>
<CAPTION>
Quarter Ended High Low Dividend
- ------------- ------- ------- --------
<S> <C> <C> <C>
1997
March 31, 1997....................................... $ 36.25 $ 31.75 $ 0.43
June 30, 1997........................................ $ 34.50 $ 31.00 $ 0.43
September 30, 1997................................... $ 32.75 $29.875 $ 0.43
December 31, 1997.................................... $33.875 $29.375 $0.465
1998
March 31, 1998....................................... $ 33.25 $ 31.18 $0.465
June 30, 1998........................................ $ 33.00 $ 30.06 $0.465
September 30, 1998................................... $ 32.25 $ 26.56 $0.465
December 31, 1998.................................... $ 30.06 $ 27.56 $0.505
</TABLE>
As of March 15, 1999, the Company had 196 shareholders of record and the
last reported sale price of its common stock was $29.5625.
The Company currently anticipates paying regular quarterly dividends of
$0.505 per share, which is equivalent to an annual dividend rate of $2.02 per
share. The dividends for each quarterly period are declared and paid one
quarter in arrears. Future dividends are dependent upon many factors including
the Company's earnings, capital requirements, its financial condition and its
available cash flow and are governed by the discretion of the Board of
Directors. The dividends paid in 1998 were 97% taxable to the Company's
shareholders as ordinary income with the remaining 3% representing a return of
capital. The dividends paid in 1997 were 100% taxable to the Company's
shareholders as ordinary income. In future periods, some portion of the
dividends paid to shareholders may represent a return of capital.
The Company has in place a dividend reinvestment plan under which current
shareholders may elect to automatically reinvest their dividends in additional
shares of common stock. A total of 300,000 shares of common stock have been
authorized and reserved for issuance under the plan. In 1998 and 1997, 227,296
and 2,343 shares of common stock, respectively, were issued through the
dividend reinvestment plan. As of February 1, 1999, all of the shares reserved
for issuance under the Company's dividend reinvestment plan had been purchased.
Accordingly, the Company intends to put in place a new dividend reinvestment
plan generally on the same terms and conditions as the prior plan during the
second quarter of 1999.
Effective October 1, 1998 and December 31, 1998, the Company caused the
Operating Partnership to issue 107,155 Common Units in partial or full
consideration for the acquisition of land and certain real estate properties
from Lichtin and affiliates. The aggregate value of the properties acquired by
the Company in exchange for such Common Units was approximately $3.1 million.
The Common Units were issued pursuant to an exemption from registration under
Section 4(2) of the Securities Act of 1933, as amended (the "Securities Act")
in reliance, in part, upon the representations and warranties set forth in the
Lichtin acquisition agreements. The Common Units are subject to a registration
rights and lock-up agreement that restricts the disposition of the Common Units
until December 31, 1999.
25
<PAGE>
On November 1, 1998, the Company caused the Operating Partnership to issue
4,253 Common Units to GB Partners, Ltd. in connection with the acquisition of
certain land and real estate property located in Jacksonville, Florida. The
aggregate value of the Common Units issued to GB Partners, Ltd. was $125,000.
The Common Units were issued pursuant to an exemption from registration under
Section 4(2) of the Securities Act in reliance, in part, upon the
representations and warranties set forth in the acquisition agreement. The
Common Units are subject to a registration rights and lock-up agreement that
restricts the disposition of the Common Units for a period of one year from the
date of issuance.
26
<PAGE>
ITEM 6. SELECTED FINANCIAL DATA
<TABLE>
<CAPTION>
Weeks Corporation
----------------------------------------------
1998 1997 1996 1995 1994
---------- -------- -------- -------- --------
(In thousands, except per share amounts)
<S> <C> <C> <C> <C> <C>
Balance Sheet Data, at year end
Real estate assets before
accumulated depreciation...... $1,404,281 $856,500 $592,841 $319,763 $162,709
Real estate assets, net........ 1,307,898 794,952 551,372 289,874 139,750
Total assets................... 1,447,592 852,361 591,849 320,441 176,674
Total indebtedness............. 654,424 275,515 296,975 147,305 71,961
Shareholders' equity........... 514,912 459,048 213,711 132,949 73,470
</TABLE>
<TABLE>
<CAPTION>
Weeks
Weeks Corporation Group(1)
--------------------------------------------------------- --------
Year Ended Year Ended Year Ended Year Ended Aug.24 to Jan. 1
Dec. 31, Dec. 31, Dec. 31, Dec. 31, Dec. 31, to Aug.
1998 1997 1996 1995 1994 23, 1994
---------- ---------- ---------- ---------- --------- --------
<S> <C> <C> <C> <C> <C> <C>
Operating Data
Rental and reimbursement
revenues............... $ 149,143 $ 90,806 $ 52,679 $ 34,015 $ 8,877 $ 11,914
Total revenues.......... 150,974 92,020 53,883 35,271 9,312 16,538
Operating, maintenance,
management and real
estate tax expense..... 35,318 19,904 11,474 7,250 1,807 3,136
Depreciation and
amortization........... 38,348 24,144 13,474 8,177 2,098 2,920
Interest expense,
including amortization
of deferred financing
costs.................. 30,782 18,833 12,643 8,797 2,210 7,004
General and
administrative
expenses............... 5,809 3,652 2,315 1,494 379 1,099
Interest income......... 965 1,509 492 334 224 --
Equity in earnings of
unconsolidated
entities............... 2,864 1,989 1,340 1,220 692 91
Income before minority
interests and
extraordinary loss..... 44,599 29,194 15,809 11,107 3,734 516
Income before
extraordinary loss..... 35,141 22,975 12,745 8,426 2,791 516
Net income.............. 34,874 22,975 12,745 8,426 798 516
Net income available to
common shareholders.... 22,874 20,255 12,745 8,426 798 516
Weighted average common
shares--basic.......... 19,256 16,357 11,512 8,171 7,675 N/A
Weighted average common
shares--diluted........ 26,299 21,580 14,386 10,832 10,286 N/A
Per Common Share Data
Income before
extraordinary loss--
basic.................. $ 1.20 $ 1.24 $ 1.11 $ 1.03 $ 0.36 N/A
Income before
extraordinary loss--
diluted................ 1.19 1.23 1.10 1.03 0.36 N/A
Net income--basic....... 1.19 1.24 1.11 1.03 0.10 N/A
Net income--diluted..... 1.18 1.23 1.10 1.03 0.10 N/A
Dividends(2)............ 1.90 1.755 1.63 1.525 0.525 N/A
Other Data
Cash provided by (used
in):
Operating activities.. $ 77,821 $ 49,097 $ 28,031 $ 18,678 $ 3,954 $ 2,769
Investing activities.. (454,721) (173,574) (120,323) (117,127) (38,148) (14,953)
Financing activities.. 372,982 129,638 91,570 93,097 40,352 12,229
Funds from
operations(3)(4)....... 51,532 38,517 23,640 14,662 4,359 N/A
</TABLE>
27
<PAGE>
- --------
(1) Represents the historical combined operations and combined financial
position of Weeks Group, the predecessor entity. On August 24, 1994, the
Company completed an initial public offering and related formation
transactions.
(2) Dividends are declared and paid quarterly in arrears. Amounts reflect
dividends attributable to the year presented.
(3) The Company believes that funds from operations provides an additional
indicator of the financial performance of the Company. Funds from
operations is defined by the National Association of Real Estate Investment
Trusts ("NAREIT") to mean net income (loss) determined in accordance with
generally accepted accounting principles ("GAAP") excluding gains (or
losses) from debt restructuring and sales of operating property, plus
depreciation and amortization, and after adjustments for unconsolidated
partnerships and joint ventures. Adjustments for unconsolidated
partnerships and joint ventures will be calculated to reflect funds from
operations on the same basis. The Company computes funds from operations
under the current NAREIT definition by subtracting from net income the
dividends to preferred shareholders before making an adjustment for the
non-cash items described above. Funds from operations is influenced not
only by the operations of the properties, but also by the capital structure
of the Company. Accordingly, management expects that funds from operations
will be one of the factors considered by the Board of Directors in
determining the amount of cash dividends the Company will pay to its
shareholders. Funds from operations does not represent cash flow from
operating, investing and financing activities as defined by GAAP, which are
discussed under "Management's Discussion and Analysis of Financial
Condition and Results of Operations--Liquidity and Capital Resources"
below. Additionally, funds from operations does not measure whether cash
flow is sufficient to fund all cash flow needs, including principal
amortization, capital expenditures and dividends to shareholders, and
should not be considered as an alternative to net income for purposes of
evaluating the Company's operating performance or as an alternative to cash
flow, as defined by GAAP, as a measure of liquidity. Funds from operations
presented herein under the NAREIT guidelines is not necessarily comparable
to funds from operations presented by other real estate companies due to
the fact that not all real estate companies use the same definition.
However, the Company's funds from operations is comparable to the funds
from operations of real estate companies that use the current NAREIT
definition. See "Management's Discussion and Analysis of Financial
Condition and Results of Operations" for the Company's computation of its
funds from operations.
(4) Represents funds from operations available to common shareholders.
28
<PAGE>
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
The following discussion should be read in conjunction with the selected
financial data and the accompanying consolidated financial statements of the
Company and notes thereto included elsewhere herein. In addition to historical
information, management's discussion and analysis and other statements issued
or made from time to time by the Company or its representatives contain
statements which may constitute "Forward-looking Statements" within the meaning
of the Securities Act of 1933, as amended, and the Securities Exchange Act of
1934, as amended, each as amended by the Private Securities Litigation Reform
Act of 1995, U.S.C.A. Sections 77z-2 and 78u-5 (Supp. 1996). Those statements
include statements regarding the intent, belief or current expectations of the
Company and members of its management team as well as the assumptions on which
such statements are based. Any such Forward-looking Statements are not
guarantees of future performance and the Company's actual results could differ
materially from those set forth in such Forward-looking Statements. Factors
currently known to management that could cause actual results to differ
materially from those set forth in such Forward-looking Statements include
general economic conditions, local real estate conditions, timely leasing of
occupied square footage upon expiration, interest rates, availability of equity
and debt financing, current construction schedules, the status of lease
negotiations with potential tenants, the satisfactory completion of due
diligence procedures and other risks detailed from time to time in the
Company's filings with the Securities and Exchange Commission, including
Quarterly Reports on Form 10-Q, Current Reports on Form 8-K and this Annual
Report on Form 10-K. The Company undertakes no obligation to update or revise
Forward-looking Statements to reflect changed assumptions, the occurrence of
unanticipated events or changes to future operating results over time.
General
The Company was founded in 1965 and operated as a private real estate
company until August 1994, when it completed an initial public offering and
elected to be taxed as a REIT. As a self-administered and self-managed REIT,
the Company owns, develops, acquires and manages primarily industrial and
suburban office properties in the southeastern United States and Texas. The
Company's third-party service businesses are conducted through the Service
Companies: Weeks Realty Services (fee landscape, property management and
commercial brokerage services) and Weeks Construction Services (fee
construction), which are accounted for on the equity method. For a further
description of the Company, see Note 1 to the consolidated financial
statements.
Announced Merger Transaction
On March 1, 1999, the Company announced that it had entered into an
Agreement and Plan of Merger (the "REIT Merger Agreement") with Duke Realty
Investments, Inc., an Indiana based REIT specializing in industrial and office
building development and ownership ("Duke"), and that the Operating Partnership
had entered into an Agreement and Plan of Merger (the "OP Merger Agreement"
and, together with the REIT Merger Agreement, the "Merger Agreements") with
Duke Realty Limited Partnership, an Indiana limited partnership of which Duke
is the managing general partner ("Duke OP"). The Merger Agreements provide for
a merger of the Company with and into Duke (the "REIT Merger") and a merger of
the Operating Partnership with and into Duke OP (the "OP Merger" and, together
with the REIT Merger, the "Mergers"). At the effective time of the Mergers,
Duke will change its name to Duke-Weeks Realty Corporation ("Duke-Weeks").
Pursuant to the Merger Agreements: (i) each outstanding share of common
stock, par value $0.01 per share, of the Company ("Weeks Common Stock") will be
converted into the right to receive 1.38 shares of common stock, par value
$0.01 per share, of Duke ("Duke Common Stock"); (ii) each issued and
outstanding share of 8.0% Series A Cumulative Redeemable Preferred Stock, par
value $0.01 per share, of the Company will be converted into the right to
receive one preference share representing 1/1000 of a share of 8.0% series F
Cumulative Redeemable Preferred Stock, par value $0.01 per share, of Duke;
(iii) each issued and outstanding share of 8.625% Series D Cumulative
Redeemable Preferred Stock, par value $0.01 per share, of the Company will be
converted into the right
29
<PAGE>
to receive one preference share representing 1/1000 of a share of 8.625%
Series H Cumulative Redeemable Preferred Stock, par value $0.01 per share, of
Duke; (iv) each issued and outstanding Common Unit in the Operating Partnership
will be converted into 1.38 common units of limited partnership interest in
Duke OP; (v) each issued and outstanding 8.0% Series A Cumulative Redeemable
Preferred Partnership Unit in the Operating Partnership will be converted into
1/1000 of one 8.0% Series F Cumulative Redeemable Preferred Unit in Duke OP;
(vi) each issued and outstanding 8.0% Series C Cumulative Redeemable Preferred
Partnership Unit in the Operating Partnership will be converted into 1/1000 of
one 8.0% Series G Cumulative Redeemable Preferred Unit in Duke OP; and (vii)
each issued and outstanding 8.625% Series D Cumulative Redeemable Preferred
Partnership Unit in the Operating Partnership will be converted into 1/1000 of
one 8.625% Series H Cumulative Redeemable Preferred Unit in Duke OP.
Holders representing 2% of the outstanding Weeks Common Stock have entered
into voting agreements, agreeing to vote their shares in favor of the
transaction contemplated by the Merger Agreements. Holders representing 5% of
the outstanding Duke Common Stock have entered into voting agreements, agreeing
to vote their shares in favor of the transactions contemplated by the Merger
Agreements. The requisite approvals of the partners of Duke OP and the
Operating Partnership to the transactions have been obtained.
The consummation of the transactions contemplated by the Merger Agreements
is expected to occur in the second or third quarter of 1999 and is subject to
approval by the stockholders of Duke and the shareholders of the Company and
satisfaction of certain other customary closing conditions. Additionally,
certain Company debt holders, lenders and others will be requested to approve
certain other aspects of the Mergers. There can be no assurance that the
transactions contemplated by the Merger Agreements will be consummated. The
Company has agreed with Duke that if the REIT Merger Agreement is terminated
under certain circumstances, the Company will pay Duke certain fees and
expenses. Duke has agreed with the Company that if the REIT Merger Agreement is
terminated under certain other circumstances, Duke will pay the Company certain
fees and expenses.
Results of Operations
Operating results in 1998 when compared to 1997, reflect the Company's
continued improved performance as measured by increased total revenue of
$58,954,000 or 64.1%, increased net income of $11,899,000 or 51.8% and
increased net income available to common shareholders of $2,619,000 or 12.9%.
As discussed in more detail below, these increases were achieved through both
the operating results from acquired properties and stabilized development
properties (i.e., those development properties placed in-service) and to a
lesser extent the increased year-to-year performance of the core or "same
store" property portfolio.
A significant part of the Company's growth in 1998 can be attributed to the
acquisition of 48 operating properties totaling approximately 4,856,000 square
feet during 1998 and the full year impact of 37 operating properties totaling
approximately 2,134,000 square feet acquired during 1997. Through its 1998
acquisitions, the Company expanded its operations in Florida, including a
January 1998 acquisition of a 2,477,000 square foot, 24-building portfolio in
Miami, Florida, as well as opening a new market in Dallas, Texas and continuing
to expand its existing markets in Nashville, Tennessee and the Research
Triangle area of North Carolina.
Operating results in 1998 were also positively impacted by increasing
contributions from the Company's active development programs throughout all of
its markets. The Company stabilized 27 properties and one property expansion
totaling 3,310,000 square feet in 1998 and received full year contributions
from 18 properties and two property expansions totaling 2,014,000 square feet
stabilized during 1997. Based on square feet of development properties placed
in service, 1998 represents the single largest year in the Company's history.
These stabilized development properties continue to achieve higher yields than
those achieved on acquisition properties, and, as a result, are expected to
continue to be a significant element of the Company's future growth strategy.
Core properties, as defined below, also contributed to overall operating
results with increased property operating revenues less property operating
expenses of 1.6% in 1998.
30
<PAGE>
The Company continues to diversify its property holdings throughout the
southeastern United States and, in 1998, the Company further expanded into the
Dallas/Ft. Worth, Texas market. Including properties under development and
under agreement to acquire at December 31, 1998 and 1997, the Company's current
portfolio is located in the following cities and the percentage of its holdings
in each city (measured by square feet) is detailed below:
<TABLE>
<CAPTION>
Percent of Total
Portfolio Square
Feet
-----------------
Dec. 31, Dec. 31,
Property Location 1998 1997
- ----------------- -------- --------
<S> <C> <C>
Atlanta, GA................................................... 51.4% 58.7%
Nashville, TN................................................. 11.3% 11.6%
Research Triangle, NC......................................... 10.3% 10.4%
Miami, FL..................................................... 9.1% 11.0%
Dallas/Ft. Worth, TX.......................................... 6.5% --
Orlando, FL................................................... 4.7% 4.9%
Jacksonville, FL.............................................. 2.5% 0.7%
Spartanburg, SC............................................... 1.5% 1.7%
Tampa, FL..................................................... 1.4% 1.0%
Ft. Lauderdale, FL............................................ 1.3% --
------ ------
Total......................................................... 100.0% 100.0%
====== ======
</TABLE>
Consolidated operating information relating to the Company's properties for
1998, 1997 and 1996 is summarized below (in thousands):
<TABLE>
<CAPTION>
% Change % Change
1998 vs. 1997 vs.
1998 1997 1996 1997 1996
-------- ------- ------- -------- --------
<S> <C> <C> <C> <C> <C>
Rental revenues.................... $131,771 $80,419 $48,162 63.9% 67.0%
Tenant reimbursements.............. 17,372 10,387 4,517 67.2% 130.0%
-------- ------- ------- ---- -----
Property operating revenues........ $149,143 $90,806 $52,679 64.2% 72.4%
-------- ------- ------- ---- -----
Operating, maintenance and
management expenses............... $ 22,494 $12,694 $ 6,749 77.2% 88.1%
Real estate taxes.................. 12,824 7,210 4,725 77.9% 52.6%
Depreciation and amortization...... 38,348 24,144 13,474 58.8% 79.2%
-------- ------- ------- ---- -----
Property operating expenses........ $ 73,666 $44,048 $24,948 67.2% 76.6%
-------- ------- ------- ---- -----
Property operating revenues less
property operating expenses....... $ 75,477 $46,758 $27,731 61.4% 68.6%
======== ======= ======= ==== =====
</TABLE>
Comparison of Year Ended December 31, 1998 to Year Ended December 31, 1997
Year to year comparisons of property operating revenues and expenses for
1998 and 1997 are discussed herein using the categories "core properties,"
"development properties" and "acquisition properties." Core properties are
defined as properties which were stabilized and operating for comparable full
year periods in 1998 and 1997. The Company defines a property as stabilized
upon the earlier of substantial lease-up or one year from building shell
completion. Development properties reflect properties completed and stabilized,
and acquisition properties are properties acquired, subsequent to January 1,
1997.
Property operating revenues increased $58,337,000 or 64.2% in 1998. Of this
increase, $39,564,000, $16,935,000 and $1,838,000 were attributable to
acquisition, development and core properties, respectively. The increases from
acquisition and development properties were due to the acquisition of 85
operating properties (48 in 1998 and 37 in 1997) totaling 6,990,000 square feet
and the stabilization of 41 development
31
<PAGE>
properties (27 in 1998 and 14 in 1997) and three property expansions (one in
1998 and two in 1997) totaling 4,717,000 square feet. Property operating
expenses increased $29,618,000 or 67.2% between years, due primarily to the
growth in the property portfolio resulting from the acquisition and development
properties discussed above.
For the comparable years of 1998 and 1997, operating results of the core
properties, representing 191 properties totaling 13,474,000 square feet, are
summarized below (in thousands):
<TABLE>
<CAPTION>
1998 1997 % Change
------- ------- --------
<S> <C> <C> <C>
Rental revenues...................................... $72,477 $70,931 2.2%
Tenant reimbursements................................ 8,553 8,261 3.5%
------- ------- ---
Property operating revenues.......................... $81,030 $79,192 2.3%
------- ------- ---
Operating, maintenance and management expenses....... $11,270 $10,758 4.8%
Real estate taxes.................................... 6,557 6,526 0.5%
Depreciation and amortization........................ 22,064 21,405 3.1%
------- ------- ---
Property operating expenses.......................... $39,891 $38,689 3.1%
------- ------- ---
Property operating revenues less property operating
expenses............................................ $41,139 $40,503 1.6%
======= ======= ===
Average occupancy.................................... 95.7% 96.3%
======= =======
</TABLE>
Property operating revenues from core properties increased 2.3% despite a
decrease in overall average occupancy. This increase was due to both rental
rate and reimbursement increases between periods. Property operating expenses
increased 3.1% due primarily to increased utilities, security and management
expenses. Property operating revenues less property operating expenses from
core properties increased 2.1%, exclusive of depreciation and amortization
expense.
Interest expense increased $11,949,000 or 63.4% from $18,833,000 in 1997 to
$30,782,000 in 1998, due primarily to increased mortgage interest of $6,348,000
related to mortgage debt assumed in connection with certain of the Company's
1997 and 1998 property acquisitions and increased net interest expense on
unsecured bank borrowings and unsecured note borrowings due primarily to higher
average borrowing levels used to finance the Company's growth in 1998 compared
to 1997.
Company general and administrative expenses increased $2,157,000 or 59.1%
from $3,652,000 in 1997 to $5,809,000 in 1998, due primarily to increased
personnel and related administrative costs attributable to the Company's
geographic expansion, including the opening of an office in Dallas, Texas and
the continued growth of its existing offices in Orlando and Tampa, Florida
during 1998. As a percentage of total revenue, general and administrative
expenses decreased from 4.0% in 1997 to 3.8% in 1998.
Interest income decreased $544,000 or 36.1% from $1,509,000 in 1997 to
$965,000 in 1998, due primarily to the settlement of approximately $10,870,000
of real estate loans in 1998.
Equity in earnings of unconsolidated entities represents primarily the
Company's 99% economic interest in the earnings of the Service Companies and
their subsidiaries after the elimination of intercompany profits to the
Company. Equity in earnings of the Service Companies and their subsidiaries
increased by $566,000 or 28.7% from $1,969,000 in 1997 to $2,535,000 in 1998
due to increased profits from the third-party service businesses (construction,
landscape and commercial brokerage), increased gains on sales of real estate,
principally land, profits from the Service Companies' 1998 investment in Codina
Group, Inc. ("Codina"), a Miami, Florida
32
<PAGE>
based real estate services company, offset by increased carrying costs relating
to additional land investments between years. Equity in earnings of
unconsolidated real estate entities increased from $20,000 in 1997 to $329,000
in 1998, due primarily to a full year of earnings in 1998 compared to one month
in 1997 from the Company's 50% investment in a single building joint venture.
Segment Operations
The Company manages its business through geographic operating segments and
segment operating performance is measured based on profits before interest
expense and depreciation and amortization expense, referred to herein as
"segment earnings." See note 13 to the consolidated financial statements for an
additional discussion and presentation of segment information.
A comparison of segment earnings in 1998 and 1997 is detailed below (in
thousands):
<TABLE>
<CAPTION>
Segment Earnings
----------------
Operating Segments 1998 1997
- ------------------ -------- -------
<S> <C> <C>
Georgia........................................................ $ 63,872 $51,112
North Carolina................................................. 17,864 11,519
South Florida.................................................. 14,741 --
Tennessee...................................................... 12,260 7,721
Other.......................................................... 6,975 2,157
-------- -------
Total.......................................................... $115,712 $72,509
======== =======
</TABLE>
Segment earnings, as defined, increased $43,203,000 or 59.6% from
$72,509,000 in 1997 to $115,712,000 in 1998. Segment earnings in Georgia
increased due primarily to a full year of operating earnings in 1998 from the
stabilization of development properties in the second half of 1997 and a
partial year of earnings from development properties stabilized throughout
1998. North Carolina segment earnings increased due primarily to the
acquisition of additional properties in the second half of 1997 relating to the
Company's December 31, 1996, Lichtin acquisition transaction (see Note 3 to the
consolidated financial statements) and from the stabilization of development
properties in 1998. South Florida segment earnings reflect the Company's
January 1998 expansion into the South Florida market through the acquisition of
a 24-building, 2,477,000 square foot property portfolio in Miami, Florida.
Segment earnings in Tennessee increased due primarily to the acquisition of
additional properties in 1997 and 1998 relating to Company's 1996 NWI
acquisition transaction (see Note 3 to the consolidated financial statements)
as well as the acquisition of additional properties from third parties in 1998.
Other segment earnings grew in 1998 from the Company's entry into the
Dallas/Ft. Worth, Texas market and the related acquisition of properties in
June 1998, from the full year of earnings in 1998 relating to the Company's
late 1997 entry into the Jacksonville, Florida market and from the continued
expansion of the Orlando, Florida market primarily through the stabilization of
additional development properties.
Comparison of Year Ended December 31, 1997 to Year Ended December 31, 1996
Year to year comparisons of property operating revenues and expenses for
1997 and 1996 are discussed herein using the categories "core properties,"
"development properties" and "acquisition properties." Core properties are
defined as properties which were stabilized and operating for comparable full
year periods in 1997 and 1996. Development properties reflect properties
completed and stabilized, and acquisition properties are properties acquired,
subsequent to January 1, 1996.
Property operating revenues increased $38,127,000 or 72.4% in 1997. Of this
increase, $29,626,000, $7,660,000 and $841,000 were attributable to
acquisition, development and core properties, respectively. The increases from
acquisition and development properties were due to the acquisition of 83
operating properties (37 in 1997 and 46 in 1996) totaling 5,402,000 square feet
and the stabilization of 26 development properties (18 in 1997 and eight in
1996) and three property expansions (two in 1997 and one in 1996) totaling
2,848,000
33
<PAGE>
square feet. As four of the 1997 development properties totaling 608,000 square
feet stabilized on January 1, 1997, they were considered core properties in the
1998 to 1997 comparison discussed previously. Property operating expenses
increased $19,100,000 or 76.6% between years, due primarily to the growth in
the property portfolio resulting from the acquisition and development
properties discussed above.
For the comparable years of 1997 and 1996, operating results of the core
properties, representing 134 properties totaling 8,861,000 square feet, are
summarized below (in thousands):
<TABLE>
<CAPTION>
1997 1996 % Change
------- ------- --------
<S> <C> <C> <C>
Rental revenues...................................... $43,216 $42,549 1.6 %
Tenant reimbursements................................ 4,196 4,022 4.3 %
------- ------- ----
Property operating revenues.......................... $47,412 $46,571 1.8 %
------- ------- ----
Operating, maintenance and management expenses....... $ 6,715 $ 6,222 7.9 %
Real estate taxes.................................... 4,114 4,299 (4.3)%
Depreciation and amortization........................ 12,229 11,889 2.9 %
------- ------- ----
Property operating expenses.......................... $23,058 $22,410 2.9 %
------- ------- ----
Property operating revenues less property operating
expenses............................................ $24,354 $24,161 0.8 %
======= ======= ====
Average occupancy.................................... 95.2% 96.1%
======= =======
</TABLE>
Property operating revenues from core properties increased 1.8% despite the
impact of lost property operating revenues between years of approximately
$242,000 resulting from the sale of a 96,000 square foot building in April 1997
and a decrease in overall average occupancy. Adjusted for the building sale
discussed above, property operating revenues from core properties increased
2.3% between years. This increase was due to both rental rate and reimbursement
increases between periods. Property operating expenses increased 2.9% due
primarily to increased utilities, repairs and maintenance and management
expenses offset by lower real estate taxes in 1997. Lower real estate taxes
resulted primarily from the successful resolution of disputed property tax
assessments. Property operating revenues less property operating expenses from
core properties increased 2.0%, exclusive of depreciation and amortization
expense and after adjusting for the building sale discussed above.
Interest expense increased $6,190,000 or 49.0% from $12,643,000 in 1996 to
$18,833,000 in 1997, due primarily to increased interest on mortgage notes
payable of $6,418,000 related to mortgage indebtedness assumed in connection
with the Company's 1996 and 1997 acquisitions. The increase in mortgage
interest expense was offset by a decrease in net interest expense on revolving
line of credit borrowings between years due primarily to a larger percentage of
revolving line of credit borrowings being utilized for the Company's increased
development activity in 1997, resulting in increased interest capitalization as
a percentage of total line of credit interest expense in 1997 compared to 1996.
Company general and administrative expenses increased $1,337,000 or 57.8%
from $2,315,000 in 1996 to $3,652,000 in 1997, due primarily to increased
personnel and related administrative costs attributable to the Company's
southeast expansion. The majority of the increase relates to the additional
general and administrative expenses associated with the Company's Nashville,
Tennessee and Raleigh, North Carolina operations, both of which were acquired
in the fourth quarter of 1996, and expenses related to the establishment of an
office in Orlando, Florida, which also occurred in the fourth quarter of 1996.
As a percentage of total revenue, general and administrative expenses decreased
from 4.3% in 1996 to 4.0% in 1997.
Interest income increased $1,017,000 or 206.7% from $492,000 in 1996 to
$1,509,000 in 1997 due primarily to increased real estate loan interest,
including $442,000 of real estate loan interest on loans to affiliated entities
and others.
34
<PAGE>
Equity in earnings of unconsolidated entities represents primarily the
Company's 99% economic interest in the earnings of the Service Companies and
their subsidiaries after the elimination of interest expense and intercompany
profits to the Company. Equity in earnings of the Service Companies and their
subsidiaries increased by $629,000 or 46.9% from $1,340,000 in 1996 to
$1,969,000 in 1997 due primarily to gains on sales of real estate properties,
principally land, and increased earnings from partnerships and joint ventures,
also principally due to gains from land sales. Apart from these gains, net
earnings from the operations of the Service Companies were comparable between
years.
Segment Operations
A comparison of segment earnings in 1997 and 1996 is detailed below (in
thousands):
<TABLE>
<CAPTION>
Segment
Earnings
---------------
Operating Segments 1997 1996
- ------------------ ------- -------
<S> <C> <C>
Georgia......................................................... $51,112 $41,083
North Carolina.................................................. 11,519 --
Tennessee....................................................... 7,721 1,047
Other........................................................... 2,157 1,066
------- -------
Total........................................................... $72,509 $43,196
======= =======
</TABLE>
Segment earnings increased $29,313,000 or 67.9% from $43,196,000 in 1996 to
$72,509,000 in 1998. Segment earnings in Georgia increased due primarily to the
stabilization of development properties throughout 1996 and 1997 as well as
property acquisitions in both years. North Carolina segment earnings in 1997
reflect the operating results from the initial acquisition from Lichtin of
operating properties in the Research Triangle area of North Carolina on
December 31, 1996 and the additional property acquisitions in 1997 associated
with that same transaction (see Note 3 to the consolidated financial
statements). Segment earnings in Tennessee increased in 1997 due primarily to
the full year operating results from the initial acquisition from NWI of
operating properties in Nashville, Tennessee on November 1, 1996 and from the
partial year impact of additional property acquisitions in 1997 associated with
that same transaction (see Note 3 to the consolidated financial statements).
Other segment earnings increased due primarily to the stabilization of
additional development properties in Orlando, Florida in 1996 and 1997 and the
Company's entry into the Jacksonville, Florida market in late 1997.
Liquidity and Capital Resources
The Company continues to generate increasing cash flows from operations.
Cash provided by operating activities increased $28,724,000 or 58.5%, from
$49,097,000 in 1997, to $77,821,000 in 1998. The increase resulted primarily
from a full year of operating income in 1998 from 37 operating buildings
acquired and 18 development properties and two property expansions stabilized
in 1997, and from the partial year operating income from 48 buildings acquired
and 27 development properties and one property expansion stabilized in 1998.
The Company's net cash flow from operations is currently sufficient to meet
the Company's current operational needs and to satisfy the Company's current
quarterly dividends. Company management believes that operating cash flows will
continue to be adequate to fund these requirements in 1999. The Company
operates as and intends to maintain its qualification as a REIT under the
Internal Revenue Code of 1986, as amended (the "Code"). As a REIT, the Company
will generally not be subject to corporate federal income taxes as long as it
satisfies certain technical requirements of the Code, including the requirement
to distribute 95% of its taxable income to its shareholders.
In 1998, the Company invested $392,015,000 in property acquisition,
development, construction and real estate loan activities. This compares to
$182,762,000 in 1997. This increased cash investment activity reflects
35
<PAGE>
the increased cash component of the Company's building acquisition activity in
1998 compared to 1997 of approximately $113,397,000 with the remaining increase
due to increased development and land acquisition activity in 1998. In
addition, the Company's investments in and advances to unconsolidated entities
increased from $2,504,000 in 1997 to $66,324,000 in 1998, due partially to the
Company financing the operations of the Service Companies through direct line
of credit borrowings subsequent to March 1998. Previously, the Service
Companies were financed through bank line of credit borrowings. The increased
investments and advances in 1998 also reflects the Service Companies'
$9,600,000 investment in Codina as well as additional real estate investments.
Financing for the Company's property investment activities in 1998 consisted
primarily of $47,200,000 from common equity offerings, $97,662,000 from
preferred partnership units issuances, $285,000,000 from unsecured note and
term loan borrowings and increased revolving credit facility borrowings of
$35,105,000 offset by repayments and retirements of mortgage and other notes
payable of $32,333,000. This compares to $251,193,000 from both common and
preferred equity offerings, offset by repayments and retirements of debt
balances totaling $86,329,000 in 1997. The debt and equity components of the
Company's on-going financing strategy may differ based upon future market
conditions.
In 1998, the Company increased its available borrowing capacity under its
syndicated, unsecured, line of credit arrangements (the "Credit Facility") from
$225,000,000 to $245,000,000 and lowered its borrowing costs from LIBOR plus
1.05% to LIBOR plus 0.80%. The Credit Facility may be used, among other things,
to meet the Company's operational obligations and annual REIT dividend
requirements. The Company currently intends to finance its development and
acquisition activities primarily through borrowings under the Credit Facility,
refinanced, as necessary, through the issuance of both common and preferred
equity securities and public and private unsecured debt obligations.
Additionally, the Company may selectively use real estate asset sales and other
joint venture arrangements to supplement the financing of its development
pipeline. At December 31, 1998, the Company had available capacity under the
Credit Facility of approximately $126,975,000 (see Note 4 to the consolidated
financial statements). The Credit Facility matures on December 31, 2000, and
provides for annual extensions through December 31, 2002.
In January 1999, the Company sold 21 buildings totaling approximately
1,181,000 square feet for net proceeds of approximately $51,832,000. The
Company has used a portion of these proceeds and intends to use the remaining
proceeds during 1999, to acquire identified operating buildings and additional
development land.
The Company received corporate preferred stock and unsecured debt ratings
from Standard & Poor's, Moody's and Duff & Phelps in 1997. The Company's
current ratings give the Company "investment grade" status for unsecured debt
and preferred stock offerings. In 1998, the Company utilized its investment
grade status and accessed the corporate unsecured debt markets for the first
time through the issuance of $200,000,000 of unsecured notes. These corporate
rating levels are subject to change based on the above rating agencies'
continuing assessments of the Company's financial strength and operating
performance. Any change in rating status could increase or decrease the
Company's financing costs.
The Company believes it currently has adequate liquidity and sources of
capital, including available borrowing capacity under its existing Credit
Facility and remaining capacity of $550,000,000 under its $750,000,000
universal shelf registration, to meet its current operational requirements, to
fund annual principal requirements under existing mortgage notes payable and to
fund its current development and acquisition activity. It is management's
expectation that the Company will continue to have access to the additional
capital resources necessary to further expand and develop its business and to
refinance mortgage notes payable as they mature in 1999. These resources
include debt and equity financings, in both public and private markets,
including the use of the Company's available capacity under its current
universal shelf registration. As an alternative to the more traditional debt
and equity financings used in prior years, the Company has in early 1999, and
may continue, to utilize selective real estate asset sales and other joint
venture arrangements to provide additional sources of capital in periods where
the pricing, terms and availability of other traditional financing sources are
not advantageous to the Company. Future development and acquisition activities
will be
36
<PAGE>
undertaken by the Company only as suitable opportunities arise. Such activities
are not expected to be undertaken unless adequate sources of financing are
available and a satisfactory budget with appropriate targeted returns on
investment has been internally approved.
Total consolidated debt amounted to $654,424,000 at December 31, 1998,
including unsecured note borrowings of $200,000,000, unsecured bank borrowings
of $203,025,000 and mortgage notes payable of $251,399,000. Of the $251,399,000
of mortgage indebtedness, $250,788,000 is fixed rate and $611,000 is variable
rate. At December 31, 1998, the weighted average interest rate on the Company's
fixed rate mortgage debt was 8.3% and on its variable rate mortgage debt was
6.1%. The weighted average interest rates under the Credit Facility and the
unsecured term loan, exclusive of the impact of the interest rate swaps
discussed below, at December 31, 1998, were each 6.5%. The weighted average
interest rate on the Company's unsecured notes was 7.125% at December 31, 1998.
Based on the outstanding balance of mortgage notes payable at December 31,
1998, the weighted average interest rates on the mortgage notes with a final
maturity in each of the next five years and thereafter were 7.3% in 1999, 9.0%
in 2000, 7.9% in 2001, 8.2% in 2002, 8.3% in 2003 and 8.5% thereafter.
Including total consolidated debt obligations of $654,424,000 and $2,309,000
of other notes payable on unconsolidated properties, the total debt obligations
of the Company and its unconsolidated entities was $656,733,000 or 39% of total
market capitalization (defined as total debt plus the market equity value of
the Company's equity securities as calculated below) at December 31, 1998
(assuming the exchange of all of the Common Units of the Operating Partnership
for shares of common stock). Based on the closing price of the common stock of
$28.1875 on December 31, 1998, and assuming the exchange of all of the Common
Units of the Operating Partnership for shares of common stock, there would be
26,988,413 shares of common stock outstanding with a total market value of
$760,736,000, 6,000,000 shares of preferred stock outstanding with a
liquidation value of $150,000,000, 4,000,000 preferred partnership units
outstanding with a liquidation value of $100,000,000 and 350,000 common stock
warrants outstanding with a book value of $1,400,000, resulting in total equity
value of $1,012,136,000.
Management of Market Risks
The Company's principal market risk relates to its exposure to interest
changes, primarily changes in short-term LIBOR and U.S. prime interest rates
and medium-term U.S. treasury security interest rates used as the benchmark
interest rate for the Company's seven to ten year fixed rate unsecured notes.
Changes in short-term interest rates cause the Company's interest costs on
unhedged line of credit borrowings to increase or decrease on a period to
period basis. Changes in medium-term U.S. treasury security interest rates will
cause the Company's interest costs on expected future medium-term unsecured
note borrowings to increase or decrease based on changes in the interest rates.
The Company's primary derivative and other financial instruments subject to
interest rate risk are the Company's fixed and variable rate borrowing
arrangements and outstanding interest rate swap arrangements. The Company's
other financial instruments (cash and cash equivalents, receivables, other
assets, accounts payable and other liabilities) are not generally subject to
interest rate risks due to the short-term nature and type of these instruments.
The Company uses interest rate swap and treasury rate guarantee hedge
arrangements to manage its exposure to interest rate changes. At December 31,
1998, outstanding interest rate swap arrangements serve to decrease the
negative impact of increased short-term interest rates on the Company's
financial results by fixing interest rates on otherwise variable rate debt
instruments. In prior years, the Company used treasury rate guarantee hedge
arrangements to effectively fix the interest rate on anticipated future debt
issuances, however, at December 31, 1998, the Company had no outstanding
treasury rate guarantee hedge arrangements.
37
<PAGE>
Following is a summary of the terms of the Company's fixed and variable rate
borrowing arrangements and interest rate swap arrangements at December 31,
1998:
<TABLE>
<CAPTION>
Principal/ Average Average
Notional Fair Interest Years to
Amount Value Rate Maturity
---------- -------- -------- --------
(Dollars in thousands)
<S> <C> <C> <C> <C>
Debt
Mortgage Debt
Fixed rate............................ $250,788 $259,770 8.3% 6.5
Variable rate......................... 611 611 6.1% 11.9
Unsecured notes--fixed rate............ 200,000 191,131 7.1% 7.4
Unsecured term loan--variable rate..... 85,000 85,000 6.5% 3.0
Unsecured line of credit facilities--
Variable rate......................... 118,025 118,025 6.5% 1.8
Interest Rate Swaps
Unsecured line of credit swaps......... $ 40,000 $ (1,446) -- 2.1
Average pay rate...................... -- -- 6.7% --
Average receive rate.................. -- -- 5.2% --
Unsecured term loan swaps.............. 85,000 169 -- 3.0
Average pay rate...................... -- -- 5.0% --
Average receive rate.................. -- -- 5.3% --
</TABLE>
If interest rates under the unsecured line of credit facilities and term
loan, in excess of the $125,000,000 effectively converted to fixed rates
discussed above, and under the Company's variable rate mortgage debt fluctuated
by 1.0%, interest costs to the Company, based on outstanding borrowings at
December 31, 1998, would increase or decrease by approximately $800,000 on an
annualized basis.
As reflected in the table above, the interest rate swap arrangements would
require the net payment of approximately $1,277,000 (at December 31, 1998), if
the arrangements were terminated. Under current accounting rules, these
potential costs are not recognized currently in the Company's financial
statements, but instead are reflected as part of interest expense over the life
of the related hedged borrowings, causing reported interest costs to be higher
than current interest costs on similar unhedged indebtedness. The costs
associated with terminated swap and hedge arrangements can result in charges to
operations to the extent hedged borrowings are not completed or are no longer
outstanding.
At December 31, 1998, the Company does not have any exposure to foreign
currency exchange risk, equity price risk or other material market risks.
Current Development and Acquisition Activity
At December 31, 1998, the Company had committed development and acquisitions
totaling approximately $354,339,000 representing 54 buildings totaling
5,923,000 square feet. Net of six buildings stabilized, one building acquired
and one building under agreement to be sold in early 1999 totaling 1,058,000
square feet and with a total cost of $50,966,000, and including other changes
in estimated costs to complete development properties, the Company had at
February 28, 1999, committed development and acquisitions totaling
approximately $312,998,000 representing 46 buildings totaling 4,865,000 square
feet. Properties to be acquired as of February 28, 1999, consist of one
building totaling 90,000 square feet with a total expected cost of
approximately $5,100,000. Development properties as of February 28, 1999,
consist of 45 buildings totaling 4,775,000 square feet with a total expected
cost of $307,898,000.
38
<PAGE>
It is expected that such development and acquisition properties will
stabilize or be acquired as detailed below:
<TABLE>
<CAPTION>
Square Estimated
Year Buildings Feet Cost
---- --------- --------- ------------
<S> <C> <C> <C>
1999 21 2,286,000 $154,254,000
2000 24 2,399,000 154,844,000
2010 1 180,000 3,900,000
--- --------- ------------
46 4,865,000 $312,998,000
=== ========= ============
</TABLE>
In addition, the Company has committed, subject to completing or updating
its due diligence procedures, to acquire development land totaling $32,641,000
over various periods ranging up to five years.
The information provided above includes forward-looking data about expected
property acquisitions or stabilizations that is based on current construction
schedules, the status of lease negotiations with potential tenants, the
successful completion of due diligence procedures and other relevant factors
currently available to the Company. There can be no assurance that any of these
factors will not change or that any change will not affect the accuracy of such
forward-looking data.
Supplemental Disclosure of Funds from Operations
The Company believes that funds from operations provides an additional
indicator of the financial performance of the Company. Funds from operations is
defined by NAREIT to mean net income (loss) determined in accordance with GAAP
excluding gains (or losses) from debt restructuring and sales of operating
property, plus depreciation and amortization, and after adjustments for
unconsolidated partnerships and joint ventures. Adjustments for unconsolidated
partnerships and joint ventures will be calculated to reflect funds from
operations on the same basis. The Company computes funds from operations under
the current NAREIT definition by subtracting from net income the dividends to
preferred shareholders before making an adjustment for the non-cash items
described above. Funds from operations is influenced not only by the operations
of the properties, but also by the capital structure of the Company.
Accordingly, management expects that funds from operations will be one of the
factors considered by the Board of Directors in determining the amount of cash
dividends the Company will pay to its shareholders. Funds from operations does
not represent cash flow from operating, investing and financing activities as
defined by GAAP, which are discussed under "Liquidity and Capital Resources"
above. Additionally, funds from operations does not measure whether cash flow
is sufficient to fund all cash flow needs, including principal amortization,
capital expenditures and dividends to shareholders, and should not be
considered as an alternative to net income for purposes of evaluating the
Company's operating performance or as an alternative to cash flow, as defined
by GAAP, as a measure of liquidity. Funds from operations presented herein
under the NAREIT guidelines is not necessarily comparable to funds from
operations presented by other real estate companies due to the fact that not
all real estate companies use the same definition. However, the Company's funds
from operations is comparable to the funds from operations of real estate
companies that use the current NAREIT definition.
The Company's calculation of funds from operations follows the guidelines
issued by NAREIT, including the recognition of rental income on the "straight-
line" basis consistent with its treatment in the Company's statements of
operations under GAAP. The "straight-line" rental adjustment increased rental
revenues by $2,129,000, $680,000 and $475,000 in 1998, 1997 and 1996,
respectively. In accordance with the NAREIT guidelines, the Company excludes
gains or losses on sales of operating (previously depreciated) real estate
assets in calculating funds from operations, but includes gains or losses on
sales of undepreciated assets (land) that are of a recurring nature. Pre-tax
gains on land sales are included in funds from operations in the amount of
$1,023,000, $636,000, and $67,000 in 1998, 1997, and 1996, respectively.
39
<PAGE>
In 1998, funds from operations available to common shareholders increased
$13,015,000 or 33.8% to $51,532,000, compared to funds from operations of
$38,517,000 in 1997. Funds from operations for 1998, 1997 and 1996, are
detailed below (in thousands):
<TABLE>
<CAPTION>
1998 1997 1996
------- ------- -------
<S> <C> <C> <C>
Net income available to common shareholders......... $22,874 $20,255 $12,745
Minority interests of common unitholders............ 8,267 6,219 3,064
Extraordinary loss, net of minority interests....... 267 -- --
Depreciation and amortization....................... 38,348 24,144 13,474
Depreciation and amortization--unconsolidated
entities........................................... 237 10 40
Gain on sale of operating real estate assets........ (53) (209) --
Gain on sale of operating real estate assets--
unconsolidated entities............................ -- (76) --
------- ------- -------
Funds from operations available to common
shareholders--Common Units fully converted......... 69,940 50,343 29,323
Percentage attributable to common shareholders(a)... 73.7% 76.5% 80.6%
------- ------- -------
Funds from operations available to common
shareholders....................................... $51,532 $38,517 $23,640
======= ======= =======
Weighted average common shares
Basic.............................................. 19,256 16,357 11,512
======= ======= =======
Diluted(b)......................................... 26,299 21,580 14,386
======= ======= =======
</TABLE>
- --------
(a) Represents the Company's weighted average ownership percentage of the
Operating Partnership (see Note 1 of the consolidated financial
statements).
(b) Represents the weighted average shares of common stock outstanding plus the
weighted average Common Units of limited partnership interest in the
Operating Partnership outstanding (Common Units are convertible into common
stock on a one-for-one basis) and the dilutive effect of outstanding stock
options. Weighted average Common Units outstanding totaled 6,878,000,
5,023,000, and 2,768,000 in 1998, 1997, and 1996, respectively. Common
stock equivalents related to outstanding stock options totaled 165,000,
200,000, and 106,000 in 1998, 1997, and 1996, respectively.
Supplemental Information on Capital Expenditures and Leasing Costs
The following table details the Company's capital expenditures and leasing
costs for 1998, 1997, and 1996 (in thousands):
<TABLE>
<CAPTION>
1998 1997 1996
-------- -------- --------
<S> <C> <C> <C>
Building acquisitions(1)(2)........................ $287,998 $129,884 $201,660
Development and land acquisition activity(3)(4).... 265,389 137,815 70,476
Non-revenue-producing building improvements........ 1,900 1,059 543
Tenant improvement and leasing costs on second-
generation leases(5).............................. 7,022 4,541 2,995
-------- -------- --------
$562,309 $273,299 $275,674
======== ======== ========
</TABLE>
- --------
(1) Building acquisitions in 1997 included two buildings acquired while still
under development.
(2) Reflects aggregate acquisition costs including the assumption of
indebtedness of $88,273,000, the issuance of $42,422,000 of Common Units
and other assumed liabilities, net of other assets, of $4,224,000 in 1998.
Reflects aggregate acquisition costs including the assumption of
indebtedness of $59,748,000, the issuance of $31,210,000 of Common Units
and exclusive of the decrease in other acquisition related payables, net of
receivables, of $756,000 in 1997. Reflects aggregate acquisition costs
including the assumption of mortgage notes payable of $104,628,000, the
issuance of $48,085,000 of Common Units, the issuance of $7,124,000 of
common stock and other acquisition related payables, net of receivables, of
$906,000 in 1996.
40
<PAGE>
(3) Includes first-generation leasing costs on development properties totaling
$9,391,000, $3,774,000, and $1,287,000 in 1998, 1997, and 1996,
respectively.
(4) Reflects aggregate development, land acquisition and leasing costs net of
the settlement of real estate development loans of $10,870,000, including
the assumption of indebtedness of $2,864,000, the issuance of $13,181,000
of Common Units and exclusive of the increase in construction payables of
$1,756,000 in 1998. Reflects aggregate costs including the assumption of
indebtedness of $5,121,000, the issuance of $388,000 of Common Units, net
of the settlement of real estate development loans of $7,376,000 and
exclusive of the decrease in construction payables of $776,000 in 1997.
Reflects aggregate costs net of the decrease in construction payables of
$743,000 in 1996.
(5) Includes second-generation leasing costs totaling $2,706,000, $2,073,000,
and $1,331,000 in 1998, 1997, and 1996, respectively.
Recent Accounting Pronouncements
The Company adopted Statements of Financial Accounting Standards ("SFAS")
130, "Reporting of Comprehensive Income," during 1998 which establishes
standards for reporting and display of comprehensive income and its components.
Comprehensive income is the total of net income and all other nonowner changes
in shareholders' equity. As of December 31, 1998, the Company had no items of
other comprehensive income.
Effective for the year ended December 31, 1998, the Company implemented the
disclosure requirements of SFAS 131, "Disclosures About Segments of an
Enterprise and Related Information." Segment disclosures under SFAS 131 for
each of the three years in the period ended December 31, 1998 are reflected in
note 13 to the consolidated financial statements.
In March 1998, Emerging Issues Task Force Issue No. 97-11, "Accounting for
Internal Costs Relating to Real Estate Property Acquisitions," was issued
prescribing that internal acquisition costs relating to the acquisition of
operating real estate properties should be expensed as incurred. Effective with
the first quarter of 1998, the Company implemented this new guideline, which
did not have a material impact on the Company's financial position or results
of operations.
In June 1998, SFAS 133, "Accounting for Derivative Instruments and for
Hedging Activities," was issued prescribing new accounting standards for the
accounting and disclosures of derivative instruments and hedging transactions.
SFAS 133 will require the Company to record all derivative instruments on the
balance sheet at fair value. Changes in derivative fair values will either be
recorded in earnings along with the changes in fair value of related hedged
assets or liabilities or as an adjustment to stockholders equity depending on
the nature and type of derivative instrument. SFAS 133 will be effective for
the Company beginning January 1, 2000. The Company is evaluating the provisions
of SFAS 133 and plans to adopt SFAS 133 in its financial statements beginning
in 2000. The impact of SFAS 133 on the Company's financial statements will
depend on the extent, type and effectiveness of the Company's hedging
activities. However, the Company does not believe the effect of adopting SFAS
133 will be material to its financial position or results of operations.
Impact of Inflation
In the last three years, inflation has not had a significant impact on the
Company because of the relatively low inflation rate. Substantially all tenant
leases do, however, contain provisions designed to protect the Company from the
impact of inflation. Most of the Company's leases require the tenants to pay a
share of operating expenses, including common area maintenance, real estate
taxes and insurance, thereby reducing the Company's exposure to increases in
costs and operating expenses resulting from inflation. In addition, many of the
leases are for terms of less than seven years which may enable the Company to
replace existing leases with new leases at higher base rentals if rents under
the existing leases are below the then-existing market rate. However, there can
be no assurance that the Company would be able to replace existing leases with
new leases at higher base rentals.
41
<PAGE>
Year 2000
General. The term "year 2000 issue" is a general term used to describe the
various problems that may result from the improper processing of dates and
date-sensitive calculations by computers and other machinery and equipment as
the year 2000 is approached and reached. The year 2000 issue is the result of
many computer programs recognizing a date ending with "00" as the year 1900
rather than 2000, causing potential system failures or miscalculations which
could result in disruptions of normal business operations.
State of Readiness. The Company's primary financial and operating systems
are supplied by third-party suppliers. Based on communications with these
third-party suppliers, internal evaluations of the third-party systems and
internal assessments of in-house information systems, the Company expects these
systems to be year 2000 compliant by the end of the second quarter of 1999.
Additionally, the Company has evaluated its telephone systems and such systems
are expected to be fully year 2000 compliant before the end of 1999.
The Company is also assessing the potential impact of the year 2000 issue
resulting from the potential failure of its key building mechanical systems or
the failure of its major vendors, suppliers and tenants to be year 2000
compliant. Key building mechanical systems include, but are not limited to,
HVAC systems, elevators and security systems. Major vendors and suppliers
include providers of utility services and suppliers of raw materials utilized
in the development and construction of buildings. The Company's assessments
include the use of questionnaires and direct discussions with such vendors,
suppliers and tenants. The Company anticipates the completion of its
assessments and evaluations in these areas in the first half of 1999.
Cost to Address Year 2000 Issues. Through December 31, 1998, the Company has
spent approximately $53,000 to upgrade and replace certain computer hardware
systems and its telecommunication systems to ensure year 2000 compliance. The
Company estimates that it will spend an additional $135,000 on computer
hardware system upgrades and replacements during 1999 relating to year 2000
compliance issues. A significant portion of such actual and future expenditures
are part of the Company's on-going technology enhancement program and, as such,
these expenditures are not incremental costs associated with year 2000
readiness. The Company does not expect to incur additional incremental costs in
excess of amounts stated above relating to year 2000 compliance and the Company
does not believe the total costs of year 2000 compliance to be material to the
Company's consolidated financial condition or results of operations taken as a
whole. The Company continues to allocate the time and resources necessary to
timely resolve significant year 2000 issues.
Risks Presented by Year 2000 Issues. The Company's major and most reasonably
likely worse case risks associated with the year 2000 issue relate to the
failure of key vendors, suppliers and tenants to be fully year 2000 compliant.
Failures of critical utility systems or other building mechanical systems could
lead to significant business disruptions for tenants. Failures of tenants'
businesses that rely heavily on information technology or that are involved in
the information technology business could also lead to significant business
disruptions or failures. These occurrences could impact the Company's cash flow
and results of operations should these disruptions lead to a tenants' inability
to continue to meet their rental obligations to the Company.
Failures of major suppliers to deliver building raw materials to the Company
due to year 2000 issues could result in the Company being unable to complete
buildings in a timely manner or at the costs budgeted by the Company. This
could result in slower overall business growth and increased costs of
constructing new buildings, both of which could impact the Company's future
financial condition and results of operations.
Based on information obtained from such third parties to date, the Company
does not believe that the impact of the year 2000 issue will have a material
adverse impact on the Company's financial condition or results of operations.
However, such conclusions are based upon communications, evaluations, and
assessments to date, and if future negative events occur which cannot be
resolved in a timely manner, it could result in material financial risk to the
Company.
Contingency Plans. To date, the Company has not established any contingency
plans for possible year 2000 issues. After its assessments are completed in the
first half of 1999, the Company anticipates evaluating
42
<PAGE>
and developing contingency plans, to the extent such plans are feasible, to
address identified risks. It is anticipated that any such plans will be
developed in the second half of 1999.
The information provided above regarding the Company's year 2000
preparedness includes Forward-looking Statements based upon management's
current assessment of year 2000 issues impacting the Company. Such assessments
are, in part, based on representations of other third parties regarding their
year 2000 preparedness. Such Forward-looking Statements involve risks and
uncertainties and there can be no assurance that any of the factors or
statements regarding the year 2000 issue will not change and that any change
will not affect the accuracy of the Company's Forward-looking Statements.
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
A discussion of the Company's exposure to, and management of, market risk
appears in Management's Discussion and Analysis of Financial Condition and
Results of Operations included in Item 7 of this Form 10-K. Such discussion
under the caption "Management of Market Risks" is incorporated herein by
reference.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
The consolidated financial statements of the Registrant and supplementary
data are detailed under Item 14(a) and filed as part of this report on the
pages indicated.
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE
None.
43
<PAGE>
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
The Directors and Executive Officers of the Company and their positions are
as follows:
<TABLE>
<CAPTION>
Name Age Title
---- --- -----
<C> <C> <S>
Directors
Chairman of the Board and Chief Executive
A. Ray Weeks, Jr............... 46 Officer
Vice Chairman of the Board and Chief
Thomas D. Senkbeil............. 49 Investment Officer
Forrest W. Robinson............ 47 President and Chief Operating Officer
John W. Nelley, Jr............. 50 Managing Director, Nashville Operations
Barrington H. Branch........... 58 Director
George D. Busbee............... 71 Director
William Cavanaugh III.......... 60 Director
Armando Codina................. 52 Director
Charles R. Eitel............... 49 Director
Harold S. Lichtin.............. 50 Director
William O. McCoy............... 65 Director
Executive Officers
Senior Vice President and Chief Financial
David P. Stockert.............. 36 Officer
Senior Vice President, North Carolina
Robert G. Cutlip............... 49 Operations
Senior Vice President, Construction
Clyde H. Duckett............... 56 Services
Mark W. Flowers................ 41 Senior Vice President, Landscape Services
Senior Vice President, North Florida
Charles D. Graham.............. 55 Operations
Senior Vice President, Dallas/Ft. Worth
Jeffrey D. Turner.............. 38 Operations
Eben Hardie III................ 40 Senior Vice President, Development
Elizabeth C. Belden............ 44 Vice President, Corporate Counsel
Arthur J. Quirk................ 41 Vice President and Controller
Vice President, Development &
Thomas W. Trocheck............. 44 Acquisitions
Susan C. Walker................ 45 Vice President, Investor Relations
Robert T. Weeks................ 38 Vice President, Information Technology
</TABLE>
The Board of Directors of the Company currently consists of eleven persons.
Directors of the Company are divided into three classes serving staggered
three-year terms, with directors serving until the election and qualification
of their successors. Certain information regarding the directors is set forth
below. This information has been furnished by the respective individuals:
Directors--Terms Expiring in 1999
Thomas D. Senkbeil. Director of the Company since October 1992. Mr.
Senkbeil has been the Vice Chairman of the Board and Chief Investment Officer
of the Company since October 1992. From September 1984 to October 1992, Mr.
Senkbeil served as Executive Vice President and Managing Partner of Senkbeil &
Associates, Inc. and Anderson & Senkbeil, Inc., each a real estate development
firm. Mr. Senkbeil is 49 years old.
John W. Nelley, Jr. Director of the Company since November 1996. In
addition, Mr. Nelley has been a Managing Director of the Company, with
responsibilities for the Company's activities in Nashville, Tennessee, since
November 1996. Since 1982, Mr. Nelley has been a General Partner of NWI
Warehouse Group, L.P., an industrial warehouse development company in
Nashville, Tennessee, whose assets and business have been acquired, or are
under agreement to be acquired, by the Company. Mr. Nelley is 50 years old.
Barrington H. Branch. Director of the Company since August 1994. He is
currently President of The Branch-Shelton Company LLC, a private investment
banking firm. From October 1991 to February 1997,
44
<PAGE>
Mr. Branch was President and Chief Executive Officer of DIHC Management
Corporation, the wholly owned U.S. real estate investment subsidiary of
Pensionenfonds PGGM, the second largest private pension fund in The
Netherlands. Mr. Branch is 58 years old.
William Cavanaugh III. Director of the Company since June 1997. Mr.
Cavanaugh has been President and Chief Executive Officer of Carolina Power &
Light Company ("CP&L") since October 1996. He joined CP&L in September 1992 and
served as the Company's President and Chief Operating Officer until October
1996, when he became Chief Executive Officer. Prior to joining CP&L, he was
Chairman, Chief Executive Officer and Director of Entergy Operations,
Incorporated, and Group President--Energy Supply for Entergy Corporation. He is
a member of the Board of Directors of the Nuclear Energy Institute, the
Association of Edison Illuminating Companies, Wachovia Bank of North Carolina,
North Carolina Citizens for Business and Industry, and the Southeastern
Electric Exchange. Mr. Cavanaugh is 60 years old.
Armando Codina. Director of the Company since June 1998. For over 20 years,
Mr. Codina has been Chairman and Chief Executive Officer of Codina Group, Inc.,
a Miami based real estate investment, development, construction, brokerage and
property management firm of which the Company owns a one-third interest. Mr.
Codina serves on the boards of AMR Inc. (American Airlines), American Bankers
Insurance Group, Inc., BellSouth Corporation, FPL Group Inc. and Winn-Dixie
Stores, Inc. Mr. Codina is 52 years old.
Directors--Terms Expiring in 2000
A. Ray Weeks, Jr. Chairman of the Board of Directors and Chief Executive
Officer of the Company since its incorporation in 1983. He was also the
President of the Company from 1983 through March 1991. Mr. Weeks is 46 years
old.
George D. Busbee. Director of the Company since August 1994. He has been of
counsel to the law firm of King & Spalding since January 1994 and was a Partner
of King & Spalding from January 1983 to December 1993. Mr. Busbee is a former
Governor of the State of Georgia. He is currently a director of Union Camp
Corporation. Mr. Busbee is 71 years old.
William O. McCoy. Director of the Company since August 1994. Since December
1997, Mr. McCoy has been a partner of Franklin Street partners, an investment
management firm in Chapel Hill, North Carolina. Mr. McCoy was Vice President-
Finance for the University of North Carolina system from February 1995 to
November 1998. He was President of BellSouth Enterprises and Vice Chairman of
the Board of BellSouth Corporation, a regional telecommunications company, from
1983 until January 1995. He is currently a Director of Carolina Power & Light
Company, Kenan Transport Company, Fidelity Investments and the Liberty
Corporation. Mr. McCoy is 65 years old.
Directors--Terms Expiring in 2001
Forrest W. Robinson. Director and President of the Company since April 1991
and the Chief Operating Officer since May 1988. Mr. Robinson is 47 years old.
Charles R. Eitel. Director of the Company since August 1994. Since February
1997, Mr. Eitel has been President and Chief Operating Officer of Interface,
Inc., a worldwide commercial interiors products and services company. He was
President and Chief Executive Officer, Floorcoverings Group, Interface, Inc.,
and served as Executive Vice President of Interface, Inc., from October 1994
until February 1997. Mr. Eitel was President and Chief Executive Officer of
Interface Flooring Systems from November 1993 to February 1994, and was
President of the Floor Coverings Division of Collins & Aikman from July 1987 to
November 1993. He is currently on the board of directors of Interface, Inc. Mr.
Eitel is 49 years old.
Harold S. Lichtin. Director of the Company since December 1996. Since
October 1997, Mr. Lichtin has been President of Lichtin Corporation, a real
estate and investment firm. Mr. Lichtin had been a Managing
45
<PAGE>
Director of the Company, with responsibilities for the Company's activities in
the Research Triangle area of North Carolina, from December 1996 through
September 1997 and since October 1997 has served as a consultant to the
Company. From 1977 to December 1996, Mr. Lichtin was President of Lichtin
Properties, Inc., a commercial development and property management company that
was acquired by the Company in December 1996. Mr. Lichtin is 50 years old.
The following is a biographical summary of the experience of the executive
officers, other than those who are also directors, of the Company:
David P. Stockert. Senior Vice President and Chief Financial Officer of the
Company since June 1995. Vice President and Associate in the Real Estate
Investment Banking Group of Dean Witter Reynolds Inc. (now Morgan Stanley Dean
Witter) from July 1990 to June 1995. CPA with Ernst & Whinney (now Ernst &
Young) from May 1985 to August 1988. Master of Business Administration from
Columbia University Business School and Bachelor of Science in Accounting from
the University of Colorado.
Robert G. Cutlip. Senior Vice President, North Carolina Operations, of the
Company since October 1997. Senior Vice President, Development, of the Company
from April 1993 to September 1997. Vice President and Principal-in-Charge of
Dallas Industrial and Phoenix/Colorado Operations of Paragon Group, a national
full service real estate development company, from January 1992 to April 1993,
Vice President and Principal of Dallas Industrial from January 1990 to December
1991 and Vice President, Operations from January 1988 to January 1990. Master
of Business Administration from University of Southern California, Master of
Science in Civil Engineering from Vanderbilt University and Bachelor of Science
in Civil Engineering from U.S. Air Force Academy.
Clyde H. Duckett. Senior Vice President, Construction Services, of the
Company since January 1989. Professional Engineer registered in Georgia, South
Carolina and Tennessee. Bachelor of Science in Mechanical Engineering from
Tennessee Technological University.
Mark W. Flowers. Senior Vice President, Landscape Services, of the Company
since October 1993. Vice President, Landscape of the Company from October 1987
through September 1993. Bachelor of Science in Horticulture from the University
of Georgia.
Charles D. Graham. Senior Vice President, North Florida Operations, since
October 1997. President of Wilma, Inc., a national real estate development
firm, from June 1983 to October 1997. Vice President and Chief Financial
Officer of the Sea Pines Company, a national real estate developer of resort
communities, from 1980 to 1983. Master of Accountancy and Bachelor of Science
in Business Administration from Florida State University.
Eben Hardie III. Senior Vice President, Development of the Company since
October 1997. President of Cauble Development Services Company from December
1994 to October 1997. Senior Vice President, Kern Realty Services from 1988 to
1994. Bachelor of Science in Economics from the Wharton School of the
University of Pennsylvania.
Jeffrey D. Turner. Senior Vice President, Dallas/Ft. Worth Operations since
June 1998. Vice President-Dallas Industrial for Paragon Group, Inc. a national
full-service real estate development company, from January 1985 through June
1998. Bachelor of Arts in Marketing from Anderson University.
Elizabeth C. Belden. Vice President, Corporate Counsel, of the Company since
October 1985. Juris Doctor from Emory University and Bachelor of Social
Sciences from Colorado State University.
Arthur J. Quirk. Vice President and Controller of the Company since December
1994. Vice President-Controller and Chief Accounting Officer for Allegiant
Physician Services, Inc., a physician management services company, from August
1993 to November 1994. Chief Financial Officer/Controller for TransTel Group
Inc., a start-up telecommunications company, from November 1991 to July 1993.
From June 1980 to October
46
<PAGE>
1991 served in various capacities including Senior Audit Manager at Arthur
Andersen LLP. Bachelor of Science in Accounting from Auburn University.
Thomas W. Trocheck. Vice President, Development & Acquisitions, of the
Company since May 1989. Professional Engineer registered in Georgia, Florida
and South Carolina. Bachelor of Science in Civil Engineering from the Georgia
Institute of Technology and Bachelor of Arts in Government and Business
Administration from Florida State University.
Susan C. Walker. Vice President, Investor Relations, of the Company since
October 1997. Public Information Manager and speechwriter for the President of
the Federal Reserve Bank of Atlanta from June 1991 through September 1997.
Previous editorial positions with the Gwinnett Daily News, the Washington
Business Journal, and Inc. magazine. Bachelor of Arts in Classics from Stanford
University.
Robert T. Weeks. Vice President, Information Technology, of the Company
since January 1992. Director of Information Systems of the Company from March
1989 through December 1991. Master of Business Administration from Georgia
State University and Bachelor of Business Administration from the University of
Georgia. Ray Weeks and Robert Weeks are first cousins.
Section 16(a) Beneficial Ownership Reporting Compliance
Compliance with Section 16(a) of the Exchange Act requires the Company's
officers, directors, and persons who own more than 10% of the Company's Common
Stock to file certain reports with respect to each such person's beneficial
ownership of the Company's Common Stock. In addition, Item 405 of
Regulation S-K requires the Company to identify in this current report each
reporting person who failed to file on a timely basis reports required by
Section 16(a) of the Exchange Act during the most recent fiscal year or prior
fiscal year. Based on a review of the copies of such forms furnished to the
Company, the Company believes that all reports required to be filed pursuant to
Section 16(a) during 1998 were timely filed except that Harold S. Litchtin, a
director of the Company, filed two late Forms 4, and John W. Nelley, Jr., an
executive officer and director of the Company, filed a late Form 4.
47
<PAGE>
ITEM 11. EXECUTIVE COMPENSATION
Summary Compensation Table
The following sets forth certain information concerning the compensation
paid to the Company's chief executive officer, each of the four other most
highly compensated executive officers of the Company and one former executive
officer of the Company (collectively, the "Named Executive Officers"):
<TABLE>
<CAPTION>
Long-Term
Compensation Awards
-----------------------
Securities
Annual Compensation Restricted Underlying
Name and Principal ----------------------- Stock Options All Other
Position Year Salary Bonus(2)(3)(4) Awards (#) Compensation(5)
- ------------------ ---- -------- -------------- ---------- ---------- ---------------
<S> <C> <C> <C> <C> <C> <C>
A. Ray Weeks, Jr.(1).... 1998 $295,277 $250,000 $300,000(6) 100,000 $ 7,531
Chairman of the Board
and 1997 264,231 192,000 -- 10,000 7,071
Chief Executive Officer 1996 218,451 -- -- 25,000 171,544
Thomas D. Senkbeil...... 1998 244,661 210,000 -- 75,000 7,531
Vice Chairman of the
Board 1997 217,392 155,000 -- -- 7,136
and Chief Investment
Officer 1996 196,382 136,000 235,000(7) 20,000 7,231
Forrest W. Robinson..... 1998 229,662 190,000 -- 65,000 7,531
President and Chief 1997 205,280 140,000 -- -- 7,125
Operating Officer 1996 196,382 128,000 200,000(7) 20,000 7,231
David P. Stockert....... 1998 219,246 175,000 -- 55,000 7,240
Senior Vice President
and 1997 193,480 127,500 -- -- 6,743
Chief Financial Officer 1996 184,687 116,000 200,000(7) 17,500 5,077
John W. Nelley, Jr.(8).. 1998 213,600 110,000 -- 37,500 8,881
Managing Director--
Nashville 1997 167,292 67,000 -- -- 9,007
Operations 1996 20,557 -- -- 40,000 962
Klay W. Simpson(9)...... 1998 29,989 448,861(10) -- -- 5,176
Senior Vice President--
Marketing 1997 57,200 348,092(10) -- -- 3,900
1996 57,200 318,014(10) -- 8,000 2,828
</TABLE>
- --------
(1) In 1998, Mr. Weeks elected to defer $143,914 of salary payments through the
Company's Deferred Compensation Plan (discussed below). As discussed in
note (5) below, in 1998, Mr. Weeks elected to add a prior year deferred
bonus amount totaling $181,503 to the Deferred Compensation Plan. Under the
provisions of the Deferred Compensation Plan and Mr. Weeks elections under
the Plan, Mr. Weeks' compensation deferrals are invested in hypothetical
shares of the Company's common stock. The value of Mr. Weeks' deferred
compensation account, at any point in time, equals the value of the
hypothetical shares of common stock held by the plan, including the
reinvestment of hypothetical cash and common stock dividends on such
shares, at the current market price of the Company's common stock. At
December 31, 1998, the value of Mr. Weeks deferred compensation account was
$309,346.
(2) Bonus amounts for 1998 totaling $250,000 for Mr. Weeks, $210,000 for Mr.
Senkbeil, $190,000 for Mr. Robinson, $175,000 for Mr. Stockert and $100,000
for Mr. Nelley earned in 1998 were paid in 1999.
(3) Bonus amounts for 1997 totaling $192,000 for Mr. Weeks, $155,000 for Mr.
Senkbeil, $140,000 for Mr. Robinson, $127,500 for Mr. Stockert and $67,000
for Mr. Nelley earned in 1997 were paid in 1998.
(4) Bonus amounts for 1996 totaling $136,000 for Mr. Senkbeil, $128,000 for Mr.
Robinson and $116,000 for Mr. Stockert earned in 1996 were paid in 1997.
(5) For 1998, amounts include the Company's matching contributions to its
401(k) retirement savings plan of $3,200 for Mr. Weeks, $3,200 for Mr.
Senkbeil, $3,200 for Mr. Robinson, $3,200 for Mr. Stockert, $3,200 for Mr.
Nelley and $3,200 for Mr. Simpson. Amounts for 1998 also include health
care and disability premium payments of $4,331 for Mr. Weeks, $4,331 for
Mr. Senkbeil, $4,331 for Mr. Robinson, $4,040 for Mr. Stockert, $5,681 for
Mr. Nelley and $1,976 for Mr. Simpson. For 1996, the amount for Mr. Weeks
also includes a bonus totaling $164,000 earned in 1996 that the
Compensation Committee of the Board of Directors elected to defer for a
period of five years. The terms of such bonus deferral also
48
<PAGE>
provided for the payment of interest to Mr. Weeks on the amount of the
deferred bonus. Total interest earned on the deferred bonus totaled $6,503
in 1998 and $11,000 in 1997. Effective July 1, 1998, Mr. Weeks elected to
have the aggregate deferred amount, including accrued interest, totaling
$181,503 be considered part of the Deferred Compensation Plan.
(6) Represents the value of 10,835 restricted shares of the Company's Common
Stock granted to Mr. Weeks on January 21, 1999, related to 1998
performance. These shares were granted in recognition of successful prior
service to the Company and will be earned through the continued financial
performance of the Company as stated below. These shares vest ratably over
the four year period ended January 21, 2003, provided the Company's annual
per share funds from operations growth exceeds 9% on an annual basis for
each vesting period. Funds from operations is a REIT industry measurement
that is one of the tools used by the Board of Directors to assess the
financial performance of the Company. At December 31, 1998, the restricted
stock granted to Mr. Weeks had a value of 305,412 (assuming all shares
will fully vest in accordance with the terms of the arrangements).
Dividends are paid on the restricted stock at the same rate payable to
common shareholders.
(7) Represents the value of 7,015, 5,970 and 5,970 restricted shares of the
Company's Common Stock granted on February 17, 1997, to Mr. Senkbeil, Mr.
Robinson and Mr. Stockert, respectively, related to 1996 performance.
These shares were granted in recognition of successful prior service to
the Company and will be earned through the continued financial performance
of the Company as stated below. These shares vest ratably over the four
year period ended February 17, 2000, provided the Company's annual per
share funds from operations growth exceeds 10% on an annual basis for each
vesting period. Effective on each of February 17, 1999 and 1998, 25% of
the restricted stock granted to Mr. Senkbeil, Mr. Robinson and Mr.
Stockert vested in accordance with the terms of their restricted stock
arrangements discussed above. At December 31, 1998, the restricted stock
granted to Mr. Senkbeil, Mr. Robinson and Mr. Stockert had a value of
$197,735, $168,279 and $168,297, respectively (assuming all shares will
fully vest in accordance with the terms of the arrangements). Dividends
are paid on the restricted stock at the same rate payable to common
shareholders.
(8) Mr. Nelley was employed by the Company on November 1, 1996.
(9) Mr. Simpson resigned his employment with the Company on June 16, 1998.
(10) Amounts represent commissions earned on real estate transactions under the
terms of Mr. Simpson's employment arrangement with the Company.
Option Grants in Last Fiscal Year
The following table sets forth the individual grants of stock options made
during 1998 to each Named Executive Officer.
<TABLE>
<CAPTION>
Individual Grants
------------------------------------------------
Potential Realizable Value
Number of at Assumed Annual Rates of
Securities Percent of Total Stock Price Appreciation
Underlying Options Granted Exercise for Option Term(2)
Options to Employees in Price Expiration ---------------------------
Name Granted(1) Fiscal Year ($/Share) Date 5% 10%
- ---- ---------- ---------------- --------- ---------- ------------- -------------
<S> <C> <C> <C> <C> <C> <C>
A. Ray Weeks, Jr........ 100,000 18.10% $32.00 5/20/08 $ 2,012,463 $ 5,099,976
Thomas D. Senkbeil...... 75,000 13.57% 32.00 5/20/08 1,509,347 3,824,982
Forrest W. Robinson..... 65,000 11.76% 32.00 5/20/08 1,308,101 3,314,984
David P. Stockert....... 55,000 9.95% 32.00 5/20/08 1,106,855 2,804,987
John W. Nelley, Jr...... 37,500 6.79% 32.00 5/20/08 754,674 1,912,491
Klay W. Simpson......... -- -- -- -- -- --
</TABLE>
- --------
(1) All options listed above become exercisable ratably on the first, second
and third anniversaries, respectively, following the date of grant.
49
<PAGE>
(2) Amounts for the Named Executive Officers shown under the "Potential
Realizable Value" columns above have been calculated by multiplying the
exercise price by the annual appreciation rate shown (compounded for the
term of the options), subtracting the exercise price per share and
multiplying the gain per share by the number of shares covered by the
options. These amounts represent certain assumed rates of appreciation
only. Actual gains, if any, on stock option exercises are dependent on the
future performance of the Company's common stock and overall market
conditions. Accordingly, the amounts reflected in this table may not be
achieved.
Options Exercised and Fiscal Year-End Option Values Table
The following table sets forth information with respect to options exercised
during the last fiscal year and the value of unexercised in-the-money options
held by the Named Executive Officers of the Company at December 31, 1998.
<TABLE>
<CAPTION>
Number of Securities Underlying Value of Unexercised
Unexercised Options at In-the-Money Options at
Shares Fiscal Year-End(#) Fiscal Year-End($)(2)
Acquired Value ----------------------------------- -------------------------
Name on Exercise(#) Realized($)(1) Exercisable Unexercisable Exercisable Unexercisable
- ---- -------------- -------------- --------------- ---------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
A. Ray Weeks, Jr........ -- -- 85,000 115,000 $617,397 $18,228
Thomas D. Senkbeil...... -- -- 68,333 81,667 $520,728 $14,584
Forrest W. Robinson..... -- -- 68,333 71,667 $520,728 $14,584
David P. Stockert....... -- -- 60,667 60,833 $236,459 $12,760
John W. Nelley, Jr...... -- -- 40,000 37,500 -- --
Klay W. Simpson......... 20,344 $118,180 -- -- -- --
</TABLE>
- --------
(1) In accordance with the Securities and Exchange Commission's rules, values
are determined by subtracting the exercise price from the fair market value
of the underlying Common Stock on the option exercise date.
(2) In accordance with the Securities and Exchange Commission's rules, values
are determined by subtracting the exercise price from the fair market value
of the underlying Common Stock. For purposes of this table, fair market
value is deemed to be $28.1875, the price of the Common Stock as reported
on the New York Stock Exchange on December 31, 1998.
Meetings of the Board of Directors
During 1998, the Board of Directors held four regular meetings and five
special meetings. In 1998, all of the directors, other than Armando Codina (who
was appointed in June), attended at least 75% of the Board meetings and the
meetings held by committees of the Board of Directors on which the directors
served.
Committees of the Board of Directors
The Board of Directors controls the management of the Company and its
property and the disposition thereof and is responsible for the general
policies of the Company and general supervision of the Company's activities. To
assist in carrying out its duties, the Board has delegated certain authority to
an Audit Committee and a Compensation Committee.
Audit Committee. The Audit Committee consists of William O. McCoy and
Charles R. Eitel. William O. McCoy is the Chairman of the Committee. The Audit
Committee makes recommendations concerning the engagement of independent public
accountants, reviews with the independent public accountants the plans and
results of the audit engagement, approves professional services provided by the
independent public accountants, reviews the independence of the independent
public accountants, considers the range of audit and non-audit fees and reviews
the adequacy of the Company's internal accounting controls. The Audit Committee
held one meeting during 1998.
50
<PAGE>
Compensation Committee. The Compensation Committee consists of Barrington H.
Branch and George D. Busbee. Barrington H. Branch is the Chairman of the
Committee. The Compensation Committee is responsible for determining
compensation for the Company's executive officers and for administering the
Company's Incentive Stock Plans. The Compensation Committee held two meetings
during 1998.
Compensation Committee Interlocks and Insider Participation. During 1998,
Messrs. Branch and Busbee served as members of the Compensation Committee. No
member of the Compensation Committee was an officer or employee of the Company
or any of its subsidiaries during 1998. Mr. Busbee is of counsel to the law
firm of King & Spalding. Mr. Busbee, formerly a Partner of such firm, retired
from King & Spalding as of December 31, 1993. King & Spalding provided certain
legal services to the Company in 1998, including services in connection with
offerings of debt and equity securities by the Company and the Operating
Partnership and certain significant acquisitions made by the Company. See
"Certain Transactions--Transactions with Directors." There are no Compensation
Committee interlocks.
The Board does not have a nominating committee.
Compensation of Directors
The Company pays its directors who are not employees of the Company fees for
their services as directors. Non-employee directors receive annual compensation
of $20,000 plus a fee of $1,000 for attendance in person and $250 for
attendance by telephone at each meeting of the Board of Directors.
Each non-employee director, upon joining the Board of Directors, receives an
initial grant of options to purchase 5,000 shares of Common Stock at an
exercise price equal to the fair market value of the Common Stock at the date
of the grant of such options. Thereafter, each director who is serving as such
on December 31 of each calendar year and who has served as such for more than
one year will, on each December 31, automatically receive an annual grant of
options to purchase 5,000 shares of Common Stock at an exercise price equal to
the fair market value of the Common Stock at the date of the grant of such
options.
Noncompetition and Employment Agreements
Certain of the Named Executive Officers and directors had employment and
noncompetition agreements with the Company, as set forth below.
Each of A. Ray Weeks, Jr., Thomas D. Senkbeil, Forrest W. Robinson, David P.
Stockert, John W. Nelley, Jr., and Harold S. Lichtin has entered into a
noncompetition agreement (the "Noncompete Agreement") with the Company, the
Operating Partnership, Weeks Realty Services and Weeks Construction Services.
The Noncompete Agreements, with certain exceptions, prohibit each individual
from serving as an officer, director, or partner of, owning any interest in or
performing certain managerial functions on behalf of any entity that engages
directly or indirectly in the development, operation, management, leasing,
construction or landscaping of any industrial or office properties during the
term of his employment or consulting arrangement with the Company, as
applicable, and for a period of three years thereafter, with respect to
Messrs. Weeks, Senkbeil and Robinson, for a period of two years thereafter,
with respect to Mr. Stockert, and for a period of one year thereafter, with
respect to Messrs. Nelley and Lichtin.
On November 1, 1996, John W. Nelley, Jr. entered into an employment
agreement with the Company (the "Employment Agreement"), and, effective October
1,1997, Mr. Lichtin entered into a consulting agreement (the "Consulting
Agreement") with the Company. The Employment Agreement provides for a three-
year term of employment for Mr. Nelley, and the Consulting Agreement provides
for a consulting arrangement until December 31, 1999. Annual compensation
(including bonus and stock option or restricted stock awards) is set in
accordance with the criteria established by the Compensation Committee of the
Board of Directors. See "Board Compensation Committee Report on Executive
Compensation." The employment agreements for Messrs. Weeks, Senkbeil, Robinson
and Stockert expired in 1998.
51
<PAGE>
Change of Control Agreements
A. Ray Weeks, Jr., Thomas D. Senkbeil, Forrest W. Robinson, David P.
Stockert and John W. Nelley, Jr. each have entered into Change of Control
Agreements with the Company which entitle the officers to receive, upon a
change of control, severance payments if his employment terminates voluntarily
or involuntarily before the first anniversary of the change in control or
involuntarily before the second anniversary of the change in control. The
benefits on such a termination would equal 2.5 times such officer's
compensation package (as defined in the agreement) and any unvested stock
options or restricted stock awards would vest automatically.
52
<PAGE>
1998 Deferred Compensation Plan
The Company has adopted the Weeks Corporation Amended and Restated 1998
Deferred Compensation Plan (the "Deferred Compensation Plan"), which permits
eligible executives and directors of the Company and its affiliates to defer
the payment of all or a portion of their compensation or retainer payable for
services as an eligible executive or a director. Each eligible executive or
director may elect, on or before December 31 of any calendar year, to defer the
payment of the compensation or retainer payable on or after the January 1. If
an eligible executive or director has made such a deferral election for any
calendar year and has not revoked such election before the beginning of any
subsequent calendar year, his or her election shall remain in effect for each
such calendar year and shall be irrevocable through the end of each such
subsequent calendar year.
Any amount deferred under the Deferred Compensation Plan will not be paid to
the eligible executive or director as earned, but will be credited to a
bookkeeping account maintained by the Company in the name of the eligible
executive or director, and the eligible executive or director shall elect when
he or she makes a deferral election whether this account shall be deemed
invested in interest (based on the prime interest rate as reported in The Wall
Street Journal) or in Common Stock. Each participating eligible executive or
director will be treated as a general and unsecured creditor of the Company and
its affiliates with respect to such funds.
The balance credited to an eligible executive's or director's account shall
become distributable to him or her as of the first day of the calendar quarter
which immediately follows the calendar quarter which includes his or her date
of death or the effective date of his or her resignation, removal or retirement
as an eligible executive or director, whichever comes first, and the
distribution shall be made (or shall begin) as soon as practicable after the
beginning of such calendar quarter. All distributions under the Deferred
Compensation Plan shall be made in cash, and all such distributions shall be
made in a lump sum unless the eligible executive or director elects at least
one full year before his or her account first becomes distributable to have his
or her account distributed in either 5 or 10 annual installments. In addition,
an eligible executive or director may receive a distribution under the Deferred
Compensation Plan pursuant to a limited early withdrawal right, and the
eligible executive or director may designate a beneficiary to receive the
balance credited to his or her account in the event of his or her death.
Board Compensation Committee Report on Executive Compensation
The Company's executive compensation program is administered by the
Compensation Committee of the Board of Directors. The Compensation Committee is
composed of two independent, non-employee directors who are responsible for
developing, administering and monitoring the compensation policies applicable
to the Company's executive officers, and for administering the Company's
Incentive Stock Plans, under which grants may be made to executive officers and
other key employees. The Compensation Committee considers recommendations from
management, along with other factors, and reviews independently prepared
industry compensation information.
Executive Compensation Philosophy.
The Compensation Committee believes that a fundamental goal of the Company's
executive compensation program should be to foster a high-performance culture
that motivates and retains high-performing executives, to promote teamwork, to
align compensation with business objectives and sustained performance and to
provide incentives to create value for the Company's shareholders. The
Compensation Committee believes that a significant portion of total executive
officer compensation should consist of variable, performance-based components,
such as bonuses and restricted stock and stock option awards, which can
increase or decrease to reflect changes in Company or individual performance.
The Compensation Committee uses as its primary market benchmark the
practices of a peer group of equity real estate investment trusts ("REITs")
similar in business focus, market capitalization and/or performance to the
Company. It believes that equity REITs offer the most likely competition for
executive talent. Comparative compensation information for the peer group of
equity REITs used by the Compensation Committee was obtained from the SNL
Executive Compensation Review 1998 -- REITs. The Compensation Committee
believes that a peer group comparison enables the Company to determine a fair
level of compensation for executive officers, while assuring shareholders that
executive pay levels are reasonable.
53
<PAGE>
Components of Compensation.
Base Salary. Base salary levels are determined based on the executive's
performance, tenure and industry experience, as well as the Company's financial
performance. Base salaries are reviewed annually by the Compensation Committee.
Annual salary increases for executive officers take into account (i) the actual
and budgeted future financial performance of the Company (including growth in
funds from operations, which the Compensation Committee believes is one of the
appropriate measures of the Company's performance), (ii) individual
performance, (iii) the functions performed by the executive officer, and (iv)
changes in the compensation practices of the peer group. The weight given such
factors by the Compensation Committee may vary from individual to individual.
Short-Term Incentive Awards. During 1998, the Company had a discretionary
bonus program based on each executive officer's performance and the Company's
overall financial and operational performance. Some of the specific factors
taken into account in determining bonus awards for 1998 included (i) the
Company's growth in funds from operations per share and achievement of budgeted
financial results; (ii) the total return to an investor in the Company's Common
Stock, assuming a holding period for the full year and the reinvestment of
dividends, in relation to the index of equity REITs prepared by NAREIT; (iii)
the success of the Company's acquisition, development and new market expansion
activities; (iv) the successful execution of the Company's debt and equity
capital-raising activities; and (v) the achievement of other subjective
individual performance goals. Consideration of these factors is subjective, and
no specific weightings were applied.
Long-Term Incentive Awards. The Company adopted the Incentive Stock Plans to
attract and provide incentives to officers, key employees and directors. The
Incentive Stock Plans provide for grants of options, stock appreciation rights
and restricted stock. The Incentive Stock Plans are designed to motivate
executive officers and key employees to maximize shareholder value. The 1994
Incentive Stock Plan had 47,889 shares of Common Stock available for future
issuance by the Compensation Committee as of December 31, 1998. The Company's
1998 Incentive Stock Plan, had 885,000 shares of Common Stock available for
future issuance by the Compensation Committee as of December 31, 1998.
The Compensation Committee grants awards under the Incentive Stock Plans
based on a number of factors, including (i) the investment performance of the
Company's equity securities, (ii) the executive officer's or key employee's
position in the Company, (iii) his or her performance and responsibilities,
(iv) equity participation levels of comparable executives and key employees at
other companies in the compensation peer group and (v) individual contribution
to the Company's financial performance. However, the Incentive Stock Plans do
not provide any formulaic method for weighting these factors, and a decision to
grant an award is based primarily upon the Compensation Committee's evaluation
of the past as well as the future anticipated performance and responsibilities
of the individual in question.
Chief Executive Officer Compensation.
The compensation of A. Ray Weeks, Jr. during 1998 was determined on the same
basis as discussed above for the Company's other executive officers. For 1998,
Mr. Weeks' compensation consisted of base salary and bonus, and grants of
restricted stock and options under the 1998 Incentive Stock Plan, each as
described under "--Summary Compensation Table" above. Mr. Weeks' compensation
for 1998 was based on his contribution to the Company's growth and financial
performance during the year, and the success of its expansion strategy, and
took into account the compensation practices relating to the Chief Executive
Officers of the compensation peer group. Mr. Weeks' base salary, bonus and
award levels under the Incentive Stock Plans will continue to be reviewed
annually by the Compensation Committee.
Policy With Respect to the $1 Million Deduction Limit.
The Omnibus Budget Reconciliation Act of 1993 placed certain limits on the
deductibility of non-performance-based executive compensation for a company's
employees, unless certain requirements are met.
54
<PAGE>
Currently, the Compensation Committee does not believe that there is a risk
of losing deductions under this law. However, in the future, the Compensation
Committee intends to consider carefully any plan or compensation arrangement
that might result in the disallowance of compensation deductions. It will use
its best judgment, taking all factors into account, including the materiality
of any deductions that may be lost versus the broader interests of the Company
to be served by paying adequate compensation for services rendered, before
adopting any plan or compensation arrangement.
Compensation Committee
Barrington H. Branch, Chairman
George D. Busbee
The foregoing report should not be deemed incorporated by reference by any
general statement incorporating by reference this current report into any
filing under the Securities Act or under the Exchange Act (together with the
Securities Act, the "Acts"), except to the extent that the Company specifically
incorporates this information by reference, and shall not otherwise be deemed
filed under such Acts.
Stock Performance Graph
The following stock price performance graph compares the Company's
performance to the S&P 500 and the index of equity REITs prepared by NAREIT.
Equity REITs are defined by NAREIT as those which derive more than 75% of their
income from equity investments in real estate assets. The NAREIT equity REIT
index includes all tax-qualified REITs listed on the New York Stock Exchange,
the American Stock Exchange and the NASDAQ National Market. The performance
graph assumes $100 invested in the Company's Common Stock as of August 18,
1994, the date on which the Company's Common Stock began trading on the New
York Stock Exchange, and assumes the investment of the same amount as of August
31, 1994, in the S&P 500 and the NAREIT equity REIT index. The difference in
the initial start dates is due to the fact that the Company's Common Stock did
not start to trade publicly until August 18, 1994, and only month-end data is
available for the NAREIT equity REIT index in that year. The Company believes
that the net effect of this difference in start dates does not have a material
effect on the performance graph. Total return includes reinvestment of
dividends. Stock price performance for the Company for the period from August
18, 1994, through December 31, 1998, is not necessarily indicative of future
results.
[GRAPH APPEARS HERE]
NAREIT
DATE WEEKS INDEX S&P500
- ------------------- ---------- --------- ----------
08/94 $100.0 $100.0 $100.0
FYE 12/31/94 $109.5 $ 98.2 $ 97.6
FYE 12/31/95 $134.4 $114.1 $134.1
FYE 12/31/96 $189.0 $153.0 $164.9
FYE 12/31/97 $191.8 $184.1 $219.9
FYE 12/31/98 $179.6 $151.8 $282.71
55
<PAGE>
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth information concerning the beneficial
ownership of shares of Common Stock of the Company as of February 28, 1999 for
(i) directors of the Company, (ii) the Chief Executive Officer and each of the
Named Executive Officers, (iii) the directors and executive officers of the
Company as a group and (iv) each person known to the Company who is, or may be
deemed to be, the beneficial owner of more than 5% of the Company's common
stock. The number of shares represents the number of shares of common stock the
person holds plus the number of shares into which Common Units in the Operating
Partnership held by the person are exchangeable (if the Company elects to issue
shares rather than pay cash upon such exchange). Common Units are exchangeable
for common stock or cash, at the option of the Company. The right to exchange
Common Units for shares of common stock or cash (the "Exchange Rights") may be
exercised by the holders of Common Units (other than John W. Nelley, Jr.,
Harold S. Lichtin and Armando Codina and certain entities controlled by them,
who are contractually restricted from exercising the Exchange Rights as
described below) from time to time, in whole or in part.
The Exchange Rights may be exercised by John W. Nelley. Jr., and certain
entities controlled by him, with respect to Common Units beneficially owned by
him through such entities, from time to time, in whole or in part, after
November 1, 1999. The Exchange Rights, generally may be exercised by Harold S.
Lichtin and certain entities that he controls from time to time, in whole or in
part, after December 31, 1999. The Exchange Rights may be exercised by Armando
Codina and certain entities controlled by him, with respect to Common Units
beneficially owned by him through such entities, in whole or in part, after the
earlier of (i) January 9, 2001, or (ii) the date of Mr. Codina's death or
removal from the Board of Directors.
56
<PAGE>
<TABLE>
<CAPTION>
Beneficial Ownership
Beneficial Ownership Assuming Assuming Exchange of Units
No Exchange of Units for Common Stock for Common Stock
--------------------------------------------------- -----------------------------------
% of Shares
% of Shares of Number of of
Name and Address of Number of Shares of Common Stock Shares of Common Stock
Beneficial Owner Common Stock(1) Outstanding Common Stock(1) Outstanding
- ------------------- --------------------- ------------------ --------------- ------------
<S> <C> <C> <C> <C>
LaSalle Advisors Capital
Management, Inc./ABKB/LaSalle
Securities Limited
Partnership(2).............. 1,765,100(2) 8.94% 1,765,100 6.52%
200 East Randolph Drive
Chicago, IL 60601
FMR Corp.(3)................. 1,228,600(3) 6.22% 1,228,600 4.54%
82 Devonshire Street
Boston, MA 02109
J.P. Morgan & Co.
Incorporated(4)............. 1,198,500(4) 6.07% 1,198,500 4.43%
60 Wall Street
New York, NY 10260
AEW Capital Management, L.P./
AEW Capital Management,
Inc./AEW TSF, Inc./AEW TSF,
L.L.C./ AEW Targeted
Securities Fund, L.P. TSF,
L.L.C./AEW Employees Holdings
TSF, L.P.(5)................. 1,181,929(5) 5.69% 1,181,929 4.20%
225 Franklin Street
Boston, Massachusetts 02110
A. Ray Weeks, Jr.(6)......... 383,486(7)(8) 1.93% 1,816,391(7)(8) 6.69%
Chairman, Chief Executive
Officer and Director
Thomas D. Senkbeil(6)........ 123,498(8) * 219,565(8)(9)(10) *
Vice Chairman, Chief
Investment Officer and
Director
Forrest W. Robinson(6)....... 94,376(8) * 166,503(8)(9)(10) *
President, Chief Operating
Officer and Director
David P. Stockert(6)......... 75,027(8) * 75,027(8) *
Senior Vice President and
Chief Financial Officer
John W. Nelley, Jr.(6)....... 149,829(8)(11) * 2,835,478(8)(11) 10.46%
Managing Director and
Director
Klay W. Simpson(16).......... 1,444 * 5,554 *
Senior Vice President,
Marketing
Harold S. Lichtin(6)......... 322,178(12)(13) 1.63% 1,053,168(12)(13) 3.89%
Director
Barrington H. Branch(6)...... 19,500(13) * 19,500(13) *
Director
George D. Busbee(6).......... 23,000(13) * 23,000(13) *
Director
William Cavanaugh III(6)..... 10,000(13) * 10,000(13) *
Director
Armando Codina(6)............ 5,000(13)(14) * 277,566(13)(14) 1.03%
Director
Charles R. Eitel(6).......... 20,000(13) * 20,000(13) *
Director
William O. McCoy(6).......... 22,000(13) * 22,000(13) *
Director
All executives officers and
directors as a group (15
persons).................... 1,262,258(15) 6.25% 6,383,672(15) 23.19%
</TABLE>
57
<PAGE>
- --------
* Represents less than 1% of the Company's outstanding common stock.
(1) Except as otherwise indicated, each of the parties listed has sole voting
and investment power over the shares owned.
(2) According to a Schedule 13G, dated February 12, 1999, filed on behalf of
LaSalle Advisors Capital Management, Inc. ("LaSalle") and ABKB/LaSalle
Securities Limited Partnership ("ABKB"), registered investment advisory
companies, each entity represents the following beneficial ownership,
voting rights and stock disposition powers with respect to the Company's
Common Stock. LaSalle claims beneficial ownership of 669,050 shares or 3.4%
of the Company's Common Stock, the sole power to vote or to direct the vote
and sole power to dispose or to direct the disposition of 316,350 shares,
shared power to vote or to direct the vote of 33,000 shares, the shared
power to direct the disposition of 352,700 shares and disclaims sole or
shared voting powers of 319,700 shares of Common Stock. ABKB claims
beneficial ownership of 1,096,050 shares or 5.6% of the Company's Common
Stock, the sole power to vote or to direct the vote of 292,200 shares, the
sole power to dispose or to direct the disposition of 263,700 shares,
shared power to vote or to direct the vote of 740,335 shares, shared power
to dispose or to direct the disposition of 832,350 shares and disclaims
sole or shared voting power to 63,515 shares of Common Stock.
(3) According to a Schedule 13G, dated February 1, 1999, filed on behalf of FMR
Corp., a parent holding company, Edward C. Johnson 3d, as Chairman and a
significant shareholder of FMR Corp., and Abigail P. Johnson, as
significant shareholder of FMR Corp., may also be deemed beneficial owners
of said shares by virtue of their relationships to FMR Corp., and the
companies discussed herein. FMR Corp., through a wholly owned investment
advisory company, Fidelity Management & Research Company ("Fidelity"), has
sole power to dispose of 911,100 shares of the Company's Common Stock owned
by Fidelity funds ("Funds") for which it serves as an advisor. Neither FMR
Corp. nor Edward C. Johnson 3d has the sole power to vote or direct the
voting of 911,100 shares as such power resides with each Fidelity Funds'
Board of Trustees. FMR Corp., through a wholly owned subsidiary bank,
Fidelity Management Trust Company, has sole power to dispose or direct the
disposition of 317,500 shares, the sole power to vote or direct the vote of
308,900 shares and disclaims the power to vote or to direct the vote of
8,600 shares, in its capacity as investment manager of the bank's
institutional accounts.
(4) According to a Schedule 13G, filed February 23, 1999, on behalf of J.P.
Morgan & Co. Incorporated ("J.P. Morgan"), a parent holding company, J.P.
Morgan, through subsidiary investment advisory companies and a bank, has
the sole power to vote or to direct the vote of 1,018,800 shares, the sole
power to dispose of or direct the disposition of 1,198,500 shares and
disclaims the power to vote or to direct the vote of 179,700 shares of
Common Stock.
(5) According to a Schedule 13G/A filed on behalf of AEW Capital Management,
L.P., AEW Capital Management, Inc., AEW TSF, Inc., AEW TSF, L.L.C., AEW
Employee Holdings TSF, L.P., and AEW Targeted Securities Fund, L.P. (the
"AEW Entities"), AEW Capital Management, L.P. and AEW Capital Management,
Inc., through their ownership or management of the AEW Entities, have the
sole power to vote or to direct the vote and the sole power to dispose or
to direct the disposition of 1,181,929 shares of the Company's Common
Stock. AEW TSF, Inc., AEW TSF, L.L.C., AEW Employee Holdings TSF, L.P. and
AEW Targeted Securities Fund, L.P. report the beneficial or actual sole
power to vote or to direct the vote and the sole power to dispose or to
direct the disposition of 1,046,729 shares of the Company's Common Stock.
The total shares beneficially owned by the AEW Entities includes 1,046,729
shares issuable upon the exercise of a common stock warrant which is
currently exercisable.
(6) Beneficial owner's address is 4497 Park Drive, Norcross, GA 30093.
(7) Includes 31,810 shares of common stock held by a foundation of which Mr.
Weeks is a director and 3,000 shares of Common Stock held by a family trust
of which Mr. Weeks is a trustee. Also, includes 3,467 shares of Common
Stock and 400,155 Common Units held by trusts of which Mr. Weeks is co-
trustee and a 20% beneficiary, and 255,623 Common Units held by
corporations that Mr. Weeks controls, including Common Units held by those
corporations discussed in notes (9) and (10) below, and 163,048 Common
Units held by Mr. Weeks' spouse. Mr. Weeks disclaims benefieial ownership
of 34,810 shares of Common Stock held by the foundation and family trust
discussed above.
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<PAGE>
(8) Includes 88,333, 68,333, 68,333, 60,667, and 40,000 shares issuable to Mr.
Weeks, Mr. Senkbeil, Mr. Robinson, Mr. Stockert, and Mr. Nelley,
respectively, upon exercise of stock options which are currently
exercisable or exercisable within 60 days, but does not include 111,667,
81,667, 71,667, 60,833 and 37,500 shares issuable to Mr. Weeks, Mr.
Senkbeil, Mr. Robinson, Mr. Stockert and Mr. Nelley, respectively, upon
exercise of stock options which are not exercisable within 60 days.
(9) Includes 42,993 Common Units held by a corporation which is owned 60%, 30%
and 10%, respectively, by Mr. Weeks, Mr. Senkbeil and Mr. Robinson.
(10) Includes 257 Common Units held by a corporation which is owned 75%, 20%
and 5%, respectively, by Mr. Weeks, Mr. Senkbeil and Mr. Robinson.
(11) Includes 100,000 shares of Common Stock and 2,685,649 Common Units held by
a partnership of which Mr. Nelley is a general partner. Mr. Nelley
disclaims beneficial ownership of 78,437 of such shares of Common Stock
and 2,106,537 of such Common Units.
(12) Includes 282,178 shares of Common Stock and 694,053 Common Units held by
entities which Mr. Lichtin controls and 298 Common Units held by Mr.
Lichtin's spouse.
(13) Includes 40,000, 18,000, 18,000, 9,000, 75,000, 17,600 and 18,000 shares
issuable to Mr. Lichtin, Mr. Branch, Mr. Busbee, Mr. Cavanaugh, Mr.
Codina, Mr. Eitel and Mr. McCoy, respectively, upon the exercise of stock
options and warrants which are currently exercisable or exercisable within
60 days.
(14) Includes 148,043 Common Units held by entities which Mr. Codina controls.
(15) Includes 462,600 shares issuable upon the exercise of stock options and
warrants which are currently exercisable or exercisable within 60 days,
but does not include 523,000 shares issuable upon exercise of stock
options and warrants which are not exercisable within 60 days.
(16) Mr. Simpson resigned his employment with the Company on June 16, 1998.
59
<PAGE>
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
General
In connection with the Company's August 1994 initial public offering, the
Company incurred $38 million in mortgage indebtedness with The Prudential
Insurance Company of America. A. Ray Weeks, Jr., certain members of the family
of A. Ray Weeks, Jr. (the "Weeks Family"), Forrest W. Robinson, Louis Robinson
(Forrest W. Robinson's father), a trust of which A. Ray Weeks, Jr. is the
trustee and of which A. Ray Weeks, Jr. and the Weeks Family are beneficiaries,
and a trust of which A. Ray Weeks, Jr., Harry T. Weeks (A. Ray Weeks, Jr.'s
uncle) and John P. Weeks (A. Ray Weeks, Jr.'s brother) are trustees and of
which A. Ray Weeks, Jr. and the Weeks Family are beneficiaries severally, but
not jointly, guaranteed collection of a portion of this indebtedness. At
December 31, 1998, such guarantees extended to, in the aggregate, the first
$20.7 million due on such indebtedness.
Transactions with Executive Officers
A. Ray Weeks, Jr., Helen Ballard Weeks and the ARW Family Trust (a trust for
the benefit of A. Ray Weeks, Jr.'s minor children), own shares of capital stock
of The International Cornerstone Group, Inc. ("Cornerstone") representing less
than 7% of the outstanding shares of Cornerstone capital stock at December 31,
1998. Ballard Designs, Inc. ("Ballard Designs"), a national home furnishing
mail order firm, which is a wholly owned subsidiary of Cornerstone, leases an
aggregate of 97,639 square feet of space in two of the Operating Partnership's
properties. The aggregate base rent and tenant reimbursable expenses paid by
Ballard Designs in 1998 with respect to such leases was approximately $465,000.
In connection with the acquisition of certain assets owned by NWI Warehouse
Group, L.P. and its affiliates (collectively, "NWI") in 1996, the Company
agreed, subject to certain conditions, to acquire additional properties from
NWI over a period of time. Pursuant to such agreements, during 1998 the Company
acquired four properties totaling approximately 267,395 square feet and 18.6
net usable acres of land for an aggregate purchase price of $16,498,922,
consisting of 429,468 Common Units of limited partnership interests in the
Operating Partnership with a value of approximately $12,498,000 and the
assumption of indebtedness. John W. Nelley, a director and executive officer of
the Company, and Albert W. Buckley, Jr., an executive officer of the Company,
own interests in NWI. As a result of this ownership, Mr. Nelley and Mr. Buckley
beneficially acquired 92,607 Units and 90,871 Units, respectively, in
connection with these acquisitions. The purchase prices paid for these
additional properties and land were the result of arm's length negotiations
between the Company and NWI in connection with the initial closing of the NWI
transaction. At December 31, 1998, the Company had advanced $4,450,000 to NWI
under a $5,700,000 demand loan agreement. The loan bears interest at LIBOR plus
2.10% and is secured by real estate properties held by NWI, for which the
Company has arrangements to acquire in future periods. Interest earned under
the agreement and included in the accompanying statements of operations totaled
approximately $346,000 for the year ended December 31, 1998.
In connection with the Company's October 1997 acquisition of certain assets
owned by GB Partners, Ltd. ("GB Partners") in the Jacksonville Tradeport, the
Company agreed, subject to certain conditions, to pay to GB Partners certain
fees in connection with the development of properties in the Jacksonville
Tradeport. Charles D. Graham, an executive officer of the Company, owns a 50%
economic interest in GB Partners. Pursuant to such agreements, in connection
with the development of properties during 1998 in the Jacksonville Tradeport,
the Company issued 6,900 Common Units to GB Partners with a value of
approximately $210,000.
In September 1998, the Company assigned the right to acquire four buildings
in Dallas, Texas to NWI, and NWI acquired the buildings for aggregate
consideration of approximately $34,645,000. Simultaneously, the Company
advanced $31,600,000 under a $33,600,000 adjustable rate loan agreement with
NWI and entered
60
<PAGE>
into an option arrangement enabling the Company to acquire the buildings from
NWI. The adjustable rate loan was secured by the four buildings, accrued
interest at LIBOR plus 1.30% and matured on the acquisition of buildings by the
Company. In January 1999, the Company acquired the four industrial buildings
from NWI for aggregate acquisition consideration of approximately $35,151,000,
which resulted in a gain to NWI, net of intercompany eliminations, of
approximately $245,000.
The Company leases the use of a turboprop airplane from time to time from
M&W Aviation, an entity in which A. Ray Weeks, Jr., owns a 50% interest. Lease
payments to M&W Aviation in 1998 totaled approximately $120,000.
Transactions with Directors
George D. Busbee, a director of the Company, is of counsel to the law firm
of King & Spalding. Mr. Busbee, formerly a partner of such firm, retired from
King & Spalding as of December 31, 1993. King & Spalding provided certain legal
services to the Company in 1998, including services in connection with
offerings of debt and equity securities by the Company and the Operating
Partnership and certain significant acquisitions made by the Company.
In connection with the acquisition of certain assets owned by Lichtin
Properties, Inc. and its affiliates (collectively, "Lichtin Entities") in 1996,
the Company agreed, subject to certain conditions, to acquire additional
properties from the Lichtin Entities over a period of time. Pursuant to such
agreements, during 1998 the Company acquired approximately 49.8 net usable
acres of land in exchange for an aggregate of 217,904 Common Units with a value
of approximately $6,356,000. The Lichtin Entities also received 14,502 Common
Units with a value of approximately $468,000 in connection a development
project pursuant to such agreements. Harold S. Lichtin, a director of the
Company, and certain of his affiliates own interests in the Lichtin Entities.
As a result of this ownership, Mr. Lichtin and his affiliates beneficially
acquired 230,228 Units, respectively, in connection with these acquisitions.
The purchase prices paid for these additional properties and land were the
result of arm's length negotiations between the Company and the Lichtin
Entities in connection with the initial closing of the Lichtin transaction.
As part of the Lichtin Properties transaction, the Operating Partnership
assumed certain mortgage indebtedness encumbering the properties acquired from
Lichtin Properties. Pursuant to pre-existing agreements that survived the
closing of the Lichtin Properties transaction, Mr. Lichtin has guaranteed
payment of a portion of the principal of such mortgage indebtedness. At
December 31, 1998, the maximum potential aggregate liability under such
guarantees was approximately $3.5 million. In addition, such pre-existing
agreements provide that Mr. Lichtin will indemnify the holders of such mortgage
indebtedness against losses resulting from the Operating Partnership's failure
to discharge its mortgage covenants relating to environmental matters and to
fund tenant improvements and lease commission costs. The Operating Partnership
has agreed to indemnify Mr. Lichtin for any losses incurred by him as a
consequence of circumstances arising after the closing date of the Lichtin
Properties transaction under such guarantees and indemnities.
The Company entered into a Development Agreement with Gran Central
Corporation, an affiliate of St. Joe Corporation (together with its affiliates,
herein referred to as "Gran Central"), and Armando Codina and his affiliates
(together with his affiliates, herein referred to as "Codina") in June 1998 for
the joint development of properties (a) in the Beacon Point Office Park in
Weston, Florida, under contract to be acquired by Codina (the "Weston
Property"), and (b) in the Beacon Station development in Medley, Florida owned
by Gran Central (the "Medley Property"), providing for the right to jointly
develop the Weston Property and the Medley Property. If a development of any of
the properties is approved by the Company and Gran Central and pursued, Codina
Group, Inc., in which each of Mr. Codina, St. Joe Corporation and the Company
owns a 1/3 interest, shall be engaged at market rates to provide development,
construction, management and leasing services. In addition, if parcels within
the Weston Property are developed, Codina will receive a profits interests
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<PAGE>
in these projects as a partner in the project partnerships, the value of which
will be determined upon stabilization of the applicable property. Codina shall
not receive a profits interests in the development of any portion of the Medley
Property. Pursuant to this Development Agreement, a project partnership was
formed by the Company, Gran Central and Codina in 1998 to develop a project on
a parcel within the Weston Property. The Company and Codina also formed three
project partnerships to develop buildings on three parcels of land in Port
Everglades Park in Hollywood, Florida. Codina did not invest capital in such
project partnerships, but received a profits interest, the value of which will
be determined upon stabilization of the applicable property. In addition,
Codina Group, Inc. was engaged at market rates to provide development,
construction, management and leasing services to such projects. In 1998, Codina
Group, Inc. received aggregate fee income in connection with the foregoing
projects of approximately $2,180,000.
Codina Group, Inc. also provides property management services for the
Company's properties located in Beacon Centre, which the Company acquired in
January 1998. Management fees paid to Codina Group, Inc. in 1998 totaled
approximately $694,000.
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PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULE AND REPORTS ON FORM 8-K
(A)1.Financial Statements
The following Consolidated Financial Statements of the Company together
with the applicable Report of Independent Public Accountants, are listed
below:
<TABLE>
<CAPTION>
Weeks Corporation and Subsidiaries Page Number
<S> <C>
Report of Independent Public Accountants on Financial
Statements and Schedule ..................................... F-1
Consolidated Balance Sheets of the Company at December 31,
1998 and 1997................................................ F-2
Consolidated Statements of Operations of the Company for the
years ended December 31, 1998, 1997 and 1996................. F-3
Consolidated Statements of Shareholders' Equity of the Company
for the years ended December 31, 1998, 1997 and 1996......... F-4
Consolidated Statements of Cash Flows of the Company for the
years ended December 31, 1998, 1997 and 1996................. F-5
Notes to Consolidated Financial Statements.................... F-6
2. Financial Statement Schedule
Schedule III--Real Estate Assets and Accumulated
Depreciation................................................. S-1 to S-16
</TABLE>
3. Exhibits
Certain of the exhibits required by item 601 of Regulation S-K have been
filed with previous reports by the Registrant and are herein incorporated
by reference thereto.
<TABLE>
<CAPTION>
Exhibit
No. Description
------- -----------
<C> <S>
2.1** Agreement of Merger by and between NWI Warehouse Group, LLC and Weeks
Realty, L.P., dated November 1, 1996.
2.2** Contribution Agreement for Development Properties between Weeks
Realty, L.P., and NWI Warehouse Group, L.P., dated November 1, 1996.
2.3** Contribution Agreement for Aspen Grove Land between Weeks Realty,
L.P., and NWI Warehouse Group, L.P., dated November 1, 1996.
2.4** Contribution Agreement for I-440 Land between Weeks Realty, L.P., and
NWI Warehouse Group, L.P., dated November 1, 1996.
2.5** Contribution Agreement for NWI Operating Business by and between
Weeks Realty, L.P. and NWI Warehouse Group, L.P., dated November 1,
1996.
2.6** Contribution Agreement for Buckley Operating Business by and between
Weeks Realty, L.P. and Buckley & Company Real Estate, Inc., dated
November 1, 1996.
2.7** Contribution Agreement for Briley Land between Weeks Realty, L.P. and
NWI Warehouse Group, L.P., dated November 1, 1996.
2.8*** Contribution Agreement by and between Harold S. Lichtin and Weeks
Realty, L.P., dated December 31, 1996.
2.9*** Agreement and Plan of Merger by and among Lichtin Properties, Inc.,
Harold S. Lichtin and Weeks Corporation, dated December 31, 1996.
2.10*** Contribution Agreement for Northern Telecom Properties, among the
Contributors identified therein (the "Contributors") and Weeks
Realty, L.P. doing business as Weeks Realty Limited Partnership,
dated December 31, 1996.
2.11*** Contribution Agreement (Perimeter Park West Land) among Harold S.
Lichtin, Marie Antoinette Robertson, and Perimeter Park West
Associates, and Weeks Realty, L.P. doing business as Weeks Realty
Limited Partnership, dated December 31, 1996.
2.12*** Contribution Agreement for Completed Properties Lichtin Portfolio
among the Contributors and Weeks Realty, L.P. doing business as Weeks
Realty Limited Partnership, dated December 31, 1996.
</TABLE>
63
<PAGE>
<TABLE>
<CAPTION>
Exhibit
No. Description
------- -----------
<C> <S>
2.13*** Contribution Agreement for Development Properties and Regency
Forrest Land among the Contributors and Weeks Realty, L.P. doing
business as Weeks Realty Limited Partnership, dated December 31,
1996.
2.14***** Beacon Centre Contribution Agreement dated January 2, 1998 by and
between Armando Codina, Codina West Dade Development Corporation,
Codina Family Investments, Ltd., The Benenson Capital Company, Raha
Associates, Inc., Laurence Tisch, Preston Tisch, Raha Associates
II, Inc., Codina West Dade Development Corporation No. 5, and Weeks
Realty, L.P., and Weeks Corporation.
2.15(g) Agreement and Plan of Merger, dated as of February 28, 1999, by and
among Duke Realty Investments, Inc. and Weeks Corporation.
2.16(g) Agreement and Plan of Merger, dated as of February 28, 1999, by and
among Duke Realty Limited Partnership and Weeks Realty, L.P.
3.1**** Amended and Restated Articles of Incorporation of the Company
3.2+++ Articles of Amendment of the Registrant's Restated Articles of
Incorporation.
3.3+++ Articles of Amendment of the Registrant's Restated Articles of
Incorporation.
3.4*** Third Amended and Restated Bylaws of Weeks Corporation.
3.5(e) Articles of Amendment of the Registrant's Restated Articles of
Incorporation
3.6 Articles of Amendment of the Registrant's Restated Articles of
Incorporation
3.7 Articles of Amendment of the Registrant's Restated Articles of
Incorporation
3.8 Articles of Amendment of the Registrant's Restated Articles of
Incorporation.
4.1* Specimen certificate of Common Stock.
4.2++++ Specimen certificate of Preferred Stock.
4.3(e) Rights Agreement
4.4(e) Form of Right Certificate
4.5 Warrant Certificate date November 6, 1998.
4.6 Amended and Restated Warrant Agreement, dated as of February 24,
1998 between Weeks Corporation and Codina Group, Inc.
4.7 Warrant Agreement, dated as of February 24, 1998, between Weeks
Corporation and Armando Codina.
4.8 Warrant Agreement, dated as of February 24, 1998, among Weeks
Corporation and Henry Befeler, Ford Gibson, Hank Klein, Jose Hevia,
Rafael Rodon and William Wasey.
10.1**** First Amended and Restated Agreement of Limited Partnership dated
August 24, 1994 of Weeks Realty L.P.
10.2**** Registration Rights and Lock-Up Agreement dated August 24, 1994
among the Company and the persons named therein.
10.3**** Incentive Stock Plan.
10.4**** Employment Agreements between the Company and A. Ray Weeks, Jr.,
Thomas D. Senkbeil and Forrest W. Robinson, respectively.
10.5**** Employment Agreements between Weeks Realty, L.P. and A. Ray Weeks,
Jr., Thomas D. Senkbeil and Forrest W. Robinson, respectively.
10.6**** Employment Agreements between Weeks Realty Services, Inc. and A.
Ray Weeks, Jr., Thomas D. Senkbeil and Forrest W. Robinson,
respectively.
10.7**** Employment Agreements between Weeks Construction Services, Inc. and
A. Ray Weeks, Jr. and Forrest W. Robinson, respectively.
10.8**** Noncompetition Agreements among the Company, Weeks Realty, L.P.,
Weeks Realty Services, Inc., Weeks Construction Services, Inc. and
each of A. Ray Weeks, Jr., Thomas D. Senkbeil and Forrest W.
Robinson.
10.9* Form of Officers and directors Indemnification Agreement.
10.10+ Credit Agreement dated September 25, 1996, by and among Wachovia
Bank of Georgia, N.A., as agent bank for Wachovia Bank of Georgia,
N.A., First Union National Bank of Georgia, Commerzbank A.G. and
Mellon Bank, N.A. as lenders, Weeks Realty, L.P., Weeks
Construction
</TABLE>
64
<PAGE>
<TABLE>
<CAPTION>
Exhibit
No. Description
------- -----------
<C> <S>
Services, Inc., Weeks Realty Services, Inc., Weeks Development
Partnership and Weeks Financing Limited Partnership, as borrowers,
and Weeks Corporation and Weeks Realty, L.P., as guarantors.
10.11++ Park North Purchase and Sale Agreement between Copley Properties
Inc., Parknorth Associates, Parknorth Associates II, Parknorth
Associates III and Weeks Realty, L.P., dated March 28, 1995.
10.12# Purchase and Sale Agreement by and among North Meadow Associates
Joint Venture, ASC North Fulton Associates Joint Venture and Weeks
Realty, L.P., dated July 7, 1995.
10.13## Employment Agreement between Weeks Corporation and David P. Stockert,
dated June 26, 1995.
10.14## Noncompetition Agreement between Weeks Corporation, Weeks Realty,
L.P., Weeks Realty Services, Inc. and Weeks Construction Services,
Inc. and David P. Stockert, dated June 26, 1995.
10.15## Agreement of Purchase and Sale between Premprop-Northwoods 6
Partnership, Premprop-Northwoods 18-22 Partnership, and Premprop-
Northwoods 23 Partnership and Weeks Realty, L.P. dated November 6,
1995. The Exhibits and Schedules to this Agreement are listed in, but
not filed with, this exhibit. Such Exhibits and Schedules have been
omitted for purposes of this filing, but will be furnished to the
Commission supplementary upon request.
10.16### Real Estate Purchase and Sale Agreement by and between Principal
Mutual Life Insurance Company and Weeks Realty, L.P., dated May 28,
1996.
10.17### Amendment to Weeks Corporation Incentive Stock Plan, dated May 21,
1996.
10.18** Employment Agreement by and between John W. Nelley, Jr. and Weeks
Corporation, dated November 1, 1996.
10.19** Employment Agreement by and between Albert W. Buckley, Jr. and Weeks
Corporation, dated November 1, 1996.
10.20** Noncompetition Agreement by and among NWI Warehouse Group, L.P.,
Weeks Corporation, Weeks Realty, L.P., Weeks Realty Services, Inc.,
Weeks Construction Services, Inc., Weeks GP Holdings, Inc., Weeks LP
Holdings, Inc., and their respective successors, dated November 1,
1996.
10.21** Noncompetition Agreement by and among John W. Nelley, Jr., Weeks
Corporation, Weeks Realty, L.P., Weeks Realty Services, Inc., Weeks
Construction Services, Inc., Weeks GP Holdings, Inc., Weeks LP
Holdings, Inc., and any other entity under the common control of
Weeks Corporation, and their respective successors, dated November 1,
1996.
10.22** Noncompetition Agreement by and among Albert W. Buckley, Jr., Weeks
Corporation, Weeks Realty, L.P., Weeks Realty Services, Inc., Weeks
Construction Services, Inc., Weeks GP Holdings, Inc., Weeks LP
Holdings, Inc., and any other entity under the common control of
Weeks Corporation, and their respective successors, dated November 1,
1996.
10.23** Indemnification Agreement by and between Weeks Corporation and John
W. Nelley, Jr., dated November 1, 1996.
10.24** Registration Rights and Lock-Up Agreement by and among Weeks
Corporation, NWI Warehouse Group, L.P., Buckley & Company Real
Estate, Inc., John W. Nelley, Jr., and Albert W. Buckley, Jr., dated
November 1, 1996.
10.25** Registration Rights Agreement for Post-March 31, 1998 Shares and
Units, by and among Weeks Corporation, NWI Warehouse Group, L.P., and
Buckley & Company Real Estate, Inc., dated November 1, 1996.
10.26** Second Amended and Restated Agreement of Limited Partnership of Weeks
Realty, L.P., dated October 30, 1996.
10.27** First Amendment to the Second Amended and Restated Agreement of
Limited Partnership of Weeks Realty, L.P. by and among NWI Warehouse
Group, L.P., Buckley & Company Real Estate, Inc. and Weeks GP
Holdings, Inc., dated November 1, 1996.
10.28*** Registration Rights and Lock-Up Agreement by and among Weeks
Corporation and Harold S. Lichtin, Noel A. Lichtin, Marie A.
Robertson, Amy R. Ehrman, Roland G. Robertson and Perimeter Park West
Associates Limited Partnership, dated December 31, 1996.
</TABLE>
65
<PAGE>
<TABLE>
<CAPTION>
Exhibit
No. Description
------- -----------
<C> <S>
10.29*** Registration Rights and Lock-Up Agreement for Post-June 30, 1998
Units by and among Weeks Corporation and Harold S. Lichtin, Noel A.
Lichtin, Marie A. Robertson, Amy R. Ehrman, Roland G. Robertson and
Perimeter Park West Associates Limited Partnership, dated
December 31, 1996.
10.30(h) Consulting Agreement by and between Harold S. Lichtin and Weeks
Corporation, dated December 30, 1997, effective October 1, 1997.
10.31*** Noncompetition Agreement by and between Harold S. Lichtin, Weeks
Corporation, Weeks Realty, L.P., Weeks Realty Services, Inc., Weeks
Construction Services, Inc., Weeks GP Holdings, Inc., Weeks LP
Holdings, Inc., and any other entity under the common control of
Weeks Corporation, and their respective successors, dated December
31, 1996.
10.32*** Indemnification Agreement by and between Weeks Corporation and
Harold S. Lichtin, dated December 31, 1996.
10.33*** Second Amendment to the Second Amended and Restated Agreement of
Limited Partnership of Weeks Realty, L.P. by and among Harold S.
Lichtin, Noel A. Lichtin, Marie Antoinette Robertson, Amy R.
Ehrman, Roland G. Robertson and Perimeter Park West Associates
Limited Partnership, Weeks GP Holdings, Inc. and Weeks Corporation,
dated December 31, 1996.
10.34++ First Amendment to Credit Agreement dated September 1, 1997 by and
among Wachovia Bank of Georgia, N.A., as agent bank for Wachovia
Bank of Georgia, N.A., First Union National Bank of Georgia,
Commerzbank A.G. and Mellon Bank, as lenders, Weeks Realty, L.P.,
Weeks Construction Services, Inc., Weeks Realty Services, Inc.,
Weeks Development Partnership and Weeks Financing Limited
Partnership, as borrowers, and Weeks Corporation, Weeks GP
Holdings, Inc., Weeks LP Holdings, Inc., and Week Realty, L.P., as
guarantors.
10.35+++++ Third Amendment to Second Amended and Restated Agreement of Limited
Partnership of Weeks Realty, L.P., dated January 31, 1997.
10.36(h) Fourth Amendment to Second Amended and Restated Agreement of
Limited Partnership of Weeks Realty, L.P., dated August 1, 1997.
10.37++++ Fifth Amendment to Second Amended and Restated Agreement of Limited
Partnership of Weeks Realty, L.P., dated October 7, 1997.
10.38(h) Sixth Amendment to Second Amended and Restated Agreement of Limited
Partnership of Weeks Realty, L.P., dated October 27, 1997.
10.39(h) Seventh Amendment to Second Amended and Restated Agreement of
Limited Partnership of Weeks Realty, L.P., dated December 30, 1997,
but effective as of August 1, 1997.
10.40(h) Settlement Agreement and Mutual Release by and among Weeks
Corporation, the affiliates and related companies of Weeks
Corporation identified therein, and Harold S. Lichtin, dated
December 30, 1997, effective October 1, 1997.
10.41***** Eighth Amendment to the Second Amended and Restated Agreement of
Limited Partnership of Weeks Realty, L.P. dated January 9, 1998.
10.42***** Registration Rights Agreement dated January 9, 1998 by and among
Weeks Corporation and The Benenson Capital Company, Raha
Associates, Inc., Laurence Tisch and Preston Tisch.
10.43***** Registration Rights and Lock-Up Agreement dated January 9, 1998 by
and among Weeks Corporation and Armando Codina, Codina Family
Investments, Ltd., and Codina West Dade Development Corporation.
10.44##### Securities Purchase Agreement among Codina Group, Inc., Armando
Codina, St. Joe Corporation and Weeks Realty Services, Inc. dated
as of February 24, 1998.
10.45##### Shareholders' Agreement among Codina Group, Inc., Armando Codina,
St. Joe Corporation and Weeks Realty Services, Inc. dated as of
February 24, 1998.
10.46 Ninth Amendment to the Second Amended and Restated Agreement of
Limited Partnership of Weeks Realty, L.P., dated January 20, 1998.
</TABLE>
66
<PAGE>
<TABLE>
<CAPTION>
Exhibit
No. Description
------- -----------
<C> <S>
10.47(a) Syndicated Credit Agreement dated July 1, 1998, by and among Weeks
Realty, L.P., as borrower, Weeks Corporation, Weeks GP Holdings,
Inc., and Weeks LP Holdings, Inc., as guarantors, and Wachovia Bank,
N.A., as agent bank for syndicated bank group.
10.48(a) Swing Credit Agreement dated July 1, 1998, by and among Weeks Realty,
L.P., as borrower, Weeks Corporation, Weeks GP Holdings, Inc., and
Weeks LP Holdings, Inc., as guarantors, and Wachovia Bank, N.A., as
lender.
10.49(f) Asset Purchase Agreement dated April 23, 1998, among MEPC PLC and
Weeks Realty, L.P., and certain other purchases as described therein.
10.50(a) Tenth Amendment to Second Amended and Restated Agreement of Limited
Partnership of Weeks Realty, L.P., dated April 3, 1998.
10.51(a) Eleventh Amendment to Second Amended and Restated Agreement of
Limited Partnership of Weeks Realty, L.P., dated May 26, 1998.
10.52(a) Twelfth Amendment to Second Amended and Restated Agreement of Limited
Partnership of Weeks Realty, L.P., dated June 3, 1998.
10.53(a) Registration Rights and Lock-Up Agreement dated April 3, 1998, by and
among Weeks Corporation and Sanford H. Orkin and Barbara H. Orkin.
10.54(a) Registration Rights and Lock-Up Agreement dated May 26, 1998, by and
among Weeks Corporation and The Futrell Properties Limited
Partnership No. 1.
10.55(a) Registration Rights and Lock-Up Agreement dated June 3, 1998, by and
among Weeks Corporation and Thomas M. Beckman and Thomas B. Fowler,
Jr.
10.56(a) Weeks Corporation 1998 Incentive Stock Plan.
10.57(a) Amendment No. 1 to the Weeks Corporation 1998 Incentive Stock Plan.
10.58(a) Weeks Corporation Amended and Restated 1998 Deferred Compensation
Plan.
10.59(b) Thirteenth Amendment to Second Amended and Restated Agreement of
Limited Partnership of Weeks Realty, L.P., dated August 7, 1998.
10.60(b) Registration Rights and Lock-Up Agreement dated August 7, 1998, by
and among Weeks Corporation and Ackerman & Co.
10.61(c) Specimen 6 7/8% Note due March 15, 2005.
10.62(d) Specimen 7 3/8% Note due August 1, 2007.
10.63(d) Indenture, dated as of March 20, 1998, between the Registrant and
State Street Bank and Trust Company.
10.64(d) Form of First Supplemental Indenture, dated as of July 30, 1998,
between the Registrant and State Street Bank and Trust Company.
10.65 Registration Rights Agreement dated November 6, 1998, by and among
Weeks Corporation and each Holder identified therein.
10.66 Registration Rights Agreement dated November 12, 1998, by and between
Weeks Corporation and Greene Street 1998 Exchange Fund, L.P.
10.67 Fourteenth Amendment to the Second Amended and Restated Agreement of
Limited Partnership of Weeks Realty, L.P. dated November 6, 1998.
10.68 Fifteenth Amendment to the Second Amended and Restated Agreement of
Limited Partnership of Weeks Realty, L.P. dated November 12, 1998.
10.69 Syndicated Term Loan Agreement dated December 4, 1998, by and among
Weeks Realty, L.P., as borrower, Weeks Corporation, Weeks GP
Holdings, Inc. and Weeks LP Holdings, Inc., as guarantors, and
Wachovia Bank, N.A., as administrative agent, First Union National
Bank, as syndication agent, and Nations Bank, as documentation agent,
for the syndicated bank group.
10.70 Form of Change in control agreement.
10.71 Form of Change in control agreement.
10.72 Form of Change in control agreement.
11.1 Computation of earnings per share.
21.1 List of subsidiaries of the Registrant.
</TABLE>
67
<PAGE>
<TABLE>
<CAPTION>
Exhibit
No. Description
------- -----------
<C> <S>
23.1 Consent of Arthur Andersen LLP regarding the Company's Form S-3, file
No. 33-96534, Form S-3, file No. 333-1106, Form S-8, file No. 333-
1108, Form S-8, file No. 333-18305, Form S-3, file No. 333-42821, Form
S-3, file No. 333-32755 and Form S-3, file No. 333-50871.
27.1 Financial Data Schedule for the year ended December 31, 1998.
99.1(g) Form of Agreement and Irrevocable Proxy by and between Weeks and
certain holders of Duke Common Stock and Duke Common Units.
99.2(g) Form of Agreement and Irrevocable Proxy by and between Weeks and
certain holders of Weeks Common Stock and Weeks Common Units.
99.3(g) Press Release dated March 1, 1999.
</TABLE>
- --------
* Filed as an exhibit to the Registration Statement on Form S-11 (SEC File
No. 33-80314) of the Company.
** Filed as an exhibit to the Company's Current Report on Form 8-K dated
November 1, 1996.
*** Filed as an exhibit to the Company's Current Report on Form 8-K dated
December 31, 1996.
**** Filed as an exhibit to the Company's Annual Report on Form 10-K for the
year ended December 31, 1994.
***** Filed as an exhibit to the Company's Current Report on Form 8-K dated
January 9, 1998.
# Filed as an exhibit to the Company's Current Report on Form 8-K dated
August 31, 1995.
## Filed as an exhibit to the Company's Annual Report on Form 10-K for the
year ended December 31, 1995.
### Filed as an exhibit to the Company's Current Report on Form 8-K dated
August 9, 1996.
#### Filed as an exhibit to the Registration Statement on Form S-8 (SEC File
No. 333-18305).
##### Filed as an exhibit to the Company's Current Report on Form 8-K dated
March 17, 1998.
+ Filed as an exhibit to the Company's Quarterly Report on Form 10-Q for
the quarterly period ended September 30, 1996.
++ Filed as an exhibit to the Company's Current Report on Form 8-K dated
July 12, 1995.
++ Filed as an exhibit to the Company's Quarterly Report on Form 10-Q for
the quarterly period ended September 30, 1997.
+++ Filed as an exhibit to the Registration Statement on Form S-3 (SEC File
No. 333-42821) of the Company.
++++ Filed as an exhibit to the Company's Current Report on Form 8-K dated
October 7, 1997.
+++++ Filed as an exhibit to the Company's Current Report on Form 8-K dated May
7, 1997.
<TABLE>
<C> <S>
a. Filed as an exhibit to the Company's Current Report on Form 10-Q for the
quarterly period ended June 30, 1998.
b. Filed as an exhibit to the Company's Current Report on Form 10-Q for the
quarterly period ended September 30, 1998.
Filed as an exhibit to the Operating Partnership's Form 8-A, filed on
c. March 18, 1998.
Filed as an exhibit to the Operating Partnership's Form 8-A, filed on
d. August 3, 1998.
e. Filed as an exhibit to the Company's Form 8-A, filed on June 26, 1998.
f. Filed as an exhibit to the Company's Form 8-K, dated June 16, 1998.
g. Filed as an exhibit to the Company's Form 8-K, dated February 28, 1999.
Filed as an exhibit to the Company's Annual Report on Form 10-K for the
h. year ended December 31, 1997.
</TABLE>
(B)1. Reports on Form 8-K
None
68
<PAGE>
Signatures
Pursuant to the requirements of Section 13 or 15(d) the Securities Exchange
Act of 1934, the Registrant has duly caused this report to be signed on its
behalf by the undersigned, thereunto duly authorized.
WEEKS CORPORATION
(Registrant)
March 31, 1999 /s/ A. R. Weeks, Jr.
By: _________________________________
A. R. Weeks, Jr., Chairman and
Chief
Executive Officer and Director
Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of the
Registrant and in the capabilities on the dates indicated:
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
/s/ A. R. Weeks, Jr. Chairman of the Board, Chief March 31, 1999
_________________________________ Executive Officer and
A. R. Weeks, Jr. Director
/s/ Thomas D. Senkbeil Vice Chairman, Chief March 31, 1999
_________________________________ Investment Officer and
Thomas D. Senkbeil Director
/s/ Forrest W. Robinson President, Chief Operating March 31, 1999
_________________________________ Officer and Director
Forrest W. Robinson
/s/ John W. Nelley, Jr. Managing Director and March 31, 1999
_________________________________ Director
John W. Nelley, Jr.
/s/ David P. Stockert Senior Vice President and March 31, 1999
_________________________________ Chief Financial Officer
David P. Stockert
/s/ Arthur J. Quirk Vice President and March 31, 1999
_________________________________ Controller
Arthur J. Quirk
/s/ Barrington H. Branch Director March 31, 1999
_________________________________
Barrington H. Branch
/s/ George D. Busbee Director March 31, 1999
_________________________________
George D. Busbee
/s/ William Cavanaugh III Director March 31, 1999
_________________________________
William Cavanaugh III
/s/ Armando Codina Director March 31, 1999
_________________________________
Armando Codina
/s/ Charles R. Eitel Director March 31, 1999
_________________________________
Charles R. Eitel
/s/ Harold S. Lichtin Director March 31, 1999
_________________________________
Harold S. Lichtin
/s/ William O. McCoy Director March 31, 1999
_________________________________
William O. McCoy
</TABLE>
69
<PAGE>
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To Weeks Corporation:
We have audited the accompanying consolidated balance sheets of Weeks
Corporation (a Georgia corporation) and subsidiaries as of December 31, 1998
and 1997, and the related consolidated statements of operations, shareholders'
equity and cash flows for each of the three years in the period ended December
31, 1998. These financial statements and the schedule referred to below are the
responsibility of the Company's management. Our responsibility is to express an
opinion on these financial statements and schedule based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.
In our opinion, the financial statements referred to above present fairly,
in all material respects, the financial position of Weeks Corporation and
subsidiaries as of December 31, 1998 and 1997, and the results of their
operations and their cash flows for each of the three years in the period ended
December 31, 1998 in conformity with generally accepted accounting principles.
Our audits were made for the purpose of forming an opinion on the basic
financial statements taken as a whole. The schedule listed in the index to
financial statements is presented for purposes of complying with the Securities
and Exchange Commission's rules and is not part of the basic financial
statements. This schedule has been subjected to the auditing procedures applied
in the audits of the basic financial statements and, in our opinion, fairly
states in all material respects the financial data required to be set forth
therein in relation to the basic financial statements taken as a whole.
ARTHUR ANDERSEN LLP
Atlanta, Georgia
February 26, 1999
F-1
<PAGE>
WEEKS CORPORATION
CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
December 31,
-----------------------------------
1998 1997
----------------- ----------------
(In thousands, except share data)
<S> <C> <C>
Assets
Real estate assets
Land...................................... $ 169,443 $ 106,196
Buildings and improvements................ 1,031,617 627,309
Accumulated depreciation.................. (96,383) (61,548)
----------------- ---------------
Operating real estate assets............. 1,104,677 671,957
Developments in progress.................. 160,783 100,433
Land held for future development.......... 42,438 22,562
----------------- ---------------
Net real estate assets................... 1,307,898 794,952
Cash and cash equivalents.................. 1,503 5,421
Receivables................................ 15,316 7,031
Deferred costs, net........................ 29,163 13,087
Investments in and notes receivable from
unconsolidated service companies.......... 43,639 9,257
Investments in unconsolidated real estate
entities.................................. 35,204 2,525
Other assets............................... 14,869 20,088
----------------- ---------------
$ 1,447,592 $ 852,361
================= ===============
Liabilities and Shareholders' Equity
Debt
Mortgage notes payable.................... $ 251,399 $ 192,595
Unsecured bank borrowings................. 203,025 82,920
Unsecured notes........................... 200,000 --
----------------- ---------------
Total debt............................... 654,424 275,515
Accounts payable and accrued expenses...... 32,977 14,578
Other liabilities.......................... 9,626 4,876
----------------- ---------------
Total liabilities........................ 697,027 294,969
----------------- ---------------
Minority interests in Operating Partnership
Preferred partnership interests........... 100,000 --
Common partnership interests.............. 135,653 98,344
----------------- ---------------
Total minority interests................. 235,653 98,344
----------------- ---------------
Commitments and contingencies
Shareholders' equity
Preferred stock, at $25.00 liquidation
preference, 20,000,000 shares authorized,
6,000,000 of 8% series A cumulative
redeemable shares issued and outstanding
at December 31, 1998 and 1997,
respectively............................. 150,000 150,000
Common stock, $0.01 par value; 100,000,000
shares authorized; 19,674,412 and
17,703,992 shares issued and outstanding
at December 31, 1998 and 1997,
respectively............................. 197 177
Common stock warrants..................... 1,400 --
Additional paid-in capital................ 430,191 370,696
Deferred compensation..................... (668) (895)
Accumulated deficit....................... (66,208) (60,930)
----------------- ---------------
Total shareholders' equity............... 514,912 459,048
----------------- ---------------
$ 1,447,592 $ 852,361
================= ===============
</TABLE>
The accompanying notes are an integral part of these balance sheets.
F-2
<PAGE>
WEEKS CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>
Years Ended December 31,
--------------------------
1998 1997 1996
-------- ------- -------
(In thousands, except
per share data)
<S> <C> <C> <C>
Revenue
Rental............................................ $131,771 $80,419 $48,162
Tenant reimbursements............................. 17,372 10,387 4,517
Other............................................. 1,831 1,214 1,204
-------- ------- -------
150,974 92,020 53,883
-------- ------- -------
Expenses
Property operating, maintenance and management.... 22,494 12,694 6,749
Real estate taxes................................. 12,824 7,210 4,725
Depreciation and amortization..................... 38,348 24,144 13,474
Interest, including amortization of deferred
financing costs.................................. 30,782 18,833 12,643
General and administrative........................ 5,809 3,652 2,315
-------- ------- -------
110,257 66,533 39,906
-------- ------- -------
Income before Equity in Earnings of Unconsolidated
Entities, Interest Income and Gain on Sale of Real
Estate Assets..................................... 40,717 25,487 13,977
Equity in earnings of unconsolidated service
companies........................................ 2,535 1,969 1,340
Equity in earnings of unconsolidated real estate
entities......................................... 329 20 --
Interest income................................... 965 1,509 492
Gain on sale of real estate assets................ 53 209 --
-------- ------- -------
Income before Minority Interests and Extraordinary
Loss.............................................. 44,599 29,194 15,809
-------- ------- -------
Minority interests
Preferred partnership interests................... (1,191) -- --
Common partnership interests...................... (8,267) (6,219) (3,064)
-------- ------- -------
(9,458) (6,219) (3,064)
-------- ------- -------
Income before Extraordinary Loss................... 35,141 22,975 12,745
Extraordinary loss, net of minority interests..... (267) -- --
-------- ------- -------
Net Income......................................... 34,874 22,975 12,745
Dividends to preferred shareholders............... (12,000) (2,720) --
-------- ------- -------
Net Income Available to Common Shareholders........ $ 22,874 $20,255 $12,745
======== ======= =======
Net Income Per Common Share
Basic
Income before extraordinary loss, net of
preferred dividends............................. $ 1.20 $ 1.24 $ 1.11
Extraordinary loss............................... (0.01) -- --
-------- ------- -------
Net income available to common shareholders...... $ 1.19 $ 1.24 $ 1.11
======== ======= =======
Diluted
Income before extraordinary loss, net of
preferred dividends............................. $ 1.19 $ 1.23 $ 1.10
Extraordinary loss............................... (0.01) -- --
-------- ------- -------
Net income available to common shareholders...... $ 1.18 $ 1.23 $ 1.10
======== ======= =======
Weighted Average Common Shares
Basic............................................. 19,256 16,357 11,512
======== ======= =======
Diluted........................................... 26,299 21,580 14,386
======== ======= =======
</TABLE>
The accompanying notes are an integral part of these financial statements.
F-3
<PAGE>
WEEKS CORPORATION
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
<TABLE>
<CAPTION>
Common Additional
Preferred Common Stock Paid-in Deferred Accumulated
Stock Stock Warrants Capital Compensation Deficit Total
--------- ------ -------- ---------- ------------ ----------- --------
(In thousands, except per share amounts)
<S> <C> <C> <C> <C> <C> <C> <C>
Shareholders' Equity,
December 31, 1995...... $ -- $112 $ -- $191,259 $ -- $(58,422) $132,949
Common share offering,
net of underwriting
discount and offering
costs of $3,843....... -- 26 -- 68,506 -- -- 68,532
Acquisition
consideration......... -- 2 -- 7,122 -- -- 7,124
Exercise of stock
options............... -- -- -- 706 -- -- 706
Dividend reinvestment
plan.................. -- -- -- 41 -- -- 41
Adjustments for
minority interest of
Unitholders in
Operating Partnership
upon issuance of
additional shares and
Units................. -- -- -- -- -- 9,474 9,474
Dividends--common
shareholders ($1.60
per share)............ -- -- -- -- -- (17,860) (17,860)
Net income............. -- -- -- -- -- 12,745 12,745
-------- ---- ------ -------- ------- -------- --------
Shareholders' Equity,
December 31, 1996...... -- 140 -- 267,634 -- (54,063) 213,711
Series A cumulative
redeemable preferred
share offering, net of
underwriting discount
and offering costs of
$5,375................ 150,000 -- -- (5,375) -- -- 144,625
Common share offering,
net of underwriting
discount and offering
costs of $6,334....... -- 36 -- 106,532 -- -- 106,568
Exercise of stock
options............... -- -- -- 649 -- -- 649
Dividend reinvestment
plan.................. -- -- -- 74 -- -- 74
Restricted stock issued
to employees.......... -- 1 -- 1,182 (1,183) -- --
Deferred compensation.. -- -- -- -- 288 -- 288
Adjustments for
minority interest of
Unitholders in
Operating Partnership
upon issuance of
additional shares and
Units................. -- -- -- -- -- 199 199
Dividends--series A
preferred shareholders
($0.45 per share)..... -- -- -- -- -- (2,720) (2,720)
Dividends--common
shareholders ($1.72
per share)............ -- -- -- -- -- (27,321) (27,321)
Net income............. -- -- -- -- -- 22,975 22,975
-------- ---- ------ -------- ------- -------- --------
Shareholders' Equity,
December 31, 1997...... 150,000 177 -- 370,696 (895) (60,930) 459,048
Common share offerings,
net of underwriting
discount and offering
costs of $1,400....... -- 16 -- 47,184 -- -- 47,200
Exercise of stock
options............... -- -- -- 725 -- -- 725
Dividend reinvestment
plan.................. -- 2 -- 6,508 -- -- 6,510
Conversion of Common
Units................. -- 2 -- 4,998 -- -- 5,000
Common stock warrants.. -- -- 1,400 -- -- -- 1,400
Restricted stock issued
to employees.......... -- -- -- 80 (80) -- --
Deferred compensation.. -- -- -- -- 307 -- 307
Adjustments for
minority interest of
Unitholders in
Operating Partnership
upon issuance of
additional shares and
Units................. -- -- -- -- -- 7,332 7,332
Dividends--series A
preferred shareholders
($2.00 per share)..... -- -- -- -- -- (12,000) (12,000)
Dividends--common
shareholders ($1.86
per share)............ -- -- -- -- -- (35,484) (35,484)
Net income............. -- -- -- -- -- 34,874 34,874
-------- ---- ------ -------- ------- -------- --------
Shareholders' Equity,
December 31, 1998...... $150,000 $197 $1,400 $430,191 $ (668) $(66,208) $514,912
======== ==== ====== ======== ======= ======== ========
</TABLE>
The accompanying notes are an integral part of these financial statements.
F-4
<PAGE>
WEEKS CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
Years Ended December 31
-------------------------------
1998 1997 1996
--------- --------- ---------
(In thousands)
<S> <C> <C> <C>
Operating Activities
Net income................................... $ 34,874 $ 22,975 $ 12,745
Adjustments to reconcile net income to net
cash provided by operating activities:
Extraordinary loss, net of minority
interests.................................. 267 -- --
Minority interests.......................... 9,458 6,219 3,064
Depreciation and amortization............... 38,348 24,144 13,474
Amortization of deferred financing costs.... 1,686 933 864
Amortization of deferred compensation....... 307 288 --
Straight-line rent revenue.................. (2,129) (680) (475)
Gain on sale of real estate assets.......... (53) (209) --
Undistributed earnings of unconsolidated
entities................................... -- (678) (27)
Net change in:
Deferred costs.............................. (12,096) (5,847) (2,618)
Receivables................................. (5,400) (1,151) (184)
Other assets................................ (952) (1,292) (1,400)
Accounts payable and accrued expenses....... 10,639 2,482 1,366
Other liabilities........................... 2,872 1,913 1,222
--------- --------- ---------
Net cash provided by operating activities... 77,821 49,097 28,031
--------- --------- ---------
Investing Activities
Property acquisition, development and
construction................................ (386,623) (163,589) (113,056)
Investments in and advances to unconsolidated
entities.................................... (66,324) (2,504) --
Real estate loans............................ (5,392) (19,173) (8,146)
Proceeds from sale of real estate assets..... 2,373 2,484 --
Collections on real estate loans, notes
receivable and other........................ 936 9,208 879
Distributions in excess of earnings of
unconsolidated entities..................... 309 -- --
--------- --------- ---------
Net cash used in investing activities........ (454,721) (173,574) (120,323)
--------- --------- ---------
Financing Activities
Common share offering proceeds............... 48,600 112,902 72,375
Issuance of preferred partnership units...... 100,000 -- --
Preferred share offering proceeds............ -- 150,000 --
Underwriting discount and offering costs..... (3,738) (11,709) (3,843)
Proceeds from common stock warrants, stock
option exercises and dividend reinvestment
plan........................................ 8,635 723 747
Unsecured note borrowings.................... 200,000 -- --
Proceeds from bank term loan................. 85,000 -- --
Line of credit proceeds (repayments), net.... 35,105 (16,480) 65,117
Payments of mortgage notes payable........... (32,333) (69,849) (20,075)
Debt prepayment penalties.................... (276) -- --
Deferred financing costs..................... (8,636) (126) (783)
Dividends to shareholders.................... (47,484) (28,041) (17,860)
Distributions to minority interests.......... (11,891) (7,782) (4,108)
--------- --------- ---------
Net cash provided by financing activities.... 372,982 129,638 91,570
--------- --------- ---------
Increase (Decrease) in Cash and Cash
Equivalents.................................. (3,918) 5,161 (722)
Cash and Cash Equivalents, beginning of
period....................................... 5,421 260 982
--------- --------- ---------
Cash and Cash Equivalents, end of period...... $ 1,503 $ 5,421 $ 260
========= ========= =========
</TABLE>
The accompanying notes are an integral part of these financial statements.
F-5
<PAGE>
WEEKS CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1. DESCRIPTION OF BUSINESS
Weeks Corporation (a Georgia corporation) and its subsidiaries acquire,
develop, own and manage primarily industrial and suburban office buildings in
the southeast United States and Texas. As used herein, the term "Company"
includes Weeks Corporation and its subsidiaries, including Weeks Realty, L.P.
(a Georgia limited partnership, the "Operating Partnership"), unless the
context indicates otherwise. The Company, through its wholly owned
subsidiaries, is the general partner and owns a majority interest in the
Operating Partnership which, including the operations of its subsidiaries,
conducts substantially all of the on-going operations of the Company. The
Company has elected to qualify and operate as a self-administered and self-
managed real estate investment trust ("REIT") under the Internal Revenue Code
of 1986, as amended (the "Code"). As a REIT, the Company will not generally be
subject to corporate federal income taxes as long as it satisfies certain
technical requirements of the Code relating to the composition of its income
and assets and the requirement to distribute 95% of its taxable income to its
shareholders.
As of December 31, 1998, the Company had outstanding 19,674,412 shares of
common stock and owned the same number of units of common limited partnership
interest ("Common Units") in the Operating Partnership representing a 72.9%
common ownership interest in the Operating Partnership. Common Units held by
persons other than the Company totaled 7,314,001 as of December 31, 1998, and
represented a 27.1% common minority interest in the Operating Partnership.
Common Units are convertible by their holders into shares of common stock on a
one-for-one basis, or into cash, at the Company's option. The Company's
weighted average common ownership interest in the Operating Partnership was
73.7%, 76.5% and 80.6% for the years ended December 31, 1998, 1997 and 1996,
respectively.
The Company conducts its third-party service businesses through two
companies (the "Service Companies"): Weeks Realty Services, Inc., and Weeks
Construction Services, Inc. Together the Service Companies and their
subsidiaries conduct third-party development, construction, landscape, property
management and commercial brokerage services. The Company holds 100% of the
nonvoting and 1% of the voting common stock of these Service Companies. The
remaining voting common stock is held by three executive officers of the
Company. The ownership of the common stock of the Service Companies entitles
the Company to substantially all (99%) of the economic benefits from the
results of the Service Companies' operations.
As of December 31, 1998, the Company's in-service property portfolio,
including three industrial properties totaling 646,000 square feet held in
unconsolidated entities, consisted of 282 industrial properties, 32 suburban
office properties and five retail properties comprising 25,797,000 square feet.
In-service properties exclude properties under development which are not yet
stabilized and properties under agreement to acquire. The Company's primary
markets and the concentration of the Company's portfolio (based on square
footage) of in-service properties are Atlanta, Georgia (56.8%), Nashville,
Tennessee (10.5%), Raleigh-Durham-Chapel Hill, North Carolina (9.8%), Miami,
Florida (9.5%), Dallas/Ft. Worth, Texas (5.4%), Orlando, Florida (3.3%),
Jacksonville, Florida (2.5%), Spartanburg, South Carolina (1.5%) and Tampa,
Florida (0.7%). In addition, 54 industrial and suburban office properties were
under development, in lease-up or under agreement to acquire at December 31,
1998, comprising an additional 5,923,000 square feet.
F-6
<PAGE>
WEEKS CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Presentation
The accompanying consolidated financial statements include the consolidated
financial position of the Company and its subsidiaries at December 31, 1998 and
1997, and their results of operations for each of the three years in the period
ended December 31, 1998. The Service Companies and their subsidiaries are
reflected in the accompanying consolidated financial statements on the equity
method of accounting as discussed below. All significant intercompany balances
and transactions have been eliminated in the consolidated financial statements.
Real Estate Assets
Real estate assets are stated at depreciated cost. Major improvements and
replacements are capitalized and depreciated over their estimated useful lives
when they extend the useful life, increase capacity or improve efficiency of
the related asset. All other repairs and maintenance are expensed as incurred.
Costs related to the planning, development and construction of buildings and
improvements, including interest, property taxes and insurance and allocated
overhead costs incurred during the construction period, are capitalized.
Depreciation is calculated using the straight-line method, generally over 35
years, for buildings and improvements. Tenant improvements are capitalized and
depreciated using the straight-line method over the term of the related lease.
The Company continually evaluates the recoverability of the carrying value
of its real estate investments using the methodology prescribed in Statement of
Financial Accounting Standards ("SFAS") 121, "Accounting for the Impairment of
Long-Lived Assets and for Long-Lived Assets to be Disposed of." Factors
considered by management in evaluating impairment include significant declines
in property operating profits, recurring property operating losses and other
significant adverse changes in general market conditions that are considered
permanent in nature. If any real estate investment is considered impaired, a
loss is provided to reduce the carrying value of the investment to its fair
value.
Cash and Cash Equivalents
Cash and cash equivalents include cash and highly liquid investments,
consisting primarily of money market accounts, with original maturities of
three months or less.
Revenue Recognition
Rental income from operating leases is recognized on a straight-line basis
over the terms of the respective leases. Straight-line rent receivables totaled
$5,832,000 and $3,703,000 at December 31, 1998 and 1997, respectively. Tenant
reimbursements for property taxes and other recoverable expenses are recognized
as revenues in the period the applicable expenses are incurred. Revenues for
development, construction, landscape, property management and leasing services
provided by the Service Companies are recognized over the period during which
the related services are rendered.
The Company accounts for one lease as a direct financing lease. Direct
financing lease income totaled $735,000, $754,000 and $768,000 in 1998, 1997
and 1996, respectively, and was included in other revenues in the accompanying
consolidated statements of operations. The net carrying value of the direct
financing lease, included in other assets in the accompanying consolidated
balance sheets, was $4,825,000 and $5,003,000 at December 31, 1998 and 1997,
respectively.
F-7
<PAGE>
WEEKS CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)
Deferred Costs
Costs incurred to procure operating leases and in connection with financing
arrangements are capitalized and amortized on a straight-line basis over the
terms of the related lease or loan arrangements. Unamortized lease and
financing costs are written off upon the early termination of the related lease
or loan agreement.
Investments in Unconsolidated Entities
The Company accounts for its investments in the Service Companies and their
subsidiaries and other non-majority owned entities on the equity method of
accounting.
Interest Rate Management Agreements
The Company uses interest rate swap and treasury rate guarantee hedge
arrangements to manage its exposure to interest rate changes. Such arrangements
are considered hedges of specific current borrowings. The costs paid or
benefits received under interest rate swap arrangements are recognized as
adjustments to interest expense. The costs or benefits resulting from the early
settlement of interest rate swap arrangements are deferred and recognized as
adjustments to interest expense over the original life of the related swap
arrangement as long as the specific borrowings are outstanding. The costs or
benefits resulting from the settlement of treasury rate guarantee hedge
arrangements are recognized as adjustments to interest expense over the term of
the specifically hedged borrowings upon issuance of the indebtedness. The costs
or benefits of terminated interest rate swap or treasury rate guarantee hedge
arrangements are recognized in income or expense in the period of settlement to
the extent hedged borrowings are no longer outstanding.
Income Taxes
The Company has elected to be taxed as a REIT under the Code. As a REIT, the
Company generally will not be subject to corporate level federal income taxes
as long as it satisfies certain technical requirements of the Code relating to
the composition of its income and assets, and the requirement that it
distribute 95% of its taxable income to its shareholders. In any event, the
Company may be subject to certain state and local taxes and to federal income
and excise taxes on its undistributed income. If the Company fails to qualify
as a REIT under the Code, it will be subject to federal income taxes at regular
corporate tax rates in such year of disqualification.
The Service Companies and their subsidiaries are taxed as regular taxable
corporations. The impact of income taxes, if any, reduces the amount of the
earnings of the Service Companies otherwise recognized by the Company under the
equity method. For the three years in the period ended December 31, 1998, the
impact of the Service Companies' income taxes and their related tax attributes
were not material to the accompanying consolidated financial statements.
Per Share Data
Basic net income per share is computed by dividing net income by the
weighted average number of common shares outstanding during the period. Diluted
net income per share is computed to reflect the additional dilution of
outstanding stock options and all other securities which are convertible into
shares of common stock.
Stock-Based Compensation
Under the provisions of SFAS 123, "Accounting for Stock-Based Compensation,"
the Company has elected to account for stock-based compensation under the
intrinsic-value method prescribed by Accounting Principles Board ("APB")
Opinion 25, "Accounting for Stock Issued to Employees" for all periods
presented. The additional fair value and other disclosures relating to
outstanding stock options prescribed by SFAS 123 are included in note 8 to
these consolidated financial statements.
F-8
<PAGE>
WEEKS CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)
Use of Estimates
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the amounts reported in the financial statements and
notes thereto. Actual results could differ from those estimates.
Recent Accounting Pronouncements
The Company adopted SFAS 130, "Reporting of Comprehensive Income," during
1988 which establishes standards for reporting and display of comprehensive
income and its components. Comprehensive income is the total of net income and
all other nonowner changes in shareholders' equity. As of December 31, 1998,
the Company had no items of other comprehensive income.
Effective for the year ended December 31, 1998, the Company implemented the
disclosure requirements of SFAS 131, "Disclosures About Segments of an
Enterprise and Related Information." Segment disclosures under SFAS 131 for
each of the three years in the period ended December 31, 1998 are included in
note 13 to these consolidated financial statements.
In March 1998, Emerging Issues Task Force Issue No. 97-11, "Accounting for
Internal Costs Relating to Real Estate Property Acquisitions," was issued
prescribing that internal acquisition costs relating to the acquisition of
operating real estate properties should be expensed as incurred. Effective with
the first quarter of 1998, the Company implemented this new guideline, which
did not have a material impact on the Company's financial position or results
of operations.
In June 1998, SFAS 133, "Accounting for Derivative Instruments and for
Hedging Activities," was issued prescribing new accounting standards for the
accounting and disclosures of derivative instruments and hedging transactions.
SFAS 133 will require the Company to record all derivative instruments on the
balance sheet at fair value. Changes in derivative fair values will either be
recorded in earnings along with the changes in fair value of related hedged
assets or liabilities or as an adjustment to shareholders' equity depending on
the nature and type of derivative instrument. SFAS 133 will be effective for
the Company beginning January 1, 2000. The Company is evaluating the provisions
of SFAS 133 and plans to adopt SFAS 133 in it financial statements beginning in
2000. The impact of SFAS 133 on the Company's financial statements will depend
on the extent, type and effectiveness of the Company's hedging activities.
However, the Company does not believe the effect of adopting SFAS 133 will be
material to its financial position or results of operations.
Reclassifications
Certain prior year amounts have been reclassified to conform to the 1998
presentation.
3. ACQUISITIONS / DISPOSITIONS
Acquisitions
In 1998, the Company acquired 48 industrial, suburban office and retail
buildings totaling approximately 4,856,000 square feet and approximately five
acres of land subject to ground leases for aggregate acquisition consideration
of approximately $287,998,000, including closing costs and acquisition
expenses. The aggregate acquisition consideration was comprised of the
assumption of mortgage indebtedness of $84,272,000, the issuance of
approximately $42,422,000 of Common Units, the assumption of certain other
liabilities in excess of certain other assets of approximately $4,224,000 and
approximately $157,080,000 of cash, funded through
F-9
<PAGE>
WEEKS CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)
the Company's revolving line of credit and used to fund the assumption and
repayment of indebtedness, closing costs and acquisition expenses. The acquired
properties are located in Florida, Georgia, North Carolina, Tennessee and
Texas. Two of the buildings, under development prior to their acquisition, were
acquired from NWI Warehouse Group, L.P. ("NWI"), a related entity, for total
acquisition consideration of approximately $13,957,000. Also, in 1998, the
Company acquired land from NWI and Lichtin Properties, Inc. and affiliates
("Lichtin"), also a related entity, for total consideration of approximately
$8,910,000.
In 1997, the Company acquired 39 industrial and suburban office buildings,
including two buildings under development, totaling approximately 2,325,000
square feet for aggregate acquisition consideration of approximately
$129,884,000. The aggregate acquisition consideration was comprised of the
assumption of mortgage indebtedness of approximately $24,010,000, the issuance
of approximately $31,114,000 of Common Units and the assumption and repayment
of other indebtedness and the payment of cash through borrowings under the
Company's revolving line of credit totaling approximately $74,760,000. The
acquired properties are located in Florida, Georgia, North Carolina and
Tennessee. Nineteen of the industrial and suburban office buildings totaling
1,547,000 square feet were acquired from NWI and Lichtin for aggregate
acquisition consideration of $92,756,000. Also, in 1997, the Company acquired
land from Lichtin for total consideration of $1,000,000.
The Company made initial acquisitions of property portfolios and the
business operations of NWI in Nashville, Tennessee, and Lichtin in the Raleigh-
Durham-Chapel Hill area of North Carolina, on November 1, 1996 and December 31,
1996, respectively, in transactions accounted for under the purchase method.
These acquisitions consisted of initial property portfolios of 31 industrial
and suburban office buildings totaling approximately 2,513,000 square feet, 82
net usable acres of undeveloped land and options to acquire 177 acres of
undeveloped land and the aggregate acquisition consideration was approximately
$171,135,000. Acquisition consideration was comprised of the assumption of
mortgage indebtedness of approximately $89,535,000, the issuance of
approximately $7,124,000 of common stock, the issuance of approximately
$48,085,000 of Common Units and approximately $26,391,000 of cash, including
amounts necessary to fund the assumption and repayment of other indebtedness,
closing costs and acquisition expenses, all funded through the Company's
revolving line of credit.
The Company's consolidated results of operations have included the operating
results of NWI and Lichtin from their effective acquisition dates. The
unaudited pro forma information below presents the consolidated results of
operations as if the initial phases of the NWI and Lichtin acquisitions had
occurred at the beginning of 1996 (in thousands, except per share amounts). The
unaudited pro forma information is not necessarily indicative of the results of
operations of the Company had the acquisitions occurred at the beginning of
1996, nor is it necessarily indicative of future results.
<TABLE>
<CAPTION>
1996
-------
<S> <C>
Revenues............................................................. $70,954
Net income........................................................... 10,555
Net income per share--basic.......................................... $ 0.89
Net income per share--diluted........................................ 0.89
</TABLE>
Also in 1996, the Company acquired 15 industrial and suburban office
buildings totaling approximately 761,000 square feet located in Atlanta,
Georgia for an aggregate price of approximately $40,102,000, including closing
costs and acquisition expenses. The acquisitions were funded through revolving
line of credit borrowings.
F-10
<PAGE>
WEEKS CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)
Dispositions
In July 1998, the Company sold a 30,381 square foot building located in
Miami, Florida to one of the building's tenants for approximately $2,373,000,
resulting in a gain of approximately $53,000. This building was originally
acquired in January 1998 as part of a Miami, Florida portfolio acquisition.
In January 1999, the Company sold 21 buildings totaling approximately
1,181,000 square feet located in Atlanta, Georgia for net proceeds of
approximately $51,832,000, resulting in a gain of approximately $4,900,000. For
income tax purposes, the Company intends to use the proceeds from the sale to
complete a tax-deferred, like-kind exchange. As part of this arrangement, the
Company has also agreed to sell, upon the completion of construction, an
additional building totaling approximately 182,000 square feet for
approximately $7,300,000.
In April 1997, the Company sold a 96,000 square foot industrial building
located in Spartanburg, South Carolina to one of the building's tenants for
approximately $2,484,000, resulting in a gain of approximately $209,000. For
income tax purposes, the Company completed a tax-deferred, like-kind exchange
involving one of the industrial buildings acquired in 1997.
4. BORROWINGS
Total borrowings at December 31, 1998 and 1997 consist of the following (in
thousands):
<TABLE>
<CAPTION>
December 31,
-----------------
1998 1997
-------- --------
<S> <C> <C>
Unsecured Notes
Due 2005, interest at 6.875%........................... $100,000 $ --
Due 2007, interest at 7.375%........................... 100,000 --
-------- --------
200,000 --
-------- --------
Unsecured Bank Borrowings
Credit Facility........................................ 118,025 82,920
Term Loan.............................................. 85,000 --
-------- --------
203,025 82,920
-------- --------
Mortgage Notes Payable
Fixed rate notes, interest at 6.00% to 9.80%, due in
1999 to 2012.......................................... 250,788 186,798
Variable rate industrial revenue bonds, interest at
6.06% at December 31, 1998, due in 2010............... 611 5,797
-------- --------
251,399 192,595
-------- --------
Total Borrowings........................................ $654,424 $275,515
======== ========
</TABLE>
Unsecured Notes
During 1998, the Operating Partnership completed the issuance of
$200,000,000 of unsecured notes. In March 1998, the Operating Partnership
issued $100,000,000 of 6.875% unsecured notes due March 15, 2005. A portion of
the proceeds from the unsecured notes totaling $4,566,000 was used to settle a
treasury rate guarantee hedge arrangement which was entered into in 1997 to
effectively fix the interest rate on the
F-11
<PAGE>
WEEKS CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)
unsecured note borrowing. The costs to settle the hedge were included in
deferred financing costs and are amortized over the life of the unsecured notes
as interest expense, resulting in an effective interest rate of approximately
7.6%. In August 1998, the Operating Partnership issued $100,000,000 of 7.375%
unsecured notes due August 1, 2007. These unsecured notes are subject to
certain covenants, including those governing the Operating Partnership's
interest and fixed charge coverage and total leverage.
Unsecured Bank Borrowings
Credit Facility
Effective July 1998, the Operating Partnership refinanced its existing
$225,000,000 syndicated revolving line of credit (the "Line of Credit") and
expanded its bank lending group to five banks. Additionally, effective July
1998, the Operating Partnership entered into a $20,000,000 swing revolving
credit facility (the "Swing Facility") with one bank. Together, the combined
Line of Credit and Swing Facility are referred to herein as the "Credit
Facility." The Credit Facility is unsecured and can be used for development and
construction, acquisitions and general corporate purposes. The entire Credit
Facility is guaranteed by the Company. Additionally, the Company and the
Operating Partnership are required to meet certain financial and non-financial
covenants including those governing the Company's and the Operating
Partnership's maximum unsecured borrowings, interest and fixed charge coverage,
total leverage, limitations on secured borrowings and a restriction on the
amount of dividends and distributions to not more than 95% of "funds from
operations," a REIT industry measure of operating performance, unless the
additional amounts are necessary to maintain the Company's REIT status under
the Code. The Line of Credit matures on December 31, 2000, and may be extended
annually through December 31, 2002, subject to annual extension fees of 0.10%
and the prior consent of the banks in the bank lending group. The Swing
Facility matures on June 30, 1999, and may be extended annually, subject to the
prior consent of the lender.
Interest under the Credit Facility accrues at bank prime minus 0.25% or at
LIBOR plus 0.80% at the election of the Operating Partnership. In addition, the
Operating Partnership pays annual facility fees equal to 0.15% of the total
Line of Credit. The weighted average interest rate on Credit Facility
borrowings, excluding the effect of the interest rate swap agreements described
below, was 6.5% at December 31, 1998. Prior to July 1998, interest under the
Credit Facility accrued at bank prime minus 0.25% or at LIBOR plus 1.05%, at
the election of the Operating Partnership, and fees on the unused portion of
the Credit Facility were 0.15%.
At December 31, 1998, the Operating Partnership had in place two interest
rate swap agreements with a commercial bank to effectively change the interest
costs on $40,000,000 of Credit Facility borrowings from the variable rates
discussed above to fixed rates. The agreements, with notional principal amounts
of $10,000,000 and $30,000,000, mature in July 1999 and July 2001 with
effective fixed interest rates of 7.3% and 7.6%, respectively.
In periods prior to March 1998, the Service Companies and certain of their
subsidiaries were direct borrowers under the Credit Facility. In connection
with the issuance of the unsecured notes in March 1998 and the refinancing of
the Credit Facility discussed above, the Service Companies and certain of their
subsidiaries refinanced their Credit Facility borrowings with intercompany
loans from the Operating Partnership (see Note 5).
Term Loan
In December 1998, the Company entered into an $85,000,000 unsecured
syndicated bank term loan (the "Term Loan") with a group of five banks.
Interest accrues on the Term Loan at LIBOR plus 1.25% and the
F-12
<PAGE>
WEEKS CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)
Term Loan matures on December 31, 2001. Simultaneously with the execution of
the Term Loan, the Operating Partnership entered into three interest rate swap
agreements with three commercial banks to effectively change the interest
costs on the entire $85,000,000 Term Loan from its variable rate to fixed
rates. The interest rate swap agreements, with notional principal amounts of
$35,000,000, $25,000,000 and $25,000,000, mature on December 31, 2001, and
effectively convert interest costs on the Term Loan to a fixed rate of
approximately 6.3% through maturity.
Mortgage Notes Payable
At December 31, 1998, fixed rate mortgage notes payable included 32 notes
with a weighted average interest rate of 8.3%. The weighted average term to
maturity of fixed rate mortgage notes payable was 6.5 years at December 31,
1998. Total mortgage indebtedness increased by $58,804,000 in 1998 due to the
assumption of seven mortgage notes totaling $91,137,000 in connection with the
Company's property acquisitions, net of principal repayments and retirements
of $32,333,000. Certain Company officers and Common Unitholders guarantee a
portion of the fixed rate mortgage notes.
Debt Maturities
Scheduled maturities of total borrowings at December 31, 1998, are
summarized as follows (in thousands):
<TABLE>
<CAPTION>
Year Amount
---- --------
<S> <C>
1999............................................................. $ 71,766(a)
2000............................................................. 134,690(a)
2001............................................................. 91,352
2002............................................................. 9,874
2003............................................................. 7,854
2004 and thereafter.............................................. 338,888
--------
$654,424
========
</TABLE>
- --------
(a) Includes $19,875 maturing in 1999 under the Swing Facility and $98,150
maturing in 2000 under the Line of Credit, assuming that no extensions
are exercised.
Net real estate assets totaling $372,256,000 and $242,268,000 at December
31, 1998 and 1997, respectively, were pledged as collateral under mortgage
notes payable. Interest capitalized in 1998, 1997 and 1996, totaled
$11,968,000, $5,289,000 and $2,358,000, respectively.
The extraordinary loss of $365,000 ($267,000 net of minority interests) in
1998 represents loan prepayment penalties and the write-off of unamortized
deferred financing costs related to the early retirement of certain mortgage
debt in 1998.
5. INVESTMENTS IN AND NOTES RECEIVABLE FROM UNCONSOLIDATED ENTITIES
Service Companies and Subsidiaries
The Company conducts third-party development, construction, landscape,
property management and commercial brokerage businesses through the Service
Companies and their subsidiaries. Additionally, the Service Companies and
their subsidiaries own land held for sale or future development, either
directly or through ownership interests in real estate partnerships and joint
ventures. The Company has acquired and
F-13
<PAGE>
WEEKS CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)
intends, based on market conditions, to acquire land from the Service Companies
and their subsidiaries for the development of properties. As discussed in Note
2, these Service Companies and their subsidiaries are accounted for on the
equity method of accounting. Under the equity method, the Company recognizes,
in its consolidated statements of operations, its economic share (99%) of the
earnings and losses of the Service Companies and their subsidiaries.
The following information summarizes the financial position, results of
operations and cash flows of the Service Companies and their subsidiaries on a
combined basis (in thousands):
<TABLE>
<CAPTION>
December 31,
-----------------
Financial Position 1998 1997
- ------------------ -------- -------
<S> <C> <C>
Assets
Real estate assets........................................... $ 22,768 $12,403
Investments in unconsolidated entities....................... 12,096 2,849
Receivables and other assets................................. 26,634 20,158
-------- -------
$ 61,498 $35,410
======== =======
Liabilities and Equity
Borrowings from the Company.................................. $ 44,575 $10,900
Credit Facility borrowings................................... -- 16,620
Other borrowings............................................. 2,309 2,000
Other liabilities............................................ 15,472 7,513
Total equity (deficit)....................................... (858) (1,623)
-------- -------
$ 61,498 $35,410
======== =======
</TABLE>
Effective March 1998, the operations of the Service Companies and their
subsidiaries are financed through line of credit borrowings from the Operating
Partnership. These line of credit borrowings accrue interest at bank prime plus
1%, payable monthly, and are due on demand. Previously, these entities were
financed through direct borrowings under the Credit Facility. As part of these
financing arrangements, the Service Companies and their subsidiaries have
agreed not to incur any additional unsecured borrowings other than through
borrowings from the Operating Partnership. Borrowings from the Operating
Partnership also include $10,876,000 of 12% notes due in 2004.
At December 31, 1998, the Company's investment in and notes receivable from
the Service Companies and subsidiaries totaling $43,639,000 includes notes
receivable from the Service Companies and subsidiaries of $44,575,000 and the
Company's investment in the Service Companies of ($936,000).
F-14
<PAGE>
WEEKS CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)
<TABLE>
<CAPTION>
Years Ended December 31,
--------------------------
1998 1997 1996
Results of Operations -------- ------- -------
(In thousands)
<S> <C> <C> <C>
Revenue
Construction and development fees.................. $ 3,756 $ 2,517 $ 2,233
Landscape.......................................... 7,425 5,974 5,035
Commissions........................................ 1,149 828 448
Property management fees and other................. 427 449 509
-------- ------- -------
12,757 9,768 8,225
-------- ------- -------
Costs and expenses
Direct costs....................................... 6,464 5,202 4,327
Interest expense--Company.......................... 2,898 1,308 1,314
Interest expense--third parties.................... 155 372 365
General and administrative......................... 3,358 2,397 1,694
Other.............................................. 1,490 494 498
-------- ------- -------
14,365 9,773 8,198
-------- ------- -------
Income (loss) before gains on sales of real estate
and equity in earnings of partnerships and joint
ventures.......................................... (1,608) (5) 27
Gain on sale of real estate--third parties......... 885 422 --
Gain on sale of real estate--Company............... 315 580 --
Equity in earnings of unconsolidated entities...... 1,076 257 (1)
-------- ------- -------
Net income ........................................ $ 668 $ 1,254 $ 26
======== ======= =======
Net income attributable to the Company............. $ 661 $ 1,241 $ 26
Interest expense--Company.......................... 2,898 1,308 1,314
Elimination of intercompany profits--Company....... (1,024) (580) --
-------- ------- -------
Equity in earnings of Service Companies............ $ 2,535 $ 1,969 $ 1,340
======== ======= =======
Distributions and interest paid to the Company..... $ 2,898 $ 1,311 $ 1,313
======== ======= =======
Cash Flow
- ---------
Operating activities............................... $ 1,657 $(4,915) $ 4,460
Investing activities............................... (20,972) (4,086) (2,540)
Financing activities............................... 14,403 11,979 (487)
</TABLE>
In connection with the Company's January 1998 acquisition of a real estate
portfolio in Miami, Florida, the Service Companies acquired a one-third
interest in Codina Group, Inc. ("Codina"), a Miami-based real estate services
company, for aggregate consideration of approximately $9,600,000. The Services
Companies account for their investment in Codina on the equity method of
accounting.
F-15
<PAGE>
Real Estate Entities
At December 31, 1998 and 1997, the Company owned a 50% interest in a limited
liability company ("LLC") which owns an 86,000 square foot industrial building
in Atlanta, Georgia. The Company's investment in this LLC totaled $3,065,000
and $2,525,000 at December 31, 1998 and 1997, respectively, and its equity in
earnings were $288,000 and $20,000 for the years ended December 31, 1998 and
1997, respectively. The total assets, liabilities and equity of the LLC were
$6,134,000, $4,000 and $6,130,000, respectively, at December 31, 1998, and
$5,645,000, $595,000 and $5,050,000, respectively, at December 31, 1997.
In September 1998, the Company assigned the right to acquire four buildings
in Dallas, Texas to NWI, a related entity, and NWI acquired the buildings for
aggregate consideration of approximately $34,645,000. Simultaneously, the
Company advanced $31,600,000 under a $33,600,000 adjustable rate loan agreement
with NWI and entered into an option arrangement enabling the Company to acquire
the buildings from NWI. The adjustable rate loan was secured by the four
buildings, accrued interest at LIBOR plus 1.30% and matured on the acquisition
of buildings by the Company. In January 1999, the Company acquired the four
industrial buildings from NWI for aggregate acquisition consideration of
approximately $35,151,000, which resulted in a gain to NWI, net of intercompany
eliminations, of approximately $245,000.
The Company accounted for this transaction with NWI as an investment in real
estate under the equity method of accounting. In 1998, the Company recognized
earnings of $41,000 under the equity method. At December 31, 1998, the Company
had invested $32,139,000 under the terms of the arrangements with NWI. Total
assets, liabilities and equity of the underlying investment were $34,942,000,
$1,438,000 and $33,504,000, respectively, at December 31, 1998.
6. SHAREHOLDERS' EQUITY
Preferred Stock
At December 31, 1998 and 1997, the Company had outstanding 6,000,000 shares
of 8% Series A cumulative redeemable preferred stock (the "Series A Preferred
Stock"). The Series A Preferred Stock has a liquidation preference of $25.00
per share and is redeemable at the option of the Company on or after
October 10, 2002, at a redemption price of $25.00 per share.
Common Stock
The Company completed public equity offerings of common stock in each of the
last three years. In 1998, 1997 and 1996, the Company sold common stock
totaling 1,541,547, 3,584,200, and 2,573,333 shares, and received net proceeds
of $47,200,000, $106,568,000, and $68,532,000, respectively. The proceeds from
each offering were used to reduce Credit Facility borrowings or to repay
mortgage indebtedness.
In February 1998, the Company sold 350,000 common stock warrants to certain
executive officers and employees of Codina for an aggregate price of
$1,400,000. The common stock warrants entitle their holders to purchase 350,000
shares of the Company's common stock at a price of $32.75 per share through
February 2008.
In 1998 and 1997, restricted shares of common stock (the "Restricted Stock")
valued at $80,000 and $1,183,000 were granted to certain Company officers and
employees as an incentive for future service and continued financial
performance of the Company. Generally, the Restricted Stock vests ratably over
four year periods and the vesting of most of the Restricted Stock is contingent
upon the Company's achieving specified levels of financial performance.
Compensation expense is recognized ratably over the vesting periods.
The Company has in place a dividend reinvestment plan under which 300,000
shares of common stock are authorized for issuance. A total of 231,000 shares
of common stock have been issued under the plan since its inception.
Additionally, in 1998, Common Units totaling 164,001 were converted into
164,001 shares of
F-16
<PAGE>
common stock. The conversion was reflected in the accompanying consolidated
financial statements at a book value of approximately $5,000,000.
Dividends
For the years detailed below, dividends were declared and paid on the
Company's common stock and Series A Preferred Stock and such dividends were
designated for income tax reporting purposes as follows (in thousands, except
per share amounts):
<TABLE>
<CAPTION>
1998 1997 1996
------- ------- -------
<S> <C> <C> <C>
Common Stock
Dividends............................................. $35,484 $27,321 $17,860
Dividends per share................................... $ 1.86 $ 1.72 $ 1.60
Income tax designation--
Ordinary dividend income............................. 97% 100% 95%
Return of capital.................................... 3% -- 5%
Series A Preferred Stock
Dividends(a).......................................... $12,000 $ 2,720 $ --
Dividends per share(a)................................ $ 2.00 $ 0.45 $ --
Income tax designation--
Ordinary dividend income............................. 100% 100% --
</TABLE>
- --------
(a) In 1997, Series A Preferred Stock dividends totaling $720,000 or $0.12 per
share were declared and paid and $2,000,000 or $0.33 per share were
accrued.
In January 1999, the Company declared and paid common stock dividends of
$9,936,000 or $0.505 per share relating to fourth quarter 1998 operating
results and also declared and paid dividends on its Series A Preferred Stock of
$3,000,000 or $0.50 per share.
Computation of Income Per Common Share
Reconciliations of income available to common shareholders before
extraordinary loss and weighted average common shares used in the Company's
basic and diluted net income per common share computations are detailed below
(in thousands, except per share data):
<TABLE>
<CAPTION>
1998 1997 1996
-------- ------- -------
<S> <C> <C> <C>
Computation of Income Available to Common
Shareholders Before Extraordinary Loss
Income before extraordinary loss.................... $ 35,141 $22,975 $12,745
Dividends to preferred shareholders................. (12,000) (2,720) --
-------- ------- -------
Income available to common shareholders before
extraordinary loss--basic.......................... 23,141 20,255 12,745
Minority interests in earnings of Common Units of
limited partnership in the Operating Partnership... 8,267 6,219 3,064
-------- ------- -------
Income available to common shareholders before
extraordinary loss--diluted........................ $ 31,408 $26,474 $15,809
======== ======= =======
Computation of Weighted Average Common Shares
Weighted average common shares--basic............... 19,256 16,357 11,512
Dilutive securities--
Common Units of limited partnership interest in the
Operating Partnership............................. 6,878 5,023 2,768
Stock options...................................... 165 200 106
-------- ------- -------
Weighted average common shares--diluted............. 26,299 21,580 14,386
======== ======= =======
Income Available to Common Shareholders
Before Extraordinary Loss Per Share
Basic.............................................. $ 1.20 $ 1.24 $ 1.11
Diluted............................................ 1.19 1.23 1.10
</TABLE>
F-17
<PAGE>
Basic income available to common shareholders before extraordinary loss per
share for the periods presented were computed by dividing income available to
common shareholders before extraordinary loss by the weighted average number of
shares of common stock outstanding during the year. Diluted income available to
common shareholders before extraordinary loss per share were computed assuming
that the weighted average number of Common Units outstanding were converted
into the equivalent number of shares of common stock and based on the dilutive
effect of stock options outstanding. The Company has 662,000, 76,000 and
147,000 outstanding stock options in 1998, 1997 and 1996 that were not dilutive
and 350,000 outstanding stock warrants that were not dilutive in 1998. In
addition, the convertible feature of the Series C Preferred Units (see Note 7)
was not dilutive in 1998.
Shareholder Rights Plan
On May 20, 1998, the Board of Directors of the Company adopted a Shareholder
Rights Plan pursuant to a Rights Agreement (the "Rights Agreement") and
authorized and declared a dividend of one Preferred Stock Purchase Right (a
"Right") with respect to each outstanding share of common stock of the Company.
Subject to certain limitations, each Right entities the holder thereof to
purchase one one-thousandths of one share of Series B junior participating
preferred stock, par value $.01 per share ("Series B Preferred Stock"), at a
price of $125.00 per one one-thousandths of one share, subject to adjustment to
prevent dilution (the "Series B Purchase Price") under certain conditions
described in the Rights Agreement. The Rights expire on June 30, 2008 unless
earlier redeemed by the Company.
The Rights become exercisable generally, unless redeemed by the Company, if
any person or group becomes the beneficial owner of 15% or more of the
outstanding common stock of the Company (an "Acquiring Person"). At such time,
each holder of a Right (other than Rights that are, or were, beneficially owned
by an Acquiring Person or any associate or affiliate thereof, which shall
become null and void and not exercisable) will thereafter have the right (the
"Flip-In Right") to receive, in lieu of shares of Series B Preferred Stock and
upon payment of the Series B Purchase Price, shares of the Company's common
stock (or in certain circumstances, cash, property or other securities of the
Company) having a value equal to two times the Series B Purchase Price.
Additionally, upon certain acquisitions or sales of the Company, each holder of
a Right (other than Rights which have previously been voided as set forth
above) shall thereafter have the right (the "Flip-Over Right") to receive, in
lieu of shares of Series B Preferred Stock and upon exercise and payment of the
Series B Purchase Price, common shares of the acquiring company having a value
equal to two times the Series B Purchase Price. If a transaction would
otherwise result in a holder's having a Flip-In as well as a Flip-Over right,
then only the Flip-Over Right will be exercisable. If a transaction results in
a holder's having a Flip-Over Right subsequent to a transaction resulting in a
holder's having a Flip-In Right, a holder will have Flip-Over Rights only to
the extent such holder's Flip-In Rights have not been exercised. Because of the
nature of the Series B Preferred Stock's dividend, liquidation and voting
rights, the value of the one one-thousandths' interest in a share of Series B
Preferred Stock purchasable upon exercise of each Right should approximate the
value of one share of the Company's common stock.
Effective in February 1999, the Board of Directors of the Company amended
the definition of an Acquiring Person to exclude from the definition Duke
Realty Investments, Inc. (see Note 18).
7. MINORITY INTERESTS IN THE OPERATING PARTNERSHIP
Preferred Units
In November 1998, the Operating Partnership sold 1,400,000, 8% Series C
cumulative redeemable preferred limited partnership interests (the "Series C
Preferred Units"). The Series C Preferred Units have a liquidation preference
of $25.00 per preferred unit and are redeemable by the Operating Partnership on
or after November 6, 2003, at a redemption price of $25.00 per preferred unit.
In combination with the issuance of the Series C Preferred Units, the Company
issued a warrant that entitles its holder to purchase either 1,046,729
F-18
<PAGE>
shares of Company common stock at a price of $33.4375 per share, or 8%
1,400,000 shares of Series A Preferred Stock at a price of $25.00 per share.
The Series C Preferred Units are automatically redeemed upon the exercise of
the warrant. The warrant has a perpetual term unless the Series C Preferred
Units are redeemed by the Operating Partnership, in which case the warrant
expires within 30 days of redemption. The Operating Partnership received net
proceeds of approximately $34,400,000 from this transaction. The Company has
accounted for this arrangement as a convertible preferred limited partnership
interest in the accompanying consolidated financial statements.
Also, in November 1998, the Operating Partnership sold 2,600,000, 8.625%
Series D cumulative redeemable preferred limited partnership interests (the
"Series D Preferred Units") and received net proceeds of approximately
$63,300,000. The Series D Preferred Units have a liquidation preference of
$25.00 per preferred unit and are redeemable at the option of the Operating
Partnership on or after November 12, 2003, at a redemption price of $25.00 per
preferred unit.
Common Units
The Operating Partnership issued 1,845,307, 1,147,505 and 1,917,720 Common
Units to persons other than the Company with aggregate values of $55,701,000,
$31,876,000 and $48,085,000 in 1998, 1997 and 1996, respectively, in exchange
for full or partial interests in certain land and buildings. Common Units are
convertible by their holders into shares of common stock on a one-for-one
basis, or into cash, at the Company's option.
Distributions
For the years detailed below, Common Unitholders of the minority interests
in the Operating Partnership received and Preferred Unitholders of the minority
interests in the Operating Partnership earned cash distributions from the
Operating Partnership as follows (in thousands, except per unit amounts):
<TABLE>
<CAPTION>
1998 1997 1996
------- ------ ------
<S> <C> <C> <C>
Common Units
Distributions............................................ $11,891 $7,782 $4,108
Distributions per Unit................................... $ 1.86 $ 1.72 $ 1.60
Series C Preferred Units
Distributions............................................ $ 428 -- --
Distributions per Unit................................... $ 0.31 -- --
Series D Preferred Units
Distributions............................................ $ 763 -- --
Distributions per Unit................................... $ 0.29 -- --
</TABLE>
In January 1999, the Operating Partnership made distributions to the
minority Common Unitholders of $3,646,000 or $0.505 per Common Unit relating to
fourth quarter 1998 operating results and made distributions to the holders of
the Series C Preferred Units of $662,000 or $0.47 per unit and the Series D
Preferred Units of $1,230,000 or $0.47 per unit.
8. INCENTIVE STOCK PLAN
The Company has two Incentive Stock Plans (the "Plans") under which shares
of the Company's common stock have been reserved for the issuance of stock
options and restricted stock. Common shares totaling 2,400,000 have been
reserved for issuance under the Plans. Participants in the Plans may be
officers and employees of the Company and the Service Companies, as well as
Company directors. The exercise price of all options under the Plans is not
less than the fair market value of the Company's common stock on the date of
grant and such options may be exercised for periods up to ten years. As
discussed in Note 2, the Company accounts for stock-based compensation under
APB Opinion 25. The additional disclosures required by SFAS 123 are detailed
below.
F-19
<PAGE>
Under SFAS 123, the fair value of stock options granted in 1998, 1997 and
1996 has been estimated using a binomial option pricing model with the
following weighted average assumptions for grants in 1998, 1997 and 1996,
respectively: risk free interest rates of 5.4% in 1998, 5.5% in 1997, and 5.7%
in 1996; expected option lives of five years for options granted in each year;
expected volatility of 17.0% in 1998, 16.6% in 1997 and 16.5% in 1996, and
expected dividend yields of 6.1% in 1998, 5.1% in 1997, and 5.7% in 1996. Using
these assumptions, the estimated fair value of options granted in 1998, 1997
and 1996 was $1,961,000, $373,000, and $945,000, respectively, and such amounts
would be included in compensation expense over the vesting period of the
options. Pro forma net income, net income available to common shareholders and
net income per common share in 1998, 1997 and 1996, assuming the Company had
accounted for the Plans under SFAS 123 were as follows (in thousands, except
per share amounts):
<TABLE>
<CAPTION>
1998 1997 1996
------- ------- -------
<S> <C> <C> <C>
Net income
As reported........................................... $34,874 $22,975 $12,745
Pro forma............................................. 34,339 22,749 12,264
Net income available to common shareholders
As reported........................................... 22,874 20,255 12,745
Pro forma............................................. 22,339 20,029 12,264
Net income per common share
As reported--basic.................................... $ 1.19 $ 1.24 $ 1.11
Pro forma--basic...................................... 1.16 1.22 1.07
As reported--diluted.................................. 1.18 1.23 1.10
Pro forma--diluted.................................... 1.15 1.21 1.06
</TABLE>
The pro forma annual compensation cost included in determining pro forma net
income and net income available to common shareholders may not be
representative of future pro forma annual compensation cost since the estimated
fair value of stock options is included in compensation expense over the
vesting period, and additional stock options may be granted in future years.
A summary of stock option activity under the Plan is presented in the table
and narrative below (share amounts in thousands):
<TABLE>
<CAPTION>
1998 1997 1996
---------------- ---------------- ----------------
Weighted Weighted Weighted
Average Average Average
Exercise Exercise Exercise
Shares Price Shares Price Shares Price
------ -------- ------ -------- ------ --------
<S> <C> <C> <C> <C> <C> <C>
Options outstanding,
beginning of year......... 807 $24.26 753 $23.06 503 $19.90
Granted.................... 552 31.77 91 32.40 283 28.22
Exercised.................. (35) 20.27 (34) 19.38 (33) 19.25
Forfeited.................. (4) 27.64 (3) 23.32 -- --
----- ------ ----- ------ ----- ------
Options outstanding, end of
year...................... 1,320 $27.50 807 $24.26 753 $23.06
===== ====== ===== ====== ===== ======
Options exercisable, end of
year...................... 701 $23.93 632 $22.98 552 $22.10
===== ====== ===== ====== ===== ======
Weighted average per share
fair value of options
granted................... $3.55 $4.10 $3.34
===== ===== =====
</TABLE>
At December 31, 1998, options for 532,000 shares were outstanding having
exercise prices ranging from $19.25 to $26.00, with a weighted average exercise
price of $21.48 and a weighted average remaining life of 6.2 years, of which
489,000 options were exercisable with a weighted average exercise price of
$21.09. Options for 788,000 shares were also outstanding having exercise prices
ranging from $28.00 to $33.75, with a weighted average exercise price of $31.56
and a weighted average remaining life of 9.1 years, of which 212,000 options
were exercisable with a weighted average exercise price of $30.48.
F-20
<PAGE>
9. EMPLOYEE BENEFIT PLAN
The Company and the Service Companies ("Plan Sponsors") sponsor a 401(k)
retirement savings plan covering substantially all employees meeting certain
age and service requirements. Employees may contribute up to the lesser of 20%
of their annual compensation or the annual statutory limit ($10,000 in 1998) to
the plan. Plan Sponsors' contributions are made on a discretionary basis up to
a maximum of 100% of the employees' contributions (currently 50% of the
employee's contribution up to 4% of an employee's annual compensation). Total
Plan Sponsor contributions were $277,000, $168,000, and $88,000 in 1998, 1997,
and 1996, respectively.
10. DEFERRED COSTS
Deferred costs consist of the following (in thousands):
<TABLE>
<CAPTION>
December 31,
-----------------
1998 1997
-------- -------
<S> <C> <C>
Deferred lease costs......................................... $ 29,658 $18,551
Deferred financing costs..................................... 12,318 3,996
-------- -------
41,976 22,547
Less accumulated amortization................................ (12,813) (9,460)
-------- -------
$ 29,163 $13,087
======== =======
</TABLE>
11. LEASING ACTIVITY
Future minimum rents due under noncancelable operating leases with tenants
at December 31, 1998, were as follows (in thousands):
<TABLE>
<CAPTION>
Year Amount
- ---- --------
<S> <C>
1999................................................................... $143,021
2000................................................................... 123,382
2001................................................................... 104,346
2002................................................................... 80,804
2003................................................................... 55,175
2004 and thereafter.................................................... 137,140
--------
$643,868
========
</TABLE>
12. RELATED-PARTY TRANSACTIONS
In addition to certain related party transactions described in Notes 3 and 5
to these consolidated financial statements, at December 31, 1998 and 1997,
receivables included $464,000 and $463,000, respectively, due from the Service
Companies and their subsidiaries, relating to accrued interest on the advances
to the Service Companies and their subsidiaries. At December 31, 1998 and 1997,
accounts payable and accrued expenses included $3,313,000 and $703,000,
respectively, due to the Service Companies and their subsidiaries.
At December 31, 1998 and 1997, other assets included outstanding loan
advances totaling $4,450,000 due from NWI, a related entity, under a $5,700,000
demand loan agreement. The loan bears interest at LIBOR plus 2.10% and is
secured by real estate assets held by NWI, for which the Company has
arrangements to acquire in future periods. Interest earned under the agreement
and included in the accompanying consolidated statements of operations totaled
$346,000 and $197,000 in the years ended December 31, 1998 and 1997,
respectively.
The Service Companies also provide development, construction, landscape and
leasing services to affiliated partnerships and joint ventures. In 1998, 1997
and 1996, total revenues for such services to related
F-21
<PAGE>
parties of the Service Companies were as follows (in thousands):
<TABLE>
<CAPTION>
1998 1997 1996
------ ------ ------
<S> <C> <C> <C>
Construction and development fees......................... $ 743 $ 390 $ 678
Landscape................................................. 472 327 271
Commissions............................................... 283 398 94
------ ------ ------
$1,498 $1,115 $1,043
====== ====== ======
</TABLE>
In addition, the Company paid development, leasing and property management
fees totaling $1,701,000, $479,000 and $694,000, respectively, to Codina in
1998.
13. SEGMENTS
Effective for the year ended December 31, 1998, the Company implemented the
segment disclosure requirements of SFAS 131. The Company operates as a self-
administered and self-managed REIT whose primary business is the acquisition,
development and ownership of industrial and suburban office properties in the
southeast United States and Texas. At December 31, 1998, the Company's in-
service operating property portfolio (based on square footage) consisted of
90.1% industrial properties, 8.1% suburban office properties and 1.8% retail
and other properties.
The Company manages its properties and operating business through geographic
markets. Each geographic market is managed by local market managers who are
knowledgeable about the specific real estate fundamentals and characteristics
of the market. The Company executes its business plan through this geographic
market strategy of utilizing local market knowledge coupled with meaningful
concentrations of properties in those markets.
Segment operating performance is measured on segment earnings before
interest expense and depreciation and amortization expense. Segment revenues
consist primarily of property operating revenues from in-service properties,
but also include other miscellaneous segment revenues. Segment earnings before
equity in earnings of unconsolidated entities consist of segment revenues less
segment property operating, maintenance, management and real estate tax
expenses and direct segment general and administrative expenses. To the extent
an operating segment generates earnings from unconsolidated entities, such
earnings are included in the measurement of segment earnings as shown below.
The Company's measurement of segment earnings is consistent with the Company's
calculation of segment unleveraged "funds from operations," a REIT industry
measure of operating performance. Segment information has been prepared using
the accounting policies described in Note 2 to the consolidated financial
statements. Intersegment transactions are not material to the presentation of
the segment data.
F-22
<PAGE>
A summary of reportable segment revenues and segment earnings is detailed
below (in thousands):
<TABLE>
<CAPTION>
North South Segment
Georgia Carolina Florida Tennessee Other(a) Total
------- -------- ------- --------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
1998
Segment revenues.......... $79,307 $24,251 $21,915 $15,483 $10,018 $150,974
======= ======= ======= ======= ======= ========
Segment earnings before
equity in earnings of
unconsolidated entities.. $61,008 $17,864 $14,741 $12,260 $ 6,975 $112,848
Equity in earnings of
unconsolidated service
companies.............. 2,535 -- -- -- -- 2,535
Equity in earnings of
unconsolidated real
estate entities........ 329 -- -- -- -- 329
------- ------- ------- ------- ------- --------
Segment earnings.......... $63,872 $17,864 $14,741 $12,260 $ 6,975 $115,712
======= ======= ======= ======= ======= ========
1997
Segment revenues.......... $62,995 $15,889 $ -- $ 9,958 $ 3,178 $ 92,020
======= ======= ======= ======= ======= ========
Segment earnings before
equity in earnings of
unconsolidated entities.. $49,123 $11,519 $ -- $ 7,721 $ 2,157 $ 70,520
Equity in earnings of
unconsolidated service
companies.............. 1,969 -- -- -- -- 1,969
Equity in earnings of
unconsolidated real
estate entities........ 20 -- -- -- -- 20
------- ------- ------- ------- ------- --------
Segment earnings.......... $51,112 $11,519 $ -- $ 7,721 $ 2,157 $ 72,509
======= ======= ======= ======= ======= ========
1996
Segment revenues.......... $50,979 $ -- $ -- $ 1,376 $ 1,528 $ 53,883
======= ======= ======= ======= ======= ========
Segment earnings before
equity in earnings of
unconsolidated entities.. $39,743 $ -- $ -- $ 1,047 $ 1,066 $ 41,856
Equity in earnings of
unconsolidated service
companies.............. 1,340 -- -- -- -- 1,340
------- ------- ------- ------- ------- --------
Segment earnings.......... $41,083 $ -- $ -- $ 1,047 $ 1,066 $ 43,196
======= ======= ======= ======= ======= ========
</TABLE>
- --------
(a) Represents aggregate data for operating segments below the quantitative
thresholds prescribed by SFAS 131.
F-23
<PAGE>
A summary of segment assets is detailed below (in thousands):
<TABLE>
<CAPTION>
North South Segment
Georgia Carolina Florida Tennessee Other(a) Total
--------- -------- -------- --------- -------- ----------
<S> <C> <C> <C> <C> <C> <C>
1998
Land.................... $ 77,134 $ 26,018 $ 25,634 $ 25,340 $ 15,317 $ 169,443
Buildings and
improvements........... 499,637 169,819 147,568 119,781 94,812 1,031,617
Accumulated
depreciation........... (69,623) (11,060) (5,077) (6,986) (3,637) (96,383)
--------- -------- -------- -------- -------- ----------
Operating real estate
assets................ 507,148 184,777 168,125 138,135 106,492 1,104,677
Other segment
assets(b).............. 87,892 24,343 24,977 42,742 63,753 243,707
Equity in earnings of
unconsolidated service
companies.............. 43,639 -- -- -- -- 43,639
Equity in earnings of
unconsolidated real
estate entities........ 35,204 -- -- -- -- 35,204
--------- -------- -------- -------- -------- ----------
Total segment assets... $ 673,883 $209,120 $193,102 $180,877 $170,245 $1,427,227
========= ======== ======== ======== ======== ==========
Additions to real estate
assets................. $ 125,413 $ 46,968 $198,054 $ 64,955 $114,824 $ 550,214
========= ======== ======== ======== ======== ==========
1997
Land.................... $ 62,277 $ 20,801 $ -- $ 18,661 $ 4,457 $ 106,196
Buildings and
improvements........... 392,945 122,594 -- 82,587 29,183 627,309
Accumulated
depreciation........... (52,584) (4,721) -- (3,022) (1,221) (61,548)
--------- -------- -------- -------- -------- ----------
Operating real estate
assets................ 402,638 138,674 -- 98,226 32,419 671,957
Other segment
assets(b).............. 77,522 25,826 -- 20,549 23,539 147,436
Equity in earnings of
unconsolidated service
companies.............. 9,257 -- -- -- -- 9,257
Equity in earnings of
unconsolidated real
estate entities........ 2,525 -- -- -- -- 2,525
--------- -------- -------- -------- -------- ----------
Total segment assets... $ 491,942 $164,500 $ -- $118,775 $ 55,958 $ 831,175
========= ======== ======== ======== ======== ==========
Additions to real estate
assets................. $ 115,780 $ 74,773 $ -- $ 43,584 $ 33,316 $ 267,453
========= ======== ======== ======== ======== ==========
1996
Land.................... $ 47,169 $ 13,562 $ -- $ 14,178 $ 2,324 $ 77,233
Buildings and
improvements........... 301,408 76,899 -- 56,919 14,776 450,002
Accumulated
depreciation........... (40,560) -- -- (379) (530) (41,469)
--------- -------- -------- -------- -------- ----------
Operating real estate
assets................ 308,017 90,461 -- 70,718 16,570 485,766
Other segment
assets(b).............. 67,683 3,290 -- 6,723 6,352 84,048
Equity in earnings of
unconsolidated service
companies.............. 7,760 -- -- -- -- 7,760
--------- -------- -------- -------- -------- ----------
Total segment assets... $ 383,460 $ 93,751 $ -- $ 77,441 $ 22,922 $ 577,574
========= ======== ======== ======== ======== ==========
Additions to real estate
assets................. $ 87,786 $ 93,751 $ -- $ 77,251 $ 14,291 $ 273,079
========= ======== ======== ======== ======== ==========
</TABLE>
- --------
(a) Represents aggregate data for operating segments below the quantitative
thresholds prescribed by SFAS 131.
(b) Includes primarily development in progress, land held for development,
deferred leasing costs and tenant receivables.
F-24
<PAGE>
Reconciliations of segment earnings to consolidated income before
extraordinary loss and segment assets to consolidated total assets is as
follows:
<TABLE>
<S> <C> <C> <C>
Segment
Earnings 1998 1997 1996
---------- -------- --------
Segment
earnings..... $ 115,712 $ 72,509 $ 43,196
Depreciation
and
amortization
expense...... (38,348) (24,144) (13,474)
Interest
expense...... (30,782) (18,833) (12,643)
Corporate
general and
administrative
expense...... (3,001) (2,056) (1,762)
Interest
income....... 965 1,509 492
Gain on sale
of real
estate
assets....... 53 209 --
Minority
interests.... (9,458) (6,219) (3,064)
---------- -------- --------
Consolidated
income before
extraordinary
loss......... $ 35,141 $ 22,975 $ 12,745
========== ======== ========
Segment Assets 1998 1997 1996
---------- -------- --------
Segment
assets....... $1,427,227 $831,175 $577,574
Deferred
financing
costs, net... 8,455 1,594 2,401
Corporate
other
assets....... 11,910 19,592 11,874
---------- -------- --------
Total
consolidated
assets....... $1,447,592 $852,361 $591,849
========== ======== ========
</TABLE>
14. COMMITMENTS AND CONTINGENCIES
The Company has entered into agreements, subject to the completion of due
diligence and customary closing conditions, for the future acquisition of land
and buildings totaling approximately $45,741,000, including land and building
commitments of approximately $9,170,000 from NWI and Lichtin and approximately
$9,100,000 from Codina and affiliates. Of this total, $32,641,000 represents
committed land acquisitions and $13,100,000 represents committed building
acquisitions. Letters of credit were issued on behalf of the Company totaling
$1,125,000 in support of certain development and land acquisition arrangements
at December 31, 1998.
The Company is subject to various legal proceedings and claims that arise in
the ordinary course of business. While the resolution of these matters cannot
be predicted with certainty, management believes that the final outcome of such
matters will not have a material adverse effect on the Company's financial
position or results of operations.
15. SUPPLEMENTAL CASH FLOW INFORMATION
Interest paid, net of amounts capitalized (see Note 4), totaled $22,813,000,
$17,958,000, and $11,265,000 in 1998, 1997 and 1996, respectively.
Significant noncash investing and financing activities were as follows:
1. The Company's 1998 property acquisition, development and investment
activity included the settlement of real estate development loans of
$10,870,000, the assumption of other liabilities in excess of other
assets of $4,224,000, the assumption of indebtedness of $91,137,000 and
the issuance of Common Units valued at $55,701,000. In addition, in 1998,
restricted common stock was issued at an aggregate value of $80,000.
2. The Company's 1997 property acquisition, development and investment
activity included the settlement of real estate loans of $7,376,000, the
assumption of indebtedness of $64,869,000, and the issuance of Common
Units valued at $31,876,000. Additionally, in 1997, restricted common
stock was issued at an aggregate value of $1,183,000.
F-25
<PAGE>
3. The Company's 1996 acquisitions of NWI and Lichtin included the
assumption of indebtedness of $104,628,000, the issuance of Common Units
valued at $48,085,000 and the issuance of common stock valued at
$7,124,000.
16. FINANCIAL INSTRUMENTS
Based on interest rates and other pertinent information available to the
Company at December 31, 1998 and 1997, the Company estimated that the carrying
values of cash and cash equivalents, notes receivable from the Service
Companies and their subsidiaries, receivables and other assets, and accounts
payable and other liabilities approximated their fair values due to the short-
term nature of the instruments and when compared to instruments of similar type
terms and maturity.
The estimated fair value of the Company's interest rate swap and treasury
rate guarantee hedge and borrowing arrangements (see Note 4), were determined
based on quoted market prices for similar financial instruments. The estimated
fair value of the Company's interest rate swap arrangements was approximately
$1,277,000 and $1,055,000 less than the Company's carrying value at December
31, 1998 and 1997, respectively. The estimated fair value of the Company's
treasury rate guarantee hedge arrangement was $3,210,000 less than the
Company's carrying value at December 31, 1997. There were no outstanding
treasury rate guarantee hedge arrangements at December 31, 1998. The estimated
fair value of the Company's unsecured note borrowings and fixed rate mortgage
notes payable was $4,168,000 in excess of their carrying value (adjusted for
the unamortized costs of the settled treasury rate guarantee hedge arrangement
totaling $4,055,000) at December 31, 1998. The fixed rate mortgage notes
payable approximated their carrying value and no unsecured notes were
outstanding at December 31, 1997.
Under current accounting principles and as discussed in Note 2, the
difference between the fair value and carrying amount of the interest rate swap
arrangements are not currently recognized in the Company's consolidated
financial statements. The Company monitors the credit quality of the
counterparties to its interest rate swap arrangements and does not anticipate
nonperformance from such parties.
Disclosure about fair value of financial instruments was based on pertinent
information available to management as of December 31, 1998 and 1997. Although
management is not aware of any factors that would significantly affect the fair
value amounts, such amounts have not been comprehensively revalued for purposes
of these financial statements since December 31, 1998.
F-26
<PAGE>
17. QUARTERLY FINANCIAL INFORMATION (UNAUDITED)
Selected quarterly financial information for 1998 and 1997 was as follows
(in thousands, except per share amounts):
<TABLE>
<CAPTION>
First Second Third Fourth
Quarter Quarter Quarter Quarter
------- ------- ------- -------
<S> <C> <C> <C> <C>
1998
Revenue........................................ $32,693 $36,326 $39,087 $42,868
Income before minority interests and
extraordinary loss............................ 10,318 10,930 11,220 12,131
Income before extraordinary loss............... 8,378 8,889 9,071 8,803
Net income..................................... 8,378 8,889 9,071 8,536
Net income available to common shareholders.... 5,378 5,889 6,071 5,536
Net income per common share:
Basic
Income before extraordinary loss, net of
preferred dividends......................... $ 0.29 $ 0.30 $ 0.31 $ 0.30
Net income................................... 0.29 0.30 0.31 0.28
Diluted
Income before extraordinary loss, net of
preferred dividends......................... 0.29 0.30 0.31 0.29
Net income................................... 0.29 0.30 0.31 0.28
1997
Revenue........................................ $19,899 $21,439 $24,279 $26,403
Income before minority interests and
extraordinary loss............................ 5,058 6,698 7,451 9,987
Income before extraordinary loss............... 3,826 5,080 5,768 8,301
Net income..................................... 3,826 5,080 5,768 8,301
Net income available to common shareholders.... 3,826 5,080 5,768 5,581
Net income per common share:
Basic
Income before extraordinary loss, net of
preferred dividends......................... $ 0.27 $ 0.32 $ 0.33 $ 0.32
Net income................................... 0.27 0.32 0.33 0.32
Diluted
Income before extraordinary loss, net of
preferred dividends......................... 0.27 0.32 0.32 0.31
Net income................................... 0.27 0.32 0.32 0.31
</TABLE>
18. SUBSEQUENT EVENTS (UNAUDITED)
On March 1, 1999, the Company announced that it had entered into an
Agreement and Plan of Merger (the "REIT Merger Agreement") with Duke Realty
Investments, Inc., an Indiana based REIT specializing in industrial and office
building development and ownership ("Duke"), and that the Operating Partnership
had entered into an Agreement and Plan of Merger (the "OP Merger Agreement"
and, together with the REIT Merger Agreement, the "Merger Agreements") with
Duke Realty Limited Partnership, an Indiana limited partnership of which Duke
is the managing general partner ("Duke OP"). The Merger Agreements provide for
a merger of the Company with and into Duke (the "REIT Merger") and a merger of
the Operating Partnership with and into Duke OP (the "OP Merger" and, together
with the REIT Merger, the "Mergers"). At the effective time of the Mergers,
Duke will change its name to Duke-Weeks Realty Corporation.
Pursuant to the Merger Agreements: (i) each outstanding share of common
stock, par value $0.01 per share, of the Company ("Weeks Common Stock") will be
converted into the right to receive 1.38 shares of common stock, par value
$0.01 per share, of Duke ("Duke Common Stock"); (ii) each issued and
outstanding share of 8.0% Series A Preferred Stock, par value $0.01 per share,
of the Company will be converted into the right to receive one preference share
representing 1/1000 of a share of 8.0% Series F Cumulative Redeemable Preferred
Stock, par value $0.01 per share, of Duke; (iii) each issued and outstanding
share of 8.625% Series D Cumulative Redeemable Preferred Stock, par value $0.01
per share, of the Company
F-27
<PAGE>
will be converted into the right to receive on preference share representing
1/1000 of a share of 8.625% Series H Cumulative Redeemable Preferred Stock, par
value $0.01 per share, of Duke; (iv) each issued and outstanding Common Unit in
the Operating Partnership will be converted into 1.38 common units of limited
partnership interest in Duke OP; (v) each issued and outstanding 8.0% Series A
Preferred Unit in the Operating Partnership will be converted into 1/1000 of
one 8.0% Series F Cumulative Redeemable Preferred Unit in Duke OP; (vi) each
issued and outstanding 8.0% Series C Preferred Unit in the Operating
Partnership will be converted into 1/1000 of one 8.0% Series G Cumulative
Redeemable Preferred Unit in Duke OP; and (vii) each issued and outstanding
8.625% Series D Preferred Unit in the Operating Partnership will be converted
into 1/1000 of one 8.625% Series H Cumulative Redeemable Preferred Unit in Duke
OP.
Holders representing 2% of the outstanding Weeks Common Stock have entered
into voting agreements, agreeing to vote their shares in favor of the
transaction contemplated by the Merger Agreements. Holders representing 5% of
the outstanding Duke Common Stock have entered into voting agreements, agreeing
to vote their shares in favor of the transactions contemplated by the Merger
Agreements. The requisite approvals of the partners of Duke OP and the
Operating Partnership to the transactions have been obtained.
The consummation of the transactions contemplated by the Merger Agreements
is expected to occur in the second or third quarter of 1999 and is subject to
approval by the stockholders of Duke and the shareholders of the Company and
satisfaction of certain other customary closing conditions. Additionally,
certain Company debt holders, lenders and others will be requested to approve
certain other aspects of the Mergers. There can be no assurance that the
transactions contemplated by the Merger Agreements will be consummated. The
Company has agreed with Duke that if the REIT Merger Agreement is terminated
under certain circumstances, the Company will pay Duke certain fees and
expenses. Duke has agreed with the Company that if the REIT Merger Agreement is
terminated under certain other circumstances, Duke will pay the Company certain
fees and expenses.
F-28
<PAGE>
WEEKS CORPORATION SCHEDULE III
REAL ESTATE ASSETS AND ACCUMULATED DEPRECIATION
DECEMBER 31, 1998
(In Thousands)
<TABLE>
<CAPTION>
Gross Amount at Which
Carried at Close of
Initial Costs Period
----------------- Cost Capitalized ------------------------
Market/Business Property Related Building and Subsequent to Building and Accumulated Year
Park/Property Type(1) Encumbrances Land Improvements Acquisition Land Improvements Total Depreciation Developed(2)
- --------------- -------- ------------ ---- ------------ ---------------- ---- ------------ ------ ------------ ------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
ATLANTA, GEORGIA
Northeast/I-85
Submarket
Northeast/I-85
Submarket
Gwinnett Park
1 1750 Beaver
Ruin............ S $640 $4,068 $ -- $640 $4,068 $4,708 $ 174 1997
2 4258 Commu-
nications Dr.... D (a) 8 725 508 29 1,212 1,241 678 1981
3 4261 Commu-
nications Dr.... D 254 1,446 36 254 1,482 1,736 211 1981
4 4291 Commu-
nications Dr.... D (a) 4 327 126 16 441 457 267 1981
5 1826 Doan
Way............. D (b) 18 1,167 238 18 1,405 1,423 599 1984
6 1857 Doan
Way............. D 23 6 5 23 11 34 2 1970
7 1650 Inter-
national Blvd... D (a) 69 994 94 69 1,088 1,157 487 1984
8 4245 Inter-
national Blvd... D (a) 192 2,913 3,063 192 5,976 6,168 1,484 1985
9 4250 Inter-
national Blvd... D 193 1,542 305 216 1,824 2,040 713 1986
10 4295 Inter-
national Blvd... D (a) 58 1,058 132 58 1,190 1,248 472 1984
11 4320 Inter-
national Blvd... D (a) 44 710 223 44 933 977 422 1984
12 4350 Inter-
national Blvd... D (a) 78 938 573 78 1,511 1,589 867 1982
13 4355 Inter-
national Blvd... D (d) 233 811 335 233 1,146 1,379 286 1983
14 4405-A In-
ternational
Blvd............ S 97 957 878 97 1,835 1,932 1,029 1984
15 4405-B In-
ternational
Blvd............ S 118 1,152 1,325 118 2,477 2,595 1,626 1984
16 4405-C In-
ternational
Blvd............ S 21 422 183 21 605 626 310 1984
17 1828 Meca
Way............. D (b) 16 487 598 16 1,085 1,101 681 1975
18 1858 Meca
Way............. D (a) 20 931 16 27 940 967 394 1975
19 4316 Park
Dr.............. D 262 1,685 -- 262 1,685 1,947 38 1980
20 4317 Park
Dr.............. D 671 1,414 241 671 1,655 2,326 674 1985
21 4357 Park
Dr.............. D (e) 12 865 379 12 1,244 1,256 636 1979
22 4366 Park
Dr.............. O 6 406 343 22 733 755 422 1981
23 4386 Park
Dr.............. D 17 758 7 17 765 782 325 1973
24 4436 Park
Dr.............. D 18 195 315 18 510 528 255 1968
25 4437 Park
Dr.............. D (a) 21 659 470 21 1,129 1,150 592 1978
26 4467 Park
Dr.............. D (b) 6 537 243 6 780 786 246 1978
27 4476 Park
Dr.............. D (b) 14 372 20 14 392 406 137 1977
28 4487 Park
Dr.............. D (b) 6 1,048 1,241 6 2,289 2,295 1,600 1978
29 1835 Shack-
leford Ct....... O (a) 29 2,780 611 29 3,391 3,420 919 1990
30 1854 Shack-
leford Ct....... O 52 4,085 1,586 52 5,671 5,723 2,270 1985
31 4274 Shack-
leford Rd....... D (a) 27 614 1,072 27 1,686 1,713 1,263 1974
32 4275 Shack-
leford Rd....... O (f) 8 1,173 447 12 1,616 1,628 745 1985
<CAPTION>
Market/Business Year
Park/Property Acquired(3)
- --------------- -----------
<S> <C>
ATLANTA, GEORGIA
Gwinnett Park
1 1750 Beaver
Ruin............
2 4258 Commu-
nications Dr....
3 4261 Commu-
nications Dr.... 1994
4 4291 Commu-
nications Dr....
5 1826 Doan
Way.............
6 1857 Doan
Way.............
7 1650 Inter-
national Blvd...
8 4245 Inter-
national Blvd...
9 4250 Inter-
national Blvd...
10 4295 Inter-
national Blvd...
11 4320 Inter-
national Blvd...
12 4350 Inter-
national Blvd...
13 4355 Inter-
national Blvd... 1994
14 4405-A In-
ternational
Blvd............
15 4405-B In-
ternational
Blvd............
16 4405-C In-
ternational
Blvd............
17 1828 Meca
Way.............
18 1858 Meca
Way.............
19 4316 Park
Dr.............. 1998
20 4317 Park
Dr..............
21 4357 Park
Dr..............
22 4366 Park
Dr..............
23 4386 Park
Dr..............
24 4436 Park
Dr..............
25 4437 Park
Dr..............
26 4467 Park
Dr..............
27 4476 Park
Dr..............
28 4487 Park
Dr..............
29 1835 Shack-
leford Ct.......
30 1854 Shack-
leford Ct.......
31 4274 Shack-
leford Rd.......
32 4275 Shack-
leford Rd.......
</TABLE>
S-1
<PAGE>
SCHEDULE III
<TABLE>
<CAPTION>
Gross Amount at Which
Initial Costs Carried at Close of Period
------------------- Cost Capitalized ---------------------------
Market/Business Property Related Building and Subsequent to Building and Accumulated
Park/Property Type(1) Encumbrances Land Improvements Acquisition Land Improvements Total Depreciation
- --------------- -------- ------------ ------ ------------ ---------------- ------ ------------ ------- ------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
33 4344 Shackle-
ford Rd.......... D $ 286 $ 984 $ 166 $ 286 $ 1,150 $ 1,436 $ 197
34 4355 Shackle-
ford Rd.......... D (a) 7 886 609 7 1,495 1,502 847
35 4364 Shackle-
ford Rd.......... D (a) 9 40 50 9 90 99 67
36 4366 Shackle-
ford Rd.......... D 20 420 874 26 1,288 1,314 866
37 4388 Shackle-
ford Rd.......... D (a) 33 1,181 246 43 1,417 1,460 279
38 4400 Shackle-
ford Rd.......... D 14 315 48 18 359 377 89
39 4444 Shackle-
ford Rd.......... D (a) 31 731 1,121 31 1,852 1,883 1,405
------ ------- ------- ------ ------- ------- -------
Total........... $3,635 $41,802 $18,727 $3,738 $60,426 $64,164 $24,574
------ ------- ------- ------ ------- ------- -------
<CAPTION>
Market/Business Year Year
Park/Property Developed(2) Acquired(3)
- --------------- ------------ -----------
<S> <C> <C>
33 4344 Shackle-
ford Rd.......... 1975 1994
34 4355 Shackle-
ford Rd.......... 1972
35 4364 Shackle-
ford Rd.......... 1973
36 4366 Shackle-
ford Rd.......... 1981
37 4388 Shackle-
ford Rd.......... 1981
38 4400 Shackle-
ford Rd.......... 1981
39 4444 Shackle-
ford Rd.......... 1979
Total...........
Horizon
40 90 Horizon
Dr............... D (b) $ 120 $ 659 $ 70 $ 120 $ 729 $ 849 $ 167
41 225 Horizon
Dr............... B (b) 121 1,423 794 121 2,217 2,338 954
42 250 Horizon
Dr............... B 466 6,131 -- 466 6,131 6,597 155
43 300 Horizon
Dr............... B 798 4,455 2,752 847 7,158 8,005 609
44 70
Crestridge....... D 575 2,947 -- 575 2,947 3,522 11
45 2700
Crestridge....... B 1,600 11,757 -- 1,600 11,757 13,357 76
46 2775 Horizon
Ridge Ct......... B 732 5,906 -- 732 5,906 6,638 426
47 2780 Horizon
Ridge Ct......... B 826 4,949 5 826 4,954 5,780 283
48 2800 Vista
Ridge Dr......... B 443 5,463 73 443 5,536 5,979 540
------ ------- ------- ------ ------- ------- -------
Total........... $5,681 $43,690 $ 3,694 $5,730 $47,335 $53,065 $ 3,221
------ ------- ------- ------ ------- ------- -------
Horizon
40 90 Horizon
Dr............... 1992
41 225 Horizon
Dr............... 1990
42 250 Horizon
Dr............... 1997
43 300 Horizon
Dr............... 1994
44 70
Crestridge....... 1998
45 2700
Crestridge....... 1998
46 2775 Horizon
Ridge Ct......... 1996
47 2780 Horizon
Ridge Ct......... 1997
48 2800 Vista
Ridge Dr......... 1995
Total...........
Northwoods
49 2915 Court-
yards Circle..... D $ 268 $ 1,793 $ 92 $ 268 $ 1,885 $ 2,153 $ 252
50 2925 Court-
yards Dr......... D 333 2,618 5 333 2,623 2,956 283
51 2975 Court-
yards Circle..... D 144 997 9 144 1,006 1,150 108
52 2995 Court-
yards Circle..... D 109 677 8 109 685 794 74
53 2725
Northwoods
Pkwy............. D 440 2,231 12 440 2,243 2,683 210
54 2755
Northwoods
Pkwy............. D 249 2,201 -- 249 2,201 2,450 207
55 2775
Northwoods
Pkwy............. D 322 1,976 50 322 2,026 2,348 214
56 2850
Northwoods
Pkwy............. D 562 3,961 50 562 4,011 4,573 432
57 3040
Northwoods
Pkwy............. D 298 1,510 2 298 1,512 1,810 142
58 3044
Northwoods Cir-
cle.............. D 167 730 26 167 756 923 81
59 3055
Northwoods
Pkwy............. D 213 916 34 213 950 1,163 110
60 3075
Northwoods
Pkwy............. S 374 2,750 4 374 2,754 3,128 259
61 3080
Northwoods Cir-
cle.............. O 387 2,215 37 387 2,252 2,639 249
62 3100
Northwoods
Pkwy............. S 393 2,177 33 393 2,210 2,603 212
63 3155
Northwoods
Pkwy............. S 331 1,808 335 331 2,143 2,474 213
64 3175
Northwoods
Pkwy............. S 250 1,644 108 250 1,752 2,002 160
------ ------- ------- ------ ------- ------- -------
Total........... $4,840 $30,204 $ 805 $4,840 $31,009 $35,849 $ 3,206
------ ------- ------- ------ ------- ------- -------
Northwoods
49 2915 Court-
yards Circle..... 1986 1995
50 2925 Court-
yards Dr......... 1986 1995
51 2975 Court-
yards Circle..... 1986 1995
52 2995 Court-
yards Circle..... 1986 1995
53 2725
Northwoods
Pkwy............. 1984 1996
54 2755
Northwoods
Pkwy............. 1986 1996
55 2775
Northwoods
Pkwy............. 1986 1996
56 2850
Northwoods
Pkwy............. 1988 1995
57 3040
Northwoods
Pkwy............. 1984 1996
58 3044
Northwoods Cir-
cle.............. 1984 1995
59 3055
Northwoods
Pkwy............. 1985 1996
60 3075
Northwoods
Pkwy............. 1985 1996
61 3080
Northwoods Cir-
cle.............. 1952 1996
62 3100
Northwoods
Pkwy............. 1985 1996
63 3155
Northwoods
Pkwy............. 1985 1996
64 3175
Northwoods
Pkwy............. 1985 1996
Total...........
</TABLE>
S-2
<PAGE>
SCHEDULE III
<TABLE>
<CAPTION>
Gross Amount at Which
Initial Costs Carried at Close of Period
------------------- Cost Capitalized ---------------------------
Market/Business Property Related Building and Subsequent to Building and Accumulated
Park/Property Type(1) Encumbrances Land Improvements Acquisition Land Improvements Total Depreciation
- --------------- -------- ------------ ------ ------------ ---------------- ------ ------------ ------- ------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Berkeley Lake Dis-
tribution Center
65 3130 North
Berkeley Lake.... B $ 675 $ 4,455 $ 3 $ 675 $ 4,458 $ 5,133 $ 255
66 3270 Summit
Ridge Pkwy....... B 499 3,896 -- 499 3,896 4,395 27
67 3280 Summit
Ridge Pkwy....... B 485 4,277 19 485 4,296 4,781 236
68 3290 Summit
Ridge Pkwy....... B 257 2,255 2 257 2,257 2,514 129
------ ------- ------ ------ ------- ------- ------
Total........... $1,916 $14,883 $ 24 $1,916 $14,907 $16,823 $ 647
------ ------- ------ ------ ------- ------- ------
<CAPTION>
Market/Business Year Year
Park/Property Developed(2) Acquired(3)
- --------------- ------------ -----------
<S> <C> <C>
Berkeley Lake Dis-
tribution Center
65 3130 North
Berkeley Lake.... 1996
66 3270 Summit
Ridge Pkwy....... 1998
67 3280 Summit
Ridge Pkwy....... 1997
68 3290 Summit
Ridge Pkwy....... 1997
Total...........
Gwinnett Pavilion
69 1480 Beaver
Ruin Rd.......... R $ 248 $ 982 $ 482 $ 248 $ 1,464 $ 1,712 $ 571
70 1505 Pavil-
ion Place........ D (a) 448 1,149 1,189 448 2,338 2,786 1,272
71 3883 Steve
Reynolds Blvd.... D (b) 612 3,101 104 612 3,205 3,817 791
72 3890 Steve
Reynolds Blvd.... D (b) 519 1,746 224 519 1,970 2,489 404
73 3905 Steve
Reynolds Blvd.... D 697 2,108 1 697 2,109 2,806 181
74 3950 Steve
Reynolds Blvd.... B (a) 684 1,701 29 684 1,730 2,414 343
75 4020 Steve
Reynolds Blvd.... D 417 1,868 21 417 1,889 2,306 107
76 4025 Steve
Reynolds Blvd.... D 461 2,252 14 461 2,266 2,727 274
------ ------- ------ ------ ------- ------- ------
Total........... $4,086 $14,907 $2,064 $4,086 $16,971 $21,057 $3,943
------ ------- ------ ------ ------- ------- ------
Gwinnett Pavilion
69 1480 Beaver
Ruin Rd.......... 1989
70 1505 Pavil-
ion Place........ 1988
71 3883 Steve
Reynolds Blvd.... 1990
72 3890 Steve
Reynolds Blvd.... 1991
73 3905 Steve
Reynolds Blvd.... 1995
74 3950 Steve
Reynolds Blvd.... 1992
75 4020 Steve
Reynolds Blvd.... 1997
76 4025 Steve
Reynolds Blvd.... 1994
Total...........
The Business Park
at Sugarloaf
77 2775 Pre-
miere Pkwy....... D $ 560 $ 3,519 $ -- $ 560 $ 3,519 $ 4,079 $ 21
78 6700 Sugar-
loaf Pkwy........ S 1,042 5,591 -- 1,042 5,591 6,633 32
------ ------- ------ ------ ------- ------- ------
Total........... $1,602 $ 9,110 $ -- $1,602 $ 9,110 $10,712 $ 53
------ ------- ------ ------ ------- ------- ------
The Business Park
at Sugarloaf
77 2775 Pre-
miere Pkwy....... 1997
78 6700 Sugar-
loaf Pkwy........ 1998
Total...........
Peachtree Corners
Business Center
79 5401 Buford
Hwy.............. B $ 294 $ 1,865 $ 163 $ 294 $ 2,028 $ 2,322 $ 259
80 5403 Buford
Hwy.............. B 420 2,737 13 420 2,750 3,170 303
81 5405 Buford
Hwy.............. B 217 1,546 31 217 1,577 1,794 183
82 5409 Buford
Hwy.............. B 364 2,675 25 364 2,700 3,064 296
------ ------- ------ ------ ------- ------- ------
Total........... $1,295 $ 8,823 $ 232 $1,295 $ 9,055 $10,350 $1,041
------ ------- ------ ------ ------- ------- ------
Peachtree Corners
Business Center
79 5401 Buford
Hwy.............. 1987 1995
80 5403 Buford
Hwy.............. 1987 1995
81 5405 Buford
Hwy.............. 1989 1995
82 5409 Buford
Hwy.............. 1989 1995
Total...........
Pinebrook
83 2625
Pinemeadow Ct.... B $ 813 $ 3,216 $ 8 $ 813 $ 3,224 $ 4,037 $ 468
84 2660
Pinemeadow Ct.... B 450 2,581 -- 450 2,581 3,031 173
85 2450 Satel-
lite Blvd........ B 821 3,466 -- 821 3,466 4,287 524
------ ------- ------ ------ ------- ------- ------
Total........... $2,084 $ 9,263 $ 8 $2,084 $ 9,271 $11,355 $1,165
------ ------- ------ ------ ------- ------- ------
Pinebrook
83 2625
Pinemeadow Ct.... 1994
84 2660
Pinemeadow Ct.... 1996
85 2450 Satel-
lite Blvd........ 1994 1994
Total...........
Northbrook
86 1000
Northbrook
Pkwy............. B (a) $ 363 $ 1,980 $ 876 $ 363 $ 2,856 $ 3,219 $1,401
87 675 Old
Peachtree Rd..... B 434 2,385 29 434 2,414 2,848 754
------ ------- ------ ------ ------- ------- ------
Total........... $ 797 $ 4,365 $ 905 $ 797 $ 5,270 $ 6,067 $2,155
------ ------- ------ ------ ------- ------- ------
Northbrook
86 1000
Northbrook
Pkwy............. 1986
87 675 Old
Peachtree Rd..... 1988
Total...........
</TABLE>
S-3
<PAGE>
SCHEDULE III
<TABLE>
<CAPTION>
Gross Amount at Which
Initial Costs Carried at Close of Period
------------------- Cost Capitalized ---------------------------
Market/Business Property Related Building and Subsequent to Building and Accumulated Year
Park/Property Type(1) Encumbrances Land Improvements Acquisition Land Improvements Total Depreciation Developed(2)
- ---------------- -------- ------------ ------ ------------ ---------------- ------ ------------ ------- ------------ ------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Druid Chase
88 2801 Buford
Hwy............. O $ 794 $ 3,505 $1,966 $ 794 $ 5,471 $ 6,265 $2,026 1977
89 1190 West
Druid Hills
Dr.............. O 689 2,722 917 689 3,639 4,328 1,265 1980
90 2071 North
Druid
Hills Rd....... R 98 65 21 98 86 184 39 1968
91 6 West Druid
Hills Dr........ O 473 2,980 677 473 3,657 4,130 1,092 1968
------ ------- ------ ------ ------- ------- ------
Total........... $2,054 $ 9,272 $3,581 $2,054 $12,853 $14,907 $4,422
------ ------- ------ ------ ------- ------- ------
<CAPTION>
Market/Business Year
Park/Property Acquired(3)
- ----------------- -----------
<S> <C>
Druid Chase
88 2801 Buford
Hwy............. 1989
89 1190 West
Druid Hills
Dr.............. 1989
90 2071 North
Druid
Hills Rd.......
91 6 West Druid
Hills Dr........ 1989
Total...........
Meadowbrook
92 2450
Meadowbrook
Pkwy............ D $ 716 $ 2,419 $ 28 $ 716 $ 2,447 $ 3,163 $ 381 1989
93 2475
Meadowbrook
Pkwy............ D 529 1,567 601 529 2,168 2,697 938 1986
94 2500
Meadowbrook
Pkwy............ D (a) 411 1,103 797 411 1,900 2,311 995 1987
95 2505
Meadowbrook
Pkwy............ D 307 1,228 422 307 1,650 1,957 436 1990
------ ------- ------ ------ ------- ------- ------
Total........... $1,963 $ 6,317 $1,848 $1,963 $ 8,165 $10,128 $2,750
------ ------- ------ ------ ------- ------- ------
Meadowbrook
92 2450
Meadowbrook
Pkwy............ 1994
93 2475
Meadowbrook
Pkwy............
94 2500
Meadowbrook
Pkwy............
95 2505
Meadowbrook
Pkwy............
Total...........
Park Creek
96 2825 Breck-
inridge Blvd.... S $ 317 $ 2,366 $ 51 $ 317 $ 2,417 $ 2,734 $ 235 1986
97 2875 Breck-
inridge Blvd.... S 476 3,496 33 476 3,529 4,005 343 1986
98 2885 Breck-
inridge Blvd.... S 487 5,235 -- 487 5,235 5,722 177 1997
------ ------- ------ ------ ------- ------- ------
Total........... $1,280 $11,097 $ 84 $1,280 $11,181 $12,461 $ 755
------ ------- ------ ------ ------- ------- ------
Park Creek
96 2825 Breck-
inridge Blvd.... 1996
97 2875 Breck-
inridge Blvd.... 1996
98 2885 Breck-
inridge Blvd....
Total...........
Crestwood Pointe
99 3805 Crest-
wood Pkwy....... O $ 877 $ 8,771 $ -- $ 877 $ 8,771 $ 9,648 $ 457 1997
------ ------- ------ ------ ------- ------- ------
Total........... $ 877 $ 8,771 $ -- $ 877 $ 8,771 $ 9,648 $ 457
------ ------- ------ ------ ------- ------- ------
Crestwood Pointe
99 3805 Crest-
wood Pkwy.......
Total...........
Peachtree Cor-
ners Technology
Center
100 3170 Reps
Miller Rd....... D $ 500 $ 2,448 $ -- $ 500 $ 2,448 $ 2,948 $ 72 1998
101 3180 Reps
Miller Rd....... D 500 1,875 -- 500 1,875 2,375 36 1998
------ ------- ------ ------ ------- ------- ------
Total........... $1,000 $ 4,323 $ -- $1,000 $ 4,323 $ 5,323 $ 108
------ ------- ------ ------ ------- ------- ------
Peachtree Cor-
ners Technology
Center
100 3170 Reps
Miller Rd.......
101 3180 Reps
Miller Rd.......
Total...........
River Green
102 3450 River
Green Ct........ D $ 194 $ 892 $ 12 $ 194 $ 904 $ 1,098 $ 95 1989
103 4800 River
Green Pkwy...... D 152 1,150 14 152 1,164 1,316 122 1989
------ ------- ------ ------ ------- ------- ------
Total........... $ 346 $ 2,042 $ 26 $ 346 $ 2,068 $ 2,414 $ 217
------ ------- ------ ------ ------- ------- ------
River Green
102 3450 River
Green Ct........ 1995
103 4800 River
Green Pkwy...... 1995
Total...........
Other
Northeast/I-85-
Properties
104 1705 Belle
Meade Ct........ D $ 277 $ 953 $ 7 $ 277 $ 960 $ 1,237 $ 149 1988
105 4125 Buford
Hwy............. B 778 3,823 23 778 3,846 4,624 393 1995
106 6525-27
Jimmy Carter
Blvd............ D 509 3,131 58 509 3,189 3,698 304 1983
107 3171 McCall
Dr.............. D 112 385 21 112 406 518 63 1967
108 5300
Peachtree Indus-
trial Blvd...... R 434 1,493 -- 434 1,493 1,927 232 1966
Other
Northeast/I-85-
Properties
104 1705 Belle
Meade Ct........ 1994
105 4125 Buford
Hwy.............
106 6525-27
Jimmy Carter
Blvd............ 1996
107 3171 McCall
Dr.............. 1994
108 5300
Peachtree Indus-
trial Blvd...... 1994
</TABLE>
S-4
<PAGE>
SCHEDULE III
<TABLE>
<CAPTION>
Gross Amount at Which
Initial Costs Carried at Close of Period
------------------- Cost Capitalized ---------------------------
Market/Business Property Related Building and Subsequent to Building and Accumulated
Park/Property Type(1) Encumbrances Land Improvements Acquisition Land Improvements Total Depreciation
- ------------------ -------- ------------ ------ ------------ ---------------- ------ ------------ ------- ------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
109 5755
Peachtree Indus-
trial Blvd....... O $ 800 $ 4,020 $-- $ 800 $ 4,020 $ 4,820 $ 190
110 5765
Peachtree Indus-
trial Blvd....... D 521 3,248 13 521 3,261 3,782 146
111 5775
Peachtree Indus-
trial Blvd....... D 521 2,382 128 521 2,510 3,031 113
112 4280 North-
east Expressway.. B 534 1,838 2 534 1,840 2,374 287
--- --- ------ ------- ---- ------ ------- ------- ------
Total........... $4,486 $21,273 $252 $4,486 $21,525 $26,011 $1,877
--- --- ------ ------- ---- ------ ------- ------- ------
<CAPTION>
Market/Business Year Year
Park/Property Developed(2) Acquired(3)
- ------------------ ------------ -----------
<S> <C> <C>
109 5755
Peachtree Indus-
trial Blvd....... 1997
110 5765
Peachtree Indus-
trial Blvd....... 1997
111 5775
Peachtree Indus-
trial Blvd....... 1997
112 4280 North-
east Expressway.. 1962 1994
------------ -----------
Total...........
------------ -----------
North Central
Submarket
North Central
Submarket
Northmeadow
113 11835
Alpharetta Hwy... O $ 524 $ 1,396 $142 $ 524 $ 1,538 $ 2,062 $ 205
114 1400 Hembree
Rd............... S 545 3,092 -- 545 3,092 3,637 --
115 1100
Northmeadow
Pkwy............. S 552 3,178 179 552 3,357 3,909 405
116 1125
Northmeadow
Pkwy............. D 320 2,222 77 320 2,299 2,619 270
117 1150
Northmeadow
Pkwy............. D 464 2,963 6 464 2,969 3,433 346
118 1175
Northmeadow
Pkwy............. D 328 3,068 58 328 3,126 3,454 411
119 1225
Northmeadow
Pkwy............. S 336 3,286 47 336 3,333 3,669 397
120 1250
Northmeadow
Pkwy............. D 312 2,328 7 312 2,335 2,647 275
121 1325
Northmeadow
Pkwy............. S 472 4,491 160 472 4,651 5,123 579
122 1335
Northmeadow
Pkwy............. S 946 6,347 -- 946 6,347 7,293 212
123 1350
Northmeadow
Pkwy............. D 672 2,556 15 672 2,571 3,243 301
124 11390 Old
Roswell Rd....... S 530 3,245 -- 530 3,245 3,775 82
--- --- ------ ------- ---- ------ ------- ------- ------
Total........... $6,001 $38,172 $691 $6,001 $38,863 $44,864 $3,483
--- --- ------ ------- ---- ------ ------- ------- ------
Northmeadow
113 11835
Alpharetta Hwy... 1994
114 1400 Hembree
Rd............... 1998
115 1100
Northmeadow
Pkwy............. 1989 1995
116 1125
Northmeadow
Pkwy............. 1987 1995
117 1150
Northmeadow
Pkwy............. 1988 1995
118 1175
Northmeadow
Pkwy............. 1987 1995
119 1225
Northmeadow
Pkwy............. 1989 1995
120 1250
Northmeadow
Pkwy............. 1989 1995
121 1325
Northmeadow
Pkwy............. 1990 1995
122 1335
Northmeadow
Pkwy............. 1997
123 1350
Northmeadow
Pkwy............. 1994
124 11390 Old
Roswell Rd....... 1997
------------ -----------
Total...........
------------ -----------
Hembree Park
125 105 Hembree
Park Dr.......... D $ 288 $ 2,067 $ 77 $ 288 $ 2,144 $ 2,432 $ 267
126 150 Hembree
Park Dr.......... D 641 2,015 224 824 2,056 2,880 257
127 200 Hembree
Park Dr.......... D 160 1,978 152 160 2,130 2,290 254
128 250 Hembree
Park Dr.......... D 686 4,466 -- 686 4,466 5,152 120
129 645 Hembree
Pkwy............. D 248 1,997 159 248 2,156 2,404 276
130 655 Hembree
Pkwy............. D 248 1,997 51 248 2,048 2,296 275
131 660 Hembree
Pkwy............. D 785 4,597 -- 785 4,597 5,382 55
--- --- ------ ------- ---- ------ ------- ------- ------
Total........... $3,056 $19,117 $663 $3,239 $19,597 $22,836 $1,504
--- --- ------ ------- ---- ------ ------- ------- ------
Hembree Park
125 105 Hembree
Park Dr.......... 1988 1995
126 150 Hembree
Park Dr.......... 1985 1995
127 200 Hembree
Park Dr.......... 1985 1995
128 250 Hembree
Park Dr.......... 1996
129 645 Hembree
Pkwy............. 1986 1995
130 655 Hembree
Pkwy............. 1986 1995
131 660 Hembree
Pkwy............. 1998
------------ -----------
Total...........
------------ -----------
Hembree Crest
132 11415 Old
Roswell Rd....... B $ 648 $ 1,947 $ 51 $ 648 $ 1,998 $ 2,646 $ 255
133 11800 Wills
Rd............... D 304 1,570 109 304 1,679 1,983 245
134 11810 Wills
Rd............... D 296 2,180 2 296 2,182 2,478 255
135 11820 Wills
Rd............... D 488 3,793 75 488 3,868 4,356 463
--- --- ------ ------- ---- ------ ------- ------- ------
Total........... $1,736 $ 9,490 $237 $1,736 $ 9,727 $11,463 $1,218
--- --- ------ ------- ---- ------ ------- ------- ------
Mansell Commons
136 993 Mansell
Rd............... D $ 136 $ 919 $ 47 $ 136 $ 966 $ 1,102 $ 123
137 995 Mansell
Rd............... D 80 714 32 80 746 826 100
Hembree Crest
132 11415 Old
Roswell Rd....... 1991 1995
133 11800 Wills
Rd............... 1987 1995
134 11810 Wills
Rd............... 1987 1995
135 11820 Wills
Rd............... 1987 1995
------------ -----------
Total...........
------------ -----------
Mansell Commons
136 993 Mansell
Rd............... 1987 1995
137 995 Mansell
Rd............... 1987 1995
</TABLE>
S-5
<PAGE>
SCHEDULE III
<TABLE>
<CAPTION>
Gross Amount at Which
Initial Costs Carried at Close of Period
------------------- Cost Capitalized ---------------------------
Market/Business Property Related Building and Subsequent to Building and Accumulated
Park/Property Type(1) Encumbrances Land Improvements Acquisition Land Improvements Total Depreciation
- --------------- -------- ------------ ------ ------------ ---------------- ------ ------------ ------- ------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
138 997 Mansell
Rd............... D $ 72 $ 612 $ 7 $ 72 $ 619 $ 691 $ 75
139 999 Mansell
Rd............... D 104 816 5 104 821 925 95
140 1003 Mansell
Rd............... D 136 881 167 136 1,048 1,184 179
141 1005 Mansell
Rd............... D 72 714 26 72 740 812 97
142 1007 Mansell
Rd............... D 168 1,592 22 168 1,614 1,782 201
143 1009 Mansell
Rd............... S 264 1,620 21 264 1,641 1,905 191
144 1011 Mansell
Rd............... S 256 1,647 29 256 1,676 1,932 199
------ ------- ----- ------ ------- ------- ------
Total........... $1,288 $ 9,515 $ 356 $1,288 $ 9,871 $11,159 $1,260
------ ------- ----- ------ ------- ------- ------
<CAPTION>
Market/Business Year Year
Park/Property Developed(2) Acquired(3)
- --------------- ------------ -----------
<S> <C> <C>
138 997 Mansell
Rd............... 1987 1995
139 999 Mansell
Rd............... 1987 1995
140 1003 Mansell
Rd............... 1990 1995
141 1005 Mansell
Rd............... 1990 1995
142 1007 Mansell
Rd............... 1990 1995
143 1009 Mansell
Rd............... 1986 1995
144 1011 Mansell
Rd............... 1984 1995
Total...........
Northwinds Pointe
145 2550
Northwinds
Pkwy............. O $2,271 $12,991 $ -- $2,271 $12,991 $15,262 $ 119
146 2555
Northwinds
Pkwy............. O 1,813 5,977 -- 1,813 5,977 7,790 285
------ ------- ----- ------ ------- ------- ------
Total........... $4,084 $18,968 $ -- $4,084 $18,968 $23,052 $ 404
------ ------- ----- ------ ------- ------- ------
Northwinds Pointe
145 2550
Northwinds
Pkwy............. 1998
146 2555
Northwinds
Pkwy............. 1997
Total...........
Brookside Office
Park
147 3925
Brookside Pkwy... O $1,269 $ 9,689 $ -- $1,269 $ 9,689 $10,958 $ 97
------ ------- ----- ------ ------- ------- ------
Total........... $1,269 $ 9,689 $ -- $1,269 $ 9,689 $10,958 $ 97
------ ------- ----- ------ ------- ------- ------
Brookside Office
Park
147 3925
Brookside Pkwy... 1998
Total...........
Other North Cen-
tral Properties
148 10745
Westside Pkwy.... O $ 925 $ 3,513 $ 79 $ 925 $ 3,592 $ 4,517 $ 418
149 7250 McGinnis
Ferry Rd......... D 498 3,712 6 498 3,718 4,216 310
------ ------- ----- ------ ------- ------- ------
Total........... $1,423 $ 7,225 $ 85 $1,423 $ 7,310 $ 8,733 $ 728
------ ------- ----- ------ ------- ------- ------
Other North Cen-
tral Properties
148 10745
Westside Pkwy.... 1995
149 7250 McGinnis
Ferry Rd......... 1996
Total...........
Airport/South At-
lanta Submarket
Airport/South At-
lanta Submarket
Southridge
150 5025 Derrick
Jones Rd......... D $ 647 $ 3,598 $ -- $ 647 $ 3,598 $ 4,245 $ 178
151 5099
Southridge
Pkwy............. D 306 1,053 139 306 1,192 1,498 218
152 5136
Southridge
Pkwy............. D 480 1,653 132 480 1,785 2,265 288
153 5139
Southridge
Pkwy............. D 465 1,601 13 465 1,614 2,079 252
154 5149
Southridge
Pkwy............. D 816 3,384 43 816 3,427 4,243 345
155 5156
Southridge
Pkwy............. D 676 2,330 17 676 2,347 3,023 365
156 5159
Southridge
Pkwy............. D 454 2,989 -- 454 2,989 3,443 8
157 5169
Southridge
Pkwy............. D 431 2,468 16 431 2,484 2,915 253
158 5195
Southridge
Pkwy............. D 390 2,334 -- 390 2,334 2,724 80
------ ------- ----- ------ ------- ------- ------
Total........... $4,665 $21,410 $ 360 $4,665 $21,770 $26,435 $1,987
------ ------- ----- ------ ------- ------- ------
Southridge
150 5025 Derrick
Jones Rd......... 1997
151 5099
Southridge
Pkwy............. 1990 1994
152 5136
Southridge
Pkwy............. 1990 1994
153 5139
Southridge
Pkwy............. 1991 1994
154 5149
Southridge
Pkwy............. 1990 1994
155 5156
Southridge
Pkwy............. 1992 1994
156 5159
Southridge
Pkwy............. 1998 1998
157 5169
Southridge
Pkwy............. 1994
158 5195
Southridge
Pkwy............. 1997
Total...........
Sullivan Interna-
tional
159 703 Sullivan
Rd............... D $ 225 $ 781 $ 213 $ 225 $ 994 $ 1,219 $ 146
160 721 Sullivan
Rd............... D 242 834 43 242 877 1,119 141
Sullivan Interna-
tional
159 703 Sullivan
Rd............... 1990 1994
160 721 Sullivan
Rd............... 1991 1994
</TABLE>
S-6
<PAGE>
SCHEDULE III
<TABLE>
<CAPTION>
Gross Amount at Which
Initial Costs Carried at Close of Period
------------------- Cost Capitalized ---------------------------
Market/Business Property Related Building and Subsequent to Building and Accumulated
Park/Property Type(1) Encumbrances Land Improvements Acquisition Land Improvements Total Depreciation
- --------------- -------- ------------ ------ ------------ ---------------- ------ ------------ ------- ------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
161 727 Sullivan
Rd............... D $ 260 $ 898 $ 29 $ 260 $ 927 $ 1,187 $ 150
162 739 Sullivan
Rd............... D 226 778 13 226 791 1,017 124
------ ------- ----- ------ ------- ------- ------
Total........... $ 953 $ 3,291 $ 298 $ 953 $ 3,589 $ 4,542 $ 561
------ ------- ----- ------ ------- ------- ------
<CAPTION>
Market/Business Year Year
Park/Property Developed(2) Acquired(3)
- --------------- ------------ -----------
<S> <C> <C>
161 727 Sullivan
Rd............... 1988 1994
162 739 Sullivan
Rd............... 1989 1994
Total...........
Liberty Distribu-
tion Center
163 120 Declara-
tion Dr.......... B $ 615 $ 6,244 $ -- $ 615 $ 6,244 $ 6,859 $ 211
------ ------- ----- ------ ------- ------- ------
Total........... $ 615 $ 6,244 $ -- $ 615 $ 6,244 $ 6,859 $ 211
------ ------- ----- ------ ------- ------- ------
Liberty Distribu-
tion Center
163 120 Declara-
tion Dr.......... 1997
Total...........
Other
Airport/South At-
lanta Properties
164 105 Kings
Mill Rd.......... B (a) $ 457 $ 4,951 $ -- $ 457 $ 4,951 $ 5,408 $ 555
------ ------- ----- ------ ------- ------- ------
Total........... $ 457 $ 4,951 $ -- $ 457 $ 4,951 $ 5,408 $ 555
------ ------- ----- ------ ------- ------- ------
Other
Airport/South At-
lanta Properties
164 105 Kings
Mill Rd.......... 1994
Total...........
Northwest/I-75
Submarket
Northwest/I-75
Submarket
Town Point
165 3240 Town
Point Dr......... D $1,092 $ 4,199 $ 90 $1,092 $ 4,289 $ 5,381 $ 255
166 3330 West
Town Point Dr.... D 551 1,551 375 551 1,926 2,477 302
167 3350 West
Town Point Dr.... D 434 2,214 2 434 2,216 2,650 201
------ ------- ----- ------ ------- ------- ------
Total........... $2,077 $ 7,964 $ 467 $2,077 $ 8,431 $10,508 $ 758
------ ------- ----- ------ ------- ------- ------
Town Point
165 3240 Town
Point Dr......... 1997
166 3330 West
Town Point Dr.... 1994
167 3350 West
Town Point Dr.... 1995
Total...........
Northwest Business
Center
168 1331-37-41-51
Capital Circle... S $ 558 $ 4,443 $ 109 $ 558 $ 4,552 $ 5,110 $ 437
169 1335 Capital
Circle........... S 416 1,704 54 416 1,758 2,174 166
170 2220 North-
west Pkwy........ S (y) 483 2,969 -- 483 2,969 3,452 44
171 2225 North-
west Pkwy........ S (y) 327 2,050 -- 327 2,050 2,377 30
172 2250 North-
west Pkwy........ D 320 2,223 18 320 2,241 2,561 132
173 2252 North-
west Pkwy........ S 92 759 9 92 768 860 44
174 2254 North-
west Pkwy........ S 175 1,442 4 175 1,446 1,621 80
175 2256 North-
west Pkwy........ S 85 702 -- 85 702 787 41
176 2258 North-
west Pkwy........ S 47 388 9 47 397 444 22
177 2260 North-
west Pkwy........ S 294 2,436 67 294 2,503 2,797 150
178 2262 North-
west Pkwy........ S 161 1,333 39 161 1,372 1,533 81
179 2264 North-
west Pkwy........ D 353 2,104 9 353 2,113 2,466 144
------ ------- ----- ------ ------- ------- ------
Total........... $3,311 $22,553 $ 318 $3,311 $22,871 $26,182 $1,371
------ ------- ----- ------ ------- ------- ------
Northwest Business
Center
168 1331-37-41-51
Capital Circle... 1985 1996
169 1335 Capital
Circle........... 1985 1996
170 2220 North-
west Pkwy........ 1988 1998
171 2225 North-
west Pkwy........ 1988 1998
172 2250 North-
west Pkwy........ 1982 1997
173 2252 North-
west Pkwy........ 1982 1997
174 2254 North-
west Pkwy........ 1982 1997
175 2256 North-
west Pkwy........ 1982 1997
176 2258 North-
west Pkwy........ 1982 1997
177 2260 North-
west Pkwy........ 1982 1997
178 2262 North-
west Pkwy........ 1982 1997
179 2264 North-
west Pkwy........ 1982 1997
Total...........
Franklin Forest
180 805 Franklin
Ct............... D $ 313 $ 1,638 $ 32 $ 313 $ 1,670 $ 1,983 $ 99
181 810 Franklin
Ct............... S 255 1,414 27 255 1,441 1,696 84
182 811 Livings-
ton Ct........... S 193 1,089 2 193 1,091 1,284 66
183 821 Livings-
ton Ct........... S 145 803 44 145 847 992 49
184 825 Franklin
Ct............... D 358 2,261 -- 358 2,261 2,619 142
Franklin Forest
180 805 Franklin
Ct............... 1983 1997
181 810 Franklin
Ct............... 1983 1997
182 811 Livings-
ton Ct........... 1983 1997
183 821 Livings-
ton Ct........... 1983 1997
184 825 Franklin
Ct............... 1983 1997
</TABLE>
S-7
<PAGE>
SCHEDULE III
<TABLE>
<CAPTION>
Gross Amount at which
Initial Costs Carried at Close of Period
-------------------- Cost Capitalized -----------------------------
Market/Business Property Related Building and Subsequent to Building and Accumulated
Park/Property Type(1) Encumbrances Land Improvements Acquisition Land Improvements Total Depreciation
- --------------- -------- ------------ ------- ------------ ---------------- ------- ------------ -------- ------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
185 830 Franklin
Ct............... S $ 133 $ 740 $ -- $ 133 $ 740 $ 873 $ 41
186 835 Franklin
Ct............... D 393 2,461 41 393 2,502 2,895 148
187 840 Franklin
Ct............... D 242 1,855 2 242 1,857 2,099 103
188 841 Livings-
ton Ct........... D 275 1,855 2 275 1,857 2,132 104
------- -------- ------- ------- -------- -------- -------
Total........... $ 2,307 $ 14,116 $ 150 $ 2,307 $ 14,266 $ 16,573 $ 836
------- -------- ------- ------- -------- -------- -------
<CAPTION>
Market/Business Year Year
Park/Property Developed(2) Acquired(3)
- --------------- ------------ -----------
<S> <C> <C>
185 830 Franklin
Ct............... 1983 1997
186 835 Franklin
Ct............... 1983 1997
187 840 Franklin
Ct............... 1983 1997
188 841 Livings-
ton Ct........... 1983 1997
Total...........
Other Northwest/
I-75 Properties
189 240
Northpoint
Pkwy............. B $ 822 $ 4,912 $ 22 $ 822 $ 4,934 $ 5,756 $ 409
------- -------- ------- ------- -------- -------- -------
Total........... $ 822 $ 4,912 $ 22 $ 822 $ 4,934 $ 5,756 $ 409
------- -------- ------- ------- -------- -------- -------
Other Northwest/
I-75 Properties
189 240
Northpoint
Pkwy............. 1995
Total...........
Stone Mountain
Submarket
Stone Mountain
Submarket
Park North
190 675 Parknorth
Blvd............. D $ 611 $ 2,743 $ 108 $ 611 $ 2,851 $ 3,462 $ 389
191 696 Parknorth
Blvd............. D 532 2,748 20 532 2,768 3,300 336
192 715 Parknorth
Blvd............. D 375 2,118 8 375 2,126 2,501 259
193 735 Parknorth
Blvd............. D 709 3,155 58 709 3,213 3,922 416
194 736 Parknorth
Blvd............. S 627 1,023 67 627 1,090 1,717 145
195 780 Parknorth
Blvd............. D 328 1,847 58 328 1,905 2,233 232
196 808 Parknorth
Blvd............. S 162 608 6 162 614 776 74
197 815 Parknorth
Blvd............. S 249 983 6 249 989 1,238 121
------- -------- ------- ------- -------- -------- -------
Total........... $ 3,593 $ 15,225 $ 331 $ 3,593 $ 15,556 $ 19,149 $ 1,972
------- -------- ------- ------- -------- -------- -------
Park North
190 675 Parknorth
Blvd............. 1990 1995
191 696 Parknorth
Blvd............. 1986 1995
192 715 Parknorth
Blvd............. 1989 1995
193 735 Parknorth
Blvd............. 1989 1995
194 736 Parknorth
Blvd............. 1992 1995
195 780 Parknorth
Blvd............. 1988 1995
196 808 Parknorth
Blvd............. 1986 1995
197 815 Parknorth
Blvd............. 1989 1995
Total...........
Chattahoochee
Submarket
Chattahoochee
Submarket
Other Chattahoo-
chee Properties
198 1670 DeFoors
Ave.............. D $ 82 $ 660 $ 963 $ 82 $ 1,623 $ 1,705 $ 924
------- -------- ------- ------- -------- -------- -------
Total........... $ 82 $ 660 $ 963 $ 82 $ 1,623 $ 1,705 $ 924
------- -------- ------- ------- -------- -------- -------
Other Chattahoo-
chee Properties
198 1670 DeFoors
Ave.............. 1960 1989
Total...........
TOTAL ATLANTA,
GEORGIA........... $75,681 $453,644 $37,191 $76,016 $490,500 $566,516 $68,869
------- -------- ------- ------- -------- -------- -------
NASHVILLE,
TENNESSEE
Airpark Business
Center
199 400 Airpark
Center Dr. ...... S (i)(j) $ 419 $ 1,679 $ 45 $ 419 $ 1,724 $ 2,143 $ 155
200 500 Airpark
Center Dr. ...... D (i)(j) 923 3,697 102 923 3,799 4,722 323
201 600 Airpark
Center Dr. ...... D (i)(j) 729 2,918 73 729 2,991 3,720 270
202 700 Airpark
Center Dr. ...... D (i)(j) 801 3,286 3 801 3,289 4,090 283
203 800 Airpark
Center Dr. ...... D (k) 924 3,701 210 924 3,911 4,835 344
204 900 Airpark
Center Dr. ...... D (k) 798 3,193 1 798 3,194 3,992 277
205 1000 Airpark
Center Dr. ...... D 1,300 7,367 24 1,300 7,391 8,691 312
TOTAL ATLANTA,
GEORGIA...........
NASHVILLE,
TENNESSEE
Airpark Business
Center
199 400 Airpark
Center Dr. ...... 1989 1996
200 500 Airpark
Center Dr. ...... 1988 1996
201 600 Airpark
Center Dr. ...... 1990 1996
202 700 Airpark
Center Dr. ...... 1992 1996
203 800 Airpark
Center Dr. ...... 1995 1996
204 900 Airpark
Center Dr. ...... 1995 1996
205 1000 Airpark
Center Dr. ...... 1997 1997
</TABLE>
S-8
<PAGE>
SCHEDULE III
<TABLE>
<CAPTION>
Gross Amount at which
Initial Costs Carried at Close of Period
-------------------- Cost Capitalized -----------------------------
Market/Business Property Related Building and Subsequent to Building and Accumulated
Park/Property Type(1) Encumbrances Land Improvements Acquisition Land Improvements Total Depreciation
- --------------- -------- ------------ ------- ------------ ---------------- ------- ------------ -------- ------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
206 1400 Donelson
Pike............. S (i)(j) $ 1,276 $ 5,076 $ -- $ 1,276 $ 5,076 $ 6,352 $ 436
207 1410 Donelson
Pike............. S (i)(j) 1,411 5,696 273 1,411 5,969 7,380 548
208 1411-1449
Donelson Pike.... B 1,308 7,412 3 1,308 7,415 8,723 290
209 1413 Donelson
Pike B (l) 549 2,196 1 549 2,197 2,746 190
210 1420 Donelson
Pike............. S (i)(j) 1,331 5,346 174 1,331 5,520 6,851 516
211 5270 Harding
Place............ B (l) 535 2,143 -- 535 2,143 2,678 186
------- -------- ------ ------- -------- -------- ------
Total........... $12,304 $ 53,710 $ 909 $12,304 $ 54,619 $ 66,923 $4,130
------- -------- ------ ------- -------- -------- ------
Brentwood South
Business Center
212 7104
Crossroad
Blvd. ........... D (g) $ 1,065 $ 4,272 $ 12 $ 1,065 $ 4,284 $ 5,349 $ 382
213 7106
Crossroad
Blvd. ........... D (g) 1,065 4,266 43 1,065 4,309 5,374 375
214 7108
Crossroad
Blvd. ........... D (g) 848 3,396 37 848 3,433 4,281 297
215 119 Seaboard
Lane............. D (h) 569 2,280 -- 569 2,280 2,849 198
216 121 Seaboard
Lane............. D (f) 445 1,784 -- 445 1,784 2,229 155
217 123 Seaboard
Lane............. D (f) 489 1,956 -- 489 1,956 2,445 169
------- -------- ------ ------- -------- -------- ------
Total........... $ 4,481 $ 17,954 $ 92 $ 4,481 $ 18,046 $ 22,527 $1,576
------- -------- ------ ------- -------- -------- ------
Aspen Grove
Business Center
218 277 Mallory
Station Rd. ..... D $ 936 $ 5,324 $ 138 $ 936 $ 5,462 $ 6,398 $ 328
219 320 Premier
Ct. ............. D 1,151 6,521 -- 1,151 6,521 7,672 74
220 416 Mary
Lindsey Polk Dr.. D 943 5,343 -- 943 5,343 6,286 57
------- -------- ------ ------- -------- -------- ------
Total........... $ 3,030 $ 17,188 $ 138 $ 3,030 $ 17,326 $ 20,356 $ 459
------- -------- ------ ------- -------- -------- ------
Four-Forty
Business Center...
221 731-759
Melrose Ave...... B $ 938 $ 5,318 $ 23 $ 938 $ 5,341 $ 6,279 $ 335
222 736-782
Melrose Ave. .... D 1,521 5,447 -- 1,521 5,447 6,968 90
------- -------- ------ ------- -------- -------- ------
Total........... $ 2,459 $ 10,765 $ 23 $ 2,459 $ 10,788 $ 13,247 $ 425
------- -------- ------ ------- -------- -------- ------
Metro Center
223 545
Mainstream Dr. .. O (z) $ 847 $ 4,890 $ -- $ 847 $ 4,890 $ 5,737 $ 139
224 566
Mainstream Dr. .. B 454 2,590 -- 454 2,590 3,044 72
225 621
Mainstream Dr. .. S 428 2,434 -- 428 2,434 2,862 61
------- -------- ------ ------- -------- -------- ------
Total............ $ 1,729 $ 9,914 $ -- $ 1,729 $ 9,914 $ 11,643 $ 272
------- -------- ------ ------- -------- -------- ------
Royal Parkway
Center
226 2501-2515
Perimeter Park
Dr............... D $ 734 $ 4,992 $ -- $ 734 $ 4,992 $ 5,726 $ 68
227 500-520 Royal
Pkwy............. S 603 4,096 -- 603 4,096 4,699 56
------- -------- ------ ------- -------- -------- ------
Total........... $ 1,337 $ 9,088 $ -- $ 1,337 $ 9,088 $ 10,425 $ 124
------- -------- ------ ------- -------- -------- ------
TOTAL NASHVILLE,
TENNESSEE......... $25,340 $118,619 $1,162 $25,340 $119,781 $145,121 $6,986
------- -------- ------ ------- -------- -------- ------
<CAPTION>
Market/Business Year Year
Park/Property Developed(2) Acquired(3)
- --------------- ------------ -----------
<S> <C> <C>
206 1400 Donelson
Pike............. 1986 1996
207 1410 Donelson
Pike............. 1986 1996
208 1411-1449
Donelson Pike.... 1996 1997
209 1413 Donelson
Pike 1996 1996
210 1420 Donelson
Pike............. 1985 1996
211 5270 Harding
Place............ 1996 1996
Total...........
Brentwood South
Business Center
212 7104
Crossroad
Blvd. ........... 1987 1996
213 7106
Crossroad
Blvd. ........... 1987 1996
214 7108
Crossroad
Blvd. ........... 1989 1996
215 119 Seaboard
Lane............. 1990 1996
216 121 Seaboard
Lane............. 1990 1996
217 123 Seaboard
Lane............. 1990 1996
Total...........
Aspen Grove
Business Center
218 277 Mallory
Station Rd. ..... 1996 1997
219 320 Premier
Ct. ............. 1996 1998
220 416 Mary
Lindsey Polk Dr.. 1996 1998
Total...........
Four-Forty
Business Center...
221 731-759
Melrose Ave...... 1997 1997
222 736-782
Melrose Ave. .... 1997
Total...........
Metro Center
223 545
Mainstream Dr. .. 1983 1988
224 566
Mainstream Dr. .. 1982 1998
225 621
Mainstream Dr. .. 1984 1998
Total............
Royal Parkway
Center
226 2501-2515
Perimeter Park
Dr............... 1990 1998
227 500-520 Royal
Pkwy............. 1990 1998
Total...........
TOTAL NASHVILLE,
TENNESSEE.........
</TABLE>
S-9
<PAGE>
SCHEDULE III
<TABLE>
<CAPTION>
Gross Amount at Which
Initial Costs Carried at Close of Period
------------------- Cost Capitalized ---------------------------
Market/Business Property Related Building and Subsequent to Building and Accumulated
Park/Property Type(1) Encumbrances Land Improvements Acquisition Land Improvements Total Depreciation
- --------------- -------- ------------ ------ ------------ ---------------- ------ ------------ ------- ------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
RESEARCH TRIANGLE,
NORTH CAROLINA
Perimeter Park
West
228 1100
Perimeter Park
Dr. ............. S $ 777 $ 4,588 $132 $ 777 $ 4,720 $ 5,497 $ 245
229 1400
Perimeter Park
Dr. ............. O (n) 666 3,777 25 666 3,802 4,468 394
230 1500
Perimeter Park
Dr. ............. O 1,148 6,511 -- 1,148 6,511 7,659 670
231 1600
Perimeter Park
Dr. ............. O (r) 1,463 8,296 8 1,463 8,304 9,767 853
232 1700
Perimeter Park
Dr. ............. O 540 6,189 -- 540 6,189 6,729 134
233 1800
Perimeter Park
Dr. ............. O (r) 907 5,140 8 907 5,148 6,055 529
234 2000
Perimeter Park
Dr. ............. O 787 4,466 196 787 4,662 5,449 208
235 4025
Paramount Pkwy... O 540 10,147 -- 540 10,147 10,687 30
------ ------- ---- ------ ------- ------- -------
Total........... $6,828 $49,114 $369 $6,828 $49,483 $56,311 $ 3,063
------ ------- ---- ------ ------- ------- -------
Perimeter Park
236 100 Perimeter
Park Dr. ........ S (v) $ 477 $ 3,030 $ 51 $ 477 $ 3,081 $ 3,558 $ 161
237 200 Perimeter
Park Dr. ........ S 567 3,048 36 567 3,084 3,651 160
238 300 Perimeter
Park Dr. ........ S (v) 567 3,047 32 567 3,079 3,646 159
239 400 Perimeter
Park Dr. ........ S (w) 486 4,051 41 486 4,092 4,578 212
240 500 Perimeter
Park Dr. ........ S (v) 522 4,051 51 522 4,102 4,624 212
241 800 Perimeter
Park Dr. ........ S (x) 405 3,048 34 405 3,082 3,487 159
242 900 Perimeter
Park Dr. ........ S (m) 629 3,568 26 629 3,594 4,223 368
243 1000
Perimeter Park
Dr. ............. S (v) 405 2,667 24 405 2,691 3,096 144
------ ------- ---- ------ ------- ------- -------
Total........... $4,058 $26,510 $295 $4,058 $26,805 $30,863 $ 1,575
------ ------- ---- ------ ------- ------- -------
Enterprise
Center............
244 507 Airport
Blvd. ........... S (r) $1,327 $ 7,578 $145 $1,327 $ 7,723 $ 9,050 $ 806
245 5150 McCrim-
mon Pkwy. ....... S 1,739 11,796 -- 1,739 11,796 13,535 109
246 5151 McCrim-
mon Pkwy. ....... S 1,318 7,474 6 1,318 7,480 8,798 769
247 2600 Perime-
ter Park Dr. .... S 975 5,528 -- 975 5,528 6,503 224
------ ------- ---- ------ ------- ------- -------
Total........... $5,359 $32,376 $151 $5,359 $32,527 $37,886 $41,908
------ ------- ---- ------ ------- ------- -------
Metro Center
248 2800
Perimeter Park
Dr. ............. D (q) $ 777 $ 4,405 $141 $ 777 $ 4,546 $ 5,323 $ 479
249 2900
Perimeter Park
Dr. ............. D (q) 235 1,330 13 235 1,343 1,578 137
250 3000
Perimeter Park
Dr. ............. D (q) 482 2,733 21 482 2,754 3,236 282
------ ------- ---- ------ ------- ------- -------
Total........... $1,494 $ 8,468 $175 $1,494 $ 8,643 $10,137 $ 898
------ ------- ---- ------ ------- ------- -------
Woodlake Center
251 100
Innovation
Ave. ............ D (p) $ 633 $ 3,590 $ 14 $ 633 $ 3,604 $ 4,237 $ 370
252 101
Innovation
Ave. ............ D (u) 615 3,488 -- 615 3,488 4,103 166
------ ------- ---- ------ ------- ------- -------
Total............ $1,248 $ 7,078 $ 14 $1,248 $ 7,092 $ 8,340 $ 536
------ ------- ---- ------ ------- ------- -------
<CAPTION>
Market/Business Year Year
Park/Property Developed(2) Acquired(3)
- --------------- ------------ -----------
<S> <C> <C>
RESEARCH TRIANGLE,
NORTH CAROLINA
Perimeter Park
West
228 1100
Perimeter Park
Dr. ............. 1990 1997
229 1400
Perimeter Park
Dr. ............. 1991 1996
230 1500
Perimeter Park
Dr. ............. 1996 1996
231 1600
Perimeter Park
Dr. ............. 1994 1996
232 1700
Perimeter Park
Dr. ............. 1997
233 1800
Perimeter Park
Dr. ............. 1994 1996
234 2000
Perimeter Park
Dr. ............. 1997 1997
235 4025
Paramount Pkwy... 1998
Total...........
Perimeter Park
236 100 Perimeter
Park Dr. ........ 1987 1997
237 200 Perimeter
Park Dr. ........ 1987 1997
238 300 Perimeter
Park Dr. ........ 1986 1997
239 400 Perimeter
Park Dr. ........ 1984 1997
240 500 Perimeter
Park Dr. ........ 1985 1997
241 800 Perimeter
Park Dr. ........ 1984 1997
242 900 Perimeter
Park Dr. ........ 1982 1996
243 1000
Perimeter Park
Dr. ............. 1982 1997
Total...........
Enterprise
Center............
244 507 Airport
Blvd. ........... 1993 1996
245 5150 McCrim-
mon Pkwy. ....... 1998
246 5151 McCrim-
mon Pkwy. ....... 1995 1996
247 2600 Perime-
ter Park Dr. .... 1997 1997
Total...........
Metro Center
248 2800
Perimeter Park
Dr. ............. 1992 1996
249 2900
Perimeter Park
Dr. ............. 1990 1996
250 3000
Perimeter Park
Dr. ............. 1989 1996
Total...........
Woodlake Center
251 100
Innovation
Ave. ............ 1994 1996
252 101
Innovation
Ave. ............ 1997 1997
Total............
</TABLE>
S-10
<PAGE>
SCHEDULE III
<TABLE>
<CAPTION>
Gross Amount at Which
Initial Costs Carried at Close of Period
-------------------- Cost Capitalized -----------------------------
Market/Business Property Related Building and Subsequent to Building and Accumulated
Park/Property Type(1) Encumbrances Land Improvements Acquisition Land Improvements Total Depreciation
- --------------- -------- ------------ ------- ------------ ---------------- ------- ------------ -------- ------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Research Triangle
Industrial Center
253 409-A Airport
Blvd. ........... D (w) $ 296 $ 2,037 $ 3 $ 296 $ 2,040 $ 2,336 $ 153
254 409-B Airport
Blvd. ........... D (w) 175 1,203 9 175 1,212 1,387 90
255 409-C Airport
Blvd. ........... D (w) 185 1,304 46 185 1,350 1,535 100
------- -------- ------ ------- -------- -------- -------
Total........... $ 656 $ 4,544 $ 58 $ 656 $ 4,602 $ 5,258 $ 343
------- -------- ------ ------- -------- -------- -------
Spring Forest
Business Center
256 3100 Spring
Forest Rd. ...... S $ 616 $ 3,611 $ -- $ 616 $ 3,611 $ 4,227 $ 69
257 3200 Spring
Forest Rd. ...... S 561 4,270 -- 561 4,270 4,831 80
------- -------- ------ ------- -------- -------- -------
Total........... $ 1,177 $ 7,881 $ -- $ 1,177 $ 7,881 $ 9,058 $ 149
------- -------- ------ ------- -------- -------- -------
Interchange Plaza
258 5520 Capital
Center Dr. ...... O (o) $ 842 $ 4,772 $ 1 $ 842 $ 4,773 $ 5,615 $ 491
259 801 Jones
Franklin Rd. .... O (t) 1,351 7,660 4 1,351 7,664 9,015 788
------- -------- ------ ------- -------- -------- -------
Total........... $ 2,193 $ 12,432 $ 5 $ 2,193 $ 12,437 $ 14,630 $ 1,279
------- -------- ------ ------- -------- -------- -------
Regency Forest
260 4000 Regency
Pkwy. ........... O $ 1,230 $ 10,279 $ -- $ 1,230 $ 10,279 $ 11,509 $ 274
------- -------- ------ ------- -------- -------- -------
Total........... $ 1,230 $ 10,279 $ -- $ 1,230 $ 10,279 $ 11,509 $ 274
------- -------- ------ ------- -------- -------- -------
Other Research
Triangle
Properties
261 6501 Weston
Pkwy. ........... O (s) $ 1,775 $ 10,064 $ 6 $ 1,775 $ 10,070 $ 11,845 $ 1,035
------- -------- ------ ------- -------- -------- -------
Total........... $ 1,775 $ 10,064 $ 6 $ 1,775 $ 10,070 $ 11,845 $ 1,035
------- -------- ------ ------- -------- -------- -------
TOTAL RESEARCH
TRIANGLE, NORTH
CAROLINA........ $26,018 $168,746 $1,073 $26,018 $169,819 $195,837 $11,060
------- -------- ------ ------- -------- -------- -------
MIAMI, FLORIDA
Beacon Centre
262 1401-1419 NW
84th Ave. ....... D (cc) $ 914 $ 4,834 $ -- $ 914 $ 4,834 $ 5,748 $ 167
263 1600-1616 NW
84th Ave. ....... D (aa) 709 4,532 -- 709 4,532 5,241 155
264 1601-1629 NW
84th Ave. ....... D (cc) 1,180 6,292 -- 1,180 6,292 7,472 220
265 1701-1729 NW
84th Ave. ....... D (aa) 1,072 6,165 -- 1,072 6,165 7,237 214
266 1701-2085 NW
87th Ave. ....... D (cc) 1,965 15,763 -- 1,965 15,763 17,728 528
267 1850 NW 84th
Ave. ............ D (bb) 845 5,452 -- 845 5,452 6,297 188
268 1900-1924 NW
84th Ave. ....... S (bb) 469 3,942 -- 469 3,942 4,411 135
269 2000 NW 84th
Ave. ............ D (aa) 893 7,742 -- 893 7,742 8,635 261
270 2001-2023 NW
84th Ave. ....... D (aa) 883 5,822 -- 883 5,822 6,705 203
271 2101-2119 NW
84th Ave. ....... D (bb) 753 3,685 -- 753 3,685 4,438 132
272 2105-2153 NW
86th Ave. ....... D (cc) 853 5,457 -- 853 5,457 6,310 188
<CAPTION>
Market/Business Year Year
Park/Property Developed(2) Acquired(3)
- --------------- ------------ -----------
<S> <C> <C>
Research Triangle
Industrial Center
253 409-A Airport
Blvd. ........... 1982 1997
254 409-B Airport
Blvd. ........... 1983 1997
255 409-C Airport
Blvd. ........... 1986 1997
Total...........
Spring Forest
Business Center
256 3100 Spring
Forest Rd. ...... 1992 1998
257 3200 Spring
Forest Rd. ...... 1986 1998
Total...........
Interchange Plaza
258 5520 Capital
Center Dr. ...... 1993 1996
259 801 Jones
Franklin Rd. .... 1995 1996
Total...........
Regency Forest
260 4000 Regency
Pkwy. ........... 1997 1998
Total...........
Other Research
Triangle
Properties
261 6501 Weston
Pkwy. ........... 1996 1996
Total...........
TOTAL RESEARCH
TRIANGLE, NORTH
CAROLINA........
MIAMI, FLORIDA
Beacon Centre
262 1401-1419 NW
84th Ave. ....... 1995 1998
263 1600-1616 NW
84th Ave. ....... 1992 1998
264 1601-1629 NW
84th Ave. ....... 1993 1998
265 1701-1729 NW
84th Ave. ....... 1992 1998
266 1701-2085 NW
87th Ave. ....... 1992 1998
267 1850 NW 84th
Ave. ............ 1989 1998
268 1900-1924 NW
84th Ave. ....... 1990 1998
269 2000 NW 84th
Ave. ............ 1989 1998
270 2001-2023 NW
84th Ave. ....... 1992 1998
271 2101-2119 NW
84th Ave. ....... 1989 1998
272 2105-2153 NW
86th Ave. ....... 1993 1998
</TABLE>
S-11
<PAGE>
SCHEDULE III
<TABLE>
<CAPTION>
Gross Amount at Which
Initial Costs Carried at Close of Period
-------------------- Cost Capitalized -----------------------------
Market/Business Property Related Building and Subsequent to Building and Accumulated
Park/Property Type(1) Encumbrances Land Improvements Acquisition Land Improvements Total Depreciation
- --------------- -------- ------------ ------- ------------ ---------------- ------- ------------ -------- ------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
273 2250 NW 84th
Ave. ............. S (cc) $ 453 $ 3,668 $ -- $ 453 $ 3,668 $ 4,121 $ 117
274 8323 NW 12th
St. .............. O/R (bb) 1,498 9,078 -- 1,498 9,078 10,576 344
275 8400 NW 25th
St. .............. D 2,045 11,921 -- 2,045 11,921 13,966 401
276 8400-8416 NW
17th St. ......... D (bb) 709 4,109 -- 709 4,109 4,818 143
277 8401 NW 17th
St. .............. D (cc) 479 3,714 -- 479 3,714 4,193 118
278 8491 NW 17th
St. .............. S (bb) 469 3,523 -- 469 3,523 3,992 112
279 8500 NW 17th
St. .............. D 759 3,912 -- 759 3,912 4,671 138
280 8501 NW 17th
St. .............. D (cc) 1,965 12,232 -- 1,965 12,232 14,197 421
281 8530 NW 23rd
St. .............. D (cc) 861 5,474 -- 861 5,474 6,335 187
282 8550 NW 17th
St. .............. D 703 4,243 -- 703 4,243 4,946 146
283 8575 NW 13th
Terrace........... R 3,480 6,179 -- 3,480 6,179 9,659 235
284 8600 NW 17th
St. .............. O 723 9,829 -- 723 9,829 10,552 324
285 1695 NW 87th
Ave. (Ground
Lease)............ R (bb) 300 -- -- 300 -- 300 --
286 8695 NW 12th
St. (Ground
Lease)............ R (bb) 202 -- -- 202 -- 202 --
287 8695 NW 13th
Terrace (Ground
Lease)............ R (bb) 196 -- -- 196 -- 196 --
288 8696 NW 13th
Terrace (Ground
Lease)............ R (bb) 256 -- -- 256 -- 256 --
------- -------- ----- ------- -------- -------- ------
Total............. $25,634 $147,568 $ -- $25,634 $147,568 $173,202 $5,077
------- -------- ----- ------- -------- -------- ------
TOTAL MIAMI,
FLORIDA......... $25,634 $147,568 $ -- $25,634 $147,568 $173,202 $5,077
------- -------- ----- ------- -------- -------- ------
DALLAS/FT. WORTH,
TEXAS
Freeport North
289 600 South
Royal Ln.......... B $ 1,644 $ 9,396 $ -- $ 1,644 $ 9,396 $ 11,040 $ 213
------- -------- ----- ------- -------- -------- ------
Total............ $ 1,644 $ 9,396 $ -- $ 1,644 $ 9,396 $ 11,040 $ 213
------- -------- ----- ------- -------- -------- ------
Northgate
International
290 3101 Marquis
Dr................ B $ 790 $ 4,516 $ -- $ 790 $ 4,516 $ 5,306 $ 106
291 3102 Miller
Park Dr. South.... B 1,401 7,992 -- 1,401 7,992 9,393 190
------- -------- ----- ------- -------- -------- ------
Total............ $ 2,191 $ 12,508 $ -- $ 2,191 $ 12,508 $ 14,699 $ 296
------- -------- ----- ------- -------- -------- ------
Water's Ridge
292 1550 Lakeway
Dr. .............. B $ 1,324 $ 7,550 $ -- $ 1,324 $ 7,550 $ 8,874 $ 166
293 501 East
Corporate Dr. .... B 965 5,506 -- 965 5,506 6,471 124
------- -------- ----- ------- -------- -------- ------
Total............ $ 2,289 $ 13,056 $ -- $ 2,289 $ 13,056 $ 15,345 $ 290
------- -------- ----- ------- -------- -------- ------
TOTAL DALLAS/FT.
WORTH, TEXAS..... $ 6,124 $ 34,960 $ -- $ 6,124 $ 34,960 $ 41,084 $ 799
------- -------- ----- ------- -------- -------- ------
<CAPTION>
Market/Business Year Year
Park/Property Developed(2) Acquired(3)
- --------------- ------------ -----------
<S> <C> <C>
273 2250 NW 84th
Ave. ............. 1994 1998
274 8323 NW 12th
St. .............. 1991 1998
275 8400 NW 25th
St. .............. 1997 1998
276 8400-8416 NW
17th St. ......... 1991 1998
277 8401 NW 17th
St. .............. 1993 1998
278 8491 NW 17th
St. .............. 1990 1998
279 8500 NW 17th
St. .............. 1995 1998
280 8501 NW 17th
St. .............. 1995 1998
281 8530 NW 23rd
St. .............. 1994 1998
282 8550 NW 17th
St. .............. 1995 1998
283 8575 NW 13th
Terrace........... 1993 1998
284 8600 NW 17th
St. .............. 1993 1998
285 1695 NW 87th
Ave. (Ground
Lease)............ 1998
286 8695 NW 12th
St. (Ground
Lease)............ 1998
287 8695 NW 13th
Terrace (Ground
Lease)............ 1998
288 8696 NW 13th
Terrace (Ground
Lease)............ 1998
Total.............
TOTAL MIAMI,
FLORIDA.........
DALLAS/FT. WORTH,
TEXAS
Freeport North
289 600 South
Royal Ln.......... 1996 1998
Total............
Northgate
International
290 3101 Marquis
Dr................ 1996 1998
291 3102 Miller
Park Dr. South.... 1996 1998
Total............
Water's Ridge
292 1550 Lakeway
Dr. .............. 1997 1998
293 501 East
Corporate Dr. .... 1998 1998
Total............
TOTAL DALLAS/FT.
WORTH, TEXAS.....
</TABLE>
S-12
<PAGE>
SCHEDULE III
<TABLE>
<CAPTION>
Gross Amount at Which
Initial Costs Carried at Close of Period
------------------- Cost Capitalized ---------------------------
Market/Business Property Related Building and Subsequent to Building and Accumulated
Park/Property Type(1) Encumbrances Land Improvements Acquisition Land Improvements Total Depreciation
- --------------- -------- ------------ ------ ------------ ---------------- ------ ------------ ------- ------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
ORLANDO, FLORIDA
Parksouth
Distribution
Center
294 2490
Principal Row.... B $ 493 $ 3,284 $ -- $ 493 $ 3,284 $ 3,777 $ 150
295 2491
Principal Row.... B 593 3,493 -- 593 3,493 4,086 31
296 2500
Principal Row.... B 565 3,915 56 565 3,971 4,536 256
297 9600
Parksouth Ct..... B 649 3,757 -- 649 3,757 4,406 170
------ ------- ----- ------ ------- ------- ------
Total........... $2,300 $14,449 $ 56 $2,300 $14,505 $16,805 $ 607
------ ------- ----- ------ ------- ------- ------
Airport Commerce
Center
298 8249 Parkline
Blvd............. D $ 214 $ 1,661 $ 32 $ 214 $ 1,693 $ 1,907 $ 187
299 8351 Parkline
Blvd............. D (c) 212 1,785 3 212 1,788 2,000 234
300 8500 Parkline
Blvd............. D (c) 691 3,200 157 691 3,357 4,048 488
301 8501 Parkline
Blvd............. D (c) 169 1,212 7 169 1,219 1,388 162
302 8549 Parkline
Blvd............. D (c) 149 1,231 99 149 1,330 1,479 171
303 1629 Prime
Ct............... D 281 2,129 8 281 2,137 2,418 82
304 1630 Prime
Ct............... D 323 1,650 1 323 1,651 1,974 145
------ ------- ----- ------ ------- ------- ------
Total........... $2,039 $12,868 $ 307 $2,039 $13,175 $15,214 $1,469
------ ------- ----- ------ ------- ------- ------
Technology Park
305 100
Technology
Pkwy............. S $ 641 $ 2,580 $ 234 $ 641 $ 2,814 $ 3,455 $ 200
------ ------- ----- ------ ------- ------- ------
Total........... $ 641 $ 2,580 $ 234 $ 641 $ 2,814 $ 3,455 $ 200
------ ------- ----- ------ ------- ------- ------
TOTAL ORLANDO,
FLORIDA......... $4,980 $29,897 $ 597 $4,980 $30,494 $35,474 $2,276
------ ------- ----- ------ ------- ------- ------
JACKSONVILLE,
FLORIDA
Jacksonville
International
Tradeport
306 13340
International
Pkwy............. B $ 289 $ 2,495 $ 114 $ 289 $ 2,609 $ 2,898 $ 119
307 13350
International
Pkwy............. B 289 2,217 -- 289 2,217 2,506 60
308 1350
Tradeport Dr..... B 538 3,659 -- 538 3,659 4,197 71
309 1371
Tradeport Dr..... B 544 3,672 -- 544 3,672 4,216 72
310 13291 Vantage
Way.............. B 499 3,414 -- 499 3,414 3,913 68
311 1460 Vantage
Way.............. B 497 4,248 -- 497 4,248 4,745 22
------ ------- ----- ------ ------- ------- ------
Total........... $2,656 $19,705 $ 114 $2,656 $19,819 $22,475 $ 412
------ ------- ----- ------ ------- ------- ------
Centurion Square
312 8380
Baymeadows Rd. .. O $ 469 $ 2,589 $ -- $ 469 $ 2,589 $ 3,058 $ 66
313 8382
Baymeadows Rd. .. O 185 1,002 -- 185 1,002 1,187 25
314 8384
Baymeadows Rd. .. O 205 1,107 -- 205 1,107 1,312 28
315 8386
Baymeadows Rd. .. O 178 962 -- 178 962 1,140 24
------ ------- ----- ------ ------- ------- ------
Total........... $1,037 $ 5,660 $ -- $1,037 $ 5,660 $ 6,697 $ 143
------ ------- ----- ------ ------- ------- ------
TOTAL
JACKSONVILLE,
FLORIDA......... $3,693 $25,365 $ 114 $3,693 $25,479 $29,172 $ 555
------ ------- ----- ------ ------- ------- ------
<CAPTION>
Market/Business Year Year
Park/Property Developed(2) Acquired(3)
- --------------- ------------ -----------
<S> <C> <C>
ORLANDO, FLORIDA
Parksouth
Distribution
Center
294 2490
Principal Row.... 1997
295 2491
Principal Row.... 1998
296 2500
Principal Row.... 1996
297 9600
Parksouth Ct..... 1997
Total...........
Airport Commerce
Center
298 8249 Parkline
Blvd............. 1996
299 8351 Parkline
Blvd............. 1994 1995
300 8500 Parkline
Blvd............. 1986 1995
301 8501 Parkline
Blvd............. 1991 1995
302 8549 Parkline
Blvd............. 1992 1995
303 1629 Prime
Ct............... 1997
304 1630 Prime
Ct............... 1996
Total...........
Technology Park
305 100
Technology
Pkwy............. 1986 1997
Total...........
TOTAL ORLANDO,
FLORIDA.........
JACKSONVILLE,
FLORIDA
Jacksonville
International
Tradeport
306 13340
International
Pkwy............. 1997 1997
307 13350
International
Pkwy............. 1998 1997
308 1350
Tradeport Dr..... 1989 1998
309 1371
Tradeport Dr..... 1995 1998
310 13291 Vantage
Way.............. 1995 1998
311 1460 Vantage
Way.............. 1998
Total...........
Centurion Square
312 8380
Baymeadows Rd. .. 1983 1998
313 8382
Baymeadows Rd. .. 1983 1998
314 8384
Baymeadows Rd. .. 1983 1998
315 8386
Baymeadows Rd. .. 1983 1998
Total...........
TOTAL
JACKSONVILLE,
FLORIDA.........
</TABLE>
S-13
<PAGE>
SCHEDULE III
<TABLE>
<CAPTION>
Gross Amount at Which
Initial Costs Carried at Close of Period
--------------------- Cost Capitalized --------------------------------
Market/Business Property Related Building and Subsequent to Building and
Park/Property Type(1) Encumbrances Land Improvements Acquisition Land Improvements Total
- --------------- -------- ------------ -------- ------------ ---------------- -------- ------------ ----------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
TAMPA, FLORIDA
Fairfield
Distribution
Center
316 4720 Oak Fair
Blvd. ........... B $ 520 $ 3,879 $ -- $ 520 $ 3,879 $ 4,399
-------- -------- ------- -------- ---------- ----------
Total........... $ 520 $ 3,879 $ -- $ 520 $ 3,879 $ 4,399
-------- -------- ------- -------- ---------- ----------
TOTAL TAMPA,
FLORIDA......... $ 520 $ 3,879 $ -- $ 520 $ 3,879 $ 4,399
-------- -------- ------- -------- ---------- ----------
SPARTANBURG, SOUTH
CAROLINA
Hillside
317 170 Parkway
West............. B $ 223 $ 2,539 $ 5 $ 223 $ 2,544 $ 2,767
318 190 Parkway
West............. B 276 2,350 -- 276 2,350 2,626
319 285 Parkway
East............. B 619 4,243 -- 619 4,243 4,862
-------- -------- ------- -------- ---------- ----------
Total........... $ 1,118 $ 9,132 $ 5 $ 1,118 $ 9,137 $ 10,255
-------- -------- ------- -------- ---------- ----------
TOTAL
SPARTANBURG,
SOUTH CAROLINA.. $ 1,118 $ 9,132 $ 5 $ 1,118 $ 9,137 $ 10,255
-------- -------- ------- -------- ---------- ----------
LAND HELD FOR
FUTURE
DEVELOPMENT....... 2,310 $ 39,346 $ -- $ 3,092 $ 42,438 $ -- $ 42,438
------- -------- -------- ------- -------- ---------- ----------
PROPERTY TOTALS... 247,731(dd) $208,454 $991,810 $43,234 $211,881 $1,031,617 $1,243,498(ee)(ff)
======= ======== ======== ======= ======== ========== ==========
<CAPTION>
Market/Business Accumulated Year Year
Park/Property Depreciation Developed(2) Acquired(3)
- --------------- ------------ ------------ -----------
<S> <C> <C> <C>
TAMPA, FLORIDA
Fairfield
Distribution
Center
316 4720 Oak Fair
Blvd. ........... $ 7 1998
------------
Total........... $ 7
------------
TOTAL TAMPA,
FLORIDA......... $ 7
------------
SPARTANBURG, SOUTH
CAROLINA
Hillside
317 170 Parkway
West............. $ 171 1995
318 190 Parkway
West............. 123 1997
319 285 Parkway
East............. 460 1994
------------
Total........... $ 754
------------
TOTAL
SPARTANBURG,
SOUTH CAROLINA.. $ 754
------------
LAND HELD FOR
FUTURE
DEVELOPMENT....... $ --
------------
PROPERTY TOTALS... $96,383
============
</TABLE>
- ----
Amounts in footnotes are in whole dollars.
(1) D = business distribution; B = bulk warehouse; S = business service; O =
suburban office; R = retail.
(2) The year of development means the year in which shell construction was
completed.
(3) For properties acquired by the Company, including properties previously
developed and sold by the Company, the year of acquisition means the year
in which an ownership interest in the property was acquired or is expected
to be acquired, unless otherwise noted.
(a) These properties are collectively encumbered by a mortgage of $38,000,000.
(b) These properties are collectively encumbered by a mortgage of $10,300,000.
(c) These properties are collectively encumbered by a mortgage of $5,200,000.
(d) These properties are collectively encumbered by a mortgage of $1,710,000.
(e) These properties are collectively encumbered by a mortgage of $1,191,000.
(f) These properties are collectively encumbered by a mortgage of $611,000.
(g) These properties are collectively encumbered by a mortgage of $6,891,000.
(h) These properties are collectively encumbered by a mortgage of $2,130,000.
(i) These properties are collectively encumbered by a mortgage of $11,730,000.
(j) These properties are collectively encumbered by a mortgage of $1,884,000.
(k) These properties are collectively encumbered by a mortgage of $8,568,000.
(l) These properties are collectively encumbered by a mortgage of $6,720,000.
(m) These properties are collectively encumbered by a mortgage of $2,828,000.
(n) These properties are collectively encumbered by a mortgage of $2,639,000.
S-14
<PAGE>
SCHEDULE III
(o) These properties are collectively encumbered by a mortgage of $2,855,000.
(p) These properties are collectively encumbered by a mortgage of $2,327,000.
(q) These properties are collectively encumbered by a mortgage of $6,547,000.
(r) These properties are collectively encumbered by a mortgage of $15,569,000.
(s) These properties are collectively encumbered by a mortgage of $7,440,000.
(t) These properties are collectively encumbered by a mortgage of $5,608,000.
(u) These properties are collectively encumbered by a mortgage of $3,512,000.
(v) These properties are collectively encumbered by a mortgage of $12,691,000.
(w) These properties are collectively encumbered by a mortgage of $4,073,000.
(x) These properties are collectively encumbered by a mortgage of $3,012,000.
(y) These properties are collectively encumbered by a mortgage of $3,255,000.
(z) These properties are collectively encumbered by a mortgage of $2,894,000.
(aa) These properties are collectively encumbered by a mortgage of $15,152,000.
(bb) These properties are collectively encumbered by a mortgage of $21,463,000.
(cc) These properties are collectively encumbered by a mortgage of $38,621,000.
(dd) Total related encumbrances include all mortgage notes payable in the
accompanying financial statements, except a mortgage of $3,668,000 which
is secured by the property at 1950 Vaughn Road which underlies a direct
financing lease discussed in note 2 to the consolidated financial
statements.
(ee) The aggregate cost for federal income tax purposes was approximately
$1,088,000,000.
(ff) Excludes developments in progress of $160,783,000.
S-15
<PAGE>
SCHEDULE III
WEEKS CORPORATION
REAL ESTATE ASSETS AND ACCUMULATED DEPRECIATION
DECEMBER 31, 1998
Depreciation of the Company's real estate assets is calculated over the
following estimated useful lives on a straight-line basis:
. Buildings--35 years
. Tenant improvements--life of the lease
A summary of activity for real estate assets and accumulated depreciation
for the years ended December 31, 1998, 1997 and 1996, were as follows (in
thousands):
<TABLE>
<CAPTION>
1998 1997 1996
---------- -------- --------
<S> <C> <C> <C>
Real Estate Assets
Balance, beginning of period.................... $ 856,500 $592,841 $319,763
Additions....................................... 262,215 137,566 71,418
Building acquisitions(a)........................ 287,998 129,884 201,660
Sales of property............................... (2,373) (2,456) --
Property retirements............................ (59) (1,335) --
---------- -------- --------
Balance, end of period.......................... $1,404,281 $856,500 $592,841
========== ======== ========
Accumulated Depreciation
Balance, beginning of period.................... $ 61,548 $ 41,469 $ 29,889
Depreciation expense............................ 34,916 21,586 11,580
Sales of property............................... (53) (182) --
Property retirements............................ (28) (1,325) --
---------- -------- --------
Balance, end of period.......................... $ 96,383 $ 61,548 $ 41,469
========== ======== ========
</TABLE>
- --------
(a) See Note 15 to the Company's consolidated financial statements, included
herein on page F-25, for a summary of certain noncash consideration
utilized in the Company's real estate acquisitions.
S-16
<PAGE>
EXHIBIT 3.6
ARTICLES OF AMENDMENT
OF
RESTATED ARTICLES OF INCORPORATION
OF
WEEKS CORPORATION
I.
The name of the corporation is Weeks Corporation (the "Corporation").
II.
The amendment (the "Amendment") is to add the following as a new Section
2.2.2 of the Corporation's Restated Articles of Incorporation, as amended (the
"Articles of Incorporation"), to determine the terms of a series of the
Preferred Stock. All capitalized terms used herein shall have the meanings
ascribed to them in the Articles of Incorporation.
"Section 2.2.2. Series B Junior Participating Preferred Stock.
---------------------------------------------
(i) TITLE; NUMBER. The shares of such series shall be designated as
"Series B Junior Participating Preferred Stock" (the "Series B Preferred Stock")
and the number of shares constituting the Series B Preferred Stock shall be
100,000. Such number of shares may be increased or decreased by resolution of
the Board of Directors; provided, that no decrease shall reduce the number of
--------
shares of Series B Preferred Stock to a number less than the number of shares
then outstanding plus the number of shares reserved for issuance upon the
exercise of outstanding options, rights or warrants or upon the conversion of
any outstanding securities issued by the Corporation convertible into Series B
Preferred Stock.
(ii) DIVIDENDS AND DISTRIBUTIONS.
(A) Subject to the rights of the holders of any shares of any series of
Preferred Stock (or any similar stock) ranking prior and superior to the
Series B Preferred Stock with respect to dividends, the holders of shares of
Series B Preferred Stock, in preference to the holders of common stock, par
value $.01 per share (the "Common Stock"), of the Corporation, and of any
other junior stock, shall be entitled to receive, when, as and if declared by
the Board of Directors out of funds legally available for the purpose,
quarterly dividends payable in cash on the last day of each January, April,
July and October or, if not a Business Day (as hereinafter defined), the next
succeeding Business Day in each year (each such date being referred to herein
as a "Quarterly Dividend Payment Date"), commencing on the first Quarterly
Dividend Payment
<PAGE>
Date after the first issuance of a share or fraction of a share of Series B
Preferred Stock, in an amount per share (rounded to the nearest cent) equal to
the greater of (1) $1.00 or (2) subject to the provision for adjustment
hereinafter set forth, 1,000 times the aggregate per share amount of all cash
dividends, and 1,000 times the aggregate per share amount (payable in kind) of
all non-cash dividends or other distributions, other than a dividend payable
in shares of Common Stock or a subdivision of the outstanding shares of Common
Stock (by reclassification or otherwise), declared on the Common Stock since
the immediately preceding Quarterly Dividend Payment Date or, with respect to
the first Quarterly Dividend Payment Date, since the first issuance of any
share or fraction of a share of Series B Preferred Stock. In the event the
Corporation shall at any time declare or pay any dividend on the Common Stock
payable in shares of Common Stock, or effect a subdivision or combination or
consolidation of the outstanding shares of Common Stock (by reclassification
or otherwise than by payment of a dividend in shares of Common Stock) into a
greater or lesser number of shares of Common Stock, then in each such case the
amount to which holders of shares of Series B Preferred Stock were entitled
immediately prior to such event under clause (2) of the preceding sentence
shall be adjusted by multiplying such amount by a fraction, the numerator of
which is the number of shares of Common Stock outstanding immediately after
such event, and the denominator of which is the number of shares of Common
Stock that were outstanding immediately prior to such event.
"Business Day" shall mean any day, other than a Saturday or Sunday, that
is neither a legal holiday nor a day on which banking institutions in New York
City are authorized or required by law, regulation or executive order to
close.
(B) The Corporation shall declare a dividend or distribution on the
Series B Preferred Stock as provided in subparagraph (A) of this paragraph
(ii) immediately after it declares a dividend or distribution on the Common
Stock (other than a dividend payable in shares of Common Stock); provided
that, in the event no dividend or distribution shall have been declared on the
Common Stock during the period between any Quarterly Dividend Payment Date and
the next subsequent Quarterly Dividend Payment Date, a dividend of $1.00 per
share on the Series B Preferred Stock shall nevertheless be payable on such
subsequent Quarterly Dividend Payment Date.
(C) Dividends shall begin to accrue and be cumulative on outstanding
shares of Series B Preferred Stock from the Quarterly Dividend Payment Date
next preceding the date of issue of such shares, unless the date of issue of
such shares is prior to the record date for the first Quarterly Dividend
Payment Date, in which case dividends on such shares shall begin to accrue
from the date of issue of such shares, or unless the date of issue is a
Quarterly Dividend Payment Date or is a date after the record date for the
determination of holders of shares of Series B Preferred Stock entitled to
receive a quarterly dividend and before such Quarterly Dividend Payment Date,
in either of which events such dividends shall begin to accrue and be
cumulative from such Quarterly Dividend Payment Date. Accrued but unpaid
dividends shall not bear interest. Dividends paid on the shares of Series B
Preferred Stock in an amount less than the total amount of such dividends at
the time accrued and payable on such shares shall be allocated
-2-
<PAGE>
pro rata on a share-by-share basis among all such shares at the time
outstanding. The Board of Directors may fix a record date for the
determination of holders of shares of Series B Preferred Stock entitled to
receive payment of a dividend or distribution declared thereon, which record
date shall be not more than 60 days prior to the date fixed for the payment
thereof.
(iii) VOTING RIGHTS. The holders of shares of Series B Preferred Stock
shall have the following voting rights:
(A) Subject to the provision for adjustment hereinafter set forth, each
share of Series B Preferred Stock shall entitle the holder thereof to 1,000
votes on all matters submitted to a vote of the shareholders of the
Corporation. In the event the Corporation shall at any time declare or pay
any dividend on the Common Stock payable in shares of Common Stock, or effect
a subdivision or combination or consolidation of the outstanding shares of
Common Stock (by reclassification or otherwise than by payment of a dividend
in shares of Common Stock) into a greater or lesser number of shares of Common
Stock, then in each such case the number of votes per share to which holders
of shares of Series B Preferred Stock were entitled immediately prior to such
event shall be adjusted by multiplying such number by a fraction, the
numerator of which is the number of shares of Common Stock outstanding
immediately after such event, and the denominator of which is the number of
shares of Common Stock that were outstanding immediately prior to such event.
(B) Except as otherwise provided herein, in any other amendment to the
Articles of Incorporation creating a series of Preferred Stock or any similar
stock, or by law, the holders of shares of Series B Preferred Stock and the
holders of Common Stock and any other capital stock of the Corporation having
general voting rights shall vote together as one class on all matters
submitted to a vote of shareholders of the Corporation.
(C) Except as set forth herein, or as otherwise provided by law, holders
of Series B Preferred Stock shall have no special voting rights and their
consent shall not be required (except to the extent they are entitled to vote
with holders of Common Stock as set forth herein) for taking any corporate
action.
(iv) CERTAIN RESTRICTIONS.
(A) Whenever quarterly dividends or other dividends or distributions
payable on the Series B Preferred Stock as provided in paragraph (ii) are in
arrears, thereafter and until all accrued and unpaid dividends and
distributions, whether or not declared, on shares of Series B Preferred Stock
outstanding shall have been paid in full, the Corporation shall not:
(1) declare or pay dividends, or make any other distributions, on
any shares of stock ranking junior (either as to dividends or the
distribution of assets upon liquidation, dissolution or winding up) to
the Series B Preferred Stock;
-3-
<PAGE>
(2) declare or pay dividends, or make any other distributions, on
any shares of stock ranking on parity (either as to dividends or the
distribution of assets upon liquidation, dissolution or winding up) with
the Series B Preferred Stock, except dividends paid ratably on the Series
B Preferred Stock and all such parity stock on which dividends are
payable or in arrears in proportion to the total amounts to which the
holders of all such shares are then entitled;
(3) redeem or purchase or otherwise acquire for consideration shares
of any stock ranking junior (either as to dividends or the distribution
of assets upon liquidation, dissolution or winding up) to the Series B
Preferred Stock, provided that the Corporation may at any time redeem,
purchase or otherwise acquire shares of any such junior stock in exchange
for shares of any stock of the Corporation ranking junior (either as to
dividends or the distribution of assets upon liquidation, dissolution or
winding up) to the Series B Preferred Stock; or
(4) redeem or purchase or otherwise acquire for consideration any
shares of Series B Preferred Stock, or any shares of stock ranking on a
parity with the Series B Preferred Stock, except in accordance with a
purchase offer made in writing or by publication (as determined by the
Board of Directors) to all holders of such shares upon such terms as the
Board of Directors, after consideration of the respective annual dividend
rates and other relative rights and preferences of the respective series
and classes, shall determine in good faith will result in fair and
equitable treatment among the respective series or classes.
(B) The Corporation shall not permit any subsidiary of the Corporation to
purchase or otherwise acquire for consideration any shares of stock of the
Corporation unless the Corporation could, under subparagraph (A) of this
paragraph (iv), purchase or otherwise acquire such shares at such time and in
such manner.
(v) REACQUIRED SHARES. Any shares of Series B Preferred Stock purchased
or otherwise acquired by the Corporation in any manner whatsoever shall be
retired and canceled promptly after the acquisition thereof. All such shares
shall upon their cancellation become authorized but unissued shares of Preferred
Stock and may be reissued as part of a new series of Preferred Stock subject to
the conditions and restrictions on issuance set forth herein, in the Articles of
Incorporation, or in any other amendment to Articles of Incorporation creating a
series of Preferred Stock or any similar stock or as otherwise required by law.
(vi) LIQUIDATION, DISSOLUTION OR WINDING UP. Upon any liquidation,
dissolution or winding up of the Corporation, no distribution shall be made (A)
to the holders of shares of stock ranking junior (either as to dividends or the
distribution of assets upon liquidation, dissolution or winding up) to the
Series B Preferred Stock unless, prior thereto, the holders of shares of Series
B Preferred Stock shall have received $1,000 per share, plus an amount equal to
accrued and unpaid dividends and distributions thereon, whether or not declared,
to the date of such payment, provided that the holders of shares of Series B
Preferred Stock shall be entitled to receive an
-4-
<PAGE>
aggregate amount per share, subject to the provision for adjustment hereinafter
set forth, equal to 1,000 times the aggregate amount to be distributed per share
to holders of shares of Common Stock, or (B) to the holders of shares of stock
ranking on a parity (either as to dividends or the distribution of assets upon
liquidation, dissolution or winding up) with the Series B Preferred Stock,
except distributions made ratably on the Series B Preferred Stock and all such
parity stock in proportion to the total amounts to which the holders of all such
shares are entitled upon such liquidation, dissolution or winding up. In the
event the Corporation shall at any time declare or pay any dividend on the
Common Stock payable in shares of Common Stock, or effect a subdivision or
combination or consolidation of the outstanding shares of Common Stock (by
reclassification or otherwise than by payment of a dividend in shares of Common
Stock) into a greater or lesser number of shares of Common Stock, then in each
such case the aggregate amount to which holders of shares of Series B Preferred
Stock were entitled immediately prior to such event under the proviso in clause
(A) of the preceding sentence shall be adjusted by multiplying such amount by a
fraction, the numerator of which is the number of shares of Common Stock
outstanding immediately after such event, and the denominator of which is the
number of shares of Common Stock that were outstanding immediately prior to such
event.
(vii) CONSOLIDATION, MERGER, ETC. In case the Corporation shall enter
into any consolidation, merger, combination or other transaction in which the
shares of Common Stock are exchanged for or converted into other stock or
securities, cash or any other property, then in any such case each share of
Series B Preferred Stock shall at the same time be similarly exchanged or
converted into an amount per share, subject to the provision for adjustment
hereinafter set forth, equal to 1,000 times the aggregate amount of stock,
securities, cash or any other property (payable in kind), as the case may be,
into which or for which each share of Common Stock is exchanged or converted.
In the event the Corporation shall at any time declare or pay any dividend on
the Common Stock payable in shares of Common Stock, or effect a subdivision or
combination or consolidation of the outstanding shares of Common Stock (by
reclassification or otherwise than by payment of a dividend in shares of Common
Stock) into a greater or lesser number of shares of Common Stock, then in each
such case the amount set forth in the preceding sentence with respect to the
exchange or conversion of shares of Series B Preferred Stock shall be adjusted
by multiplying such amount by a fraction, the numerator of which is the number
of shares of Common Stock outstanding immediately after such event, and the
denominator of which is the number of shares of Common Stock that were
outstanding immediately prior to such event.
(viii) NO REDEMPTION. The shares of Series B Preferred Stock shall not
be redeemable.
(ix) RANK. The Series B Preferred Stock shall rank, with respect to the
payment of dividends and the distribution of assets, junior to all series of any
other class of the Corporation's Preferred Stock.
(x) AMENDMENT. The Articles of Incorporation shall not be amended in any
manner which would materially alter or change the powers, preferences or special
rights of the Series B Preferred Stock so as to affect them adversely without
the affirmative vote of the holders of at
-5-
<PAGE>
least two-thirds of the outstanding shares of Series B Preferred Stock, voting
together as a single class."
III.
This Amendment was adopted by the Board of Directors on May 20, 1998.
IV.
This Amendment was duly adopted by the Board of Directors without shareholder
approval, as such approval was not required.
-6-
<PAGE>
IN WITNESS WHEREOF, Weeks Corporation has caused these Articles of Amendment
to be executed and sealed by its duly authorized officers this _____ day of
June, 1998.
___________________________________
A.R. Weeks, Jr.
Chairman and Chief Executive Officer
Attest:
______________________________
Elizabeth C. Belden
Vice President and Secretary
-7-
<PAGE>
EXHIBIT 3.7
ARTICLES OF AMENDMENT
OF
RESTATED ARTICLES OF INCORPORATION
OF
WEEKS CORPORATION
I.
The name of the corporation is Weeks Corporation (the "Corporation").
II.
The amendment (the "Amendment") is to delete paragraph (ii) of Section
2.2.1 in its entirety and replace it with the following:
"(ii) NUMBER. The maximum number of authorized shares of the Series A
Preferred Stock shall be 7,400,000."
III.
This Amendment was adopted by the Board of Directors on October 30, 1998.
IV.
This Amendment was duly adopted by the Board of Directors without
shareholder approval, as such approval was not required.
<PAGE>
IN WITNESS WHEREOF, Weeks Corporation has caused these Articles of
Amendment to be executed and sealed by its duly authorized officers this ____
day of November, 1998.
WEEKS CORPORATION
By:_______________________________
A. R. Weeks, Jr.
Chairman and Chief Executive Officer
Attest:
By:______________________________
Name: Elizabeth C. Belden
Title: Vice President and Secretary
-2-
<PAGE>
EXHIBIT 3.8
ARTICLES OF AMENDMENT
OF
RESTATED ARTICLES OF INCORPORATION
OF
WEEKS CORPORATION
I.
The name of the corporation is Weeks Corporation (the "Corporation").
II.
The amendment (the "Amendment") is to add the following as a new Section
2.2.3 of the Corporation's Restated Articles of Incorporation, as amended (the
"Articles of Incorporation"), to determine the terms of a series of the
Preferred Stock. All capitalized terms used herein shall have the meanings
ascribed to them in the Articles of Incorporation.
"Section 2.2.3 8.625% Series D Cumulative Redeemable Preferred Stock.
-------------
(i) TITLE. The series of Preferred Stock is hereby designated as the
"8.625% Series D Cumulative Redeemable Preferred Stock" (the "Series D Preferred
Stock").
(ii) NUMBER. The maximum number of authorized shares of the Series D
Preferred Stock shall be 2,600,000.
(iii) RELATIVE SENIORITY. In respect of rights to receive dividends
and to participate in distributions of payments in the event of any liquidation,
dissolution or winding up of the Corporation, the Series D Preferred Stock shall
rank (a) senior to any class or series of Equity Stock of the Corporation
ranking, as to the payment of dividends or as to the distribution of assets upon
liquidation, dissolution or winding up, junior to the Series D Preferred Stock
(collectively, "Junior Stock"), (b) senior to any class or series of Equity
Stock of the Corporation ranking, as to the payment of dividends and as to the
distribution of assets upon liquidation, dissolution or winding up, junior to
the Series D Preferred Stock (collectively, "Fully Junior Stock"), and (c) on a
parity with any class or series of Equity Stock of the Corporation ranking, as
to the payment of dividends and as to the distribution of assets upon
liquidation, dissolution or winding up, whether or not the dividend rates,
dividend payment dates or redemption or liquidation prices per share thereof are
different from those of the Series D Preferred Stock, if the holders of such
class or series of Equity Stock and the Series D Preferred Stock shall be
entitled to the receipt of dividends and of amounts distributable upon
liquidation, dissolution or winding up in proportion to their respective amounts
of accrued and unpaid dividends per share or liquidation preferences, without
preference or priority one over the other (collectively, "Parity Stock").
<PAGE>
(iv) DIVIDENDS.
(A) The holders of the then outstanding Series D Preferred Stock shall be
entitled to receive, when, as and if declared by the Board of Directors out of
funds legally available therefor, cumulative dividends at the rate of $2.15625
per share per year, payable in equal amounts of $0.5390625 per share quarterly
in cash on the last day of each January, April, July and October or, if not a
Business Day (as hereinafter defined), the next succeeding Business Day.
Dividends shall begin to accrue and shall be fully cumulative from the first
date on which the pertinent shares of the Series D Preferred Stock are issued
and sold and shall first be payable on January 31, 1999 (each such payment date
being hereafter called a "Quarterly Dividend Date" and each period ending on a
Quarterly Dividend Date being hereinafter called a "Dividend Period").
Dividends shall be payable to holders of record as they appear in the share
records of the Corporation at the close of business on the applicable record
date (the "Record Date"), which shall be the 15th day of the calendar month in
which the applicable Quarterly Dividend Date falls on or such other date
designated by the Board of Directors of the Corporation for the payment of
dividends that is not more than 50 nor less than 10 days prior to such Quarterly
Dividend Date. The amount of any dividend payable for any Dividend Period
shorter than a full Dividend Period shall be prorated and computed on the basis
of the actual number of days in such period. Dividends paid on the Series D
Preferred Stock in an amount less than the total amount of such dividends at the
time accrued and payable on such shares shall be allocated pro rata on a per
share basis among all such shares at the time outstanding.
"Business Day" shall mean any day, other than a Saturday or Sunday, that is
neither a legal holiday nor a day on which banking institutions in New York City
are authorized or required by law, regulation or executive order to close.
(B) The amount of any dividends accrued on any Series D Preferred Stock at
any Quarterly Dividend Date shall be the amount of any unpaid dividends
accumulated thereon, to and including such Quarterly Dividend Date, whether or
not earned or declared, and the amount of dividends accrued on any shares of
Series D Preferred Stock at any date other than a Quarterly Dividend Date shall
be equal to the sum of the amount of any unpaid dividends accumulated thereon,
to and including the last preceding Quarterly Dividend Date, whether or not
earned or declared, plus an amount calculated on the basis of the annual
dividend rate of $2.15625 per share for the period after such last preceding
Quarterly Dividend Date to and including the date as of which the calculation is
made based on the actual number of days in such period.
(C) Except as provided in this Section 2.2.3, the Series D Preferred Stock
will not be entitled to any dividends in excess of full cumulative dividends as
described above and shall not be entitled to participate in the earnings or
assets of the Corporation, and no interest, or sum of money in lieu of interest,
shall be payable in respect of any dividend payment or payments on the Series D
Preferred Stock which may be in arrears.
(D) Any dividend payment made on the Series D Preferred Stock shall first
be credited against the earliest accrued but unpaid dividend due with respect to
such shares which remains payable.
-2-
<PAGE>
(E) If, for any taxable year, the Corporation elects to designate as
"capital gain dividends" (as defined in Section 857 of the Code), any portion
(the "Capital Gains Amount") of the dividends paid or made available for the
year to holders of all classes of shares (the "Total Dividends"), then the
portion of the Capital Gains Amount that shall be allocated to the holders of
the Series D Preferred Stock shall equal (i) the Capital Gains Amount multiplied
by (ii) a fraction that is equal to (a) the total dividends paid or made
available to the holders of the Series D Preferred Stock for the year over (b)
the Total Dividends.
(F) No dividends on the Series D Preferred Stock shall be authorized by the
Board of Directors or be paid or set apart for payment by the Corporation at
such time as the terms and provisions of any agreement of the Corporation,
including any agreement relating to its indebtedness, prohibit such
authorization, payment or setting apart for payment or provide that such
authorization, payment or setting apart for payment would constitute a breach
thereof or a default thereunder, or if such authorization or payment shall be
restricted or prohibited by law. Notwithstanding the foregoing, dividends on
the Series D Preferred Stock will accrue whether or not the Corporation has
earnings, whether or not there are funds legally available for the payment of
such dividends and whether or not such dividends are authorized.
(G) So long as any Series D Preferred Stock remain outstanding, no
dividends, except as described in the immediately following sentence, shall be
declared or paid or set apart for payment on any class or series of Parity Stock
for any period unless full cumulative dividends have been or contemporaneously
are declared and paid or declared and a sum sufficient for the payment thereof
set apart for such payment on the Series D Preferred Stock for all Dividend
Periods terminating on or prior to the dividend payment date for such class or
series of Parity Stock. When dividends are not paid in full or a sum sufficient
for such payment is not set apart, as aforesaid, all dividends declared upon
Series D Preferred Stock and all dividends declared upon any other class or
series of Parity Stock shall be declared ratably in proportion to the respective
amounts of dividends accumulated and unpaid on the Series D Preferred Stock and
accumulated and unpaid on such Parity Stock.
(H) So long as any shares of Series D Preferred Stock remain outstanding,
no dividends (other than dividends or distributions paid solely in shares of, or
options, warrants or rights to subscribe for or purchase shares of, Fully Junior
Stock) shall be declared or paid or set apart for payment or other distribution
declared or made upon Junior Stock or Fully Junior Stock, nor shall any Junior
Stock or Fully Junior Stock be redeemed, purchased or otherwise acquired (other
than a redemption, purchase or other acquisition of shares of Common Stock made
for purposes of any employee incentive or benefit plan of the Corporation or any
subsidiary) for any consideration (or any monies be paid to or made available
for a sinking fund for the redemption of any such shares) by the Corporation,
directly or indirectly (except by conversion into or exchange for shares of
Fully Junior Stock), unless in each case (i) the full cumulative dividends on
all outstanding shares of Series D Preferred Stock and any other Parity Stock of
the Corporation shall have been or contemporaneously are declared and paid or
declared and set apart for payment for all past Dividend Periods with respect to
the Series D Preferred Stock and all past dividend periods with respect to such
Parity Stock and (ii) sufficient funds shall have been or contemporaneously are
declared and
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<PAGE>
paid or declared and set apart for the payment of the dividend for the current
Dividend Period with respect to the Series D Preferred Stock and the current
dividend period with respect to such Parity Stock.
(v) LIQUIDATION RIGHTS.
(A) Upon the voluntary or involuntary liquidation, dissolution or winding
up of the Corporation, the holders of the Series D Preferred Stock then
outstanding shall be entitled to receive and to be paid out of the assets of the
Corporation available for distribution to its shareholders, before any payment
or distribution shall be made on any Junior Stock, the amount of $25.00 per
share, plus accrued and unpaid dividends thereon.
(B) After the payment to the holders of the Series D Preferred Stock of
the full preferential amounts provided for in this Section 2.2.3, any other
series or class of Junior Stock or Fully Junior Stock shall, subject to the
respective terms and provisions (if any) applying thereto, be entitled to
receive any and all assets remaining to be paid, and the holders of the Series D
Preferred Stock, as such, shall have no right or claim to any of the remaining
assets of the Corporation.
(C) If, upon any voluntary or involuntary dissolution, liquidation, or
winding up of the Corporation, the assets of the Corporation, or proceeds
thereof, distributable among the holders of the Series D Preferred Stock shall
be insufficient to pay in full the preferential amount aforesaid and liquidating
payments on any other shares of any class or series of Parity Stock, then such
assets, or the proceeds thereof, shall be distributed among the holders of the
Series D Preferred Stock and any such other Parity Stock ratably in accordance
with the respective amounts that would be payable on such Series D Preferred
Stock and any such other Parity Stock if all amounts payable thereon were paid
in full.
(D) Neither a consolidation nor a merger of any other entity into or with
the Corporation, a statutory share exchange by the Corporation or a sale, lease,
transfer or conveyance of all or substantially all of the property or business
of the Corporation, shall be deemed to be a dissolution, liquidation or winding
up, voluntary or involuntary, for the purposes of this Section 2.2.3.
(vi) REDEMPTION.
(A) OPTIONAL REDEMPTION. On and after November 12, 2003, the Corporation
may, at its option, redeem at any time all or, from time to time, any part of
the Series D Preferred Stock at a price per share (the "Redemption Price"),
payable in cash, of $25.00, together with all accrued and unpaid dividends to
and including the date fixed for redemption (the "Redemption Date"), without
interest, to the full extent the Company has funds legally available therefor.
The Series D Preferred Stock shall have no stated maturity and will not be
subject to any sinking fund or mandatory redemption provisions.
(B) PROCEDURES OF REDEMPTION.
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<PAGE>
(1) Notice of redemption will be given by publication in a newspaper
of general circulation in the City of New York, such publication to be made
once a week for two successive weeks commencing not less than 30 nor more
than 90 days prior to the Redemption Date. Notice of any redemption will
also be mailed by the registrar, postage prepaid, not less than 30 nor more
than 90 days prior to the Redemption Date, addressed to each holder of
record of the Series D Preferred Stock to be redeemed at the address set
forth in the share transfer records of the registrar. Any notice mailed in
the manner provided herein shall be conclusively presumed to have been
given on the date mailed whether or not the holder received the notice. No
failure to give such notice or any defect therein or in the mailing thereof
shall affect the validity of the proceedings for the redemption of any
Series D Preferred Stock except as to the holder to whom the Corporation
has failed to give notice or except as to the holder to whom notice was
defective. In addition to any information required by law or by the
applicable rules of any exchange upon which Series D Preferred Stock may be
listed or admitted to trading, such notice shall state: (a) the Redemption
Date; (b) the Redemption Price; (c) the number of shares of Series D
Preferred Stock to be redeemed; (d) the place or places where certificates
for such shares are to be surrendered for payment of the Redemption Price;
and (e) that dividends on the shares to be redeemed will cease to
accumulate on the Redemption Date. If fewer than all of the shares of
Series D Preferred Stock held by any holder are to be redeemed, the notice
mailed to such holder shall also specify the number of shares of Series D
Preferred Stock to be redeemed from such holder.
(2) If notice has been mailed in accordance with subparagraph
(vi)(B)(1) above and provided that on or before the Redemption Date
specified in such notice all funds necessary for such redemption shall have
been irrevocably set aside by the Corporation, separate and apart from its
other funds in trust for the pro rata benefit of the holders of the Series
D Preferred Stock so called for redemption, so as to be, and to continue to
be available therefor, then, from and after the Redemption Date, dividends
on the Series D Preferred Stock so called for redemption shall cease to
accumulate, and said shares shall no longer be deemed to be outstanding and
shall not have the status of Series D Preferred Stock and all rights of the
holders thereof as shareholders of the Corporation (except the right to
receive the Redemption Price) shall cease. Upon surrender, in accordance
with such notice, of the certificates for any shares of Series D Preferred
Stock so redeemed (properly endorsed or assigned for transfer, if the
Corporation shall so require and the notice shall so state), such shares of
Series D Preferred Stock shall be redeemed by the Corporation at the
Redemption Price. In case fewer than all the shares of Series D Preferred
Stock represented by any such certificate are redeemed, a new certificate
or certificates shall be issued presenting the unredeemed shares of Series
D Preferred Stock without cost to the holder thereof.
(3) Any funds deposited with a bank or trust company for the purpose
of redeeming shares of Series D Preferred Stock shall be irrevocably
deposited except that:
(a) the Corporation shall be entitled to receive from such bank
or trust company the interest or other earnings, if any, earned on any
money so deposited in
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<PAGE>
trust, and the holders of any shares redeemed shall have no claim to
such interest or other earnings; and
(b) any balance of monies so deposited by the Corporation and
unclaimed by the holders of the Series D Preferred Stock entitled
thereto at the expiration of two years from the applicable Redemption
Date shall be repaid, together with any interest or other earnings
earned thereon, to the Corporation, and after any such repayment, the
holders of the shares entitled to the funds so repaid to the
Corporation shall look only to the Corporation for payment without
interest or other earnings.
(4) No Series D Preferred Stock may be redeemed except from proceeds
from the sale of other capital stock of the Corporation, including but not
limited to common stock, preferred stock, depositary shares, interests,
participations or other ownership interests (however designated) and any
rights (other than debt securities convertible into or exchangeable for
equity securities) or options to purchase any of the foregoing.
(5) Unless full accumulated dividends on all Series D Preferred Stock
and any other class or series of Parity Stock shall have been or
contemporaneously are declared and paid or declared and a sum sufficient
for the payment thereof set apart for payment for all past Dividend Periods
and the then current Dividend Period, no Series D Preferred Stock or Parity
Stock shall be redeemed or purchased or otherwise acquired directly or
indirectly; provided, however, that the foregoing shall not prevent the
redemption of Series D Preferred Stock or Parity Stock to preserve the
Corporation's REIT status or the purchase or acquisition of Series D
Preferred Stock or Parity Stock pursuant to a purchase or exchange offer
made on the same terms to holders of all outstanding shares of Series D
Preferred Stock or Parity Stock, as the case may be.
(6) If the Redemption Date is after a Record Date and before the
related Quarterly Dividend Date, the dividend payable on such Quarterly
Dividend Date shall be paid to the holder in whose name the shares of
Series D Preferred Stock to be redeemed are registered at the close of
business on such Record Date notwithstanding the redemption thereof between
such Record Date and the related Quarterly Dividend Date or the
Corporation's default in the payment of the dividend due. Except as
provided above, the Company will make no payment or allowance for unpaid
dividends, whether or not in arrears, on Series D Preferred Stock to be
redeemed.
(7) In case of redemption of less than all of the Series D Preferred
Stock at the time outstanding, the shares of Series D Preferred Stock to be
redeemed shall be selected by the Corporation by lot or pro rata from the
holders of record of such shares in proportion to the number of shares of
Series D Preferred Stock held by such holders (with adjustments to avoid
redemption of fractional shares) or by any other equitable method
determined by the Corporation in its sole and absolute discretion.
(vii) VOTING RIGHTS. Except as required by law, and as set forth below,
the holders of the Series D Preferred Stock shall not be entitled to vote at any
meeting of the shareholders of the Corporation for election of Directors or for
any other purpose or otherwise to participate in any
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<PAGE>
action taken by the Corporation or the shareholders thereof, or to receive
notice of any meeting of shareholders and the consent of the holders of the
Series D Preferred Stock shall not be required for the taking of any corporate
action.
(A) If and whenever dividends payable on the Series D Preferred Stock or
any series or class of Parity Stock shall be in arrears for six consecutive
Dividend Periods, whether or not declared, the number of directors then
constituting the Board of Directors shall be increased by two, and the holders
of such Series D Preferred Stock, together with the holders of shares of every
other series of Parity Stock, voting together as a single class regardless of
series, shall be entitled to vote for the election of two additional directors
of the Corporation at any annual meeting of shareholders or special meeting held
in place thereof, or at a special meeting of the holders of the Series D
Preferred Stock and the Parity Stock called as hereinafter provided. Whenever
all arrears in dividends on the Series D Preferred Stock and the Parity Stock
then outstanding shall have been paid and dividends thereon for the current
Dividend Period shall have been paid or declared and set apart for payment, then
the right of the holders of the Series D Preferred Stock and the Parity Stock to
elect such additional two directors shall immediately cease (but subject always
to the same provision for the vesting of such voting rights in the case of any
similar future arrearages in six consecutive Dividend Periods), and the terms of
office of all persons elected as directors by the holders of the Series D
Preferred Stock and the Parity Stock shall immediately terminate and the number
of the Board of Directors shall be reduced accordingly.
(B) At any time after such voting rights shall have been so vested in the
holders of the Series D Preferred Stock and the Parity Stock, the secretary of
the Corporation may, and upon the written request of holders of record of at
least ten percent (10%) of the Series D Preferred Stock then outstanding
(addressed to the secretary at the principal office of the Corporation) shall,
call a special meeting of the holders of the Series D Preferred Stock and of the
Parity Stock for the election of the two directors to be elected by them as
herein provided, such call to be made by notice similar to that provided in the
Bylaws of the Corporation for a special meeting of the shareholders or as
required by law. If any such special meeting required to be called as provided
above shall not be called by the secretary within 20 days after receipt of any
such request, then any holder of Series D Preferred Stock may call such meeting,
upon the notice provided above, and for that purpose shall have access to the
stock records of the Corporation. The directors elected at any such special
meeting shall hold office until the next annual meeting of the shareholders or
special meeting held in lieu thereof if such office shall not have previously
terminated as provided above. If any vacancy shall occur among the directors
elected by the holders of the Series D Preferred Stock and the Parity Stock, a
successor shall be elected by the Board of Directors, upon the nomination of the
then-remaining director elected by the holders of the Series D Preferred Stock
and the Parity Stock or the successor of such remaining director, to serve until
the next annual meeting of the shareholders or special meeting held in place
thereof if such office shall not have previously terminated as provided above.
(C) So long as any shares of Series D Preferred Stock remain outstanding,
the Corporation will not, without the affirmative vote or consent of the holders
of at least two-thirds of the Series D Preferred Stock and the Parity Stock
outstanding at the time, acting as a single class regardless of series, given in
person or by proxy, either in writing or at a meeting,
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<PAGE>
(1) authorize or create, or increase the authorized or issued amount
of, any class or series of Equity Securities ranking prior to the Series D
Preferred Stock with respect to the payment of dividends or the
distribution of assets upon liquidation, dissolution or winding up or
reclassify any authorized shares of the Corporation into such shares, or
create, authorize or issue any obligation or security convertible into or
evidencing the right to purchase any such shares; or
(2) amend, alter or repeal the provisions of the Articles of
Incorporation, including this Amendment, so as to materially and adversely
affect any right, preference, privilege or voting power of the Series D
Preferred Stock, the Parity Stock or the holders thereof; provided,
however, that the amendment of the provisions of the Articles of
Incorporation so as to authorize or create or to increase the authorized
amount of shares of any class of any Fully Junior Stock or Junior Stock
that are not senior in any respect to the Series D Preferred Stock, or any
shares of any class ranking on a parity with the Series D Preferred Stock
or the Parity Stock, shall not be deemed to adversely affect the rights,
preferences, privileges or voting power of the Series D Preferred Stock;
and provided further, however, that if any such amendment, alteration or
repeal would materially and adversely affect any right, preference,
privilege or voting power of the Series D Preferred Stock or another series
of Parity Stock that is not enjoyed by some or all of the other series
otherwise entitled to vote in accordance herewith, the affirmative vote of
at least two thirds of the votes entitled to be cast by the holders of all
series similarly affected, similarly given, shall be required in lieu of
the affirmative vote of at least two thirds of the votes entitled to be
cast by the holders of the Series D Preferred Stock and the Parity Stock
otherwise entitled to vote in accordance herewith; or
(3) effect or validate a share exchange that affects the Series D
Preferred Stock, a consolidation with or merger of the Corporation into
another entity, or a consolidation with or merger of another entity into
the Corporation, unless in each such case each share of Series D Preferred
Stock (x) shall remain outstanding without a material and adverse change to
its terms and rights or (y) shall be converted into or exchanged for
preferred stock of the surviving entity having preferences, voting powers,
restrictions, limitations as to dividends, qualifications and terms or
conditions of redemption thereof identical to that of a share of Series D
Preferred Stock (except for changes that do not materially and adversely
affect the holders of the Series D Preferred Stock).
The foregoing voting provisions will not apply if, at or prior to the time
when the act with respect to which such vote would otherwise be required shall
be effected, all outstanding shares of Series D Preferred Stock shall have been
redeemed or called for redemption and sufficient funds shall have been deposited
in trust to effect such redemption.
(D) On each matter submitted to a vote of the holders of Series D Preferred
Stock in accordance with this Section 2.2.3, or as otherwise required by law,
each share of Series D Preferred Stock shall be entitled to one vote. With
respect to each share of Series D Preferred Stock, the holder thereof may
designate a proxy, with each such proxy having the right to vote on behalf of
the holder.
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<PAGE>
(viii) RETIREMENT. Except as otherwise provided in the Articles of
Incorporation, all shares of Series D Preferred Stock which shall have been
issued and reacquired in any manner by the Corporation shall be restored to the
status of authorized but unissued shares of Preferred Stock, without designation
as to class or series.
(ix) CONVERSION. The shares of Series D Preferred Stock are not
convertible into or exchangeable for any other property or securities of the
Corporation.
(x) RECORD HOLDERS. The Corporation and the Corporation's transfer agent
may deem and treat the record holder of any shares of Series D Preferred Stock
as the true and lawful owner thereof for all purposes, and neither the
Corporation nor its transfer agent shall be affected by any notice to the
contrary."
III.
This Amendment was adopted by the Board of Directors on November 11, 1998.
IV.
This Amendment was duly adopted by the Board of Directors without
shareholder approval, as such approval was not required.
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<PAGE>
IN WITNESS WHEREOF, Weeks Corporation has caused these Articles of
Amendment to be executed and sealed by its duly authorized officers this ___ day
of November, 1998.
WEEKS CORPORATION
By:__________________________
A. R. Weeks, Jr.
Chairman and Chief Executive Officer
Attest:
By:____________________________
Name: Elizabeth C. Belden
Title: Vice President and Secretary
<PAGE>
EXHIBIT 4.5
THIS WARRANT AND THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED, NOR PURSUANT TO THE SECURITIES OR
"BLUE SKY" LAWS OF ANY STATE AND MAY NOT BE TRANSFERRED, SOLD, OR OTHERWISE
DISPOSED OF, EXCEPT IN ACCORDANCE WITH APPLICABLE "BLUE SKY" LAWS AND PURSUANT
TO (i) A REGISTRATION STATEMENT WITH RESPECT TO SUCH SECURITIES WHICH IS
EFFECTIVE UNDER SUCH ACT, (ii) RULE 144 OR RULE 144A UNDER SUCH ACT, OR (iii)
ANY OTHER EXEMPTION FROM REGISTRATION UNDER SUCH ACT RELATING TO SUCH ACT,
PROVIDED THAT, IF REQUESTED BY WEEKS CORPORATION, AN OPINION OF COUNSEL
REASONABLY SATISFACTORY IN FORM AND SUBSTANCE IS FURNISHED TO WEEKS CORPORATION
THAT AN EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF SUCH ACT IS AVAILABLE.
No. W-1 November 6, 1998
WARRANT FOR THE PURCHASE
OF (i) SHARES OF COMMON STOCK OR
(ii) SHARES OF 8% SERIES A CUMULATIVE
REDEEMABLE PREFERRED STOCK OF
WEEKS CORPORATION
THIS CERTIFIES THAT AEW Targeted Securities Fund, L.P., a Delaware limited
partnership (the "Holder"), for value received and subject to the terms and
conditions set forth in this Warrant (the "Warrant"), is entitled to purchase at
any time prior to the Expiration Date (as defined herein) from Weeks
Corporation, a Georgia corporation (the "Company"), either (i) 1,046,729 duly
authorized, validly issued, fully paid and nonassessable shares of Common Stock,
par value $.01 per share (the "Common Stock"), at a purchase price of $33.4375
per share (the "Initial Common Stock Exercise Price") or (ii) 1,400,000 duly
authorized, validly issued, fully paid and nonassessable shares of 8% Series A
Cumulative Redeemable Preferred Stock, par value $.01 per share (the "Preferred
Stock"), at a purchase price equal to the Liquidation Preference per share of
the Preferred Stock (the "Initial Preferred Stock Exercise Price").
This Warrant is originally issued in connection with the execution and
delivery of the Securities Purchase Agreement dated as of November 6, 1998 (the
"Securities Purchase Agreement") by and among the Company, the Operating
Partnership and the Holder. This Warrant evidences the right to purchase an
aggregate of 1,046,729 shares of Common Stock or 1,400,000 shares of Preferred
Stock, subject to adjustment as provided herein. Certain capitalized terms used
in this Warrant are defined in Section 12 hereof.
<PAGE>
1. EXERCISE OR PUT OF WARRANT.
1.1 Manner of Exercise or Put; Payment
----------------------------------
1.1.1 Exercise. This Warrant may be exercised by the Holder, in
whole but not in part, during normal business hours on any Business Day on or
prior to the Expiration Date, if any, by surrender of this Warrant to the
Company at its principal office identified in Section 11.2(a) hereof,
accompanied by a subscription in substantially the form attached to this Warrant
duly executed by the Holder and accompanied by payment as set forth below.
(i) If the Warrant is exercised for Common Stock, the subscription
shall be accompanied by payment of, at the option of the
Holder, either (i) cash in an amount equal to, or (ii) shares
of Common Stock with an aggregate Current Market Price equal
to, the product of (a) the number of shares of Common Stock for
which this Warrant may be exercised multiplied by (b) the
Common Stock Exercise Price.
(ii) If the Warrant is exercised for Preferred Stock, the
subscription shall be accompanied by payment of, at the option
of the Holder, either (i) cash in an amount equal to, or (ii)
the number of Series C Preferred Partnership Units with an
aggregate Liquidation Preference Amount (including accrued and
unpaid quarterly distributions plus interest thereon) equal to,
the product of (a) the number of shares of Preferred Stock for
which this Warrant may be exercised multiplied by (b) the
Preferred Stock Exercise Price.
The Holder shall thereupon be entitled to receive the number of duly authorized,
validly issued, fully paid and nonassessable shares of Common Stock or Preferred
Stock (or Other Securities) determined as provided in Sections 2 through 4
hereof.
1.1.2 Put. This Warrant may be put by the Holder to the Company, in
whole but not in part, during normal business hours on any Business Day on or
prior to the Expiration Date, if any (the "Put Date"), by surrender of this
Warrant to the Company at its principal office identified in Section 11.2(a)
hereof, accompanied by a put notice in substantially the form attached to this
Warrant duly executed by the Holder, and the Holder shall thereupon be entitled
to receive, at the option of the Company, either:
(i) a number of duly authorized, validly issued, fully paid and
nonassessable shares of Common Stock (or Other Securities)
equal to:
2
<PAGE>
(a) the remainder of:
(x) the product of (aa) the number of shares of Common
Stock (or Other Securities) determined as provided in
Sections 2 through 4 hereof which the Holder would as
of the Put Date be entitled to receive upon exercise
of this Warrant multiplied by (bb) the Current Market
Price as of the Put Date of each such share of Common
Stock (or such Other Securities) so receivable upon
such exercise
minus
(y) $35,000,000
divided by
(b) the Current Market Price as of the Put Date of each such
share of Common Stock (or Other Securities); or
(ii) cash in an amount equal to the aggregate Current Market Price
as of the Put Date of the shares of Common Stock (or Other
Securities) that would have been received pursuant to
subsection (i) above.
For all purposes of this Warrant (other than this Section 1.1), any reference
herein to the exercise of this Warrant shall be deemed to include a reference to
the put of this Warrant to the Company and the receipt therefor of shares of
Common Stock (or Other Securities) or cash in accordance with the terms of this
Section 1.1.2.
1.2 Expiration Date. This Warrant shall have a perpetual term; provided,
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however, that this Warrant shall expire the earliest of (i) thirty (30) days
- -------
after the Operating Partnership has redeemed the Series C Preferred Partnership
Units pursuant to Section 5(a) or 5(b) of the Partnership Amendment; (ii) the
date on which the Holder exercises its Put Right (as defined in the Partnership
Amendment); or (iii) the Merger Date (as defined in the Partnership Amendment)
if the Operating Partnership redeems the Series C Preferred Partnership Units
pursuant to Section 5(c) of the Partnership Amendment (any such date hereinafter
referred to as the "Expiration Date").
1.3 Effectiveness of Exercise. The exercise of this Warrant shall be
-------------------------
deemed to have been effected immediately prior to the close of business on the
Business Day on which this Warrant shall have been surrendered to the Company as
provided in Section 1.1 hereof, and at such time the Person or Persons in whose
name or names any certificate or certificates for
3
<PAGE>
shares of Common Stock or Preferred Stock (or Other Securities) shall be
issuable upon such exercise as provided in Section 1.4 hereof shall be deemed to
have become the holder or holders of record thereof.
1.4 Delivery of Stock Certificates and Cash. As soon as practicable after
---------------------------------------
the exercise of this Warrant, and in any event within five (5) Business Days
thereafter, the Company will deliver to the Holder any cash to be paid to the
Holder pursuant to Section 1.1 hereof and, at its expense (including the payment
by it of any applicable issue taxes), will cause to be issued in the name of and
delivered to the Holder or, subject to Section 8 hereof, as the Holder (upon
payment by the Holder of any applicable transfer taxes) may direct, a
certificate or certificates for the number of duly authorized, validly issued,
fully paid and nonassessable shares of Common Stock or Preferred Stock (or Other
Securities) to which the Holder shall be entitled upon such exercise plus, in
lieu of any fractional share to which the Holder would otherwise be entitled,
cash in an amount equal to the same fraction of the Current Market Price per
share on the Business Day next preceding the date of such exercise.
1.5 Company to Reaffirm Obligations. The Company will, at the time of the
-------------------------------
exercise of this Warrant and upon the request of the Holder, acknowledge in
writing its continuing obligation to afford to the Holder all rights (including
without limitation the rights to registration, pursuant to the Registration
Rights Agreement referred to in Section 7 hereof, of the shares of Common Stock
or Preferred Stock (or Other Securities) issued upon such exercise) to which the
Holder shall continue to be entitled after such exercise in accordance with the
terms of this Warrant; provided, however, that if the Holder shall fail to make
-------- -------
any such request, such failure shall not affect the continuing obligation of the
Company to afford such rights to the Holder.
2. ADJUSTMENT OF STOCK ISSUABLE UPON EXERCISE
2.1 General; Number of Shares; Exercise Price.
-----------------------------------------
2.1.1 Common Stock. The number of shares of Common Stock which the
Holder shall be entitled to receive upon the exercise hereof shall be the number
of shares of Common Stock originally issuable upon the exercise of this Warrant
as adjusted, from time to time, pursuant to this Section 2. The aggregate
exercise price shall be determined by multiplying such number by the Common
Stock Exercise Price in effect on the date of such exercise. The "Common Stock
Exercise Price," which shall initially be the Initial Common Stock Exercise
Price, shall be adjusted and readjusted from time to time as provided in this
Section 2 and, as so adjusted and readjusted, shall remain in effect until a
further adjustment or readjustment thereof is required by this Section 2.
4
<PAGE>
2.1.2 Preferred Stock. The number of shares of Preferred Stock which
the Holder shall be entitled to receive upon the exercise hereof shall be the
number of shares of Preferred Stock originally issuable upon the exercise of
this Warrant as adjusted, from time to time, pursuant to this Section 2. The
aggregate exercise price shall be determined by multiplying such number by the
Preferred Stock Exercise Price in effect on the date of such exercise. The
"Preferred Stock Exercise Price" which shall initially be the Initial Preferred
Stock Exercise Price, shall be adjusted and readjusted from time to time as
provided in this Section 2 and, as so adjusted and readjusted, shall remain in
effect until a further adjustment or readjustment thereof is required by this
Section 2.
2.2 Adjustments for Dividends and Distributions.
-------------------------------------------
In case the Company at any time or from time to time after the date
hereof shall declare, order, pay or make a dividend or other distribution
(including without limitation any distribution of cash, other or additional
stock or other securities or property or the right to purchase any such
securities or property, by way of dividend or spin-off, reclassification,
recapitalization or similar corporate rearrangement or otherwise (except for
distributions in Common Stock)) on the Common Stock such that the aggregate
dividends and distributions per share paid on the Common Stock over the prior
twelve (12) month period exceed $2,675 per share (the "Dividend Cap") (the fair
market value of any non-cash distributions having been established in good faith
by the Board of Directors of the Company), then:
(i) in the case of a distribution in cash, the Common Stock
Exercise Price shall be reduced (without duplication) by an
amount equal to the per share amount of the cash dividend that
exceeds the Dividend Cap per share; and
(ii) in the case of any other distribution, the Company shall
provide the Holder with ten (10) Business Days' prior written
notice of such distribution and make appropriate provisions to
insure that the Holder shall thereafter have the right to
receive (without duplication), upon exercise of this Warrant,
in addition to the cash, Common Stock or Preferred Stock
immediately theretofore acquirable and recoverable upon
exercise of this Warrant, either, at the option of the Holder,
(a) such stock or other securities, property or rights as would
have been receivable by the Holder had this Warrant been
exercised prior to the time the Company took a record of
holders of Common Stock for purposes of entitling them to
receive such dividend or distribution, or (b) an amount of cash
equal to the fair market value of the property described in
clause (a) as of the date of such distribution, as determined
in good faith by the Board of Directors of the Company.
5
<PAGE>
The adjustment provided for in this Section 2.2 shall under no
circumstances reduce the Common Stock Exercise Price payable in connection with
any exercise of this Warrant below the par value per share issuable upon such
exercise.
2.3 Adjustments for Subdivision or Combination. If the Company at any
------------------------------------------
time or from time to time subdivides (by any stock split, stock dividend,
recapitalization or otherwise) its outstanding shares of Common Stock or
Preferred Stock into a greater number of shares or combines (by reverse stock
split or otherwise) its outstanding shares of Common Stock or Preferred Stock
into a lesser number of shares, immediately after the occurrence of such
subdivision or combination, the number of shares of Common Stock or Preferred
Stock, as applicable, for which this Warrant is exercisable shall be the number
of shares of Common Stock or Preferred Stock, as applicable, which a record
holder of the same number of shares of Common Stock or Preferred Stock, as
applicable, for which this Warrant is exercisable immediately prior to such
event would own or be entitled to receive in respect of such shares upon the
happening of such event. In the event an adjustment is made to the number of
shares of Common Stock or Preferred Stock for which this Warrant is exercisable,
(a) the Common Stock Exercise Price or the Preferred Stock Exercise Price, as
applicable, and, (b) in the case of an adjustment to the number of shares of
Common Stock for which this Warrant is exercisable, the Dividend Cap, shall be
adjusted by multiplying (i) each of the current Common Stock Exercise Price,
Preferred Exercise Price or Dividend Cap, as applicable, by (ii) a fraction
where the numerator is (y) the number of shares of Common Stock or Preferred
Stock, as applicable, for which this Warrant was exercisable immediately prior
to such adjustment over (z) the number of shares of Common Stock or Preferred
Stock, as applicable, for which this Warrant was exercisable immediately
following such adjustment.
2.4 Adjustments for Consolidation, Merger, Sale of Assets, Etc. In case
-----------------------------------------------------------
the Company after the date hereof (a) shall consolidate with or merge into any
other Person and shall not be the continuing or surviving corporation of such
consolidation or merger, or (b) shall permit any other Person to consolidate
with or merge into the Company and the Company shall be the continuing or
surviving Person but, in connection with such consolidation or merger, the
Common Stock, Preferred Stock or Other Securities shall be changed into or
exchanged for stock or other securities of any other Person or cash or any other
property, or (c) shall transfer all or substantially all of its properties or
assets to any other Person, or (d) shall effect a capital reorganization or
reclassification of the Common Stock, Preferred Stock or Other Securities, then,
and in the case of each such transaction, proper provision shall be made so
that, upon the basis and the terms and in the manner provided in this Warrant,
the Holder, upon the exercise hereof at any time after the consummation of such
transaction, shall be entitled to receive (at the aggregate Common Stock
Exercise Price or Preferred Stock Exercise Price, as applicable, in effect at
the time of such consummation for all Common Stock, Preferred Stock or Other
Securities issuable upon such exercise immediately prior to such consummation),
in lieu of the Common Stock, Preferred Stock or Other Securities
6
<PAGE>
issuable upon the exercise prior to such consummation, the greatest amount of
securities, cash or other property to which the Holder would actually have been
entitled as a shareholder upon such consummation if the Holder had exercised the
rights represented by this Warrant immediately prior thereto, subject to
adjustments (subsequent to such consummation) as nearly equivalent as possible
to the adjustments provided for in Section 2 hereof; provided, however, that if
-------- -------
a purchase, tender or exchange offer shall have been made to and accepted by the
holders of more than fifty percent (50%) of the outstanding shares of Common
Stock, and if the Holder so designates in a notice given to the Company on or
before the date immediately preceding the date of the consummation of such
transaction, the Holder shall be entitled to receive upon such exercise the
greatest amount of securities, cash or other property to which the Holder would
actually have been entitled as a shareholder if the Holder had exercised such
Warrants prior to the expiration of such purchase, tender or exchange offer and
accepted such offer, subject to adjustments (from and after the consummation of
such purchase, tender or exchange offer) as nearly equivalent as possible to the
adjustments provided for in Section 2 hereof.
2.5 Assumption of Obligations. Notwithstanding anything contained in this
-------------------------
Warrant to the contrary, the Company will not effect any of the transactions
described in clauses (a) through (d) of Section 2.4 hereof unless, prior to the
consummation thereof, each person (other than the Company) which may be required
to deliver any stock, securities, cash or property upon the exercise of this
Warrant as provided herein shall by written instrument delivered to, and
reasonably satisfactory to, the Holder, assume (a) the obligations of the
Company under this Warrant (and if the Company shall survive the consummation of
such transaction, such assumption shall be in addition to, and shall not release
the Company from, any continuing obligations of the Company under this Warrant),
(b) the obligations of the Company under the Registration Rights Agreement and
(c) the obligation to deliver to the Holder such shares of stock, securities,
cash or property as, in accordance with the provisions of Section 2.4, the
Holder may be entitled to receive, and such Person shall have similarly
delivered to the Holder an opinion of counsel for such Person, which counsel
shall be reasonably satisfactory to the Holder, stating that this Warrant shall
thereafter continue in full force and effect and the terms hereof (including
without limitation all of the provisions of this Section 2) shall be applicable
to the stock, securities, cash or property which such Person may deliver upon
any exercise of this Warrant or the exercise of any rights pursuant hereto.
3. OTHER DILUTIVE EVENTS. In case any event shall occur as to which the
provisions of Section 2 hereof are not strictly applicable but the failure to
make any adjustment would not, in the opinion of the Holder, fairly protect the
purchase rights represented by this Warrant in accordance with the essential
intent and principles of such Section, then, in each such case, at the request
of the Holder, the Company shall appoint a firm of independent investment
bankers of recognized national standing (which shall be completely independent
of the Company and shall be satisfactory to the Holder), which shall give their
opinion upon the
7
<PAGE>
adjustment, if any, on a basis consistent with the essential intent and
principles established in Section 2 hereof, necessary to preserve, without
dilution, the purchase rights represented by this Warrant. Upon receipt of such
opinion, the Company will promptly mail a copy thereof to the Holder and shall
make the adjustments described therein.
4. NO DILUTION OR IMPAIRMENT. The Company will not, by amendment of its
articles of incorporation or through any consolidation, merger, reorganization,
transfer of assets, dissolution, issue or sale of securities or any other
voluntary action, avoid or seek to avoid the observance or performance of any of
the terms of this Warrant, but will at all times in good faith assist in the
carrying out of all such terms and in the taking of all such action as may be
necessary or appropriate in order to protect the rights of the holder of this
Warrant against dilution or other impairment. Without limiting the generality of
the foregoing, the Company (a) will not permit the par value of any shares of
stock receivable upon the exercise of this Warrant to exceed the amount payable
therefor upon such exercise, (b) will take all such action as may be necessary
or appropriate in order that the Company may validly and legally issue fully
paid and nonassessable shares of stock on the exercise of the Warrants from time
to time outstanding, and (c) will not take any action which results in any
adjustment of the Common Stock Exercise Price or the Preferred Stock Exercise
Price if the total number of shares of Common Stock, Preferred Stock (or Other
Securities) issuable after the action upon the exercise of all of the Warrants
would exceed the total number of shares of Common Stock, Preferred Stock (or
Other Securities) then authorized by the Company's articles of incorporation and
available for the purpose of issue upon such exercise.
5. ACCOUNTANTS' REPORT AS TO ADJUSTMENTS. In each case of any adjustment or
readjustment in the shares of Common Stock or Preferred Stock (or Other
Securities) issuable upon the exercise of this Warrant, the Company will
promptly compute such adjustment or readjustment in accordance with the terms of
this Warrant. In the event of a dispute in connection with such adjustment, the
Company at its own expense will cause independent certified public accountants
of recognized national standing (which may be the regular auditors of the
Company) selected by the Company to verify such computation (other than any
computation of the fair value of property as determined in good faith by the
Board of Directors of the Company) and prepare a report setting forth such
adjustment or readjustment and showing in reasonable detail the method of
calculation thereof and the facts upon which such adjustment or re-adjustment is
based. The Company will forthwith mail a copy of each such report to the Holder
and will, upon the written request at any time of the Holder, furnish to the
Holder a like report setting forth the Common Stock Exercise Price and the
Preferred Stock Exercise Price at the time in effect and showing in reasonable
detail how it was calculated. The Company will also keep copies of all such
reports at its office maintained pursuant to Section 11.2(a) hereof and will
cause the same to be available for inspection at such office during normal
business hours by the Holder or any prospective purchaser of a Warrant
designated by the holder thereof.
8
<PAGE>
6. NOTICES OF CORPORATE ACTION. In the event of
(a) any taking by the Company of a record of the holders of any class
of securities for the purpose of determining the holders thereof who are
entitled to receive any dividend or other distribution (other than the
Company's regular quarterly cash dividends provided that any such dividend
does not cause the Company's aggregate distributions for the prior twelve
(12) month period to exceed the Dividend Cap), or any right to subscribe
for, purchase or otherwise acquire any shares of stock of any class or any
other securities or property, or to receive any other right, or
(b) any capital reorganization of the Company, any reclassification
or recapitalization of the capital stock of the Company or any
consolidation or merger involving the Company and any other Person or any
transfer of all or substantially all the assets of the Company to any other
Person, or
(c) any voluntary or involuntary dissolution, liquidation or winding-
up of the Company,
the Company will mail to the Holder a notice specifying (i) the date or expected
date on which any such record is to be taken for the purpose of such dividend,
distribution or right, and the amount and character of such dividend,
distribution or right and (ii) the date or the date on which any such
reorganization, reclassification, recapitalization, consolidation, merger,
transfer, dissolution, liquidation or winding-up is to take place, the time, if
any such time is to be fixed, as of which the holders of record of Common Stock
or Preferred Stock (or Other Securities) shall be entitled to exchange their
shares of Common Stock or Preferred Stock (or Other Securities) for the
securities or other property deliverable upon such reorganization,
reclassification, recapitalization, consolidation, merger, transfer,
dissolution, liquidation or winding-up and a description in reasonable detail of
the transaction. Such notice shall be mailed at least thirty (30) days prior to
the date therein specified.
7. REGISTRATION OF COMMON STOCK OR PREFERRED STOCK. The shares of Common
Stock and Preferred Stock (and Other Securities) issuable upon exercise of this
Warrant shall constitute Registrable Securities (as such term is defined in the
Registration Rights Agreement). The Holder of this Warrant shall be entitled to
all of the benefits afforded to a holder of any such Registrable Securities
under the Registration Rights Agreement and the Holder, by its acceptance of
this Warrant, agrees to be bound by and agrees to the terms and conditions of
the Registration Rights Agreement applicable to the Holder as a holder of such
Registrable Securities. If requested by the Company, the Holder shall execute a
counterpart signature page to the Registration Rights Agreement.
9
<PAGE>
8. RESTRICTIONS ON TRANSFER.
8.1 Not Divisible. This Warrant may not be divided and may only be
-------------
transferred in whole.
8.2 Restrictive Legends. Except as otherwise permitted by this Section 8,
-------------------
each certificate for Common Stock or Preferred Stock (or Other Securities)
issued upon the exercise of this Warrant, each certificate issued upon the
direct or indirect transfer of any such Common Stock or Preferred Stock (or
Other Securities), this Warrant originally issued pursuant to the Securities
Purchase Agreement and each Warrant issued upon direct or indirect transfer or
in substitution for any Warrant pursuant to Section 11 hereof shall be
transferable only upon satisfaction of the conditions specified in Section 6 of
the Securities Purchase Agreement and in this Section 8 and shall be stamped or
otherwise imprinted with legends in substantially the form required by Section
6.1 of the Securities Purchase Agreement.
Notwithstanding any other provision of this Section 8 or of the Securities
Purchase Agreement, no opinion of counsel shall be necessary for a transfer of
Restricted Securities by the holder thereof to a subsidiary, shareholder,
partner or other affiliate of such holder, if the transferee agrees in writing
to be subject to the terms hereof to the same extent as if such transferee were
the original Holder of this Warrant.
9. AVAILABILITY OF INFORMATION. If the Company shall have filed a
registration statement pursuant to the requirements of Section 12 of the
Exchange Act or a registration statement pursuant to the requirements of the
Securities Act, the Company will comply with the reporting requirements of
Sections 13 and 15(d) of the Exchange Act and will comply with all other public
information reporting requirements of the Commission (including Rule 144 and
144A promulgated by the Commission under the Securities Act) from time to time
in effect and relating to the availability of an exemption from the Securities
Act for the sale of any Restricted Securities. The Company will also cooperate
with each holder of any Restricted Securities in supplying such information as
may be necessary for such holder to complete and file any information reporting
forms presently or hereafter required by the Commission as a condition to the
availability of an exemption from the Securities Act for the sale of any
Restricted Securities. The Company will furnish to the Holder of this Warrant,
promptly upon their becoming available, copies of all financial statements,
reports, notices and proxy statements sent or made available generally by the
Company to its stockholders, and copies of all regular and periodic reports and
all registration statements and prospectuses filed by the Company with any
securities exchange or with the Commission.
10. RESERVATION OF STOCK. The Company will at all times reserve and keep
available, solely for issuance and delivery upon exercise of this Warrant, the
number of shares of Common Stock and Preferred Stock (or Other Securities)
from time to time issuable upon exercise of this Warrant. All shares of Common
Stock and Preferred Stock (or Other Securities)
10
<PAGE>
issuable upon exercise of this Warrant shall be duly authorized and, when issued
upon such exercise, shall be validly issued and, in the case of shares, fully
paid and nonassessable with no liability on the part of the holders thereof.
11. OWNERSHIP, TRANSFER AND SUBSTITUTION OF WARRANTS.
11. Ownership of Warrants. The Company may treat the person in whose name
---------------------
this Warrant is registered on the register kept at the office of the Company
maintained pursuant to Section 11.2(a) hereof as the owner and Holder thereof
for all purposes, notwithstanding any notice to the contrary. This Warrant may
be exercised by a new Holder without a new Warrant first having been issued.
11. Office; Transfer and Exchange of Warrants:
-----------------------------------------
(a) Company will maintain an office in Norcross, Georgia where
notices, presentations and demands in respect of this Warrant may be made
upon it. Such office shall be maintained at 4497 Park Drive, Norcross,
Georgia 30093 until such time as the Company shall notify the holders of
this Warrant of any change of location of such office.
(b) The Company shall cause to be kept at its office maintained
pursuant to Section 11.2(a) hereof a register for the registration and
transfer of this Warrant. The name and address of the Holder of this
Warrant, the transfers thereof and the names and addresses of transferees
of this Warrant shall be registered in such register. The Person in whose
name this Warrant shall be so registered shall be deemed and treated as the
owner and Holder thereof for all purposes of this Warrant, and the Company
shall not be affected by any notice or knowledge to the contrary.
(c) Upon the surrender of this Warrant, properly endorsed, for
registration of transfer or for exchange at the office of the Company
maintained pursuant to Section 11.2(a) hereof, the Company at its expense
will execute and deliver to or upon the order of the Holder thereof a new
Warrant of like tenor, in the name of such Holder or as such Holder (upon
payment by such holder of any applicable transfer taxes) may direct,
calling in the aggregate on the face thereof for the number of shares of
Common Stock or Preferred Stock called for on the face of the Warrant so
surrendered.
11. Replacement Of Warrant. Upon receipt of evidence reasonably
----------------------
satisfactory to the Company of the loss, theft, destruction or mutilation of
this Warrant and, in the case of any such mutilation, upon surrender of such
Warrant for cancellation at the office of the Company maintained pursuant to
Section 11.2(a) hereof, the Company at its expense will execute and deliver, in
lieu thereof, a new Warrant of like tenor and dated the date hereof. The Holder
shall provide such security or indemnity as the Company may require to hold the
Company and its agents harmless from such replacement of the Warrant.
11
<PAGE>
12. DEFINITIONS.
Business Day. Any day other than a Saturday or Sunday or a day on which
commercial banking institutions in Boston, Massachusetts, New York, New York or
Atlanta, Georgia are authorized by law to be closed. Any reference to "days"
(unless Business Days are specified) shall mean calendar days.
Commission. The Securities and Exchange Commission or any other federal
agency at the time administering the Securities Act.
Common Stock. As defined in the introduction to this Warrant, such term to
include any stock into which such Common Stock shall have been changed or any
stock resulting from any reclassification of such Common Stock, and all other
stock of any class or classes (however designated) of the Company the holders of
which have the right, without limitation as to amount, either to all or to a
share of the balance of current dividends and liquidating dividends after the
payment of dividends and distributions on any shares entitled to preference.
Common Stock Exercise Price. As defined in Section 2.1.1.
Company. As defined in the introduction to this Warrant, such term to
include any corporation which shall succeed to or assume the obligations of the
Company hereunder in compliance with Section 2 hereof.
Current Market Price. With respect to the Common Stock, on any date
specified herein, the average of the Market Price during the period of the most
recent 10 consecutive trading days ending on such date.
Exchange Act. The Securities Exchange Act of 1934, or any similar federal
statute, and the rules and regulations of the Commission thereunder, all as the
same shall be in effect at the time.
Expiration Date. As defined in Section 1.2 hereof.
Holder. The original holder of this Warrant identified in the introduction
and any Person to whom this Warrant is transferred.
Initial Common Stock Exercise Price. As defined in the introduction to
this Warrant.
Liquidation Preference. The Liquidation Preference of the Company's Series
A Preferred Stock as set forth in the Company's Articles of Amendment relating
to the Preferred Stock.
12
<PAGE>
Liquidation Preference Amount. As defined in the Partnership Amendment.
Market Price. With respect to the Common Stock, on any date shall mean the
last sale price, regular way, or, in case no such sale takes place on such day,
the average of the closing bid and asked prices, regular way, in either case as
reported in the principal consolidated transaction reporting system with respect
to securities listed or admitted to trading on the New York Stock Exchange or,
if the Common Stock is not listed or admitted to trading on the New York Stock
Exchange, as reported in the principal consolidated transaction reporting system
with respect to securities listed on the principal national securities exchange
on which the Common Stock is listed or admitted to trading or, if the Common
Stock is not listed or admitted to trading on any national securities exchange,
the last quoted price, or if not so quoted, the average of the high bid and low
asked prices in the over-the-counter market, as reported by the NASD Automated
Quotation System or, if such system is no longer in use, the principal other
automated quotation system that may then be in use, or if the Common Stock is
not quoted by any such organization, the average of the closing bid and asked
prices as furnished by a professional market maker making a market in the Common
Stock that is selected by the Board of Directors of the Company, or, if there is
no such professional market maker, such amount as an independent investment
banking firm selected by the Board of Directors of the Company determines to be
the value of a share of Common Stock.
NASD. The National Association of Securities Dealers, Inc.
Operating Partnership. Weeks Realty, L.P., a Georgia limited partnership.
Other Securities. Any stock (other than Common Stock or Preferred Stock)
and other securities of the Company or any other Person which the Holder at any
time shall be entitled to receive, or shall have received, upon the exercise of
the Warrant, in lieu of or in addition to Common Stock or Preferred Stock, or
which at any time shall be issuable or shall have been issued in exchange for or
in replacement of Common Stock, Preferred Stock or Other Securities pursuant to
Section 3 hereof or otherwise.
Partnership Agreement. The Second Amended and Restated Agreement of Limited
Partnership of the Operating Partnership, as amended.
Partnership Amendment. The Fourteenth Amendment to the Partnership
Agreement by and between the Operating Partnership and the Purchaser.
Person. A corporation, an association, a partnership, an organization, a
business, an individual, a government or political subdivision thereof or a
governmental agency.
13
<PAGE>
Preferred Stock. As defined in the introduction to this Warrant, such term
to include any stock into which such Preferred Stock shall have been changed or
any stock resulting from any reclassification of such Preferred Stock.
Preferred Stock Exercise Price. As defined in the introduction to this
Warrant.
Registration Rights Agreement. The Registration Rights Agreement in the
form of Exhibit B to the Securities Purchase Agreement, as from time to time in
effect.
Restricted Securities. All of the following: (a) this Warrant which shall
bear the legend or legends referred to in Section 8 hereof, (b) any shares of
Common Stock or Preferred Stock (or Other Securities) which have been issued
upon the exercise of this Warrant and which are evidenced by a certificate or
certificates bearing the applicable legend or legends referred to in such
Section, (c) unless the context otherwise requires, any shares of Common Stock
or Preferred Stock (or Other Securities) which are at the time issuable upon the
exercise of this Warrant and which, when so issued, will be evidenced by a
certificate or certificates bearing the applicable legend or legends referred to
in such Section.
Securities Act. The Securities Act of 1933, or any similar federal
statute, and the rules and regulations of the Commission thereunder, all as the
same shall be in effect at the time.
Securities Purchase Agreement. As defined in the introduction to this
Warrant.
Series C Preferred Partnership Units. Series C Preferred Partnership Units
of the Operating Partnership.
13. REMEDIES. The Company stipulates that the remedies at law of the Holder in
the event of any default or threatened default by the Company in the performance
of or compliance with any of the terms of this Warrant are not and will not be
adequate and that, to the fullest extent permitted by law, such terms may be
specifically enforced by a decree for the specific performance of any agreement
contained herein or by an injunction against a violation of any of the terms
hereof or otherwise.
14. NO LIABILITIES AS STOCKHOLDER. Nothing contained in this Warrant shall be
construed as conferring upon the Holder any rights as a stockholder of the
Company or as imposing any obligation on the Holder to purchase any securities
or as imposing any liabilities on the Holder as a stockholder of the Company,
whether such obligation or liabilities are asserted by the Company or by
creditors of the Company.
15. NOTICES. Except as otherwise provided in this Warrant, notices and other
communications under this Warrant shall be in writing and shall be delivered, or
mailed by registered or certified mail, return receipt requested, or by a
nationally recognized overnight
14
<PAGE>
courier, postage prepaid, addressed, (a) if to the Holder, at the address set
forth in the register kept at the office of the Company maintained pursuant to
Section 11.2(a) hereof or such other address as the Holder shall have furnished
to the Company in writing, or (b) if to any other holder of any Securities, at
such address as such other holder shall have furnished to the Company in
writing, or, until any such other holder so furnishes to the Company an address,
then to and at the address of the last holder of such Securities who has
furnished an address to the Company, or (c) if to the Company, at its address
maintained pursuant to Section 11.2(a) hereof, to the attention of the
President, or at such other address, or to the attention of such other officer,
the Company shall have furnished to the Holder and each such other holder in
writing, with a copy to William B. Fryer, King & Spalding, 191 Peachtree Street,
Atlanta, Georgia 30303-1703. This Warrant and all other documents delivered in
connection with the transactions contemplated by the Securities Purchase
Agreement embody the entire agreement and understanding between the Holder and
the Company and supersedes all prior agreements and understandings relating to
the subject matter hereof.
16. GOVERNING LAW. This Warrant shall be construed and enforced in accordance
with and governed by the laws of the State of Georgia.
17. AMENDMENTS. This Warrant and any term hereof may be changed, waived,
discharged or terminated only by an instrument in writing signed by the party
against which enforcement of such change, waiver, discharge or termination is
sought.
18. HEADINGS. The Section headings in this Warrant are for purposes of
convenience only and shall not constitute a part hereof.
WEEKS CORPORATION
By:________________________
Name:
Title:
15
<PAGE>
FORM OF SUBSCRIPTION
--------------------
Date:
Weeks Corporation
[address]
The undersigned registered Holder of the within Warrant hereby irrevocably
exercises such Warrant for, and purchases thereunder, for _______ shares of
[COMMON STOCK/PREFERRED STOCK] and herewith makes payment of [CASH EQUAL TO OR
_________ SHARES OF COMMON STOCK/PREFERRED UNITS WITH A VALUE OF] $__________
therefor, and requests that a certificate for such shares be issued in the name
of the undersigned and be delivered to the undersigned at the address stated
below.
BY: AEW TSF, LLC., its General Partner
By:______________________
Name:
Title:
Address: c/o AEW Capital Management, L.P.
225 Franklin Street
Boston, MA 02110
16
<PAGE>
FORM OF PUT NOTICE
------------------
Date:
Weeks Corporation
[ADDRESS]
The undersigned registered Holder of the within Warrant hereby irrevocably
puts to the Company such Warrant with respect to, at the option of the Company,
either (i) _______ shares of Common Stock or (ii) cash in the amount of
$__________, which such holder would be entitled to receive upon the put hereof,
and, if the Company elects to issue shares of Common Stock in respect of such
put, the undersigned requests that a certificate for such shares be issued in
the name of the undersigned and be delivered to the undersigned at the address
stated below.
Signed: AEW TARGETED SECURITIES FUND, L.P.
By: AEW TSF, L.L.C., its General Partner
By: AEW TSF, INC., its General Partner
By:______________________
Name:
Title:
Address: c/o AEW Capital Management, L.P.
225 Franklin Street
Boston, MA 02110
17
<PAGE>
EXHIBIT 4.8
____________________________________________
WEEKS CORPORATION
AND
CODINA GROUP, INC.
____________________________________________
AMENDED AND RESTATED WARRANT AGREEMENT
Effective as of February 24, 1998
____________________________________________
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
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<S> <C>
ARTICLE I DEFINITIONS.......................................................................... 1
1.1 Certain Definitions........................................................... 1
-------------------
ARTICLE II ISSUANCE AND EXECUTION OF WARRANT CERTIFICATES....................................... 3
Section 2.1 ISSUANCE OF WARRANT CERTIFICATES..................................... 3
Section 2.2 FORM OF WARRANT CERTIFICATE.......................................... 3
Section 2.3 EXECUTION AND DELIVERY OF WARRANT
CERTIFICATES......................................................... 3
Section 2.4 TEMPORARY WARRANT CERTIFICATES....................................... 4
Section 2.5 PAYMENT OF TAXES..................................................... 4
Section 2.6 DEFINITION OF HOLDER................................................. 4
ARTICLE III WARRANT PRICE, DURATION AND EXERCISE OF WARRANTS..................................... 5
Section 3.1 WARRANT PRICE........................................................ 5
Section 3.2 DURATION OF WARRANTS................................................. 5
Section 3.3 EXERCISE OF WARRANTS................................................. 5
Section 3.4 RESERVATION OF SHARES................................................ 6
ARTICLE IV OTHER TERMS OF WARRANTS.............................................................. 6
Section 4.1 ADJUSTMENT OF EXERCISE PRICE AND
NUMBER OF SHARES PURCHASABLE OR NUMBER OF WARRANTS................... 6
ARTICLE V REGISTRATION, EXCHANGE, TRANSFER AND SUBSTITUTION OF WARRANT CERTIFICATES............ 10
Section 5.1 REGISTRATION, EXCHANGE AND TRANSFER OF
WARRANT CERTIFICATES................................................. 10
Section 5.2 MUTILATED, DESTROYED, LOST OR STOLEN
WARRANT CERTIFICATES................................................. 10
Section 5.3 PERSONS DEEMED OWNERS................................................ 11
Section 5.4 CANCELLATION OF WARRANT CERTIFICATES................................. 11
ARTICLE VI OTHER PROVISIONS RELATING TO RIGHTS OF HOLDERS OF WARRANT CERTIFICATES............... 11
Section 6.1 NO RIGHTS AS SHAREHOLDER CONFERRED BY
WARRANTS OR WARRANT CERTIFICATES..................................... 11
Section 6.2 HOLDER OF WARRANT CERTIFICATE MAY
ENFORCE RIGHTS....................................................... 11
ARTICLE VII CONCERNING THE COMPANY AS WARRANT AGENT.............................................. 12
</TABLE>
i
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<TABLE>
<S> <C>
Section 7.1 WARRANT AGENT...........................................................12
Section 7.2 DOCUMENTS...............................................................12
ARTICLE VIII MISCELLANEOUS...........................................................................12
Section 8.1 CONSOLIDATIONS AND MERGERS OF THE COMPANY AND SALES, LEASES AND
CONVEYANCES PERMITTED SUBJECT TO CERTAIN CONDITIONS.....................12
Section 8.2 RIGHTS AND DUTIES OF SUCCESSOR
CORPORATION.............................................................12
Section 8.3 AMENDMENT...............................................................12
Section 8.4 NOTICES TO WARRANTHOLDERS...............................................13
Section 8.5 ADDRESSES...............................................................13
Section 8.6 GOVERNING LAW...........................................................13
Section 8.7 DELIVERY OF PROSPECTUS..................................................13
Section 8.8 OBTAINING OF GOVERNMENTAL APPROVALS.....................................13
Section 8.9 PERSONS HAVING RIGHTS UNDER WARRANT
AGREEMENT...............................................................14
Section 8.10 HEADINGS................................................................14
Section 8.11 COUNTERPARTS............................................................14
Section 8.12 INSPECTION OF AGREEMENT.................................................14
Section 8.13 TRANSFERS IN COMPLIANCE WITH
APPLICABLE LAW..........................................................14
</TABLE>
ii
<PAGE>
Testimonium
Signatures
Exhibit A - Form of Warrant Certificate
iii
<PAGE>
AMENDED AND RESTATED WARRANT AGREEMENT
--------------------------------------
THIS AMENDED AND RESTATED WARRANT AGREEMENT, effective as of February 24,
1998 (the "Agreement"), between Weeks Corporation, a Georgia corporation (the
---------
"Company"), and Armando Codina, an individual resident of the State of Florida
- --------
("Codina Group").
------------
WHEREAS, the Company and Codina entered into that certain Warrant Agreement
dated as of February 4, 1998 (the "Prior Agreement"), pursuant to which the
---------------
Company issued and sold to the Codina warrant certificates (such warrant
certificates and other warrant certificates issued pursuant to the Prior
Agreement collectively referred to herein as the "Warrant Certificates" and
--------------------
individually as a "Warrant Certificate") evidencing 70,000 warrants
-------------------
(collectively, the "Warrants" or, individually, a "Warrant") representing the
-------- -------
right to purchase an aggregate of 70,000 shares of the Company's Common Stock;
WHEREAS, the Company is the warrant agent in connection with the issuance,
exchange, exercise and replacement of the Warrant Certificates; and
WHEREAS, the Prior Agreement set forth, among other things, the form and
provisions of the Warrant Certificates and the terms and conditions upon which
they may be issued, exchanged, exercised and replaced, and the Company and
Codina desire to amend and restate the Prior Agreement in its entirety pursuant
to this Agreement.
NOW, THEREFORE, in consideration of the premises and of the mutual
agreements herein contained, the parties hereto agree as follows:
ARTICLE I
DEFINITIONS
1.1 Certain Definitions. For the purposes of this Agreement, the
-------------------
following terms have the meanings set forth below:
"Affiliate" has the same meaning as in Rule 12b-2 promulgated under
---------
the Exchange Act.
"Agreement" is defined in the Recitals.
---------
"Business Day" means any day which is neither a Saturday or Sunday nor
------------
a legal holiday on which banks are authorized or required to be closed in
Atlanta, Georgia.
"Codina Group" is defined in the Recitals.
------------
<PAGE>
"Common Stock" means shares now or hereafter authorized of any class
------------
of common stock of the Company and any other capital stock of the Company,
however designated, that has the right (subject to any prior rights of the
Company's 8.00% Series A Cumulative Redeemable Preferred Stock and any other
class or series of preferred stock issued by the Company) to participate in any
distribution of the assets upon voluntary or involuntary liquidation,
dissolution or winding up of the Company or in the earnings of the Company
without limit as to per share amount, and shall include, without limitation, the
presently authorized 100,000,000 shares of the Company's common stock, par
value $.01 per share.
"Company" is defined in the Recitals.
-------
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
------------
"Exercise Price" means $32.75 per share of Common Stock issuable upon
--------------
exercise of the Warrants, as adjusted from time to time in accordance with this
Agreement.
"Expiration Date" is defined in Section 3.2.
---------------
"Governmental Authority" means any nation or government, any state or
----------------------
other political subdivision thereof and any entity exercising executive,
legislative, judicial, regulatory or administrative functions of or pertaining
to government.
"Holder" is defined in Section 2.6.
------
"Market Price" is defined in Section 4.1(e).
------------
"NYSE" is defined in Section 4.1(e).
----
"Person" means any natural person, corporation, partnership, limited
------
liability company, firm, association, government, governmental agency or any
other entity, whether acting in an individual, fiduciary or other capacity.
"Securities Act" means the Securities Act of 1933, as amended.
--------------
"State" means any State of the United States or the District of
-----
Columbia.
"Transfer Agent" is defined in Section 3.4.
--------------
"Valuation Date" is defined in Section 4.1(h).
--------------
"Warrant" or "Warrants" is defined in the Recitals.
------- --------
"Warrant Certificate" or "Warrant Certificates" is defined in the
------------------- --------------------
Recitals.
"Warrant Register" is defined in Section 5.1.
----------------
-2-
<PAGE>
ARTICLE II
ISSUANCE AND EXECUTION
OF WARRANT CERTIFICATES
Section II.1 ISSUANCE OF WARRANT CERTIFICATES. Upon issuance, each
Warrant Certificate shall evidence one or more Warrants. Each Warrant evidenced
thereby shall represent the right, subject to the provisions contained herein
and therein, to purchase one (1) share of Common Stock.
Section II.2 FORM OF WARRANT CERTIFICATE. The Warrant Certificates
(including the Form(s) of Exercise and Assignment to be set forth on the reverse
thereof) shall be in substantially the form set forth in Exhibit A hereto, shall
---------
be printed, lithographed or engraved on steel engraved borders (or in any other
manner determined by the officers executing such Warrant Certificates, with the
execution thereof by such officers conclusively evidencing such determination)
and may have such letters, numbers or other marks of identification and such
legends or endorsements placed thereon as may be required to comply with any law
or with any rule or regulation made pursuant thereto or with any rule or
regulation of any securities exchange on which the Warrants may be listed or as
may, consistently herewith, be determined by the officers executing such Warrant
Certificates, with the execution thereof by such officers conclusively
evidencing such determination.
Section II.3 EXECUTION AND DELIVERY OF WARRANT CERTIFICATES. The Warrant
Certificates shall be executed on behalf of the Company by its Chairman and
Chief Executive Officer, its President or its Chief Financial Officer, under its
corporate seal reproduced thereon attested to by its Treasurer or Secretary. The
signature of any of these officers on the Warrant Certificates may be manual or
facsimile.
Warrant Certificates evidencing the right to purchase a number of shares
of Common Stock having an aggregate par value not exceeding $700.00 (except as
provided in Sections 2.4, 3.3(b), 5.1 and 5.2) may be executed and delivered by
---------------------------------
the Company upon the execution of this Warrant Agreement or from time to time
thereafter. Subsequent to such original issuance of the Warrant Certificates,
the Company shall execute and deliver a Warrant Certificate only if the Warrant
Certificate is issued in exchange or in substitution for one or more previously
executed and delivered Warrant Certificates or in connection with their
transfer, as hereinafter provided.
Each Warrant Certificate shall be dated the date of its execution by the
Company.
No Warrant Certificate shall be entitled to any benefit under this
Agreement or be valid or obligatory for any purpose, and no Warrant evidenced
thereby shall be exercisable, until such Warrant Certificate has been duly
executed by the Company. Such signature by the Company
-3-
<PAGE>
shall be conclusive evidence, and the only evidence, that the Warrant
Certificate so executed has been duly issued hereunder.
Warrant Certificates bearing the manual or facsimile signatures of
individuals who were at the time the proper officers of the Company shall bind
the Company, notwithstanding that such individuals or any of them have ceased to
hold such offices prior to the delivery of such Warrant Certificates.
Section II.4 TEMPORARY WARRANT CERTIFICATES. Pending the preparation of
definitive Warrant Certificates, the Company may execute and deliver temporary
Warrant Certificates which are printed, lithographed, typewritten, mimeographed
or otherwise produced substantially of the tenor of the definitive Warrant
Certificates in lieu of which they are issued and with such appropriate
insertions, omissions, substitutions and other variations as the officers
executing such Warrant Certificates may determine, with the execution thereof by
such officers conclusively evidencing such determination.
If temporary Warrant Certificates are issued, the Company will cause
definitive Warrant Certificates to be prepared without unreasonable delay. After
the preparation of definitive Warrant Certificates, the temporary Warrant
Certificates shall be exchangeable for definitive Warrant Certificates upon
surrender of the temporary Warrant Certificates to the Company, without charge
to the Holder. Upon surrender for cancellation of any one or more temporary
Warrant Certificates, the Company shall execute and deliver in exchange therefor
definitive Warrant Certificates representing the same aggregate number of
Warrants. Until so exchanged, the temporary Warrant Certificates shall in all
respects be entitled to the same benefits under this Agreement as definitive
Warrant Certificates.
Section II.5 PAYMENT OF TAXES. The Company will pay all stamp taxes and
other duties, if any, arising out of or related to the execution and delivery of
this Agreement or the original issuance of the Warrant Certificates, under the
laws of the United States of America or any State or political subdivision
thereof.
Section II.6 DEFINITION OF HOLDER. The term "Holder" as used herein
------
shall mean the Person in whose name at the time of determination such Warrant
Certificate shall be registered upon the Warrant Register to be maintained by
the Company for that purpose pursuant to Section 5.1.
-----------
ARTICLE III
WARRANT PRICE, DURATION AND EXERCISE OF WARRANTS
Section III.1 WARRANT PRICE. During the period set forth in Section 3.2,
-----------
each Warrant shall entitle the Holder thereof, subject to the provisions of this
Agreement, to purchase from the Company one share of Common Stock, subject to
adjustment as provided in Article IV, at the Exercise Price.
-4-
<PAGE>
Section III.2 DURATION OF WARRANTS. Any Warrant evidenced by a Warrant
Certificate may be exercised by the Holder thereof at any time and from time to
time during the period beginning on August 24, 1999, and at or before 5:00 p.m.
(Atlanta time) on February 24, 2008 (the "Expiration Date"), only upon the terms
---------------
and subject to the conditions set forth herein and in the applicable Warrant
Certificate. Each Warrant not exercised at or before 5:00 p.m. (Atlanta time)
on the Expiration Date shall become void, and all rights of the Holder of the
Warrant Certificate evidencing such Warrant under this Agreement or otherwise
shall cease.
Section III.3 EXERCISE OF WARRANTS. (a) During the period specified in
Section 3.2, any whole number of Warrants may be exercised by surrendering the
- -----------
Warrant Certificate evidencing such Warrants at the place or at the places set
forth in the Warrant Certificate, with the purchase form set forth in the
Warrant Certificate duly executed, accompanied by payment in full, in lawful
money of the United States of America, in cash or by certified check or official
bank check or by wire transfer in immediately available funds, of the Exercise
Price for each Warrant exercised. The date on which payment in full of the
Exercise Price for a Warrant and the duly executed and completed Warrant
Certificate are received by the Company shall be deemed to be the date on which
such Warrant is exercised.
(b) As soon as practicable after the exercise of any Warrants, the Company
shall issue to or upon the order of the Holder of the Warrant Certificate
evidencing such Warrants, a certificate or certificates representing the number
of shares of Common Stock to which such Holder is entitled in such name or names
as may be directed by such Holder. If fewer than all of the Warrants evidenced
by such Warrant Certificate are exercised, the Company shall execute and deliver
a new Warrant Certificate evidencing the number of Warrants remaining
unexercised.
(c) The Company shall not be required to pay any stamp or other tax or
other governmental charge required to be paid in connection with any transfer
involved in the issuance of the Common Stock. In the event that any such
transfer is involved, the Company shall not be required to issue or deliver any
shares of Common Stock until such tax or other charge shall have been paid or it
has been established to the Company's satisfaction that no such tax or other
charge is due.
Section III.4 RESERVATION OF SHARES. For the purpose of enabling it to
satisfy any obligation to issue shares of Common Stock upon exercise of
Warrants, the Company will, at all times through the close of business on the
Expiration Date, reserve and keep available, free from preemptive rights, out of
the aggregate of its authorized but unissued capital stock or its authorized and
issued capital stock held in its treasury, for the purpose of enabling it to
satisfy any obligation to issue Common Stock upon exercise of Warrants, the
maximum number of shares of Common Stock which may then be deliverable upon the
exercise of all outstanding Warrants. The transfer agent for shares of Common
Stock of the Company (the "Transfer Agent") and every subsequent transfer agent
--------------
for any shares of the Company's capital stock issuable upon the exercise of the
Warrants will be irrevocably authorized and directed at all times to reserve
such number of authorized shares as shall be required for such purpose. The
Company
-5-
<PAGE>
will keep a copy of this Agreement on file with the Transfer Agent and with
every subsequent transfer agent for any shares of the Company's capital stock
issuable upon the exercise of the rights of purchase represented by the
Warrants. The Company will furnish such Transfer Agent a copy of all notices of
adjustments, and certificates related thereto, transmitted to each Holder
pursuant to Section 8.4. Before taking any action which would cause an
------------
adjustment pursuant to Section 4.1 to the maximum number of shares of Common
-----------
Stock deliverable upon the exercise of all outstanding Warrants pursuant to
Section 3.3, the Company shall cause to be authorized additional shares of
- -----------
Common Stock such that the sum of such maximum number of shares of Common Stock
deliverable upon exercise of all outstanding Warrants and the number of shares
of Common Stock outstanding as of such date does not exceed the number of shares
of Common Stock authorized pursuant to the Company's Restated Articles of
Incorporation, as amended.
The Company covenants that all shares of Common Stock issued upon exercise
of the Warrants will, upon issuance in accordance with the terms of this
Agreement, be fully paid and nonassessable and free from all taxes, liens,
charges and security interests created by or imposed upon the Company with
respect to the issuance and holding thereof.
ARTICLE IV
OTHER TERMS OF WARRANTS
Section IV.1 ADJUSTMENT OF EXERCISE PRICE AND NUMBER OF SHARES
PURCHASABLE OR NUMBER OF WARRANTS. The Exercise Price, the number of shares of
Common Stock purchasable upon the exercise of each Warrant and the number of
Warrants outstanding are subject to adjustment from time to time upon the
occurrence of the events enumerated in this Section 4.1.
-----------
(a) If the Company shall (i) pay a dividend in or make a distribution of
shares of its capital stock, whether shares of Common Stock or shares of its
capital stock of any other class, (ii) subdivide its outstanding shares of
Common Stock, (iii) combine its outstanding shares of Common Stock into a
smaller number of shares of Common Stock or (iv) issue any shares of its capital
stock in a reclassification of the Common Stock (including any such
reclassification in connection with a consolidation or merger in which the
Company is the continuing corporation), the number of shares of Common Stock
purchasable upon exercise of each Warrant immediately prior thereto shall be
adjusted so that the Holder of each Warrant shall be entitled to receive the
kind and number of shares of Common Stock or other securities of the Company
which such Holder would have owned or have been entitled to receive after the
happening of any of the events described above, had such Warrant been exercised
immediately prior to the happening of such event or any record date with respect
thereto. An adjustment made pursuant to this paragraph (a) shall become
effective immediately after the effective date of such event, retroactive to
immediately after the record date, if any, for such event.
(b) If the Company shall issue rights, options or warrants to all Holders
of its outstanding Common Stock, without any charge to such Holders, entitling
them to subscribe for
-6-
<PAGE>
or purchase shares of Common Stock at a price per share that is lower than the
Market Price per share of Common Stock (as defined in paragraph (e) below) at
the record date mentioned below, the number of shares of Common Stock thereafter
purchasable upon the exercise of each Warrant shall be determined by multiplying
the number of shares of Common Stock theretofore purchasable upon exercise of
each Warrant by a fraction, of which the numerator shall be (i) the number of
shares of Common Stock outstanding on the date of issuance of such rights,
options or warrants plus the number of additional shares of Common Stock offered
for subscription or purchase, and of which the denominator shall be (ii) the
number of shares of Common Stock outstanding on the date of issuance of such
rights, options or warrants plus the number of shares which the aggregate
offering price of the total number of shares of Common Stock so offered would
purchase at the Market Price per share of Common Stock at such record date. Such
adjustment shall be made whenever such rights, options or warrants are issued,
and shall become effective retroactive to immediately after the record date for
the determination of shareholders entitled to receive such rights, options or
warrants.
(c) If the Company shall distribute to all Holders of its shares of Common
Stock evidence of its indebtedness or assets (excluding cash dividends or
distributions payable out of capital surplus and dividends or distributions
referred to in paragraph (a) above) or rights, options or warrants or
convertible or exchangeable securities containing the right to subscribe for or
purchase shares of Common Stock (excluding those referred to in paragraph (b)
above), then in each case the number of shares of Common Stock thereafter
purchasable upon the exercise of each Warrant shall be determined by multiplying
the number of shares of Common Stock theretofore purchasable upon the exercise
of each Warrant, by a fraction, of which the numerator shall be (i) the then
current Market Price per share of Common Stock (as defined in paragraph (e)
below) on the date of such distribution, and of which the denominator shall be
(ii) the then current Market Price per share of Common Stock less the then fair
value (as determined by the Board of Directors of the Company, whose
determination shall be conclusive) of the portion of the assets or evidence of
indebtedness so distributed or of such subscription rights, options or warrants
or convertible or exchangeable securities applicable to one (1) share of Common
Stock. Such adjustment shall be made whenever any such distribution is made,
and shall become effective on the date of distribution retroactive to
immediately after the record date for the determination of shareholders entitled
to receive such distribution.
(d) In the event of any capital reorganization or any reclassification of
the Common Stock (except as provided in paragraphs (a) through (c) above), any
Holder of Warrants upon exercise thereof shall be entitled to receive, in lieu
of the Common Stock to which he or she would have become entitled upon exercise
immediately prior to such reorganization or reclassification, the shares (of any
class or classes) or other securities or property of the Company that he or she
would have been entitled to receive at the same aggregate Exercise Price upon
such reorganization or reclassification if his or her Warrants had been
exercised immediately prior thereto.
(e) For the purpose of any computation under paragraphs (b) and (c) of this
Section 4.1, the current or closing Market Price per share of Common Stock at
- -----------
any date shall be deemed to be the average of the daily closing prices for the
twenty (20) consecutive trading days before
-7-
<PAGE>
the date of such computation. The closing price for each day shall be the last
sale price for such day, in either case as reported in the principal
consolidated transaction reporting system with respect to securities listed or
admitted to trading on the New York Stock Exchange (the "NYSE") or if the Common
----
Stock is not listed on the NYSE, then on the principal United States national
securities exchange on which the Common Stock is listed or quoted. If the Common
Stock is not listed or quoted on any United States national securities exchange,
then the current or closing market price per share of Common Stock shall be
determined by the Board of Directors of the Company in good faith.
(f) Whenever the number of shares of Common Stock purchasable upon the
exercise of each Warrant is adjusted as herein provided, the Exercise Price
payable upon the exercise of each Warrant shall be adjusted by multiplying such
Exercise Price immediately prior to such adjustment by a fraction, of which the
numerator shall be the number of shares purchasable upon the exercise of each
Warrant immediately prior to such adjustment, and of which the denominator shall
be the number of shares so purchasable immediately thereafter.
(g) The Company may elect, on or after the date of any adjustment required
by paragraphs (a) through (d) of this Section 4.1, to adjust the number of
-----------
Warrants in substitution for an adjustment in the number of shares of Common
Stock purchasable upon the exercise of a Warrant. Each of the Warrants
outstanding after such adjustment of the number of Warrants shall be exercisable
for the same number of shares of Common Stock as immediately prior to such
adjustment. Each Warrant held of record prior to such adjustment of the number
of Warrants shall become that number of Warrants (calculated to the nearest
hundredth) obtained by dividing the Exercise Price in effect prior to adjustment
of the Exercise Price by the Exercise Price in effect after adjustment of the
Exercise Price. The Company shall notify the Holders of Warrants, in the same
manner as provided in the first paragraph of Section 8.4, of its election to
-----------
adjust the number of Warrants, indicating the record date for the adjustment,
and, if known at the time, the amount of the adjustment to be made. This record
date may be the date on which the Exercise Price is adjusted or any day
thereafter. Upon each adjustment of the number of Warrants pursuant to this
paragraph (g) the Company shall, as promptly as practicable, cause to be
distributed to Holders of record of Warrants on such record date Warrant
Certificates evidencing, subject to paragraph (h), the additional Warrants to
which such Holders shall be entitled as a result of such adjustment, or, at the
option of the Company, shall cause to be distributed to such Holders of record
in substitution and replacement for the Warrant Certificates held by such
Holders prior to the date of adjustment, and upon surrender thereof, new Warrant
Certificates evidencing all the Warrants to be executed, issued and registered
in the manner specified in Section 5.1 (and which may bear, at the option of the
-----------
Company, the adjusted Exercise Price) and shall be registered in the names of
the Holders of record of Warrant Certificates on the record date specified in
the notice.
(h) The Company shall not be required to issue fractions of Warrants on
any distribution of Warrants to Holders of Warrant Certificates pursuant to
paragraph (g) or to distribute Warrant Certificates that evidence fractional
Warrants. In lieu of such fractional Warrants, there shall be paid to the
registered Holders of the Warrant Certificates with regard to which such
fractional Warrants would otherwise be issuable, an amount in cash equal to the
-8-
<PAGE>
same fraction of the current market value of a full Warrant on the trading day
immediately prior to the date on which such fractional Warrant could have been
otherwise issuable (the "Valuation Date"). For purposes of this paragraph (h),
--------------
the current market value of a Warrant shall be the aggregate closing Market
Price on the Valuation Date (determined as set forth in paragraph (e)) of all
shares of Common Stock issuable upon exercise of one Warrant plus the fair value
(as determined by the Board of Directors of the Company, whose determination
shall be conclusive) of any other assets or securities purchasable upon exercise
of one Warrant less the Exercise Price of one Warrant.
(i) Notwithstanding any adjustment pursuant to Section 4.1 in the number of
-----------
shares of Common Stock purchasable upon the exercise of a Warrant, the Company
shall not be required to issue fractions of shares of Common Stock upon exercise
of the Warrants or to distribute certificates which evidence fractional shares.
In lieu of fractional shares, there shall be paid to the registered Holders of
Warrant Certificates at the time such Warrant Certificates are exercised as
herein provided an amount in cash equal to the same fraction of the current
market value of one (1) share of Common Stock. For purposes of this paragraph
(i), the current market value of one (1) share of Common Stock shall be the
closing Market Price (determined as set forth in paragraph (e)) of one (1) share
of Common Stock for the trading day immediately prior to the date of such
exercise.
ARTICLE V
REGISTRATION, EXCHANGE, TRANSFER AND
SUBSTITUTION OF WARRANT CERTIFICATES
Section V.1 REGISTRATION, EXCHANGE AND TRANSFER OF WARRANT CERTIFICATES.
The Company shall keep, at its principal executive offices, books in which,
subject to such reasonable regulations as it may prescribe, it shall register
Warrant Certificates and transfers of outstanding Warrants (the "Warrant
-------
Register").
- --------
Upon surrender at the principal executive offices of the Company of Warrant
Certificates properly endorsed or accompanied by appropriate instruments of
transfer and accompanied by written instructions for transfer or exchange, all
in form satisfactory to the Company, such Warrant Certificates may be exchanged
for other Warrant Certificates or may be transferred in whole or in part;
provided, however, that Warrant Certificates issued in exchange for or upon
- -------- -------
transfer of surrendered Warrant Certificates shall evidence the same aggregate
number of Warrants as the Warrant Certificates so surrendered. No service charge
shall be made for any exchange or transfer of Warrant Certificates, but the
Company may require payment of a sum sufficient to cover any stamp or other tax
or governmental charge that may be imposed in connection with any such exchange
or transfer. Whenever any Warrant Certificates are so surrendered for exchange
or transfer, the Company shall execute and deliver to the Person or Persons
entitled thereto a Warrant Certificate or Warrant Certificates as so requested.
The Company shall not be required to effect any exchange or transfer which would
result in the issuance of a Warrant Certificate evidencing a fraction of a
Warrant or a number of full Warrants and a fraction of a Warrant. All Warrant
Certificates issued upon any exchange or transfer of
-9-
<PAGE>
Warrant Certificates shall evidence the same obligations, and be entitled to the
same benefits under this Agreement, as the Warrant Certificates surrendered for
such exchange or transfer.
Section V.2 MUTILATED, DESTROYED, LOST OR STOLEN WARRANT CERTIFICATES.
If any mutilated Warrant Certificate is surrendered to the Company, the Company
shall execute and deliver in exchange therefor a new Warrant Certificate of like
tenor and bearing a number not contemporaneously outstanding. If there shall be
delivered to the Company (i) evidence to its satisfaction of the destruction,
loss or theft of any Warrant Certificate and of the ownership thereof and (ii)
such security or indemnity as may be required by it to save the Company and any
agent thereof harmless, then, in the absence of notice to the Company that such
Warrant Certificate has been acquired by a bona fide purchaser, the Company
shall execute and deliver, in lieu of any such destroyed, lost or stolen Warrant
Certificate, a new Warrant Certificate of like tenor and bearing a number not
contemporaneously outstanding. Upon the issuance of any new Warrant Certificate
under this Section 5.2, the Company may require the payment of a sum sufficient
-----------
to cover any tax or other governmental charge that may be imposed in relation
thereto and any other expenses connected therewith. Every new Warrant
Certificate issued pursuant to this Section 5.2 in lieu of any destroyed, lost
-----------
or stolen Warrant Certificate shall evidence an original additional contractual
obligation of the Company, whether or not the destroyed, lost or stolen Warrant
Certificate shall be at any time enforceable by anyone, and shall be entitled to
all the benefits of this Agreement equally and proportionately with any and all
other Warrant Certificates duly issued hereunder. The provisions of this Section
-------
5.2 are exclusive and shall preclude (to the extent lawful) all other rights and
- ---
remedies with respect to the replacement or payment of mutilated, destroyed,
lost or stolen Warrant Certificates.
Section V.3 PERSONS DEEMED OWNERS. Prior to due presentment of a
Warrant Certificate for registration of transfer, the Company and all other
Persons may treat the Holder as the owner thereof for any purpose and as the
Person entitled to exercise the rights represented by the Warrants evidenced
thereby, any notice to the contrary notwithstanding.
Section V.4 CANCELLATION OF WARRANT CERTIFICATES. Any Warrant
Certificate surrendered to the Company for exchange, transfer or exercise of the
Warrants evidenced thereby shall be promptly canceled by it and shall not be
reissued and, except as expressly permitted by this Agreement, no Warrant
Certificate shall be issued hereunder in lieu or in exchange thereof. The
Company shall promptly cancel any Warrant Certificates previously issued
hereunder which the Company may have acquired in any manner whatsoever.
-10-
<PAGE>
ARTICLE VI
OTHER PROVISIONS RELATING TO RIGHTS
OF HOLDERS OF WARRANT CERTIFICATES
Section VI.1 NO RIGHTS AS SHAREHOLDER CONFERRED BY WARRANTS OR WARRANT
CERTIFICATES. No Warrant Certificate or Warrant evidenced thereby shall entitle
the Holder thereof to any of the rights of a shareholder, including, without
limitation, the right to receive dividends.
Section VI.2 HOLDER OF WARRANT CERTIFICATE MAY ENFORCE RIGHTS.
Notwithstanding any of the provisions of this Agreement, any Holder of any
Warrant Certificate, without the consent of any shareholder or the Holder of any
other Warrant Certificate, may, on its own behalf and for its own benefit,
enforce, and may institute and maintain any suit, action or proceeding against
the Company suitable to enforce or otherwise in respect of its right to exercise
the Warrant or Warrants evidenced by his or her Warrant Certificate in the
manner provided in the Warrant Certificates and in this Agreement.
ARTICLE VII
CONCERNING THE COMPANY AS WARRANT AGENT
Section VII.1 WARRANT AGENT. The Company shall serve as warrant agent in
respect of the Warrants and the Warrant Certificates upon the terms and subject
to the conditions herein set forth. The Company shall have the power and
authority granted to and conferred upon it in the Warrant Certificates. All of
the terms and provisions with respect to such power and authority contained in
the Warrant Certificates are subject to and governed by the terms and provisions
hereof.
Section VII.2 DOCUMENTS. The Company shall be protected and shall incur
no liability for or in respect of any action taken or omitted by it in reliance
upon any notice, direction, consent, certificate, affidavit, statement or other
paper or document reasonably believed by it to be genuine and to have been
presented or signed by the proper parties.
-11-
<PAGE>
ARTICLE VII
MISCELLANEOUS
Section VII.1 CONSOLIDATIONS AND MERGERS OF THE COMPANY AND SALES, LEASES
AND CONVEYANCES PERMITTED SUBJECT TO CERTAIN CONDITIONS. The Company may
consolidate with, or sell or convey all or substantially all of its assets to,
or merge with or into any other corporation, provided that in any such case,
either the Company shall be the continuing corporation, or the corporation (if
other than the Company) formed by such consolidation or into which the Company
is merged or the corporation which acquired by purchase or conveyance all or
substantially all of the assets of the Company shall expressly assume the
obligations of the Company hereunder.
Section VII.2 RIGHTS AND DUTIES OF SUCCESSOR CORPORATION. In case of any
such consolidation, merger, sale, lease or conveyance and upon any such
assumption by the successor corporation, such successor corporation shall
succeed to and be substituted for the Company, with the same effect as if it had
been named herein, and the predecessor corporation, except in the event of a
lease, shall be relieved of any further obligation under this Agreement and the
Warrants. Such successor corporation thereupon may cause to be signed, and may
issue either in its own name or in the name of the Company, any or all of the
shares of Common Stock issuable pursuant to the terms hereof.
Section VII.3 AMENDMENT. This Agreement may be amended by the parties
hereto, without the consent of the Holder of any Warrant Certificate, for the
purpose of curing any ambiguity, or curing, correcting or supplementing any
defective provision contained herein, or making such provisions in regard to
matters or questions arising under this Agreement as the Company may deem
necessary or desirable; provided, however, that such action shall not adversely
-------- -------
affect the interests of the Holders of the Warrant Certificates in any material
respect. Any amendment or supplement to this Agreement or the Warrants that has
a material adverse effect on the interests of Holders of any series of Warrants
shall require the written consent of the Holders of a majority of the then
outstanding Warrants of such series. The consent of each Holder of a Warrant
affected shall be required for any amendment pursuant to which the Exercise
Price would be increased or the number of shares of Common Stock purchasable
upon exercise of Warrants would be decreased.
Section VII.4 NOTICES TO WARRANTHOLDERS. Upon any adjustment of the
number of shares purchasable upon exercise of each Warrant, the Exercise Price
or the number of Warrants outstanding pursuant to Section 4.1, the Company
-----------
within ten (10) Business Days thereafter shall cause to be given to each of the
Holders of the Warrant Certificates written notice of such adjustments, together
with a copy of a certificate of the Chief Financial Officer of the Company
setting forth the Exercise Price and either the number of shares of Common Stock
and other securities or assets purchasable upon exercise of each Warrant or the
additional number of Warrants to be issued for each previously outstanding
Warrant, as the case may be, after such adjustment and setting forth in
reasonable detail the method of calculation and the facts upon which such
adjustments are made, which certificate shall be conclusive evidence of the
-12-
<PAGE>
correctness of the matters set forth therein, at such Holder's address appearing
on the Warrant Register written notice of such adjustments by first-class mail,
postage prepaid.
Section VII.5 ADDRESSES. Any communications to the Company with respect
to this Agreement shall be addressed to Weeks Corporation, 4497 Park Drive,
Norcross, Georgia 30093, Attention: Chief Financial Officer. Any communications
to any Holder shall be addressed to such Holder at its address appearing on the
Warrant Register.
Section VII.6 GOVERNING LAW. This Agreement and each Warrant
Certificate issued hereunder shall be governed by and construed in accordance
with the laws of the State of Georgia.
Section VII.7 DELIVERY OF PROSPECTUS. Upon the exercise of any Warrant
Certificate, the Company will deliver to the person designated to receive a
certificate representing shares of Common Stock, prior to or concurrently with
the delivery of such securities, a Prospectus.
Section VII.8 OBTAINING OF GOVERNMENTAL APPROVALS. The Company will
from time to time take all action which may be necessary to obtain and keep
effective any and all permits, consents and approvals of Governmental
Authorities and securities acts filings under United States Federal and state
laws (including, without limitation, to the extent required, the maintenance of
the effectiveness of a registration statement in respect of the Common Stock
under the Securities Act), which may be or become required in connection with
exercise of the Warrant Certificates.
Section VII.9 PERSONS HAVING RIGHTS UNDER WARRANT AGREEMENT. Nothing in
this Agreement expressed or implied and nothing that may be inferred from any of
the provisions herein is intended, or shall be construed, to confer upon, or
give to, any Person other than the Company and the Holders of the Warrant
Certificates any right, remedy or claim under or by reason of this Agreement or
of any covenant, condition, stipulation, promise or agreement hereof. All
covenants, conditions, stipulations, promises and agreements contained in this
Agreement shall be for the sole and exclusive benefit of the Company and its
successors and of the Holders of the Warrant Certificates.
Section VIII.10 HEADINGS. The Article and Section headings herein and the
Table of Contents are for convenience of reference only and shall not affect the
construction hereof.
Section VIII.11 COUNTERPARTS. This Agreement may be executed in any
number of counterparts, each of which so executed shall be deemed to be an
original, but such counterparts shall together constitute but one and the same
instrument.
Section VIII.12 INSPECTION OF AGREEMENT. A copy of this Agreement shall
be available at all reasonable times at the principal executive offices of the
Company for inspection by the Holder of any Warrant Certificate. The Company may
require such Holder to submit its Warrant Certificate for inspection by it.
-13-
<PAGE>
Section 8.13 TRANSFERS IN COMPLIANCE WITH APPLICABLE LAW. Notwithstanding
anything in this Agreement to the contrary, no Warrant evidenced by a Warrant
Certificate may be sold, assigned, pledged or otherwise transferred by the
Holder thereof if such sale, assignment, pledge or other transfer is in
violation of applicable law, including, without limitation, any federal or state
securities laws.
-14-
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed effective as of the day and year first above written.
WEEKS CORPORATION
By:_____________________________
Name:
Title:
CODINA GROUP, INC.
By:_____________________________
Name:
Title:
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<PAGE>
EXHIBIT A
[FORM OF WARRANT CERTIFICATE]
[Face]
EXERCISABLE ONLY IF EXECUTED AND DELIVERED
BY THE COMPANY AS PROVIDED HEREIN
VOID AFTER 5:00 P.M. (ATLANTA TIME) ON FEBRUARY 24, 2008
WEEKS CORPORATION
Warrant Certificate representing
Warrants to purchase
Common Stock
as described herein.
____________________________
No. __________________ _________ Warrants
This certifies that ____________ or registered assigns is the registered
owner of the above indicated number of Warrants, each Warrant entitling such
registered owner to purchase one (1) share of common stock, par value $.01 per
share ("Common Stock") of Weeks Corporation (the "Company"), subject to
adjustment as provided in Article IV of the Warrant Agreement referred to
herein, during the period set forth herein on the following basis. The Warrants
shall remain exercisable at any time and from time to time during the period
beginning on August 24, 1999, and at or before 5:00 p.m. (Atlanta time) February
24, 2008. During such period, each Warrant shall entitle the Holder thereof,
subject to the provisions of the Warrant Agreement (as defined below), to
purchase from the Company one share of Common Stock at the exercise price of
$32.75, subject to adjustment as provided in Article IV of the Warrant Agreement
referred to herein (the "Exercise Price"). The Holder of this Warrant
Certificate may exercise the Warrants evidenced hereby, in whole or in part, by
surrendering this Warrant Certificate, with the purchase form set forth hereon
duly completed, accompanied by payment in full, in lawful money of the United
States of America, in cash or by certified check or official bank check or by
bank wire transfer in immediately available funds, the Exercise Price for each
Warrant exercised, to the Company, at the principal executive offices of the
Company, or its successor, as warrant agent (the "Warrant Agent"), the addresses
specified on the reverse hereof and upon compliance with and subject to the
conditions set forth herein and in the Warrant Agreement.
The term "Holder" as used herein shall mean the person in whose name at the
time of determination such Warrant Certificate shall be registered upon the
books to be maintained by the Company for that purpose pursuant to Section 5.1
of the Warrant Agreement.
Any whole number of Warrants evidenced by this Warrant Certificate may be
exercised to purchase shares of Common Stock. Upon any exercise of fewer than
all of the Warrants
A-1
<PAGE>
evidenced by this Warrant Certificate, there shall be issued to the registered
owner hereof a new Warrant Certificate evidencing the number of Warrants
remaining unexercised.
This Warrant Certificate is issued under and in accordance with the Amended
and Restated Warrant Agreement dated effective as of February 24, 1998 (the
"Warrant Agreement"), between the Company and Codina Group, Inc. and is subject
to the terms and provisions contained in the Warrant Agreement, to all of which
terms and provisions the Holder of this Warrant Certificate consents by
acceptance hereof. Copies of the Warrant Agreement are on file at the above-
mentioned offices of the Company.
This Warrant Certificate and all rights hereunder, may be transferred when
surrendered at the principal executive offices of the Company by the registered
owner or his assigns, in person or by an attorney duly authorized in writing, in
the manner and subject to the limitations provided in the Warrant Agreement.
After execution and delivery by the Company and prior to the expiration of
this Warrant Certificate, this Warrant Certificate may be exchanged at the
principal executive offices of the Company for Warrant Certificates representing
the same aggregate number of Warrants.
This Warrant Certificate shall not entitle the registered owner hereof to
any of the rights of a shareholder of the Company, including, without
limitation, the right to receive dividends.
Reference is hereby made to the further provisions of this Warrant
Certificate set forth on the reverse hereof, which further provisions shall for
all purposes have the same effect as if set forth at this place.
This Warrant Certificate shall not be valid obligatory for any purpose
until executed and delivered by the Company.
A-2
<PAGE>
IN WITNESS WHEREOF, the Company has caused this Warrant Certificate to be
duly executed under its corporate seal.
Dated: ________________, 1998 WEEKS CORPORATION
Attest:
By:_______________________________
Name:
Title:
____________________________
Secretary
A-3
<PAGE>
[FORM OF WARRANT CERTIFICATE]
[REVERSE]
(Instructions for Exercise of Warrants)
To exercise any Warrants evidenced hereby, the Holder of this Warrant
Certificate must pay in cash or by certified check or official bank check or by
wire transfer in immediately available funds, the Exercise Price in full for
each of the Warrants exercised, to Weeks Corporation, 4497 Park Drive, Norcross,
Georgia 30093; Attn: Chief Financial Officer, which payment should specify the
name of the Holder of this Warrant Certificate and the number of Warrants
exercised by such Holder. In addition, the Holder of this Warrant Certificate
should complete the information required below and present in person or mail by
registered mail this Warrant Certificate to the Company at the address set forth
below.
[FORM OF EXERCISE]
(To be executed upon exercise of Warrants.)
The undersigned hereby irrevocably elects to exercise Warrants, represented
by this Warrant Certificate, to purchase _________ shares of Common Stock, par
value $.01 per share ("Common Stock"), of Weeks Corporation and represents that
he or she has tendered payment for such shares of Common Stock in cash or by
certified check or official bank check or by bank wire transfer in immediately
available funds to the order of Weeks Corporation, c/o Chief Financial Officer,
in the amount of $________ in accordance with the terms hereof. The undersigned
requests that said shares of Common Stock be registered in such names and
delivered, all as specified in accordance with the instructions set forth below.
If said number of shares of Common Stock is less than all of the shares of
Common Stock purchasable hereunder, the undersigned requests that a new Warrant
Certificate representing the remaining balance of the Warrants evidenced hereby
be issued and delivered to the undersigned unless otherwise specified in the
instructions below.
A-4
<PAGE>
Dated:______________________ Name:_________________________
(Please Print)
____________________________ Address:
Insert Social Security or Other _______________________________
Identifying Number of Holder) _______________________________
_______________________________
___________________________
Signature
(Signature must conform in all
respects to name of Holder as specified on
the face of this Warrant Certificate and must
bear a signature guarantee by a bank, trust
company or member broker of the New York,
Chicago or Pacific Stock Exchange.)
This Warrant may be exercised by hand or by mail
at the following address:
Weeks Corporation
4497 Park Drive
Norcross, Georgia 30093
Attention: Chief Financial Officer
(Instructions as to form and delivery of
certificates representing shares of Common Stock
and/or Warrant Certificates):
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
_________________________________________________________________.
A-5
<PAGE>
[FORM OF ASSIGNMENT]
(TO BE EXECUTED TO TRANSFER
THE WARRANT CERTIFICATE)
FOR VALUE RECEIVED, _______________________________ hereby sells, assigns
and transfers unto
___________________________
___________________________
___________________________
Please print name and address
(including zip code)
Please insert social security or
other identifying number
___________________________
the right represented by the within Warrant Certificate and does hereby
irrevocably constitute and appoint ________________, Attorney, to transfer said
Warrant Certificate on the books of the Warrant Agent with full power of
substitution.
Dated:_____________________ _____________________________
Signature
(Signature must conform in all respects
to name of Holder as specified on the
face of this Warrant Certificate and
must bear a signature guarantee by a
bank, trust company or member broker of
the New York, Chicago or Pacific Stock
Exchange.)
Signature Guaranteed:
__________________________
A-6
<PAGE>
Agreement dated December 31, 1996 by and among the Company and Harold S.
Lichtin, Noel A. Lichtin, Marie A. Robertson, Amy R. Ehrman, Roland G. Robertson
and Perimeter Park West Associates Limited Partnership, (b) securities covered
by piggyback registration requests pursuant to the Registration Rights and Lock-
Up Agreement for Post-June 30, 1998 Units dated as of the date hereof by and
among the Company and Harold S. Lichtin, Noel A. Lichtin, Marie A. Robertson,
Amy R. Ehrman, Roland G. Robertson and Perimeter Park West Associates Limited
Partnership, (c) securities covered by piggyback registration requests pursuant
to the Registration Rights and Lock-Up Agreement dated as of November 1, 1996,
by and among the Company, NWI Warehouse Group, L.P., Buckley & Company Real
Estate, Inc., John W. Nelley, Jr. and Albert W. Buckley, Jr., and (d) securities
covered by piggyback registration requests pursuant to the Registration Rights
and Lock-Up Agreement for Post-March 31, 1998 Shares and Units dated as of
November 1, 1996, by and among the Company, NWI Warehouse Group, L.P. and
Buckley & Company Real Estate, Inc., pro rata among the holders thereof on the
basis of the number of shares requested to be included in such registration,
(iv) fourth, (a) securities covered by piggyback registration requests pursuant
to the Registration Rights Agreement dated as of November 6, 1998, by and
between the Company and AEW Targeted Securities Fund, L.P., (b) Shelf
Registrable Securities covered by Piggyback Registration requests, and (c) all
other securities requested to be included in such registration, pro rata among
the holders thereof on the basis of the number of shares requested to be
included in such registration.
(c) Priority on Secondary Registrations. If a Piggyback Registration is an
-----------------------------------
underwritten secondary registration on behalf of holders of the Company's
securities, and the managing underwriters advise the Company in writing that in
their opinion the number of securities requested to be included in such
registration exceeds the Maximum Number, the Company will include in such
registration the shares requested to be included therein by the holders
requesting such registration and the Shelf Registrable Securities covered by
Piggyback Registration Requests and any other securities requested to be
included in such registration, pro rata among the holders thereof on the basis
of the number of shares requested to be included in such registration; provided,
--------
however, that if the holders requesting registration are doing so pursuant to
- -------
demand registration rights of such holders, such holders' shares shall take
priority over any Shelf Registrable Securities and any other securities
requested to be included, which shall be included on a pro rata basis.
5. Holdback Agreements. Each Holder agrees not to effect any public sale
-------------------
or distribution (including sales pursuant to Rule 144) of equity securities of
the Company, or any securities convertible into or exchangeable or exercisable
for such securities, during the 7 days prior to (provided that such Holder
receives a notice from the Company of the commencement of such 7-day period) and
the 90-day period beginning on the effective date of any underwritten offering
of securities by the Company (except as part of such underwritten registration),
unless the underwriters managing the registered public offering otherwise agree.
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<PAGE>
6. Indemnification; Contribution.
-----------------------------
(a) Indemnification by the Company. The Company agrees to indemnify and
------------------------------
hold harmless each Holder and the beneficial owners, officers and directors and
each Person, if any, who controls each Holder within the meaning of Section 15
of the Securities Act as follows:
(i) against any and all loss, liability, claim, damage and expense
whatsoever, as incurred, to which each Holder, or any beneficial owner,
officer, director or controlling Person may become subject under the
Securities Act or otherwise (A) that arise out of or are based upon any
untrue statement or alleged untrue statement of a material fact contained
in the Shelf Registration Statement or any amendment thereto, or the
omission or alleged omission to state therein a material fact required to
be stated therein or necessary to make the statements therein not
misleading or (B) that arise out of or are based upon any untrue statement
or alleged untrue statement of a material fact contained in any Shelf
Prospectus or any amendment or supplement thereto, or the omission or
alleged omission to state therein a material fact necessary in order to
make the statements therein, in the light of the circumstances under which
they were made, not misleading;
(ii) against any and all loss, liability, claim, damage and expense
whatsoever, as incurred, to the extent of the aggregate amount paid in
settlement of any litigation, or investigation or proceeding by any
governmental agency or body, commenced or threatened, or of any claim
whatsoever based upon any such untrue statement or alleged untrue statement
or any omission or alleged omission, if such settlement is effected with
the written consent of the Company; and
(iii) subject to the limitations set forth in Section 6(c), against
any and all expense whatsoever, as incurred (including reasonable fees and
disbursements of counsel), reasonably incurred in investigating, preparing
or defending against any litigation, or investigation or proceeding by any
governmental agency or body, commenced or threatened, in each case whether
or not a party, or any claim whatsoever based upon any such untrue
statement or alleged untrue statement or omission or alleged omission, to
the extent that any such expense is not paid under subparagraph (i) or (ii)
above;
provided, however, that the indemnity provided pursuant to this Section 6(a)
- -------- -------
shall not apply with respect to any loss, liability, claim, damage or expense
that arises out of or are based upon any untrue statement or alleged untrue
statement or omission or alleged omission made in reliance upon and in
conformity with written information furnished to the Company by any Holder (i)
expressly for use in the Shelf Registration Statement or any amendment thereto,
or the Shelf Prospectus or any amendment or supplement thereto or (ii) pursuant
to any representation, warranty or other statement contained in the Contribution
Agreement or any admission amendment to the Partnership Agreement.
(b) Indemnification by the Holders. Each Holder severally agrees to
------------------------------
indemnify and hold harmless the Company, and each of its respective directors
and officers (including each director
-11-
<PAGE>
and officer of the Company who signed the Shelf Registration Statement), and
each Person, if any, who controls the Company within the meaning of Section 15
of the Securities Act, to the same extent as the indemnity contained in Section
6(a) hereof, but only insofar as such loss, liability, claim, damage or expense
arises out of or is based upon any untrue statement or alleged untrue statement
or omission or alleged omission made in the Shelf Registration Statement or any
amendment thereto, or the Shelf Prospectus or any amendment or supplement
thereto, in reliance upon and in conformity with written information furnished
to the Company by such Holder expressly for use therein. In no event, however,
shall the liability of a Holder exceed the cumulative net proceeds received by
such Holder from any offering made in connection with a Shelf Registration
Statement.
(c) Conduct of Indemnification Proceedings. Each indemnified party shall
--------------------------------------
give reasonably prompt notice to each indemnifying party of any action or
proceeding commenced against it in respect of which indemnity may be sought
hereunder, but failure to so notify an indemnifying party (i) shall not relieve
it from any liability which it may have under the indemnity agreement provided
in Section 6(a) or (b) above, unless and to the extent it did not otherwise
learn of such action and the lack of notice by the indemnified party materially
prejudices the indemnifying party or results in the forfeiture by the
indemnifying party of substantial rights and defenses and (ii) shall not, in any
event, relieve the indemnifying party from any obligations to any indemnified
party other than the indemnification obligation provided under Section 6(a) or
(b) above. After receipt of such notice, the indemnifying party shall be
entitled to participate in and, to the extent it shall wish, jointly with any
other indemnifying party so notified, to assume the defense of such action or
proceeding at such indemnifying party's own expense with counsel chosen by such
indemnifying party and approved by the indemnified party, which approval shall
not be unreasonably withheld; provided, however, that, if the defendants in any
-------- -------
such action or proceeding include both the indemnified party and the
indemnifying party and the indemnified party reasonably determines, upon advice
of counsel, that a conflict of interest exists or that there may be legal
defenses available to it or other indemnified parties that are different from or
in addition to those available to the indemnifying party, then the indemnified
party shall be entitled to separate counsel (which shall be limited to a single
law firm), the reasonable fees and expenses of which shall be paid by the
indemnifying party. If the indemnifying party does not assume the defense of any
such action or proceeding, after having received the notice referred to in the
first sentence of this paragraph, the indemnifying party will pay the reasonable
fees and expenses of counsel (which shall be limited to a single law firm) for
the indemnified party. In such event, however, the indemnifying party will not
be liable for any settlement effected without the written consent of such
indemnifying party. If the indemnifying party assumes the defense of any such
action or proceeding in accordance with this paragraph, such indemnifying party
shall not be liable for any fees and expenses of counsel for the indemnified
party incurred thereafter in connection with such action or proceeding, except
as set forth in the proviso in the second sentence of this Section 6(c).
(d) Contribution. In order to provide for just and equitable contribution
------------
in circumstances in which the indemnity agreement provided for in this Section 6
is for any reason held to be unenforceable although applicable in accordance
with its terms, the Company and the selling Holders shall contribute to the
aggregate losses, liabilities, claims, damages and expenses of the nature
contemplated by such indemnity agreement incurred by the Company and the selling
Holders,
-12-
<PAGE>
in such proportion as is appropriate to reflect the relative fault of and
benefits to the Company on the one hand and the selling Holders on the other (in
such proportion that the selling Holders are severally, not jointly, responsible
for the balance), in connection with the statements or omissions which resulted
in such losses, claims, damages, liabilities or expenses, as well as any other
relevant equitable considerations. The relative benefits to the indemnifying
party and indemnified parties shall be determined by reference to, among other
things, the total proceeds received by the indemnifying party and indemnified
parties in connection with the offering to which such losses, claims, damages,
liabilities or expenses relate. The relative fault of the indemnifying party and
indemnified parties shall be determined by reference to, among other things,
whether the action in question, including any untrue or alleged untrue statement
of a material fact or omission or alleged omission to state a material fact, has
been made by, or relates to information supplied by, such indemnifying party or
the indemnified parties, and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such action.
The parties hereto agree that it would not be just or equitable if
contribution pursuant to this Section 6(d) were determined by pro rata
allocation or by any other method of allocation which does not take account of
the equitable considerations referred to in the immediately preceding paragraph.
Notwithstanding the provisions of this Section 6(d), a Holder shall not be
required to contribute any amount in excess of the amount by which the total
price at which the Shelf Registrable Securities of such Holder were offered to
the public exceeds the amount of any damages which such Holder would otherwise
have been required to pay by reason of such untrue statement or omission.
Notwithstanding the foregoing, no Person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Securities Act)
shall be entitled to contribution from any Person who was not guilty of such
fraudulent misrepresentation. For purposes of this Section 6(d), each Person,
if any, who controls any Holder within the meaning of Section 15 of the
Securities Act and beneficial owners, directors and officers of any Holder shall
have the same rights to contribution as any member of the Holders, and each
director of the Company, each officer of the Company who signed the Shelf
Registration Statement, and each Person, if any, who controls the Company within
the meaning of Section 15 of the Securities Act shall have the same rights to
contribution as the Company.
(e) In the event any sale pursuant to a Shelf Registration is an
underwritten offering, then the Company agrees to indemnify and hold harmless
each underwriter of Shelf Registrable Securities to the same extent and on
substantially similar terms as the Company's indemnification of the members of
the Holders as set forth in Section 6(a) above.
7. Rule 144 Sales.
--------------
(a) Compliance. The Company covenants that, so long as it is subject to
----------
the reporting requirements of the Exchange Act, it will file the reports
required to be filed by it under the
-13-
<PAGE>
Exchange Act so as to enable the Holders to sell Shelf Registrable Securities
pursuant to Rule 144 under the Securities Act.
(b) Cooperation with the Holders. In connection with any sale, transfer or
----------------------------
other disposition by a Holder of any Shelf Registrable Securities pursuant to
Rule 144 under the Securities Act, the Company shall cooperate with such Holder
to facilitate the timely preparation and delivery of certificates representing
Shelf Registrable Securities to be sold and not bearing any Securities Act
legend, and enable certificates for such Shelf Registrable Securities to be for
such number of shares as such Holder may reasonably request at least two
business days prior to any sale of Shelf Registrable Securities.
8. Miscellaneous.
-------------
(a) Amendments and Waivers. The provisions of this Agreement, including
----------------------
the provisions of this sentence, may not be amended, modified, supplemented or
waived, nor may consent to departures therefrom be given, without the written
consent of the Company and the Holders.
(b) Notices. All notices and other communications provided for or
-------
permitted hereunder shall be made in writing by hand-delivery, registered first-
class mail, telex, telecopier, or any courier guaranteeing overnight delivery,
(i) if to the Holder, at the address set forth in the Contribution Agreement, or
(ii) if to the Company, at 4497 Park Drive, Norcross, Georgia 30093, Attention:
A. R. Weeks, Jr.
All such notices and communications shall be deemed to have been duly
given: at the time delivered by hand, if personally delivered; five business
days after being deposited in the mail, postage prepaid, if mailed; when
answered back, if telexed; when receipt is acknowledged, if telecopied; or at
the time delivered if delivered by an air courier guaranteeing overnight
delivery.
(c) No Assignment. This Agreement shall inure to the benefit of and be
-------------
binding upon the parties hereto and, where applicable, their successors and
permitted assigns. No party to this Agreement may assign or delegate all or any
portion of its rights, obligations, or liabilities under this Agreement without
the prior written consent of each other party to this Agreement; provided,
--------
however, that the registration rights of any Holder under this Agreement may be
- -------
transferred to (a) any transferee of such Shelf Registrable Securities who
acquires at least 25% of the total number of Shelf Registrable Securities
(adjusted for stock splits and consolidations after the date hereof) or (b) an
affiliate of such Holder; provided further that the transferring Holder shall
-------- -------
give the Company written notice prior to the time of such transfer stating the
name and address of the transferee and identifying the number of Shelf
Registrable Securities so transferred. Nothing expressed or implied herein is
intended or shall be construed to confer upon or give to any third party any
rights or remedies by virtue hereof.
(d) Third Party Beneficiaries. There shall be no third party beneficiaries
-------------------------
or intended beneficiaries of this Agreement
-14-
<PAGE>
(e) Counterparts. This Agreement may be executed in any number of
------------
counterparts and by the parties hereto in separate counterparts, each of which
when so executed shall be deemed to be an original and all of which taken
together shall constitute one and the same agreement.
(f) Headings. The headings in this Agreement are for convenience of
--------
reference only and shall not limit or otherwise affect the meaning hereof.
(g) Governing Law. This Agreement shall be governed by and construed in
-------------
accordance with the laws of the State of Georgia without giving effect to the
conflicts of law provisions thereof.
(h) Specific Performance. The parties hereto acknowledge that there would
--------------------
be no adequate remedy at law if any party fails to perform any of its
obligations hereunder, and accordingly agree that each party, in addition to any
other remedy to which it may be entitled at law or in equity, shall be entitled
to compel specific performance of the obligations of any other party under this
Agreement in accordance with the terms and conditions of this Agreement in any
court of the United States or any State thereof having jurisdiction.
(i) Entire Agreement. This Agreement is intended by the parties as a final
----------------
expression of their agreement and intended to be a complete and exclusive
statement of the agreement and understanding of the parties hereto in respect of
the subject matter contained herein. This Agreement supersedes all prior
agreements and understandings between the parties with respect to such subject
matter.
-15-
<PAGE>
IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
first written above
WEEKS CORPORATION
By:____________________________
Name:
Title:
GREENE STREET 1998 EXCHANGE
FUND, L.P.
By: Goldman Sachs Management Partners, L.P., its General Partner
By: Goldman Sachs Management,
Inc., its
General Partner
By:______________________________
Name:
Title:
<PAGE>
EXHIBIT 4.6
EXECUTION COPY
_____________________________________________________
WEEKS CORPORATION
AND
ARMANDO CODINA
_____________________________________________________
AMENDED AND RESTATED WARRANT AGREEMENT
Effective as of February 24, 1998
_____________________________________________________
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TABLE OF CONTENTS
Page
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ARTICLE I DEFINITIONS 1
1.1 Certain Definitions 1
ARTICLE II ISSUANCE AND EXECUTION OF WARRANT
CERTIFICATES 3
Section 2.1 ISSUANCE OF WARRANT CERTIFICATES 3
Section 2.2 FORM OF WARRANT CERTIFICATE 3
Section 2.3 EXECUTION AND DELIVERY OF
WARRANT CERTIFICATES 3
Section 2.4 TEMPORARY WARRANT CERTIFICATES 4
Section 2.5 PAYMENT OF TAXES 4
Section 2.6 DEFINITION OF HOLDER 4
ARTICLE III WARRANT PRICE, DURATION AND EXERCISE OF
WARRANTS 5
Section 3.1 WARRANT PRICE 5
Section 3.2 DURATION OF WARRANTS 5
Section 3.3 EXERCISE OF WARRANTS 5
Section 3.4 RESERVATION OF SHARES 6
ARTICLE IV OTHER TERMS OF WARRANTS 6
Section 4.1 ADJUSTMENT OF EXERCISE PRICE AND
NUMBER OF SHARES PURCHASABLE OR
NUMBER OF WARRANTS 6
ARTICLE V REGISTRATION, EXCHANGE, TRANSFER AND
SUBSTITUTION OF WARRANT CERTIFICATES 10
Section 5.1 REGISTRATION, EXCHANGE AND
TRANSFER OF WARRANT CERTIFICATES 10
Section 5.2 MUTILATED, DESTROYED, LOST OR
STOLEN WARRANT CERTIFICATES 10
Section 5.3 PERSONS DEEMED OWNERS 11
Section 5.4 CANCELLATION OF WARRANT CERTIFICATES 11
ARTICLE VI OTHER PROVISIONS RELATING TO RIGHTS OF
HOLDERS OF WARRANT CERTIFICATES 11
Section 6.1 NO RIGHTS AS SHAREHOLDER CONFERRED BY
WARRANTS OR WARRANT CERTIFICATES 11
Section 6.2 HOLDER OF WARRANT CERTIFICATE MAY
ENFORCE RIGHTS 11
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ARTICLE VII CONCERNING THE COMPANY AS WARRANT AGENT 12
Section 7.1 WARRANT AGENT 12
Section 7.2 DOCUMENTS 12
ARTICLE VIII MISCELLANEOUS 12
Section 8.1 CONSOLIDATIONS AND MERGERS OF THE
COMPANY AND SALES, LEASES AND
CONVEYANCES PERMITTED SUBJECT TO
CERTAIN CONDITIONS 12
Section 8.2 RIGHTS AND DUTIES OF SUCCESSOR
CORPORATION 12
Section 8.3 AMENDMENT 12
Section 8.4 NOTICES TO WARRANTHOLDERS 13
Section 8.5 ADDRESSES 13
Section 8.6 GOVERNING LAW 13
Section 8.7 DELIVERY OF PROSPECTUS 13
Section 8.8 OBTAINING OF GOVERNMENTAL APPROVALS 13
Section 8.9 PERSONS HAVING RIGHTS UNDER WARRANT
AGREEMENT 14
Section 8.10 HEADINGS 14
Section 8.11 COUNTERPARTS 14
Section 8.12 INSPECTION OF AGREEMENT 14
Section 8.13 TRANSFERS IN COMPLIANCE WITH
APPLICABLE LAW 14
Testimonium
Signatures
Exhibit A - Form of Warrant Certificate
ii
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AMENDED AND RESTATED WARRANT AGREEMENT
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THIS AMENDED AND RESTATED WARRANT AGREEMENT, effective as of February 24,
1998 (the "Agreement"), between Weeks Corporation, a Georgia corporation (the
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"Company"), and Armando Codina, an individual resident of the State of Florida
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("Codina").
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WHEREAS, the Company and Codina entered into that certain Warrant Agreement
dated as of February 4, 1998 (the "Prior Agreement"), pursuant to which the
Company issued and sold to the Codina warrant certificates (such warrant
certificates and other warrant certificates issued pursuant to the Prior
Agreement collectively referred to herein as the "Warrant Certificates" and
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individually as a "Warrant Certificate") evidencing 70,000 warrants
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(collectively, the "Warrants" or, individually, a "Warrant") representing the
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right to purchase an aggregate of 70,000 shares of the Company's Common Stock;
WHEREAS, the Company is the warrant agent in connection with the issuance,
exchange, exercise and replacement of the Warrant Certificates; and
WHEREAS, the Prior Agreement set forth, among other things, the form and
provisions of the Warrant Certificates and the terms and conditions upon which
they may be issued, exchanged, exercised and replaced, and the Company and
Codina desire to amend and restate the Prior Agreement in its entirety pursuant
to this Agreement.
NOW, THEREFORE, in consideration of the premises and of the mutual
agreements herein contained, the parties hereto agree as follows:
ARTICLE I
DEFINITIONS
Section 1.1 Certain Definitions. For the purposes of this Agreement,
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the following terms have the meanings set forth below:
"Affiliate" has the same meaning as in Rule 12b-2 promulgated under
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the Exchange Act.
"Agreement" is defined in the Recitals.
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"Business Day" means any day which is neither a Saturday or Sunday nor
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a legal holiday on which banks are authorized or required to be closed in
Atlanta, Georgia.
"Codina" is defined in the Recitals.
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"Common Stock" means shares now or hereafter authorized of any class
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of common stock of the Company and any other capital stock of the Company,
however designated, that has the
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right (subject to any prior rights of the Company's 8.00% Series A Cumulative
Redeemable Preferred Stock and any other class or series of preferred stock
issued by the Company) to participate in any distribution of the assets upon
voluntary or involuntary liquidation, dissolution or winding up of the Company
or in the earnings of the Company without limit as to per share amount, and
shall include, without limitation, the presently authorized 100,000,000 shares
of the Company's common stock, par value $.01 per share.
"Company" is defined in the Recitals.
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"Exchange Act" means the Securities Exchange Act of 1934, as amended.
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"Exercise Price" means $32.75 per share of Common Stock issuable upon
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exercise of the Warrants, as adjusted from time to time in accordance with this
Agreement.
"Expiration Date" is defined in Section 3.2.
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"Governmental Authority" means any nation or government, any state or
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other political subdivision thereof and any entity exercising executive,
legislative, judicial, regulatory or administrative functions of or pertaining
to government.
"Holder" is defined in Section 2.6.
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"Market Price" is defined in Section 4.1(e).
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"NYSE" is defined in Section 4.1(e).
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"Person" means any natural person, corporation, partnership, limited
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liability company, firm, association, government, governmental agency or any
other entity, whether acting in an individual, fiduciary or other capacity.
"Securities Act" means the Securities Act of 1933, as amended.
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"State" means any State of the United States or the District of
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Columbia.
"Transfer Agent" is defined in Section 3.4.
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"Valuation Date" is defined in Section 4.1(h).
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"Warrant" or "Warrants" is defined in the Recitals.
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"Warrant Certificate" or "Warrant Certificates" is defined in the
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Recitals.
"Warrant Register" is defined in Section 5.1.
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ARTICLE II
ISSUANCE AND EXECUTION
OF WARRANT CERTIFICATES
Section II.1 ISSUANCE OF WARRANT CERTIFICATES. Upon issuance, each
Warrant Certificate shall evidence one or more Warrants. Each Warrant evidenced
thereby shall represent the right, subject to the provisions contained herein
and therein, to purchase one (1) share of Common Stock.
Section II.2 FORM OF WARRANT CERTIFICATE. The Warrant Certificates
(including the Form(s) of Exercise and Assignment to be set forth on the reverse
thereof) shall be in substantially the form set forth in Exhibit A hereto, shall
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be printed, lithographed or engraved on steel engraved borders (or in any other
manner determined by the officers executing such Warrant Certificates, with the
execution thereof by such officers conclusively evidencing such determination)
and may have such letters, numbers or other marks of identification and such
legends or endorsements placed thereon as may be required to comply with any law
or with any rule or regulation made pursuant thereto or with any rule or
regulation of any securities exchange on which the Warrants may be listed or as
may, consistently herewith, be determined by the officers executing such Warrant
Certificates, with the execution thereof by such officers conclusively
evidencing such determination.
Section II.3 EXECUTION AND DELIVERY OF WARRANT CERTIFICATES.The Warrant
Certificates shall be executed on behalf of the Company by its Chairman and
Chief Executive Officer, its President or its Chief Financial Officer, under its
corporate seal reproduced thereon attested to by its Treasurer or Secretary. The
signature of any of these officers on the Warrant Certificates may be manual or
facsimile.
Warrant Certificates evidencing the right to purchase a number of shares of
Common Stock having an aggregate par value not exceeding $700.00 (except as
provided in Sections 2.4, 3.3(b), 5.1 and 5.2) may be executed and delivered by
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the Company upon the execution of this Warrant Agreement or from time to time
thereafter. Subsequent to such original issuance of the Warrant Certificates,
the Company shall execute and deliver a Warrant Certificate only if the Warrant
Certificate is issued in exchange or in substitution for one or more previously
executed and delivered Warrant Certificates or in connection with their
transfer, as hereinafter provided.
Each Warrant Certificate shall be dated the date of its execution by the
Company.
No Warrant Certificate shall be entitled to any benefit under this
Agreement or be valid or obligatory for any purpose, and no Warrant evidenced
thereby shall be exercisable, until such Warrant Certificate has been duly
executed by the Company. Such signature by the Company shall be conclusive
evidence, and the only evidence, that the Warrant Certificate so executed has
been duly issued hereunder.
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Warrant Certificates bearing the manual or facsimile signatures of
individuals who were at the time the proper officers of the Company shall bind
the Company, notwithstanding that such individuals or any of them have ceased to
hold such offices prior to the delivery of such Warrant Certificates.
Section II.4 TEMPORARY WARRANT CERTIFICATES. Pending the preparation of
definitive Warrant Certificates, the Company may execute and deliver temporary
Warrant Certificates which are printed, lithographed, typewritten, mimeographed
or otherwise produced substantially of the tenor of the definitive Warrant
Certificates in lieu of which they are issued and with such appropriate
insertions, omissions, substitutions and other variations as the officers
executing such Warrant Certificates may determine, with the execution thereof by
such officers conclusively evidencing such determination.
If temporary Warrant Certificates are issued, the Company will cause
definitive Warrant Certificates to be prepared without unreasonable delay. After
the preparation of definitive Warrant Certificates, the temporary Warrant
Certificates shall be exchangeable for definitive Warrant Certificates upon
surrender of the temporary Warrant Certificates to the Company, without charge
to the Holder. Upon surrender for cancellation of any one or more temporary
Warrant Certificates, the Company shall execute and deliver in exchange therefor
definitive Warrant Certificates representing the same aggregate number of
Warrants. Until so exchanged, the temporary Warrant Certificates shall in all
respects be entitled to the same benefits under this Agreement as definitive
Warrant Certificates.
Section II.5 PAYMENT OF TAXES. The Company will pay all stamp taxes and
other duties, if any, arising out of or related to the execution and delivery of
this Agreement or the original issuance of the Warrant Certificates, under the
laws of the United States of America or any State or political subdivision
thereof.
Section II.6 DEFINITION OF HOLDER. The term "Holder" as used herein
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shall mean the Person in whose name at the time of determination such Warrant
Certificate shall be registered upon the Warrant Register to be maintained by
the Company for that purpose pursuant to Section 5.1.
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ARTICLE III
WARRANT PRICE, DURATION AND EXERCISE OF WARRANTS
Section III.1 WARRANT PRICE. During the period set forth in Section 3.2,
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each Warrant shall entitle the Holder thereof, subject to the provisions of this
Agreement, to purchase from the Company one share of Common Stock, subject to
adjustment as provided in Article IV, at the Exercise Price.
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Section III.2 DURATION OF WARRANTS. Any Warrant evidenced by a Warrant
Certificate may be exercised by the Holder thereof at any time and from time to
time during the period beginning on August 24, 1999, and at or before 5:00 p.m.
(Atlanta time) on February 24, 2008 (the "Expiration Date"), only upon the terms
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and subject to the conditions set forth herein and in the applicable Warrant
Certificate. Each Warrant not exercised at or before 5:00 p.m. (Atlanta time)
on the Expiration Date shall become void, and all rights of the Holder of the
Warrant Certificate evidencing such Warrant under this Agreement or otherwise
shall cease.
Section III.3 EXERCISE OF WARRANTS. (a) During the period specified in
Section 3.2, any whole number of Warrants may be exercised by surrendering the
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Warrant Certificate evidencing such Warrants at the place or at the places set
forth in the Warrant Certificate, with the purchase form set forth in the
Warrant Certificate duly executed, accompanied by payment in full, in lawful
money of the United States of America, in cash or by certified check or official
bank check or by wire transfer in immediately available funds, of the Exercise
Price for each Warrant exercised. The date on which payment in full of the
Exercise Price for a Warrant and the duly executed and completed Warrant
Certificate are received by the Company shall be deemed to be the date on which
such Warrant is exercised.
(b) As soon as practicable after the exercise of any Warrants, the Company
shall issue to or upon the order of the Holder of the Warrant Certificate
evidencing such Warrants, a certificate or certificates representing the number
of shares of Common Stock to which such Holder is entitled in such name or names
as may be directed by such Holder. If fewer than all of the Warrants evidenced
by such Warrant Certificate are exercised, the Company shall execute and deliver
a new Warrant Certificate evidencing the number of Warrants remaining
unexercised.
(c) The Company shall not be required to pay any stamp or other tax or
other governmental charge required to be paid in connection with any transfer
involved in the issuance of the Common Stock. In the event that any such
transfer is involved, the Company shall not be required to issue or deliver any
shares of Common Stock until such tax or other charge shall have been paid or it
has been established to the Company's satisfaction that no such tax or other
charge is due.
Section III.4 RESERVATION OF SHARES. For the purpose of enabling it to
satisfy any obligation to issue shares of Common Stock upon exercise of
Warrants, the Company will, at all times through the close of business on the
Expiration Date, reserve and keep available, free from preemptive rights, out of
the aggregate of its authorized but unissued capital stock or its authorized and
issued capital stock held in its treasury, for the purpose of enabling it to
satisfy any obligation to issue Common Stock upon exercise of Warrants, the
maximum number of shares of Common Stock which may then be deliverable upon the
exercise of all outstanding Warrants. The transfer agent for shares of Common
Stock of the Company (the "Transfer Agent") and every subsequent transfer agent
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for any shares of the Company's capital stock issuable upon the exercise of the
Warrants will be irrevocably authorized and directed at all times to reserve
such number of authorized shares as shall be required for such purpose. The
Company will keep a copy of this Agreement on file with the Transfer Agent and
with every subsequent
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transfer agent for any shares of the Company's capital stock issuable upon the
exercise of the rights of purchase represented by the Warrants. The Company will
furnish such Transfer Agent a copy of all notices of adjustments, and
certificates related thereto, transmitted to each Holder pursuant to Section
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8.4. Before taking any action which would cause an adjustment pursuant to
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Section 4.1 to the maximum number of shares of Common Stock deliverable upon the
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exercise of all outstanding Warrants pursuant to Section 3.3, the Company shall
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cause to be authorized additional shares of Common Stock such that the sum of
such maximum number of shares of Common Stock deliverable upon exercise of all
outstanding Warrants and the number of shares of Common Stock outstanding as of
such date does not exceed the number of shares of Common Stock authorized
pursuant to the Company's Restated Articles of Incorporation, as amended.
The Company covenants that all shares of Common Stock issued upon exercise
of the Warrants will, upon issuance in accordance with the terms of this
Agreement, be fully paid and nonassessable and free from all taxes, liens,
charges and security interests created by or imposed upon the Company with
respect to the issuance and holding thereof.
ARTICLE IV
OTHER TERMS OF WARRANTS
Section IV.1 ADJUSTMENT OF EXERCISE PRICE AND NUMBER OF SHARES
PURCHASABLE OR NUMBER OF WARRANTS. The Exercise Price, the number of shares of
Common Stock purchasable upon the exercise of each Warrant and the number of
Warrants outstanding are subject to adjustment from time to time upon the
occurrence of the events enumerated in this Section 4.1.
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(a) If the Company shall (i) pay a dividend in or make a distribution of
shares of its capital stock, whether shares of Common Stock or shares of its
capital stock of any other class, (ii) subdivide its outstanding shares of
Common Stock, (iii) combine its outstanding shares of Common Stock into a
smaller number of shares of Common Stock or (iv) issue any shares of its capital
stock in a reclassification of the Common Stock (including any such
reclassification in connection with a consolidation or merger in which the
Company is the continuing corporation), the number of shares of Common Stock
purchasable upon exercise of each Warrant immediately prior thereto shall be
adjusted so that the Holder of each Warrant shall be entitled to receive the
kind and number of shares of Common Stock or other securities of the Company
which such Holder would have owned or have been entitled to receive after the
happening of any of the events described above, had such Warrant been exercised
immediately prior to the happening of such event or any record date with respect
thereto. An adjustment made pursuant to this paragraph (a) shall become
effective immediately after the effective date of such event, retroactive to
immediately after the record date, if any, for such event.
(b) If the Company shall issue rights, options or warrants to all Holders
of its outstanding Common Stock, without any charge to such Holders, entitling
them to subscribe for or purchase shares of Common Stock at a price per share
that is lower than the Market Price per
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share of Common Stock (as defined in paragraph (e) below) at the record date
mentioned below, the number of shares of Common Stock thereafter purchasable
upon the exercise of each Warrant shall be determined by multiplying the number
of shares of Common Stock theretofore purchasable upon exercise of each Warrant
by a fraction, of which the numerator shall be (i) the number of shares of
Common Stock outstanding on the date of issuance of such rights, options or
warrants plus the number of additional shares of Common Stock offered for
subscription or purchase, and of which the denominator shall be (ii) the number
of shares of Common Stock outstanding on the date of issuance of such rights,
options or warrants plus the number of shares which the aggregate offering price
of the total number of shares of Common Stock so offered would purchase at the
Market Price per share of Common Stock at such record date. Such adjustment
shall be made whenever such rights, options or warrants are issued, and shall
become effective retroactive to immediately after the record date for the
determination of shareholders entitled to receive such rights, options or
warrants.
(c) If the Company shall distribute to all Holders of its shares of Common
Stock evidence of its indebtedness or assets (excluding cash dividends or
distributions payable out of capital surplus and dividends or distributions
referred to in paragraph (a) above) or rights, options or warrants or
convertible or exchangeable securities containing the right to subscribe for or
purchase shares of Common Stock (excluding those referred to in paragraph (b)
above), then in each case the number of shares of Common Stock thereafter
purchasable upon the exercise of each Warrant shall be determined by multiplying
the number of shares of Common Stock theretofore purchasable upon the exercise
of each Warrant, by a fraction, of which the numerator shall be (i) the then
current Market Price per share of Common Stock (as defined in paragraph (e)
below) on the date of such distribution, and of which the denominator shall be
(ii) the then current Market Price per share of Common Stock less the then fair
value (as determined by the Board of Directors of the Company, whose
determination shall be conclusive) of the portion of the assets or evidence of
indebtedness so distributed or of such subscription rights, options or warrants
or convertible or exchangeable securities applicable to one (1) share of Common
Stock. Such adjustment shall be made whenever any such distribution is made,
and shall become effective on the date of distribution retroactive to
immediately after the record date for the determination of shareholders entitled
to receive such distribution.
(d) In the event of any capital reorganization or any reclassification of
the Common Stock (except as provided in paragraphs (a) through (c) above), any
Holder of Warrants upon exercise thereof shall be entitled to receive, in lieu
of the Common Stock to which he or she would have become entitled upon exercise
immediately prior to such reorganization or reclassification, the shares (of any
class or classes) or other securities or property of the Company that he or she
would have been entitled to receive at the same aggregate Exercise Price upon
such reorganization or reclassification if his or her Warrants had been
exercised immediately prior thereto.
(e) For the purpose of any computation under paragraphs (b) and (c) of this
Section 4.1, the current or closing Market Price per share of Common Stock at
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any date shall be deemed to be the average of the daily closing prices for the
twenty (20) consecutive trading days before the date of such computation. The
closing price for each day shall be the last sale price for such
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day, in either case as reported in the principal consolidated transaction
reporting system with respect to securities listed or admitted to trading on the
New York Stock Exchange (the "NYSE") or if the Common Stock is not listed on the
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NYSE, then on the principal United States national securities exchange on which
the Common Stock is listed or quoted. If the Common Stock is not listed or
quoted on any United States national securities exchange, then the current or
closing market price per share of Common Stock shall be determined by the Board
of Directors of the Company in good faith.
(f) Whenever the number of shares of Common Stock purchasable upon the
exercise of each Warrant is adjusted as herein provided, the Exercise Price
payable upon the exercise of each Warrant shall be adjusted by multiplying such
Exercise Price immediately prior to such adjustment by a fraction, of which the
numerator shall be the number of shares purchasable upon the exercise of each
Warrant immediately prior to such adjustment, and of which the denominator shall
be the number of shares so purchasable immediately thereafter.
(g) The Company may elect, on or after the date of any adjustment required
by paragraphs (a) through (d) of this Section 4.1, to adjust the number of
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Warrants in substitution for an adjustment in the number of shares of Common
Stock purchasable upon the exercise of a Warrant. Each of the Warrants
outstanding after such adjustment of the number of Warrants shall be exercisable
for the same number of shares of Common Stock as immediately prior to such
adjustment. Each Warrant held of record prior to such adjustment of the number
of Warrants shall become that number of Warrants (calculated to the nearest
hundredth) obtained by dividing the Exercise Price in effect prior to adjustment
of the Exercise Price by the Exercise Price in effect after adjustment of the
Exercise Price. The Company shall notify the Holders of Warrants, in the same
manner as provided in the first paragraph of Section 8.4, of its election to
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adjust the number of Warrants, indicating the record date for the adjustment,
and, if known at the time, the amount of the adjustment to be made. This record
date may be the date on which the Exercise Price is adjusted or any day
thereafter. Upon each adjustment of the number of Warrants pursuant to this
paragraph (g) the Company shall, as promptly as practicable, cause to be
distributed to Holders of record of Warrants on such record date Warrant
Certificates evidencing, subject to paragraph (h), the additional Warrants to
which such Holders shall be entitled as a result of such adjustment, or, at the
option of the Company, shall cause to be distributed to such Holders of record
in substitution and replacement for the Warrant Certificates held by such
Holders prior to the date of adjustment, and upon surrender thereof, new Warrant
Certificates evidencing all the Warrants to be executed, issued and registered
in the manner specified in Section 5.1 (and which may bear, at the option of the
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Company, the adjusted Exercise Price) and shall be registered in the names of
the Holders of record of Warrant Certificates on the record date specified in
the notice.
(h) The Company shall not be required to issue fractions of Warrants on any
distribution of Warrants to Holders of Warrant Certificates pursuant to
paragraph (g) or to distribute Warrant Certificates that evidence fractional
Warrants. In lieu of such fractional Warrants, there shall be paid to the
registered Holders of the Warrant Certificates with regard to which such
fractional Warrants would otherwise be issuable, an amount in cash equal to the
same fraction of the current market value of a full Warrant on the trading day
immediately prior
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to the date on which such fractional Warrant could have been otherwise issuable
(the "Valuation Date"). For purposes of this paragraph (h), the current market
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value of a Warrant shall be the aggregate closing Market Price on the Valuation
Date (determined as set forth in paragraph (e)) of all shares of Common Stock
issuable upon exercise of one Warrant plus the fair value (as determined by the
Board of Directors of the Company, whose determination shall be conclusive) of
any other assets or securities purchasable upon exercise of one Warrant less the
Exercise Price of one Warrant.
(i) Notwithstanding any adjustment pursuant to Section 4.1 in the number of
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shares of Common Stock purchasable upon the exercise of a Warrant, the Company
shall not be required to issue fractions of shares of Common Stock upon exercise
of the Warrants or to distribute certificates which evidence fractional shares.
In lieu of fractional shares, there shall be paid to the registered Holders of
Warrant Certificates at the time such Warrant Certificates are exercised as
herein provided an amount in cash equal to the same fraction of the current
market value of one (1) share of Common Stock. For purposes of this paragraph
(i), the current market value of one (1) share of Common Stock shall be the
closing Market Price (determined as set forth in paragraph (e)) of one (1) share
of Common Stock for the trading day immediately prior to the date of such
exercise.
ARTICLE V
REGISTRATION, EXCHANGE, TRANSFER AND
SUBSTITUTION OF WARRANT CERTIFICATES
Section V.1 REGISTRATION, EXCHANGE AND TRANSFER OF WARRANT CERTIFICATES.
The Company shall keep, at its principal executive offices, books in which,
subject to such reasonable regulations as it may prescribe, it shall register
Warrant Certificates and transfers of outstanding Warrants (the "Warrant
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Register").
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Upon surrender at the principal executive offices of the Company of Warrant
Certificates properly endorsed or accompanied by appropriate instruments of
transfer and accompanied by written instructions for transfer or exchange, all
in form satisfactory to the Company, such Warrant Certificates may be exchanged
for other Warrant Certificates or may be transferred in whole or in part;
provided, however, that Warrant Certificates issued in exchange for or upon
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transfer of surrendered Warrant Certificates shall evidence the same aggregate
number of Warrants as the Warrant Certificates so surrendered. No service charge
shall be made for any exchange or transfer of Warrant Certificates, but the
Company may require payment of a sum sufficient to cover any stamp or other tax
or governmental charge that may be imposed in connection with any such exchange
or transfer. Whenever any Warrant Certificates are so surrendered for exchange
or transfer, the Company shall execute and deliver to the Person or Persons
entitled thereto a Warrant Certificate or Warrant Certificates as so requested.
The Company shall not be required to effect any exchange or transfer which would
result in the issuance of a Warrant Certificate evidencing a fraction of a
Warrant or a number of full Warrants and a fraction of a Warrant. All Warrant
Certificates issued upon any exchange or transfer of
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Warrant Certificates shall evidence the same obligations, and be entitled to the
same benefits under this Agreement, as the Warrant Certificates surrendered for
such exchange or transfer.
Section V.2 MUTILATED, DESTROYED, LOST OR STOLEN WARRANT CERTIFICATES.
If any mutilated Warrant Certificate is surrendered to the Company, the Company
shall execute and deliver in exchange therefor a new Warrant Certificate of like
tenor and bearing a number not contemporaneously outstanding. If there shall be
delivered to the Company (i) evidence to its satisfaction of the destruction,
loss or theft of any Warrant Certificate and of the ownership thereof and (ii)
such security or indemnity as may be required by it to save the Company and any
agent thereof harmless, then, in the absence of notice to the Company that such
Warrant Certificate has been acquired by a bona fide purchaser, the Company
shall execute and deliver, in lieu of any such destroyed, lost or stolen Warrant
Certificate, a new Warrant Certificate of like tenor and bearing a number not
contemporaneously outstanding. Upon the issuance of any new Warrant Certificate
under this Section 5.2, the Company may require the payment of a sum sufficient
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to cover any tax or other governmental charge that may be imposed in relation
thereto and any other expenses connected therewith. Every new Warrant
Certificate issued pursuant to this Section 5.2 in lieu of any destroyed, lost
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or stolen Warrant Certificate shall evidence an original additional contractual
obligation of the Company, whether or not the destroyed, lost or stolen Warrant
Certificate shall be at any time enforceable by anyone, and shall be entitled to
all the benefits of this Agreement equally and proportionately with any and all
other Warrant Certificates duly issued hereunder. The provisions of this Section
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5.2 are exclusive and shall preclude (to the extent lawful) all other rights and
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remedies with respect to the replacement or payment of mutilated, destroyed,
lost or stolen Warrant Certificates.
Section V.3 PERSONS DEEMED OWNERS. Prior to due presentment of a
Warrant Certificate for registration of transfer, the Company and all other
Persons may treat the Holder as the owner thereof for any purpose and as the
Person entitled to exercise the rights represented by the Warrants evidenced
thereby, any notice to the contrary notwithstanding.
Section V.4 CANCELLATION OF WARRANT CERTIFICATES. Any Warrant
Certificate surrendered to the Company for exchange, transfer or exercise of the
Warrants evidenced thereby shall be promptly canceled by it and shall not be
reissued and, except as expressly permitted by this Agreement, no Warrant
Certificate shall be issued hereunder in lieu or in exchange thereof. The
Company shall promptly cancel any Warrant Certificates previously issued
hereunder which the Company may have acquired in any manner whatsoever.
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ARTICLE VI
OTHER PROVISIONS RELATING TO RIGHTS
OF HOLDERS OF WARRANT CERTIFICATES
Section VI.1 NO RIGHTS AS SHAREHOLDER CONFERRED BY WARRANTS OR WARRANT
CERTIFICATES. No Warrant Certificate or Warrant evidenced thereby shall entitle
the Holder thereof to any of the rights of a shareholder, including, without
limitation, the right to receive dividends.
Section VI.2 HOLDER OF WARRANT CERTIFICATE MAY ENFORCE RIGHTS.
Notwithstanding any of the provisions of this Agreement, any Holder of any
Warrant Certificate, without the consent of any shareholder or the Holder of any
other Warrant Certificate, may, on its own behalf and for its own benefit,
enforce, and may institute and maintain any suit, action or proceeding against
the Company suitable to enforce or otherwise in respect of its right to exercise
the Warrant or Warrants evidenced by his or her Warrant Certificate in the
manner provided in the Warrant Certificates and in this Agreement.
ARTICLE VII
CONCERNING THE COMPANY AS WARRANT AGENT
Section VII.1 WARRANT AGENT. The Company shall serve as warrant agent in
respect of the Warrants and the Warrant Certificates upon the terms and subject
to the conditions herein set forth. The Company shall have the power and
authority granted to and conferred upon it in the Warrant Certificates. All of
the terms and provisions with respect to such power and authority contained in
the Warrant Certificates are subject to and governed by the terms and provisions
hereof.
Section VII.2 DOCUMENTS. The Company shall be protected and shall incur
no liability for or in respect of any action taken or omitted by it in reliance
upon any notice, direction, consent, certificate, affidavit, statement or other
paper or document reasonably believed by it to be genuine and to have been
presented or signed by the proper parties.
-11-
<PAGE>
ARTICLE VIII
MISCELLANEOUS
Section VIII.1 CONSOLIDATIONS AND MERGERS OF THE COMPANY AND SALES, LEASES
AND CONVEYANCES PERMITTED SUBJECT TO CERTAIN CONDITIONS. The Company may
consolidate with, or sell or convey all or substantially all of its assets to,
or merge with or into any other corporation, provided that in any such case,
either the Company shall be the continuing corporation, or the corporation (if
other than the Company) formed by such consolidation or into which the Company
is merged or the corporation which acquired by purchase or conveyance all or
substantially all of the assets of the Company shall expressly assume the
obligations of the Company hereunder.
Section VIII.2 RIGHTS AND DUTIES OF SUCCESSOR CORPORATION. In case of any
such consolidation, merger, sale, lease or conveyance and upon any such
assumption by the successor corporation, such successor corporation shall
succeed to and be substituted for the Company, with the same effect as if it had
been named herein, and the predecessor corporation, except in the event of a
lease, shall be relieved of any further obligation under this Agreement and the
Warrants. Such successor corporation thereupon may cause to be signed, and may
issue either in its own name or in the name of the Company, any or all of the
shares of Common Stock issuable pursuant to the terms hereof.
Section VIII.3 AMENDMENT. This Agreement may be amended by the parties
hereto, without the consent of the Holder of any Warrant Certificate, for the
purpose of curing any ambiguity, or curing, correcting or supplementing any
defective provision contained herein, or making such provisions in regard to
matters or questions arising under this Agreement as the Company may deem
necessary or desirable; provided, however, that such action shall not adversely
-------- -------
affect the interests of the Holders of the Warrant Certificates in any material
respect. Any amendment or supplement to this Agreement or the Warrants that has
a material adverse effect on the interests of Holders of any series of Warrants
shall require the written consent of the Holders of a majority of the then
outstanding Warrants of such series. The consent of each Holder of a Warrant
affected shall be required for any amendment pursuant to which the Exercise
Price would be increased or the number of shares of Common Stock purchasable
upon exercise of Warrants would be decreased.
Section VIII.4 NOTICES TO WARRANTHOLDERS. Upon any adjustment of the
number of shares purchasable upon exercise of each Warrant, the Exercise Price
or the number of Warrants outstanding pursuant to Section 4.1, the Company
-----------
within ten (10) Business Days thereafter shall cause to be given to each of the
Holders of the Warrant Certificates written notice of such adjustments, together
with a copy of a certificate of the Chief Financial Officer of the Company
setting forth the Exercise Price and either the number of shares of Common Stock
and other securities or assets purchasable upon exercise of each Warrant or the
additional number of Warrants to be issued for each previously outstanding
Warrant, as the case may be, after such adjustment and setting forth in
reasonable detail the method of calculation and the facts upon which such
adjustments are made, which certificate shall be conclusive evidence of the
-12-
<PAGE>
correctness of the matters set forth therein, at such Holder's address appearing
on the Warrant Register written notice of such adjustments by first-class mail,
postage prepaid.
Section VIII.5 ADDRESSES. Any communications to the Company with respect
to this Agreement shall be addressed to Weeks Corporation, 4497 Park Drive,
Norcross, Georgia 30093, Attention: Chief Financial Officer. Any communications
to any Holder shall be addressed to such Holder at its address appearing on the
Warrant Register.
Section VIII.6 GOVERNING LAW. This Agreement and each Warrant Certificate
issued hereunder shall be governed by and construed in accordance with the laws
of the State of Georgia.
Section VIII.7 DELIVERY OF PROSPECTUS. Upon the exercise of any Warrant
Certificate, the Company will deliver to the person designated to receive a
certificate representing shares of Common Stock, prior to or concurrently with
the delivery of such securities, a Prospectus.
Section VIII.8 OBTAINING OF GOVERNMENTAL APPROVALS. The Company will from
time to time take all action which may be necessary to obtain and keep effective
any and all permits, consents and approvals of Governmental Authorities and
securities acts filings under United States Federal and state laws (including,
without limitation, to the extent required, the maintenance of the effectiveness
of a registration statement in respect of the Common Stock under the Securities
Act), which may be or become required in connection with exercise of the Warrant
Certificates.
Section VIII.9 PERSONS HAVING RIGHTS UNDER WARRANT AGREEMENT. Nothing in
this Agreement expressed or implied and nothing that may be inferred from any of
the provisions herein is intended, or shall be construed, to confer upon, or
give to, any Person other than the Company and the Holders of the Warrant
Certificates any right, remedy or claim under or by reason of this Agreement or
of any covenant, condition, stipulation, promise or agreement hereof. All
covenants, conditions, stipulations, promises and agreements contained in this
Agreement shall be for the sole and exclusive benefit of the Company and its
successors and of the Holders of the Warrant Certificates.
Section VIII.10 HEADINGS. The Article and Section headings herein and the
Table of Contents are for convenience of reference only and shall not affect the
construction hereof.
Section VIII.11 COUNTERPARTS. This Agreement may be executed in any number
of counterparts, each of which so executed shall be deemed to be an original,
but such counterparts shall together constitute but one and the same instrument.
Section VIII.12 INSPECTION OF AGREEMENT. A copy of this Agreement shall be
available at all reasonable times at the principal executive offices of the
Company for
-13-
<PAGE>
inspection by the Holder of any Warrant Certificate. The Company may
require such Holder to submit its Warrant Certificate for inspection by it.
Section VIII.13 TRANSFERS IN COMPLIANCE WITH APPLICABLE LAW.
Notwithstanding anything in this Agreement to the contrary, no Warrant evidenced
by a Warrant Certificate may be sold, assigned, pledged or otherwise transferred
by the Holder thereof if such sale, assignment, pledge or other transfer is in
violation of applicable law, including, without limitation, any federal or state
securities laws.
-14-
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed effective as of the day and year first above written.
WEEKS CORPORATION
By:______________________________
Name:
Title:
_________________________________
ARMANDO CODINA
-15-
<PAGE>
EXHIBIT A
[FORM OF WARRANT CERTIFICATE]
[Face]
EXERCISABLE ONLY IF EXECUTED AND DELIVERED
BY THE COMPANY AS PROVIDED HEREIN
VOID AFTER 5:00 P.M. (ATLANTA TIME) ON FEBRUARY 24, 2008
WEEKS CORPORATION
Warrant Certificate representing
Warrants to purchase
Common Stock
as described herein.
____________________________
No. __________________ _________ Warrants
This certifies that ____________ or registered assigns is the registered
owner of the above indicated number of Warrants, each Warrant entitling such
registered owner to purchase one (1) share of common stock, par value $.01 per
share ("Common Stock") of Weeks Corporation (the "Company"), subject to
adjustment as provided in Article IV of the Warrant Agreement referred to
herein, during the period set forth herein on the following basis. The Warrants
shall remain exercisable at any time and from time to time during the period
beginning August 24, 1999 or before 5:00 p.m. (Atlanta time) February 24, 2008.
During such period, each Warrant shall entitle the Holder thereof, subject to
the provisions of the Warrant Agreement (as defined below), to purchase from the
Company one share of Common Stock at the exercise price of $32.75, subject to
adjustment as provided in Article IV of the Warrant Agreement referred to herein
(the "Exercise Price"). The Holder of this Warrant Certificate may exercise the
Warrants evidenced hereby, in whole or in part, by surrendering this Warrant
Certificate, with the purchase form set forth hereon duly completed, accompanied
by payment in full, in lawful money of the United States of America, in cash or
by certified check or official bank check or by bank wire transfer in
immediately available funds, the Exercise Price for each Warrant exercised, to
the Company, at the principal executive offices of the Company, or its
successor, as warrant agent (the "Warrant Agent"), the addresses specified on
the reverse hereof and upon compliance with and subject to the conditions set
forth herein and in the Warrant Agreement.
The term "Holder" as used herein shall mean the person in whose name at the
time of determination such Warrant Certificate shall be registered upon the
books to be maintained by the Company for that purpose pursuant to Section 5.1
of the Warrant Agreement.
Any whole number of Warrants evidenced by this Warrant Certificate may be
exercised to purchase shares of Common Stock. Upon any exercise of fewer than
all of the Warrants
A-1
<PAGE>
evidenced by this Warrant Certificate, there shall be issued to the registered
owner hereof a new Warrant Certificate evidencing the number of Warrants
remaining unexercised.
This Warrant Certificate is issued under and in accordance with the Amended
and Restated Warrant Agreement dated effective as of February 24, 1998 (the
"Warrant Agreement"), between the Company and Armando Codina and is subject to
the terms and provisions contained in the Warrant Agreement, to all of which
terms and provisions the Holder of this Warrant Certificate consents by
acceptance hereof. Copies of the Warrant Agreement are on file at the above-
mentioned offices of the Company.
This Warrant Certificate and all rights hereunder, may be transferred when
surrendered at the principal executive offices of the Company by the registered
owner or his assigns, in person or by an attorney duly authorized in writing, in
the manner and subject to the limitations provided in the Warrant Agreement.
After execution and delivery by the Company and prior to the expiration of
this Warrant Certificate, this Warrant Certificate may be exchanged at the
principal executive offices of the Company for Warrant Certificates representing
the same aggregate number of Warrants.
This Warrant Certificate shall not entitle the registered owner hereof to
any of the rights of a shareholder of the Company, including, without
limitation, the right to receive dividends.
Reference is hereby made to the further provisions of this Warrant
Certificate set forth on the reverse hereof, which further provisions shall for
all purposes have the same effect as if set forth at this place.
This Warrant Certificate shall not be valid obligatory for any purpose
until executed and delivered by the Company.
A-2
<PAGE>
IN WITNESS WHEREOF, the Company has caused this Warrant Certificate to be
duly executed under its corporate seal.
Dated: ___________, 1998 WEEKS CORPORATION
Attest:
By:_____________________________
Name:
Title:
____________________________
Secretary
A-3
<PAGE>
[FORM OF WARRANT CERTIFICATE]
[REVERSE]
(Instructions for Exercise of Warrants)
To exercise any Warrants evidenced hereby, the Holder of this Warrant
Certificate must pay in cash or by certified check or official bank check or by
wire transfer in immediately available funds, the Exercise Price in full for
each of the Warrants exercised, to Weeks Corporation, 4497 Park Drive, Norcross,
Georgia 30093; Attn: Chief Financial Officer, which payment should specify the
name of the Holder of this Warrant Certificate and the number of Warrants
exercised by such Holder. In addition, the Holder of this Warrant Certificate
should complete the information required below and present in person or mail by
registered mail this Warrant Certificate to the Company at the address set forth
below.
[FORM OF EXERCISE]
(To be executed upon exercise of Warrants.)
The undersigned hereby irrevocably elects to exercise Warrants, represented
by this Warrant Certificate, to purchase _________ shares of Common Stock, par
value $.01 per share ("Common Stock"), of Weeks Corporation and represents that
he or she has tendered payment for such shares of Common Stock in cash or by
certified check or official bank check or by bank wire transfer in immediately
available funds to the order of Weeks Corporation, c/o Chief Financial Officer,
in the amount of $________ in accordance with the terms hereof. The undersigned
requests that said shares of Common Stock be registered in such names and
delivered, all as specified in accordance with the instructions set forth below.
If said number of shares of Common Stock is less than all of the shares of
Common Stock purchasable hereunder, the undersigned requests that a new Warrant
Certificate representing the remaining balance of the Warrants evidenced hereby
be issued and delivered to the undersigned unless otherwise specified in the
instructions below.
A-4
<PAGE>
Dated:______________________ Name:_________________________
(Please Print)
___________________________ Address:
Insert Social Security or Other _______________________________
Identifying Number of Holder) _______________________________
_______________________________
___________________________
Signature
(Signature must conform in all
respects to name of Holder as specified on
the face of this Warrant Certificate and must
bear a signature guarantee by a bank, trust
company or member broker of the New York,
Chicago or Pacific Stock Exchange.)
This Warrant may be exercised by hand or by mail
at the following address:
Weeks Corporation
4497 Park Drive
Norcross, Georgia 30093
Attention: Chief Financial Officer
(Instructions as to form and delivery of
certificates representing shares of Common Stock
and/or Warrant Certificates):
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
[FORM OF ASSIGNMENT]
(TO BE EXECUTED TO TRANSFER
THE WARRANT CERTIFICATE)
A-5
<PAGE>
FOR VALUE RECEIVED, _______________________________ hereby sells, assigns
and transfers unto
___________________________
___________________________
___________________________
Please print name and address
(including zip code)
Please insert social security or
other identifying number
___________________________
the right represented by the within Warrant Certificate and does hereby
irrevocably constitute and appoint ________________, Attorney, to transfer said
Warrant Certificate on the books of the Warrant Agent with full power of
substitution.
Dated:__________________ _____________________________
Signature
(Signature must conform in all respects
to name of Holder as specified on the
face of this Warrant Certificate and
must bear a signature guarantee by a
bank, trust company or member broker of
the New York, Chicago or Pacific Stock
Exchange.)
Signature Guaranteed:
__________________________
A-6
<PAGE>
EXECUTION COPY
_____________________________________________________
WEEKS CORPORATION
AND
HENRY BEFELER, FORD GIBSON, HANK KLEIN,
JOSE HEVIA, RAFAEL RODON AND WILLIAM WASEY
_____________________________________________________
AMENDED AND RESTATED WARRANT AGREEMENT
Effective as of February 24, 1998
_____________________________________________________
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
<S> <C> <C>
ARTICLE I DEFINITIONS 1
Section 1.1 Certain Definitions 1
ARTICLE II ISSUANCE AND EXECUTIONOF WARRANT CERTIFICATES 3
Section 2.1 ISSUANCE OF WARRANT CERTIFICATES 3
Section 2.2 FORM OF WARRANT CERTIFICATE 3
Section 2.3 EXECUTION AND DELIVERY OF WARRANT
CERTIFICATES 3
Section 2.4 TEMPORARY WARRANT CERTIFICATES 4
Section 2.5 PAYMENT OF TAXES 4
Section 2.6 DEFINITION OF HOLDER 4
ARTICLE III WARRANT PRICE, DURATION AND EXERCISE OF WARRANTS 5
Section 3.1 WARRANT PRICE 5
Section 3.2 DURATION OF WARRANTS 5
Section 3.3 EXERCISE OF WARRANTS 5
Section 3.4 RESERVATION OF SHARES 6
ARTICLE IV OTHER TERMS OF WARRANTS 6
Section 4.1 6
ADJUSTMENT OF EXERCISE PRICE AND NUMBER OF SHARES
PURCHASABLE OR NUMBER OF WARRANTS 6
ARTICLE V REGISTRATION, EXCHANGE, TRANSFER ANDSUBSTITUTION OF WARRANT 10
CERTIFICATES
Section 5.1 REGISTRATION, EXCHANGE AND TRANSFER
OF WARRANT CERTIFICATES 10
Section 5.2 MUTILATED, DESTROYED, LOST OR STOLEN
WARRANT CERTIFICATES 10
Section 5.3 PERSONS DEEMED OWNERS 11
Section 5.4 CANCELLATION OF WARRANT CERTIFICATES 11
ARTICLE VI OTHER PROVISIONS RELATING TO RIGHTSOF HOLDERS OF WARRANT 11
CERTIFICATES
Section 6.1 NO RIGHTS AS SHAREHOLDER CONFERRED BY
WARRANTS OR WARRANT CERTIFICATES 11
Section 6.2 HOLDER OF WARRANT CERTIFICATE MAY
ENFORCE RIGHTS 11
</TABLE>
i
<PAGE>
<TABLE>
<S> <C> <C>
ARTICLE VII CONCERNING THE COMPANY AS WARRANT AGENT 12
Section 7.1 WARRANT AGENT 12
Section 7.2 12
ARTICLE VIII MISCELLANEOUS 12
Section 8.1 CONSOLIDATIONS AND MERGERS OF THE
COMPANY AND SALES, LEASES AND CONVEYANCES
PERMITTED SUBJECT TO CERTAIN CONDITIONS 12
Section 8.2 RIGHTS AND DUTIES OF SUCCESSOR CORPORATION 12
Section 8.3 AMENDMENT 12
Section 8.4 NOTICES TO WARRANTHOLDERS 13
Section 8.5 ADDRESSES 13
Section 8.6 GOVERNING LAW 13
Section 8.7 DELIVERY OF PROSPECTUS 13
Section 8.8 OBTAINING OF GOVERNMENTAL APPROVALS 13
Section 8.9 PERSONS HAVING RIGHTS UNDER WARRANT
AGREEMENT 14
Section 8.10 HEADINGS 14
Section 8.11 COUNTERPARTS 14
Section 8.12 INSPECTION OF AGREEMENT 14
Section 8.13 TRANSFERS IN COMPLIANCE WITH APPLICABLE
LAW 14
</TABLE>
ii
<PAGE>
Testimonium
Signatures
Exhibit A - Form of Warrant Certificate
iii
<PAGE>
AMENDED AND RESTATED WARRANT AGREEMENT
--------------------------------------
THIS AMENDED AND RESTATED WARRANT AGREEMENT, dated effective as of February
24, 1998 (the "Agreement"), between Weeks Corporation, a Georgia corporation
---------
(the "Company"), and HENRY BEFELER, an individual resident of the State of
-------
Florida, FORD GIBSON, an individual resident of the State of Florida, HANK
KLEIN, an individual resident of the State of Florida, JOSE HEVIA, an individual
resident of the State of Florida, RAFAEL RODON, an individual resident of the
State of Florida, and WILLIAM WASEY, an individual resident of the State of
Florida (collectively, the "Codina Executives").
-----------------
WHEREAS, the Company and the Codina Executives entered into that certain
Warrant Agreement dated as of February 24, 1998 (the "Prior Agreement"),
---------------
pursuant to which the Company issued and sold to the Codina Executives warrant
certificates (such warrant certificates and other warrant certificates issued
pursuant to the Prior Agreement collectively referred to herein as the "Warrant
-------
Certificates" and individually as a "Warrant Certificate") evidencing 180,000
- ------------ -------------------
warrants (collectively, the "Warrants" or, individually, a "Warrant")
-------- -------
representing the right to purchase an aggregate of 180,000 shares of the
Company's Common Stock;
WHEREAS, the Company is the warrant agent in connection with the issuance,
exchange, exercise and replacement of the Warrant Certificates; and
WHEREAS, the Prior Agreement set forth, among other things, the form and
provisions of the Warrant Certificates and the terms and conditions upon which
they may be issued, exchanged, exercised and replaced, and the Company and the
Codina Executives desire to amend and restate the Prior Agreement in its
entirety pursuant to this Agreement.
NOW, THEREFORE, in consideration of the premises and of the mutual
agreements herein contained, the parties hereto agree as follows:
ARTICLE I
DEFINITIONS
Section 1.1 Certain Definitions. For the purposes of this Agreement,
-------------------
the following terms have the meanings set forth below:
"Affiliate" has the same meaning as in Rule 12b-2 promulgated under
---------
the Exchange Act.
"Agreement" is defined in the Recitals.
---------
<PAGE>
"Business Day" means any day which is neither a Saturday or Sunday nor
------------
a legal holiday on which banks are authorized or required to be closed in
Atlanta, Georgia.
"Codina Executives" is defined in the Recitals.
-----------------
"Common Stock" means shares now or hereafter authorized of any class
------------
of common stock of the Company and any other capital stock of the Company,
however designated, that has the right (subject to any prior rights of the
Company's 8.00% Series A Cumulative Redeemable Preferred Stock and any other
class or series of preferred stock issued by the Company) to participate in any
distribution of the assets upon voluntary or involuntary liquidation,
dissolution or winding up of the Company or in the earnings of the Company
without limit as to per share amount, and shall include, without limitation, the
presently authorized 100,000,000 shares of the Company's common stock, par
value $.01 per share.
"Company" is defined in the Recitals.
-------
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
------------
"Exercise Price" means $32.75 per share of Common Stock issuable upon
--------------
exercise of the Warrants, as adjusted from time to time in accordance with this
Agreement.
"Expiration Date" is defined in Section 3.2.
---------------
"Governmental Authority" means any nation or government, any state or
----------------------
other political subdivision thereof and any entity exercising executive,
legislative, judicial, regulatory or administrative functions of or pertaining
to government.
"Holder" is defined in Section 2.6.
------
"Market Price" is defined in Section 4.1(e).
------------
"NYSE" is defined in Section 4.1(e).
----
"Person" means any natural person, corporation, partnership, limited
------
liability company, firm, association, government, governmental agency or any
other entity, whether acting in an individual, fiduciary or other capacity.
"Securities Act" means the Securities Act of 1933, as amended.
--------------
"State" means any State of the United States or the District of
-----
Columbia.
"Transfer Agent" is defined in Section 3.4.
--------------
"Valuation Date" is defined in Section 4.1(h).
--------------
-2-
<PAGE>
"Warrant" or "Warrants" is defined in the Recitals.
------- --------
"Warrant Certificate" or "Warrant Certificates" is defined in the
------------------- --------------------
Recitals.
"Warrant Register" is defined in Section 5.1.
----------------
ARTICLE II
ISSUANCE AND EXECUTION
OF WARRANT CERTIFICATES
Section II.1 ISSUANCE OF WARRANT CERTIFICATES. Upon issuance, each
Warrant Certificate shall evidence one or more Warrants. Each Warrant evidenced
thereby shall represent the right, subject to the provisions contained herein
and therein, to purchase one (1) share of Common Stock.
Section II.2 FORM OF WARRANT CERTIFICATE. The Warrant Certificates
(including the Form(s) of Exercise and Assignment to be set forth on the reverse
thereof) shall be in substantially the form set forth in Exhibit A hereto, shall
---------
be printed, lithographed or engraved on steel engraved borders (or in any other
manner determined by the officers executing such Warrant Certificates, with the
execution thereof by such officers conclusively evidencing such determination)
and may have such letters, numbers or other marks of identification and such
legends or endorsements placed thereon as may be required to comply with any law
or with any rule or regulation made pursuant thereto or with any rule or
regulation of any securities exchange on which the Warrants may be listed or as
may, consistently herewith, be determined by the officers executing such Warrant
Certificates, with the execution thereof by such officers conclusively
evidencing such determination.
Section II.3 EXECUTION AND DELIVERY OF WARRANT CERTIFICATES. The Warrant
Certificates shall be executed on behalf of the Company by its Chairman and
Chief Executive Officer, its President or its Chief Financial Officer, under its
corporate seal reproduced thereon attested to by its Treasurer or Secretary. The
signature of any of these officers on the Warrant Certificates may be manual or
facsimile.
Warrant Certificates evidencing the right to purchase a number of shares of
Common Stock having an aggregate par value not exceeding $1,800.00 (except as
provided in Sections 2.4, 3.3(b), 5.1 and 5.2) may be executed and delivered by
---------------------------------
the Company upon the execution of this Warrant Agreement or from time to time
thereafter. Subsequent to such original issuance of the Warrant Certificates,
the Company shall execute and deliver a Warrant Certificate only if the Warrant
Certificate is issued in exchange or in substitution for one or more previously
executed and delivered Warrant Certificates or in connection with their
transfer, as hereinafter provided.
-3-
<PAGE>
Each Warrant Certificate shall be dated the date of its execution by the
Company.
No Warrant Certificate shall be entitled to any benefit under this
Agreement or be valid or obligatory for any purpose, and no Warrant evidenced
thereby shall be exercisable, until such Warrant Certificate has been duly
executed by the Company. Such signature by the Company shall be conclusive
evidence, and the only evidence, that the Warrant Certificate so executed has
been duly issued hereunder.
Warrant Certificates bearing the manual or facsimile signatures of
individuals who were at the time the proper officers of the Company shall bind
the Company, notwithstanding that such individuals or any of them have ceased to
hold such offices prior to the delivery of such Warrant Certificates.
Section II.4 TEMPORARY WARRANT CERTIFICATES. Pending the preparation of
definitive Warrant Certificates, the Company may execute and deliver temporary
Warrant Certificates which are printed, lithographed, typewritten, mimeographed
or otherwise produced substantially of the tenor of the definitive Warrant
Certificates in lieu of which they are issued and with such appropriate
insertions, omissions, substitutions and other variations as the officers
executing such Warrant Certificates may determine, with the execution thereof by
such officers conclusively evidencing such determination.
If temporary Warrant Certificates are issued, the Company will cause
definitive Warrant Certificates to be prepared without unreasonable delay. After
the preparation of definitive Warrant Certificates, the temporary Warrant
Certificates shall be exchangeable for definitive Warrant Certificates upon
surrender of the temporary Warrant Certificates to the Company, without charge
to the Holder. Upon surrender for cancellation of any one or more temporary
Warrant Certificates, the Company shall execute and deliver in exchange therefor
definitive Warrant Certificates representing the same aggregate number of
Warrants. Until so exchanged, the temporary Warrant Certificates shall in all
respects be entitled to the same benefits under this Agreement as definitive
Warrant Certificates.
Section II.5 PAYMENT OF TAXES. The Company will pay all stamp taxes and
other duties, if any, arising out of or related to the execution and delivery of
this Agreement or the original issuance of the Warrant Certificates, under the
laws of the United States of America or any State or political subdivision
thereof.
Section II.6 DEFINITION OF HOLDER. The term "Holder" as used herein
------
shall mean the Person in whose name at the time of determination such Warrant
Certificate shall be registered upon the Warrant Register to be maintained by
the Company for that purpose pursuant to Section 5.1.
-----------
-4-
<PAGE>
ARTICLE III
WARRANT PRICE, DURATION AND EXERCISE OF WARRANTS
Section III.1 WARRANT PRICE. During the period set forth in Section 3.2,
-----------
each Warrant shall entitle the Holder thereof, subject to the provisions of this
Agreement, to purchase from the Company one share of Common Stock, subject to
adjustment as provided in Article IV, at the Exercise Price.
Section III.2 DURATION OF WARRANTS. Any Warrant evidenced by a Warrant
Certificate may be exercised by the Holder thereof at any time and from time to
time during the period beginning on August 24, 1999, and at or before 5:00 p.m.
(Atlanta time) on February 24, 2008 (the "Expiration Date"), only upon the terms
---------------
and subject to the conditions set forth herein and in the applicable Warrant
Certificate. Each Warrant not exercised at or before 5:00 p.m. (Atlanta time)
on the Expiration Date shall become void, and all rights of the Holder of the
Warrant Certificate evidencing such Warrant under this Agreement or otherwise
shall cease.
Section III.3 EXERCISE OF WARRANTS. (a) During the period specified in
Section 3.2, any whole number of Warrants may be exercised by surrendering the
- -----------
Warrant Certificate evidencing such Warrants at the place or at the places set
forth in the Warrant Certificate, with the purchase form set forth in the
Warrant Certificate duly executed, accompanied by payment in full, in lawful
money of the United States of America, in cash or by certified check or official
bank check or by wire transfer in immediately available funds, of the Exercise
Price for each Warrant exercised. The date on which payment in full of the
Exercise Price for a Warrant and the duly executed and completed Warrant
Certificate are received by the Company shall be deemed to be the date on which
such Warrant is exercised.
(b) As soon as practicable after the exercise of any Warrants, the Company
shall issue to or upon the order of the Holder of the Warrant Certificate
evidencing such Warrants, a certificate or certificates representing the number
of shares of Common Stock to which such Holder is entitled in such name or names
as may be directed by such Holder. If fewer than all of the Warrants evidenced
by such Warrant Certificate are exercised, the Company shall execute and deliver
a new Warrant Certificate evidencing the number of Warrants remaining
unexercised.
(c) The Company shall not be required to pay any stamp or other tax or
other governmental charge required to be paid in connection with any transfer
involved in the issuance of the Common Stock. In the event that any such
transfer is involved, the Company shall not be required to issue or deliver any
shares of Common Stock until such tax or other charge shall have been paid or it
has been established to the Company's satisfaction that no such tax or other
charge is due.
-5-
<PAGE>
Section III.4 RESERVATION OF SHARES. For the purpose of enabling it to
satisfy any obligation to issue shares of Common Stock upon exercise of
Warrants, the Company will, at all times through the close of business on the
Expiration Date, reserve and keep available, free from preemptive rights, out of
the aggregate of its authorized but unissued capital stock or its authorized and
issued capital stock held in its treasury, for the purpose of enabling it to
satisfy any obligation to issue Common Stock upon exercise of Warrants, the
maximum number of shares of Common Stock which may then be deliverable upon the
exercise of all outstanding Warrants. The transfer agent for shares of Common
Stock of the Company (the "Transfer Agent") and every subsequent transfer agent
--------------
for any shares of the Company's capital stock issuable upon the exercise of the
Warrants will be irrevocably authorized and directed at all times to reserve
such number of authorized shares as shall be required for such purpose. The
Company will keep a copy of this Agreement on file with the Transfer Agent and
with every subsequent transfer agent for any shares of the Company's capital
stock issuable upon the exercise of the rights of purchase represented by the
Warrants. The Company will furnish such Transfer Agent a copy of all notices of
adjustments, and certificates related thereto, transmitted to each Holder
pursuant to Section 8.4. Before taking any action which would cause an
-----------
adjustment pursuant to Section 4.1 to the maximum number of shares of Common
-----------
Stock deliverable upon the exercise of all outstanding Warrants pursuant to
Section 3.3, the Company shall cause to be authorized additional shares of
- -----------
Common Stock such that the sum of such maximum number of shares of Common Stock
deliverable upon exercise of all outstanding Warrants and the number of shares
of Common Stock outstanding as of such date does not exceed the number of shares
of Common Stock authorized pursuant to the Company's Restated Articles of
Incorporation, as amended.
The Company covenants that all shares of Common Stock issued upon exercise
of the Warrants will, upon issuance in accordance with the terms of this
Agreement, be fully paid and nonassessable and free from all taxes, liens,
charges and security interests created by or imposed upon the Company with
respect to the issuance and holding thereof.
ARTICLE IV
OTHER TERMS OF WARRANTS
Section IV.1 ADJUSTMENT OF EXERCISE PRICE AND NUMBER OF SHARES
PURCHASABLE OR NUMBER OF WARRANTS. The Exercise Price, the number of shares of
Common Stock purchasable upon the exercise of each Warrant and the number of
Warrants outstanding are subject to adjustment from time to time upon the
occurrence of the events enumerated in this Section 4.1.
-----------
(a) If the Company shall (i) pay a dividend in or make a distribution of
shares of its capital stock, whether shares of Common Stock or shares of its
capital stock of any other class, (ii) subdivide its outstanding shares of
Common Stock, (iii) combine its outstanding shares of Common Stock into a
smaller number of shares of Common Stock or (iv) issue any shares of its
-6-
<PAGE>
capital stock in a reclassification of the Common Stock (including any such
reclassification in connection with a consolidation or merger in which the
Company is the continuing corporation), the number of shares of Common Stock
purchasable upon exercise of each Warrant immediately prior thereto shall be
adjusted so that the Holder of each Warrant shall be entitled to receive the
kind and number of shares of Common Stock or other securities of the Company
which such Holder would have owned or have been entitled to receive after the
happening of any of the events described above, had such Warrant been exercised
immediately prior to the happening of such event or any record date with respect
thereto. An adjustment made pursuant to this paragraph (a) shall become
effective immediately after the effective date of such event, retroactive to
immediately after the record date, if any, for such event.
(b) If the Company shall issue rights, options or warrants to all Holders
of its outstanding Common Stock, without any charge to such Holders, entitling
them to subscribe for or purchase shares of Common Stock at a price per share
that is lower than the Market Price per share of Common Stock (as defined in
paragraph (e) below) at the record date mentioned below, the number of shares of
Common Stock thereafter purchasable upon the exercise of each Warrant shall be
determined by multiplying the number of shares of Common Stock theretofore
purchasable upon exercise of each Warrant by a fraction, of which the numerator
shall be (i) the number of shares of Common Stock outstanding on the date of
issuance of such rights, options or warrants plus the number of additional
shares of Common Stock offered for subscription or purchase, and of which the
denominator shall be (ii) the number of shares of Common Stock outstanding on
the date of issuance of such rights, options or warrants plus the number of
shares which the aggregate offering price of the total number of shares of
Common Stock so offered would purchase at the Market Price per share of Common
Stock at such record date. Such adjustment shall be made whenever such rights,
options or warrants are issued, and shall become effective retroactive to
immediately after the record date for the determination of shareholders entitled
to receive such rights, options or warrants.
(c) If the Company shall distribute to all Holders of its shares of Common
Stock evidence of its indebtedness or assets (excluding cash dividends or
distributions payable out of capital surplus and dividends or distributions
referred to in paragraph (a) above) or rights, options or warrants or
convertible or exchangeable securities containing the right to subscribe for or
purchase shares of Common Stock (excluding those referred to in paragraph (b)
above), then in each case the number of shares of Common Stock thereafter
purchasable upon the exercise of each Warrant shall be determined by multiplying
the number of shares of Common Stock theretofore purchasable upon the exercise
of each Warrant, by a fraction, of which the numerator shall be (i) the then
current Market Price per share of Common Stock (as defined in paragraph (e)
below) on the date of such distribution, and of which the denominator shall be
(ii) the then current Market Price per share of Common Stock less the then fair
value (as determined by the Board of Directors of the Company, whose
determination shall be conclusive) of the portion of the assets or evidence of
indebtedness so distributed or of such subscription rights, options or warrants
or convertible or exchangeable securities applicable to one (1) share of Common
Stock. Such adjustment shall be made whenever any such distribution is made,
and
-7-
<PAGE>
shall become effective on the date of distribution retroactive to immediately
after the record date for the determination of shareholders entitled to receive
such distribution.
(d) In the event of any capital reorganization or any reclassification of
the Common Stock (except as provided in paragraphs (a) through (c) above), any
Holder of Warrants upon exercise thereof shall be entitled to receive, in lieu
of the Common Stock to which he or she would have become entitled upon exercise
immediately prior to such reorganization or reclassification, the shares (of any
class or classes) or other securities or property of the Company that he or she
would have been entitled to receive at the same aggregate Exercise Price upon
such reorganization or reclassification if his or her Warrants had been
exercised immediately prior thereto.
(e) For the purpose of any computation under paragraphs (b) and (c) of this
Section 4.1, the current or closing Market Price per share of Common Stock at
- -----------
any date shall be deemed to be the average of the daily closing prices for the
twenty (20) consecutive trading days before the date of such computation. The
closing price for each day shall be the last sale price for such day, in either
case as reported in the principal consolidated transaction reporting system with
respect to securities listed or admitted to trading on the New York Stock
Exchange (the "NYSE") or if the Common Stock is not listed on the NYSE, then on
----
the principal United States national securities exchange on which the Common
Stock is listed or quoted. If the Common Stock is not listed or quoted on any
United States national securities exchange, then the current or closing market
price per share of Common Stock shall be determined by the Board of Directors of
the Company in good faith.
(f) Whenever the number of shares of Common Stock purchasable upon the
exercise of each Warrant is adjusted as herein provided, the Exercise Price
payable upon the exercise of each Warrant shall be adjusted by multiplying such
Exercise Price immediately prior to such adjustment by a fraction, of which the
numerator shall be the number of shares purchasable upon the exercise of each
Warrant immediately prior to such adjustment, and of which the denominator shall
be the number of shares so purchasable immediately thereafter.
(g) The Company may elect, on or after the date of any adjustment required
by paragraphs (a) through (d) of this Section 4.1, to adjust the number of
-----------
Warrants in substitution for an adjustment in the number of shares of Common
Stock purchasable upon the exercise of a Warrant. Each of the Warrants
outstanding after such adjustment of the number of Warrants shall be exercisable
for the same number of shares of Common Stock as immediately prior to such
adjustment. Each Warrant held of record prior to such adjustment of the number
of Warrants shall become that number of Warrants (calculated to the nearest
hundredth) obtained by dividing the Exercise Price in effect prior to adjustment
of the Exercise Price by the Exercise Price in effect after adjustment of the
Exercise Price. The Company shall notify the Holders of Warrants, in the same
manner as provided in the first paragraph of Section 8.4, of its election to
-----------
adjust the number of Warrants, indicating the record date for the adjustment,
and, if known at the time, the amount of the adjustment to be made. This record
date may be the date on which
-8-
<PAGE>
the Exercise Price is adjusted or any day thereafter. Upon each adjustment of
the number of Warrants pursuant to this paragraph (g) the Company shall, as
promptly as practicable, cause to be distributed to Holders of record of
Warrants on such record date Warrant Certificates evidencing, subject to
paragraph (h), the additional Warrants to which such Holders shall be entitled
as a result of such adjustment, or, at the option of the Company, shall cause to
be distributed to such Holders of record in substitution and replacement for the
Warrant Certificates held by such Holders prior to the date of adjustment, and
upon surrender thereof, new Warrant Certificates evidencing all the Warrants to
be executed, issued and registered in the manner specified in Section 5.1 (and
-----------
which may bear, at the option of the Company, the adjusted Exercise
Price) and shall be registered in the names of the Holders of record of Warrant
Certificates on the record date specified in the notice.
(h) The Company shall not be required to issue fractions of Warrants on any
distribution of Warrants to Holders of Warrant Certificates pursuant to
paragraph (g) or to distribute Warrant Certificates that evidence fractional
Warrants. In lieu of such fractional Warrants, there shall be paid to the
registered Holders of the Warrant Certificates with regard to which such
fractional Warrants would otherwise be issuable, an amount in cash equal to the
same fraction of the current market value of a full Warrant on the trading day
immediately prior to the date on which such fractional Warrant could have been
otherwise issuable (the "Valuation Date"). For purposes of this paragraph (h),
--------------
the current market value of a Warrant shall be the aggregate closing Market
Price on the Valuation Date (determined as set forth in paragraph (e)) of all
shares of Common Stock issuable upon exercise of one Warrant plus the fair value
(as determined by the Board of Directors of the Company, whose determination
shall be conclusive) of any other assets or securities purchasable upon exercise
of one Warrant less the Exercise Price of one Warrant.
(i) Notwithstanding any adjustment pursuant to Section 4.1 in the number of
-----------
shares of Common Stock purchasable upon the exercise of a Warrant, the Company
shall not be required to issue fractions of shares of Common Stock upon exercise
of the Warrants or to distribute certificates which evidence fractional shares.
In lieu of fractional shares, there shall be paid to the registered Holders of
Warrant Certificates at the time such Warrant Certificates are exercised as
herein provided an amount in cash equal to the same fraction of the current
market value of one (1) share of Common Stock. For purposes of this paragraph
(i), the current market value of one (1) share of Common Stock shall be the
closing Market Price (determined as set forth in paragraph (e)) of one (1) share
of Common Stock for the trading day immediately prior to the date of such
exercise.
-9-
<PAGE>
ARTICLE V
REGISTRATION, EXCHANGE, TRANSFER AND
SUBSTITUTION OF WARRANT CERTIFICATES
Section V.1 REGISTRATION, EXCHANGE AND TRANSFER OF WARRANT CERTIFICATES.
The Company shall keep, at its principal executive offices, books in which,
subject to such reasonable regulations as it may prescribe, it shall register
Warrant Certificates and transfers of outstanding Warrants (the "Warrant
-------
Register").
- --------
Upon surrender at the principal executive offices of the Company of Warrant
Certificates properly endorsed or accompanied by appropriate instruments of
transfer and accompanied by written instructions for transfer or exchange, all
in form satisfactory to the Company, such Warrant Certificates may be exchanged
for other Warrant Certificates or may be transferred in whole or in part;
provided, however, that Warrant Certificates issued in exchange for or upon
- -------- -------
transfer of surrendered Warrant Certificates shall evidence the same aggregate
number of Warrants as the Warrant Certificates so surrendered. No service charge
shall be made for any exchange or transfer of Warrant Certificates, but the
Company may require payment of a sum sufficient to cover any stamp or other tax
or governmental charge that may be imposed in connection with any such exchange
or transfer. Whenever any Warrant Certificates are so surrendered for exchange
or transfer, the Company shall execute and deliver to the Person or Persons
entitled thereto a Warrant Certificate or Warrant Certificates as so requested.
The Company shall not be required to effect any exchange or transfer which would
result in the issuance of a Warrant Certificate evidencing a fraction of a
Warrant or a number of full Warrants and a fraction of a Warrant. All Warrant
Certificates issued upon any exchange or transfer of Warrant Certificates shall
evidence the same obligations, and be entitled to the same benefits under this
Agreement, as the Warrant Certificates surrendered for such exchange or
transfer.
Section V.2 MUTILATED, DESTROYED, LOST OR STOLEN WARRANT CERTIFICATES.
If any mutilated Warrant Certificate is surrendered to the Company, the Company
shall execute and deliver in exchange therefor a new Warrant Certificate of like
tenor and bearing a number not contemporaneously outstanding. If there shall be
delivered to the Company (i) evidence to its satisfaction of the destruction,
loss or theft of any Warrant Certificate and of the ownership thereof and (ii)
such security or indemnity as may be required by it to save the Company and any
agent thereof harmless, then, in the absence of notice to the Company that such
Warrant Certificate has been acquired by a bona fide purchaser, the Company
shall execute and deliver, in lieu of any such destroyed, lost or stolen Warrant
Certificate, a new Warrant Certificate of like tenor and bearing a number not
contemporaneously outstanding. Upon the issuance of any new Warrant Certificate
under this Section 5.2, the Company may require the payment of a sum sufficient
-----------
to cover any tax or other governmental charge that may be imposed in relation
thereto and any other expenses connected therewith. Every new Warrant
Certificate issued pursuant to this Section 5.2 in lieu of any destroyed, lost
-----------
or stolen Warrant Certificate shall evidence an original additional contractual
obligation of the
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<PAGE>
Company, whether or not the destroyed, lost or stolen Warrant Certificate shall
be at any time enforceable by anyone, and shall be entitled to all the benefits
of this Agreement equally and proportionately with any and all other Warrant
Certificates duly issued hereunder. The provisions of this Section 5.2 are
-----------
exclusive and shall preclude (to the extent lawful) all other rights and
remedies with respect to the replacement or payment of mutilated, destroyed,
lost or stolen Warrant Certificates.
Section V.3 PERSONS DEEMED OWNERS. Prior to due presentment of a
Warrant Certificate for registration of transfer, the Company and all other
Persons may treat the Holder as the owner thereof for any purpose and as the
Person entitled to exercise the rights represented by the Warrants evidenced
thereby, any notice to the contrary notwithstanding.
Section V.4 CANCELLATION OF WARRANT CERTIFICATES. Any Warrant
Certificate surrendered to the Company for exchange, transfer or exercise of the
Warrants evidenced thereby shall be promptly canceled by it and shall not be
reissued and, except as expressly permitted by this Agreement, no Warrant
Certificate shall be issued hereunder in lieu or in exchange thereof. The
Company shall promptly cancel any Warrant Certificates previously issued
hereunder which the Company may have acquired in any manner whatsoever.
ARTICLE VI
OTHER PROVISIONS RELATING TO RIGHTS
OF HOLDERS OF WARRANT CERTIFICATES
Section VI.1 NO RIGHTS AS SHAREHOLDER CONFERRED BY WARRANTS OR WARRANT
CERTIFICATES. No Warrant Certificate or Warrant evidenced thereby shall entitle
the Holder thereof to any of the rights of a shareholder, including, without
limitation, the right to receive dividends.
Section VI.2 HOLDER OF WARRANT CERTIFICATE MAY ENFORCE RIGHTS.
Notwithstanding any of the provisions of this Agreement, any Holder of any
Warrant Certificate, without the consent of any shareholder or the Holder of any
other Warrant Certificate, may, on its own behalf and for its own benefit,
enforce, and may institute and maintain any suit, action or proceeding against
the Company suitable to enforce or otherwise in respect of its right to exercise
the Warrant or Warrants evidenced by his or her Warrant Certificate in the
manner provided in the Warrant Certificates and in this Agreement.
ARTICLE VII
CONCERNING THE COMPANY AS WARRANT AGENT
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<PAGE>
Section VII.1 WARRANT AGENT. The Company shall serve as warrant agent in
respect of the Warrants and the Warrant Certificates upon the terms and subject
to the conditions herein set forth. The Company shall have the power and
authority granted to and conferred upon it in the Warrant Certificates. All of
the terms and provisions with respect to such power and authority contained in
the Warrant Certificates are subject to and governed by the terms and provisions
hereof.
Section VII.2 DOCUMENTS. The Company shall be protected and shall incur
no liability for or in respect of any action taken or omitted by it in reliance
upon any notice, direction, consent, certificate, affidavit, statement or other
paper or document reasonably believed by it to be genuine and to have been
presented or signed by the proper parties.
ARTICLE VIII
MISCELLANEOUS
Section VIII.1 CONSOLIDATIONS AND MERGERS OF THE COMPANY AND SALES, LEASES
AND CONVEYANCES PERMITTED SUBJECT TO CERTAIN CONDITIONS. The Company may
consolidate with, or sell or convey all or substantially all of its assets to,
or merge with or into any other corporation, provided that in any such case,
either the Company shall be the continuing corporation, or the corporation (if
other than the Company) formed by such consolidation or into which the Company
is merged or the corporation which acquired by purchase or conveyance all or
substantially all of the assets of the Company shall expressly assume the
obligations of the Company hereunder.
Section VIII.2 RIGHTS AND DUTIES OF SUCCESSOR CORPORATION. In case of any
such consolidation, merger, sale, lease or conveyance and upon any such
assumption by the successor corporation, such successor corporation shall
succeed to and be substituted for the Company, with the same effect as if it had
been named herein, and the predecessor corporation, except in the event of a
lease, shall be relieved of any further obligation under this Agreement and the
Warrants. Such successor corporation thereupon may cause to be signed, and may
issue either in its own name or in the name of the Company, any or all of the
shares of Common Stock issuable pursuant to the terms hereof.
Section VIII.3 AMENDMENT. This Agreement may be amended by the parties
hereto, without the consent of the Holder of any Warrant Certificate, for the
purpose of curing any ambiguity, or curing, correcting or supplementing any
defective provision contained herein, or making such provisions in regard to
matters or questions arising under this Agreement as the Company may deem
necessary or desirable; provided, however, that such action shall not adversely
-------- -------
affect the interests of the Holders of the Warrant Certificates in any material
respect. Any amendment or supplement to this Agreement or the Warrants that has
a material adverse effect on the interests of Holders of any series of Warrants
shall require the written consent of
-12-
<PAGE>
the Holders of a majority of the then outstanding Warrants of such series. The
consent of each Holder of a Warrant affected shall be required for any amendment
pursuant to which the Exercise Price would be increased or the number of shares
of Common Stock purchasable upon exercise of Warrants would be decreased.
Section VIII.4 NOTICES TO WARRANTHOLDERS. Upon any adjustment of the
number of shares purchasable upon exercise of each Warrant, the Exercise Price
or the number of Warrants outstanding pursuant to Section 4.1, the Company
-----------
within ten (10) Business Days thereafter shall cause to be given to each of the
Holders of the Warrant Certificates written notice of such adjustments, together
with a copy of a certificate of the Chief Financial Officer of the Company
setting forth the Exercise Price and either the number of shares of Common Stock
and other securities or assets purchasable upon exercise of each Warrant or the
additional number of Warrants to be issued for each previously outstanding
Warrant, as the case may be, after such adjustment and setting forth in
reasonable detail the method of calculation and the facts upon which such
adjustments are made, which certificate shall be conclusive evidence of the
correctness of the matters set forth therein, at such Holder's address appearing
on the Warrant Register written notice of such adjustments by first-class mail,
postage prepaid.
Section VIII.5 ADDRESSES. Any communications to the Company with respect
to this Agreement shall be addressed to Weeks Corporation, 4497 Park Drive,
Norcross, Georgia 30093, Attention: Chief Financial Officer. Any communications
to any Holder shall be addressed to such Holder at its address appearing on the
Warrant Register.
Section VIII.6 GOVERNING LAW. This Agreement and each Warrant Certificate
issued hereunder shall be governed by and construed in accordance with the laws
of the State of Georgia.
Section VIII.7 DELIVERY OF PROSPECTUS. Upon the exercise of any Warrant
Certificate, the Company will deliver to the person designated to receive a
certificate representing shares of Common Stock, prior to or concurrently with
the delivery of such securities, a Prospectus.
Section VIII.8 OBTAINING OF GOVERNMENTAL APPROVALS. The Company will from
time to time take all action which may be necessary to obtain and keep effective
any and all permits, consents and approvals of Governmental Authorities and
securities acts filings under United States Federal and state laws (including,
without limitation, to the extent required, the maintenance of the effectiveness
of a registration statement in respect of the Common Stock under the Securities
Act), which may be or become required in connection with exercise of the Warrant
Certificates.
Section VIII.9 PERSONS HAVING RIGHTS UNDER WARRANT AGREEMENT. Nothing in
this Agreement expressed or implied and nothing that may be inferred from any of
the provisions herein is intended, or shall be construed, to confer upon, or
give to, any Person other than the Company and the Holders of the Warrant
Certificates any right, remedy or claim
-13-
<PAGE>
under or by reason of this Agreement or of any covenant, condition, stipulation,
promise or agreement hereof. All covenants, conditions, stipulations, promises
and agreements contained in this Agreement shall be for the sole and exclusive
benefit of the Company and its successors and of the Holders of the Warrant
Certificates.
Section VIII.10 HEADINGS. The Article and Section headings herein and the
Table of Contents are for convenience of reference only and shall not affect the
construction hereof.
Section VIII.11 COUNTERPARTS. This Agreement may be executed in any number
of counterparts, each of which so executed shall be deemed to be an original,
but such counterparts shall together constitute but one and the same instrument.
Section VIII.12 INSPECTION OF AGREEMENT. A copy of this Agreement shall be
available at all reasonable times at the principal executive offices of the
Company for inspection by the Holder of any Warrant Certificate. The Company may
require such Holder to submit its Warrant Certificate for inspection by it.
Section VIII.13 TRANSFERS IN COMPLIANCE WITH APPLICABLE LAW.
Notwithstanding anything in this Agreement to the contrary, no Warrant evidenced
by a Warrant Certificate may be sold, assigned, pledged or otherwise transferred
by the Holder thereof if such sale, assignment, pledge or other transfer is in
violation of applicable law, including, without limitation, any federal or state
securities laws.
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<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed effective as of the day and year first above written.
WEEKS CORPORATION
By:______________________________
Name:
Title:
____________________________
HENRY BEFELER
____________________________
FORD GIBSON
____________________________
HANK KLEIN
____________________________
JOSE HEVIA
____________________________
RAFAEL RODON
____________________________
WILLIAM WASEY
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<PAGE>
EXHIBIT A
[FORM OF WARRANT CERTIFICATE]
[Face]
EXERCISABLE ONLY IF EXECUTED AND DELIVERED
BY THE COMPANY AS PROVIDED HEREIN
VOID AFTER 5:00 P.M. (ATLANTA TIME) ON FEBRUARY 24, 2008
WEEKS CORPORATION
Warrant Certificate representing
Warrants to purchase
Common Stock
as described herein.
____________________________
No. __________________ _________ Warrants
This certifies that ____________ or registered assigns is the registered
owner of the above indicated number of Warrants, each Warrant entitling such
registered owner to purchase one (1) share of common stock, par value $.01 per
share ("Common Stock") of Weeks Corporation (the "Company"), subject to
adjustment as provided in Article IV of the Warrant Agreement referred to
herein, during the period set forth herein on the following basis. The Warrants
shall remain exercisable at any time and from time to time during the period
beginning on August 24, 1999 at or before 5:00 p.m. (Atlanta time) February 24,
2008. During such period, each Warrant shall entitle the Holder thereof,
subject to the provisions of the Warrant Agreement (as defined below), to
purchase from the Company one share of Common Stock at the exercise price of
$32.75, subject to adjustment as provided in Article IV of the Warrant Agreement
referred to herein (the "Exercise Price"). The Holder of this Warrant
Certificate may exercise the Warrants evidenced hereby, in whole or in part, by
surrendering this Warrant Certificate, with the purchase form set forth hereon
duly completed, accompanied by payment in full, in lawful money of the United
States of America, in cash or by certified check or official bank check or by
bank wire transfer in immediately available funds, the Exercise Price for each
Warrant exercised, to the Company, at the principal executive offices of the
Company, or its successor, as warrant agent (the "Warrant Agent"), the addresses
specified on the reverse hereof and upon compliance with and subject to the
conditions set forth herein and in the Warrant Agreement.
The term "Holder" as used herein shall mean the person in whose name at the
time of determination such Warrant Certificate shall be registered upon the
books to be maintained by the Company for that purpose pursuant to Section 5.1
of the Warrant Agreement.
A-1
<PAGE>
Any whole number of Warrants evidenced by this Warrant Certificate may be
exercised to purchase shares of Common Stock. Upon any exercise of fewer than
all of the Warrants evidenced by this Warrant Certificate, there shall be issued
to the registered owner hereof a new Warrant Certificate evidencing the number
of Warrants remaining unexercised.
This Warrant Certificate is issued under and in accordance with the Amended
and Restated Warrant Agreement dated effective as of February 24, 1998 (the
"Warrant Agreement"), between the Company and the Codina Executives and is
subject to the terms and provisions contained in the Warrant Agreement, to all
of which terms and provisions the Holder of this Warrant Certificate consents by
acceptance hereof. Copies of the Warrant Agreement are on file at the above-
mentioned offices of the Company.
This Warrant Certificate and all rights hereunder, may be transferred when
surrendered at the principal executive offices of the Company by the registered
owner or his assigns, in person or by an attorney duly authorized in writing, in
the manner and subject to the limitations provided in the Warrant Agreement.
After execution and delivery by the Company and prior to the expiration of
this Warrant Certificate, this Warrant Certificate may be exchanged at the
principal executive offices of the Company for Warrant Certificates representing
the same aggregate number of Warrants.
This Warrant Certificate shall not entitle the registered owner hereof to
any of the rights of a shareholder of the Company, including, without
limitation, the right to receive dividends.
Reference is hereby made to the further provisions of this Warrant
Certificate set forth on the reverse hereof, which further provisions shall for
all purposes have the same effect as if set forth at this place.
This Warrant Certificate shall not be valid obligatory for any purpose
until executed and delivered by the Company.
A-2
<PAGE>
IN WITNESS WHEREOF, the Company has caused this Warrant Certificate to be
duly executed under its corporate seal.
Dated: ___________, 1998 WEEKS CORPORATION
Attest:
By:_____________________________
Name:
Title:
____________________________
Secretary
A-3
<PAGE>
[FORM OF WARRANT CERTIFICATE]
[REVERSE]
(Instructions for Exercise of Warrants)
To exercise any Warrants evidenced hereby, the Holder of this Warrant
Certificate must pay in cash or by certified check or official bank check or by
wire transfer in immediately available funds, the Exercise Price in full for
each of the Warrants exercised, to Weeks Corporation, 4497 Park Drive, Norcross,
Georgia 30093; Attn: Chief Financial Officer, which payment should specify the
name of the Holder of this Warrant Certificate and the number of Warrants
exercised by such Holder. In addition, the Holder of this Warrant Certificate
should complete the information required below and present in person or mail by
registered mail this Warrant Certificate to the Company at the address set forth
below.
[FORM OF EXERCISE]
(To be executed upon exercise of Warrants.)
The undersigned hereby irrevocably elects to exercise Warrants, represented
by this Warrant Certificate, to purchase _________ shares of Common Stock, par
value $.01 per share ("Common Stock"), of Weeks Corporation and represents that
he or she has tendered payment for such shares of Common Stock in cash or by
certified check or official bank check or by bank wire transfer in immediately
available funds to the order of Weeks Corporation, c/o Chief Financial Officer,
in the amount of $________ in accordance with the terms hereof. The undersigned
requests that said shares of Common Stock be registered in such names and
delivered, all as specified in accordance with the instructions set forth below.
If said number of shares of Common Stock is less than all of the shares of
Common Stock purchasable hereunder, the undersigned requests that a new Warrant
Certificate representing the remaining balance of the Warrants evidenced hereby
be issued and delivered to the undersigned unless otherwise specified in the
instructions below.
A-4
<PAGE>
Dated:______________________ Name:_________________________
(Please Print)
___________________________ Address:
Insert Social Security or Other _______________________________
Identifying Number of Holder) _______________________________
_______________________________
___________________________
Signature
(Signature must conform in all
respects to name of Holder as specified on
the face of this Warrant Certificate and must
bear a signature guarantee by a bank, trust
company or member broker of the New York,
Chicago or Pacific Stock Exchange.)
This Warrant may be exercised by hand or by mail
at the following address:
Weeks Corporation
4497 Park Drive
Norcross, Georgia 30093
Attention: Chief Financial Officer
(Instructions as to form and delivery of
certificates representing shares of Common Stock
and/or Warrant Certificates):
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
A-5
<PAGE>
[FORM OF ASSIGNMENT]
(TO BE EXECUTED TO TRANSFER
THE WARRANT CERTIFICATE)
FOR VALUE RECEIVED, _______________________________ hereby sells, assigns
and transfers unto
___________________________
___________________________
___________________________
Please print name and address
(including zip code)
Please insert social security or
other identifying number
___________________________
the right represented by the within Warrant Certificate and does hereby
irrevocably constitute and appoint ________________, Attorney, to transfer said
Warrant Certificate on the books of the Warrant Agent with full power of
substitution.
Dated:__________________ _____________________________
Signature
(Signature must conform in all
respects to name of Holder as
specified on the face of this Warrant
Certificate and must bear a signature
guarantee by a bank, trust company or
member broker of the New York,
Chicago or Pacific Stock Exchange.)
Signature Guaranteed:
__________________________
A-6
<PAGE>
NINTH AMENDMENT
TO THE
SECOND AMENDED AND RESTATED
AGREEMENT OF LIMITED PARTNERSHIP
OF
WEEKS REALTY, L.P.
THIS NINTH AMENDMENT TO THE SECOND AMENDED AND RESTATED AGREEMENT OF
LIMITED PARTNERSHIP OF WEEKS REALTY, L.P. (the "Amendment") is entered into as
of the 22nd day of January, 1998, by and among WEEKS GP HOLDINGS, INC., a
Georgia corporation (the "General Partner"), WEEKS CORPORATION, a Georgia
corporation (the "Company"), and PCTC ASSOCIATES, LLC, a Georgia limited
liability company (the "Contributor").
RECITALS
--------
Weeks Realty, L.P. (the "Partnership") is a Georgia limited partnership.
The General Partner is the sole general partner of the Partnership and is a
wholly owned subsidiary of the Company. The partnership agreement of the
Partnership is that certain Second Amended and Restated Agreement of Limited
Partnership of Weeks Realty, L.P., dated as of October 30, 1996, as amended by
the First Amendment to the Partnership Agreement dated November 1, 1996, the
Second Amendment to the Partnership Agreement dated December 31, 1996, the Third
Amendment to the Partnership Agreement dated January 31, 1997, the Fourth
Amendment to the Partnership Agreement dated August 1, 1997, the Fifth Amendment
to the Partnership Agreement dated October 7, 1997, the Sixth Amendment to the
Partnership Agreement dated October 27, 1997, the Seventh Amendment to the
Partnership Agreement dated as of December 30, 1997 and effective as of August
1, 1997, and the Eighth Amendment to the Partnership Agreement dated January 9,
1998 (the "Partnership Agreement"). Capitalized terms used herein without
definition shall have the meanings ascribed to them in the Partnership
Agreement.
<PAGE>
Pursuant to the agreements and instruments listed or referred to on Exhibit
A hereto (the ("Transaction Documents"), and the transactions effected by the
Transaction Documents, effective as of the date hereof the Contributor has
contributed, directly or indirectly, certain properties to the capital of the
Partnership.
Pursuant to the Partnership Agreement (including, without limitation,
Section 9.3 and Section 15.7(b)(ii) thereof), the General Partner is authorized
(without the consent of any Limited Partner) to admit additional Limited
Partners to the Partnership for such Capital Contributions as are determined by
the General Partner to be appropriate, and to amend the Partnership Agreement to
reflect such admissions.
The General Partner wishes to amend the Partnership Agreement as set forth
herein to reflect the admission of the Contributor as a Limited Partner of the
Partnership, and the Contributor wishes to enter into this Amendment to
memorialize their agreement as to certain matters relating to their becoming
Limited Partners of the Partnership.
AGREEMENT
---------
In consideration of the circumstances referred to in the Recitals, the
consummation of the transactions effected pursuant to the Transaction Documents,
the mutual covenants and agreements contained herein, and other good and
valuable consideration, the receipt, adequacy and sufficiency of which are
hereby acknowledged, the parties hereto, intending to be legally bound, hereby
agree as follows:
1. Admission. The Contributor hereby is admitted to the Partnership as a
---------
Limited Partner, effective as of the date hereof, and the Contributor hereby
agrees to be bound by the Partnership Agreement, including, but not limited to,
the transfer restrictions contained in Article IX thereof.
-2-
<PAGE>
2. Capital Contributions. The Contributor is agreed to have made, as of
---------------------
the date hereof, the Capital Contributions set forth on Exhibit B hereto. The
agreed to gross fair market values of any property other than money contributed
by the Contributor, which shall be such property's initial Gross Asset Value,
are shown on Exhibit B.
3. Initial Partnership Units; Rights.
---------------------------------
(1) The Partnership Units attributable to the Partnership Interests of
the Contributor, effective upon its admission as a Limited Partner at the
date hereof, are as set forth on Exhibit B hereto, and the Partnership
Agreement is hereby amended to reflect the Contributor having such
Partnership Units.
(2) The Partnership does hereby grant to the Contributor, and the
Contributor does hereby accept, the right, but not the obligation (herein
such rights being sometimes referred to as the "Rights"), to require the
Partnership to redeem all or a portion of the Partnership Units issued to
it pursuant to the Transaction Documents, on the terms and subject to the
conditions and restrictions contained in Exhibit D hereto. The Rights are
governed solely by this Amendment and Exhibit D hereto, and the Contributor
shall not have any rights with respect to the "Rights" provided for in
Section 11.1 and Exhibit B-1 to the Partnership Agreement. The Rights
granted hereunder may be exercised by the Contributor, on the terms and
subject to the conditions and restrictions contained in Exhibit D hereto,
upon delivery to the Partnership of a Conversion Exercise Notice, in the
form of Schedule 1 attached to Exhibit D, which notice shall specify the
Partnership Units with respect to which the Rights are being exercised.
Once delivered, the Conversion Exercise Notice shall be irrevocable,
subject to compliance by the General Partner and the Partnership with the
terms of the Rights.
4. Restated Percentage Interests. After giving effect to the admission
-----------------------------
of the Contributor as a Limited Partner at the date hereof, the Percentage
Interests of all of the Partners have been
-3-
<PAGE>
revised and are as reflected on Exhibit C hereto, and the Partnership Agreement
is hereby amended accordingly.
5. [Intentionally omitted.]
6. Adjustments to Partnership Units. The parties acknowledge that the
--------------------------------
Transaction Documents provide for the issuance of additional Partnership Units
to the Contributors, and accordingly the Contributors' final Partnership
Interests and Units, and the resulting restated Percentage Interests of all of
the Partners, following such issuance cannot be determined on the date hereof.
At the time of issuance and final determination provided for in the Transaction
Documents, the General Partner shall supplement this Amendment by executing and
attaching hereto supplements to Exhibits B and C (which shall be captioned
"Exhibit B-1," "Exhibit C-1," and so on and shall identify the Capital
Contribution to which it relates). Such supplements shall be in accordance with
the terms of the Transaction Documents. The Partnership Agreement shall be
deemed to be amended as reflected in each such supplement to this Amendment.
7. Proration of Distributions. Notwithstanding any contrary provision of
--------------------------
the Partnership Agreement, including, without limitation, Section 6.2 thereof,
the Contributor agrees that the distribution of Net Operating Cash Flow made for
the calendar quarter in which the Partnership Units are issued, by reason of the
Capital Contribution made pursuant to the Transaction Documents, shall be equal
to the amount of Net Operating Cash Flow otherwise distributable with respect to
such Partnership Units under the terms of the Partnership Agreement, multiplied
by a fraction, the numerator of which is the number of calendar days beginning
on the date of issuance of the Partnership Units and ending on the last day of
such calendar quarter and the denominator of which is the total number of days
in the calendar quarter in which the Partnership Units are issued.
-4-
<PAGE>
8. Representations and Warranties.
------------------------------
(1) Contributor's Representations. The Contributor hereby reaffirms
-----------------------------
and makes to each of the Partnership and the General Partner those
representations and warranties contained in Sections 2 and 3 of the
Contribution Agreement identified in Exhibit A attached hereto. In
---------
addition, the Contributor hereby represents and warrants to the Partnership
and the General Partner that (i) the Contributor is acquiring the
Partnership Units for the Contributor's own account and not with a view to,
or for sale in connection with, the "distribution," as such term is used in
Section 2(11) of the Securities Act of 1933, as amended (the "Securities
Act"), of any of the Partnership Units in violation of the Securities Act;
(ii) each of the Managers of the Contributor is an "accredited investor,"
as that term is defined in Rule 501(a) of Regulation D promulgated under
the Securities Act; (iii) the Contributor understands that the Partnership
Units have not been registered under the Securities Act by reason of a
specific exemption from the registration provisions of the Securities Act
which depends upon, among other things, the nature of the investment intent
and the accuracy of the Contributor's representations as expressed herein;
(iv) the Contributor has had an opportunity to discuss the Partnership's
business, management and financial affairs with the Partnership's
management and the opportunity to review the Partnership's financial
records; (v) the Contributor understands and acknowledges that no public
market now exists for any of the Partnership Units and that there can be no
assurance that a public market will ever exist for the Partnership Units;
and (vi) the Contributor has such knowledge and experience in financial and
business matters, or has been adequately advised by its financial
representatives, that the Contributor is capable of evaluating the merits
and risks of the purchase of the Partnership Units pursuant to this
Amendment and of protecting the Contributor's interests in connection
herewith.
(2) No Liens. The Contributor represents and warrants to the
--------
Partnership and the General Partner that at the date hereof none of the
Partnership Units issued or issuable to the Contributor pursuant to the
Transaction Documents, and none of the shares of Common
-5-
<PAGE>
Stock that may be acquired by the Contributor upon exercise of Rights, is
subject to any Lien, other than the security interest created by paragraph
11 hereof.
(3) Definition. All of the representations, warranties, covenants and
----------
agreements of the Contributor referred to in this paragraph 8 are referred
to collectively as the "Representations and Warranties."
(4) General Partner Representations. The General Partner represents
-------------------------------
and warrants to the Contributor as follows:
(i) Organization. The General Partner is duly incorporated,
------------
validly existing and in good standing under the laws of the State of
Georgia.
(ii) Due Authorization; Binding Agreement. The execution,
------------------------------------
delivery and performance of this Amendment by the General Partner have
been duly and validly authorized by all necessary action of the
General Partner and the Partnership. This Amendment has been duly
executed and delivered by the General Partner and constitutes a legal,
valid and binding obligation of the General Partner and the
Partnership, enforceable against the General Partner and the
Partnership in accordance with the terms hereof.
(iii) Consents and Approvals. No consent, waiver, approval or
----------------------
authorization of, or filing, registration or qualification with, or
notice to, any governmental unit or any other Person is required to be
made, obtained or given by the General Partner in connection with the
execution, delivery and performance of this Amendment, other than
consents, waivers, approvals or authorizations that have been obtained
prior to the date hereof.
(iv) Partnership Units. The Partnership Units issued pursuant
-----------------
to the Transaction Documents are duly authorized and, when issued in
accordance with the
-6-
<PAGE>
Transaction Documents, will be duly issued, fully paid and
nonassessable and will be unencumbered except for the security
interest created by paragraph 11 hereof.
9. Survival of Representations and Warranties. All of the
------------------------------------------
Representations and Warranties shall survive the consummation of the
transactions contemplated by the Transaction Documents; provided, however, that
no claim for a breach of any Representation or Warranty may be maintained by the
Partnership, the Company or the General Partner unless the Partnership, the
Company or the General Partner shall have delivered a written notice ("Notice of
Breach") specifying the details of such claimed breach to the Contributor on or
before the first anniversary of this Amendment (the "Survival Period").
10. Indemnification.
---------------
(1) The Contributor indemnifies and holds harmless the Partnership,
the Company and the General Partner against and from all liabilities,
demands, claims, actions or causes of action, assessments, losses, fines,
penalties, costs, damages and expenses (including, without limitation,
reasonable attorneys' and accountants' fees and expenses actually incurred)
sustained or incurred by the Partnership, the Company or the General
Partner as a result of or arising out of any inaccuracy in or breach of a
Representation or Warranty.
(2) The Partnership, the Company and the General Partner shall not be
entitled to indemnification hereunder unless a Notice of Breach has been
delivered by the Partnership, the Company or the General Partner to the
Contributor.
(3) If a claim for indemnification is asserted by the Partnership, the
Company or the General Partner against the Contributor, the Contributor
shall have the right, at its own expense, to participate in the defense of
any claim, action or proceeding asserted against the Partnership, the
Company or the General Partner that resulted in the claim for
-7-
<PAGE>
indemnification, and if such right is exercised, the parties shall
cooperate in the defense of such action or proceeding.
(4) Indemnification of the Partnership, the Company and the General
Partner pursuant to this paragraph 10 shall be the exclusive remedy of the
Partnership, the Company and the General Partner for any breach of any
Representation or Warranty contained in this Amendment. Nothing contained
herein shall limit any remedy the Partnership (or any affiliate of the
Partnership including, without limitation, any affiliate of the Partnership
as determined with respect to the voting or economic control held by or in
the Partnership) may have under the Transaction Documents, including,
without limitation, the remedy of specific performance for any failure by
the Contributor to contribute a property or otherwise limit any remedy the
Partnership, the Company or the General Partner may have for any commission
of fraud made by the Contributor.
11. Security and Remedies.
---------------------
(1) The Contributor hereby grants to the Partnership a lien upon and a
continuing security interest in the Partnership Units issued to it pursuant
to the Transaction Documents and the shares of Common Stock acquired by it
upon exercise of Rights with respect to such Partnership Units (the
"Collateral"), which shall be security for the indemnification obligations
of the Contributor under paragraph 10 hereof. Except as otherwise provided
in this Amendment, the indemnification obligations of the Contributor
hereunder with respect to breaches of Representations and Warranties shall
be payable out of the Contributor's entire Collateral; provided, however,
that the Contributor may satisfy all or any part of such indemnification
obligation in cash if the Contributor so elects. Any Transfer by the
Contributor of its Collateral shall be subject to the lien and security
interest granted hereby.
(2) In the event the General Partner asserts that the Contributor has
an indemnification obligation to the Partnership, the Company or the
General Partner under
-8-
<PAGE>
paragraph 10 hereof, the General Partner shall deliver written notice (the
"Indemnification Notice") to the Contributor describing in reasonable
detail the circumstances giving rise to such obligation and the amount
thereof. If, within thirty (30) days after the receipt of an
Indemnification Notice, the Contributor delivers written notice to the
General Partner indicating that the Contributor disputes the circumstances
giving rise to or the amount of such claimed indemnification obligation,
the General Partner may submit such matter for binding arbitration in
accordance with the provisions of Article XIV of the Partnership Agreement
by delivering a Demand Notice to the Contributor pursuant to such Article
XIV. If, after receiving timely notice of a dispute hereunder from the
Contributor, the General Partner fails to so submit the matter for
arbitration within twenty (20) days after receipt of such notice from the
Contributor, then the Contributor shall be relieved of the claimed
indemnification obligation described in the Indemnification Notice. In the
event the Contributor (i) receives an Indemnification Notice and fails to
timely deliver notice to the General Partner of their dispute as to the
indemnification obligation and fails to make payment within thirty (30)
days after delivery of an Indemnification Notice or (ii) has an
indemnification obligation to the Partnership or the General Partner under
paragraph 10 hereof as determined pursuant to Article XIV of the
Partnership Agreement, and does not satisfy such obligation within ten (10)
days after the decision rendered in the arbitration, then, in either event,
the Partnership shall have any and all remedies of a secured creditor under
the Uniform Commercial Code, and, in addition thereto, at the election of
the Partnership, the Partnership shall, to the extent permitted by law, be
deemed, without the payment of any further consideration or the taking of
any further action required by the Contributor, to have acquired from the
Contributor such portion of the Collateral as shall be equal in value
(based, in the case of Partnership Units, on the Current Per Share Market
Price as computed as of the date immediately preceding such deemed
acquisition of the number of shares of Common Stock for which such
Partnership Units could be redeemed if the General Partner assumed the
redemption obligation and elected to pay the Redemption Price (as defined
in Exhibit D) in shares of Common Stock (assuming the ownership limits in
the Articles of Incorporation would not prohibit the issuance of any such
shares of Common Stock to the Contributor), and, in the case of shares of
Common Stock, on the Current Per
-9-
<PAGE>
Share Common Stock Price computed as of the date immediately preceding such
deemed acquisition) to the amount recoverable from the Contributor under
paragraph 10 hereof. In the event the Partnership shall have acquired from
the Contributor any Collateral pursuant to this paragraph 11, the General
Partner shall deliver written notice to the Contributor within ten (10)
days thereafter identifying the specific Collateral acquired and, if such
Collateral consists of Partnership Units, the Percentage Interests of the
Contributor following such acquisition. Unless and until the Partnership
shall have acquired from the Contributor any Collateral pursuant to this
paragraph 11, the Contributor shall retain all rights with respect to the
Collateral not expressly limited herein or in the Partnership Agreement,
including, without limitation, rights to distributions provided for in the
Partnership Agreement and rights to dividends on shares of Common Stock.
The Contributor hereby agrees to take any and all actions and to execute
and deliver any and all documents or instruments necessary to perfect the
security interest created by this Amendment, including delivering the
certificates representing the Partnership Units or shares of Common Stock
to the General Partner.
(3) On the first day immediately following the expiration of the
Survival Period as defined in paragraph 9 hereof (or, if a Notice of Breach
has been delivered to the Contributor prior to such date, then on the first
day immediately following the resolution of such Notice of Breach) the
Contributor will be relieved of the restrictions on transferability
provided for by this Amendment (except that the transfer restrictions
contained in the Partnership Agreement shall continue) and the security
interest in the Collateral shall terminate without further action, and the
Partnership, at the request of the Contributor, shall promptly execute and
deliver any document or instrument reasonably requested by the Contributor
to evidence such termination.
12. Recourse. Notwithstanding anything contained in this Amendment or in
--------
the Partnership Agreement to the contrary, the recourse of the General Partner,
the Company or the Partnership under paragraph 10 hereof with respect to
breaches of Representations and Warranties of the Contributor shall not be
limited to the Collateral.
-10-
<PAGE>
13. Restriction on Transfer. In connection with the security interest
-----------------------
granted by the Contributor under paragraph 11 hereof, the Contributor agrees
that any shares of Common Stock and any portion of the Contributor's Partnership
Interests included in the Collateral shall not be Transferred without the
consent of the General Partner; provided, however, that the Contributor may
Transfer all or any portion of such shares of Common Stock or Partnership
Interests to an Affiliate of such person (so long as such Affiliate remains an
Affiliate of such person), subject to the prior security interest granted in
paragraph 11 hereof and to the restrictions contained in Article IX of the
Partnership Agreement. Upon exercise of the Rights with respect to any
Partnership Units included in the Collateral, the Partnership, in perfection of
the security interest herein granted, shall retain the certificate(s)
representing the portion of the Common Stock issued upon such exercise that is
included in such Collateral. If any portion of the Partnership Interests of the
Contributor included in the Collateral is represented by certificates, the
Partnership shall retain such certificates in perfection of the security
interest herein granted. On the first day immediately following the expiration
of the Survival Period as defined in paragraph 9 hereof (or, if a Notice of
Breach has been delivered to the Contributor prior to such date, then on the
first day immediately following the resolution of such Notice of Breach) the
Contributor will be relieved of the restrictions on transferability provided for
by this paragraph 13 without further action, and the Partnership, at the request
of the Contributor, shall promptly execute and deliver any document or
instrument reasonably requested by the Contributor to evidence such termination.
14. Miscellaneous. This Amendment shall be governed by and construed in
-------------
conformity with the laws of the State of Georgia. For the purposes of the
notice provisions of the Partnership Agreement, the address of each of the
Contributor is as set forth on the signature page hereof. Except as expressly
amended hereby, the Partnership Agreement shall remain in full force and effect.
This Amendment and all the terms and provisions hereof shall be binding upon and
shall inure to the benefit of the parties, and their legal representatives,
heirs, successors and permitted assigns.
-11-
<PAGE>
IN WITNESS WHEREOF, the parties have executed and delivered this Amendment
as of the date first above written.
WEEKS REALTY, L.P., a Georgia limited
partnership
By: Weeks GP Holdings, Inc., a Georgia
corporation, its Sole General Partner
By:
_____________________________________
Name:
Title:
CONTRIBUTOR:
PCTC ASSOCIATES, LLC
By:
_____________________________________
Timothy P. Bright
Manager
By:
_____________________________________
William F. Law, Jr.
Manager
Address: 1355 Peachtree Street
-------
Suite 500 South Tower
Atlanta, Georgia 30309
Solely to evidence its agreement to
its undertakings in Exhibit D hereto:
WEEKS CORPORATION
By:_________________________________
Name:_______________________________
Title:______________________________
-12-
<PAGE>
Exhibit A
---------
TRANSACTION DOCUMENTS
1. Contract for the Partnership Contribution of Real and Personal Property,
dated January 20, 1998, by and among PCTC Associates, LLC and Weeks Realty,
L.P. (the "Contribution Agreement")
2. Registration Rights and Lock-Up Agreement, dated January 20, 1998, by and
among Weeks Corporation and PCTC Associates, LLC
A-1
<PAGE>
Exhibit B
---------
Capital Contribution:
- --------------------
PCTC Associates, LLC Capital Contribution: All assets, properties and
businesses transferred from PCTC Associates at January 20,
1998, to the Partnership pursuant to the Transaction Documents
(as defined in the foregoing Amendment)
Gross Fair Market Value of Property Contributions:
- -------------------------------------------------
Gross Fair Market Value of all
property other than money included in
PCTC Associates, LLC Contribution: $1,239,075.58
PCTC Associates, LLC Units issued hereby: 38,806
B-1
<PAGE>
Exhibit C
---------
PARTNERSHIP UNITS/PERCENTAGE INTERESTS
All Partners
<TABLE>
<CAPTION>
Partner Units Percentage Interest
- ------- ---------- -------------------
<S> <C> <C>
Weeks GP Holdings, Inc. 237,503 0.971%
Weeks LP Holdings, Inc. 17,467,840 71.426%
NWI Warehouse Group, L.P. 2,281,273 9.328%
A. Ray Weeks, Jr. 614,079 2.511%
John P. Weeks 239,791 0.981%
Marsha L. Weeks 228,047 0.932%
Trust U/W/1/ 212,663 0.870%
Patricia L. Weeks 206,607 0.845%
Deborah Weeks Felker 198,339 0.811%
Trust B/2/ 187,492 0.767%
Helen B. Weeks 163,048 0.667%
Weeks Horizon Corp. 116,012 0.474%
Oakdale Land Management, Inc. 110,493 0.452%
Weeks Hillside Corp. 78,145 0.320%
Thomas D. Senkbeil 52,817 0.216%
Weeks Southridge Corp. 42,993 0.176%
</TABLE>
- --------------------
/1/ A. R. Weeks, Jr., as Trustee U/W of Alvin Ray Weeks dated March 1, 1983,
f/b/o Marsha Lee Weeks, A. R. Weeks, Jr., Deborah Weeks Felker, Patricia Louise
Weeks and John Phillip Weeks.
/2/ Harry T. Weeks, A. R. Weeks, Jr., and Martha Patterson Weeks as
Trustees under Trust Agreement dated 10/27/76, as amended, f/b/o Marsha Lee
Weeks, A. R. Weeks, Jr., Deborah Weeks Felker, Patricia Louise Weeks and John
Phillip Weeks.
C-1
<PAGE>
<TABLE>
<S> <C> <C>
Forrest W. Robinson 28,877 0.118%
Harry T. Weeks 27,535 0.113%
Louis C. Robinson 20,016 0.082%
Buckley & Company Real Estate, Inc. 20,000 0.082%
HV, Inc. 17,074 0.070%
Clyde H. Duckett 5,627 0.023%
John C. Atwell 5,627 0.023%
Robert G. Cutlip 5,138 0.021%
Klay W. Simpson 4,110 0.017%
Mark W. Flowers 1,541 0.006%
Weeks Management Corp 1,142 0.005%
RTF Management Corp. 257 0.001%
Marie Antoinette Robertson 268,045 1.096%
Harold S. Lichtin 28,780 0.118%
Noel A. Lichtin 153 0.001%
Perimeter Park West Associates
Limited Partnership 252,796 1.034%
Amy R. Ehrman 2,053 0.008%
Roland G. Robertson 2,053 0.008%
Roderick Duncan 2,928 0.012%
Timothy Nicholls 1,757 0.007%
James McCabe 39 0.000%
Anne Broaddus 1,561 0.006%
Harold S. Lichtin Family 342,569 1.401%
Lmited Partnership
GB Partners, Ltd. 11,561 0.047%
Armando Codina 124,523 0.509%
Codina Family Investments, Ltd. 30,351 0.124%
Codina West Dade 117,692 0.481%
Development Corporation
The Benenson Capital Company 320,721 1.311%
Raha Associates, Inc. 7,281 0.030%
Preston R. Tisch 164,001 0.671%
Laurence A. Tisch 164,001 0.671%
PCTC Associates, LLC 38,806 0.159%
---------- -------
Total 24,455,757 100.000%
========== =======
</TABLE>
C-2
<PAGE>
Exhibit D
---------
RIGHTS TERMS
------------
The Rights granted by the Partnership to the Contributor (referred to in
this Exhibit as "Limited Partners"), pursuant to paragraph 3(b) of the foregoing
Amendment shall be subject to the following terms and conditions:
1. Definitions. Capitalized terms used in this Exhibit without
-----------
definition shall have the meanings given to them in the Partnership Agreement or
the foregoing Amendment, as applicable, and the following terms and phrases
shall, for purposes of this Exhibit D, the Partnership Agreement and the
foregoing Amendment, have the meanings set forth below:
"Cash Purchase Price" shall have the meaning set forth in Paragraph 4
-------------------
hereof.
"Closing Notice" shall mean the written notice to be given by the
--------------
General Partner to the Exercising Partner(s) in response to the receipt by the
General Partner of a Conversion Exercise Notice from such Exercising Partner(s).
The form of the Closing Notice is attached hereto as Schedule 2.
"Computation Date" shall mean the date on which a Conversion Exercise
-----------------
Notice is delivered to the General Partner.
"Conversion Exercise Notice" shall have the meaning set forth in
--------------------------
Paragraph 2 hereof.
"Conversion Factor" shall mean 100%, provided that such factor shall
-----------------
be adjusted in accordance with the provisions of paragraph 10 hereof.
"Exchange Act" shall mean the Securities Exchange Act of 1934, as
------------
amended, or any successor statute.
"Exercising Partners" shall have the meaning set forth in Paragraph 2
-------------------
hereof.
"Offered Partnership Units" shall mean the Partnership Units of the
-------------------------
Exercising Partner(s) identified in a Conversion Exercise Notice that, pursuant
to the exercise of Rights, must be redeemed by the Partnership or acquired by
the General Partner and/or Weeks LP Holdings under the terms hereof.
"Redemption Price" shall mean the Cash Purchase Price or the Stock
----------------
Purchase Price.
"Rights" shall have the meaning set forth in paragraph 3(b) of the
------
foregoing Amendment.
C-1
<PAGE>
"Securities Act" shall mean the Securities Act of 1933, as amended, or
--------------
any successor statute.
"Stock Purchase Price" shall have the meaning set forth in Paragraph 4
--------------------
hereof.
2. Delivery of Conversion Exercise Notices. Any one or more Limited
---------------------------------------
Partners ("Exercising Partners") may, subject to the limitations set forth
herein, deliver to the General Partner written notice (the "Conversion Exercise
Notice") pursuant to which such Exercising Partners elect to exercise the
Rights. The form of Conversion Exercise Notice is attached hereto as Schedule
1.
3. Limitations on Exercise of Rights; Deemed Exercise.
--------------------------------------------------
(1) No Conversion Exercise Notice, with respect to any Unit may be
delivered to the General Partner by a Limited Partner until the later of
(i) the first anniversary of the date of each such issuance, or (ii) the
date on which either (A) there is a registration statement effective under
the Securities Act with respect to any resale by such Limited Partner of
any of such shares of Common Stock, or (B) in the opinion of counsel to
Weeks, shares of Common Stock that could be issued to such Limited Partner
pursuant to such exercise of Rights may be issued without registration
under the Securities Act.
(2) A Limited Partner may not exercise the Rights for less than one
thousand (1,000) Partnership Units or, if such Limited Partner holds less
than one thousand (1,000) Partnership Units, all of the Partnership Units
held by such Limited Partner.
(3) Neither the General Partner nor the Partnership shall have any
obligation or authority to redeem or purchase Offered Partnership Units to
the extent that issuance of shares of Common Stock in payment of the Stock
Purchase Price for any part of the Offered Partnership Units would result
(i) in the violation of the General Ownership Limit (as such term is
defined in the Articles of Incorporation), (ii) would cause Weeks to fail
the stock ownership test of Section 856(a)(6) of the Code, or (iii) would
otherwise cause Weeks to fail to qualify as a REIT; provided that in any
such case, the General Partner or the Partnership shall purchase for cash
those offered Partnership Units which may not be redeemed with shares of
Common Stock. Each Exercising Partner shall provide to the General Partner
such information as the General Partner may request regarding such
Exercising Partner's actual and constructive ownership of Common Stock (and
of individuals, and entities related to such Exercising Partner) in order
for the General Partner to determine, in its sole discretion, whether a
purchase or redemption of the Offered Partnership Units for shares of
Common Stock would result in a violation of such restrictions.
(4) If, after complying with all applicable provisions of the
Partnership Agreement, any Person with an ownership interest in any of the
Contributor becomes the owner of any Partnership Units previously owned by
the any of the Contributor, such Person may exercise the Rights granted
with respect to such Partnership Units in accordance with the terms hereof.
C-2
<PAGE>
4. Computation of Redemption Price/Form of Payment. The Redemption Price
-----------------------------------------------
payable by the Partnership to each Exercising Partner for the Offered
Partnership Units shall be payable, at the election of the General Partner, by
the delivery by the Partnership of the Redemption Price. Notwithstanding the
foregoing, at the election of the General Partner, the Redemption Price may be
the Stock Purchase Price for part of the Offered Partnership Units and the Cash
Purchase Price for the remainder of the Offered Partnership Units. The "Stock
Purchase Price" shall mean the number of shares of Common Stock equal to the
product, expressed as a whole number, of (i) the number of Offered Partnership
Units, multiplied by (ii) the Conversion Factor. The "Cash Purchase Price"
shall mean an amount of cash (in immediately available funds) equal to (i) the
number of shares of Common Stock that would be issued to the Exercising Partner
if the Stock Purchase Price were paid for such Offered Partnership Units,
multiplied by (ii) the Current Per Share Market Price computed as of the
Computation Date. To the extent the Partnership elects to pay the Stock
Purchase Price, it shall obtain the necessary shares of Common Stock in exchange
for the issuance of additional Partnership Interests to the General Partner,
Weeks LP Holdings, or any combination thereof, as determined by the General
Partner in its sole discretion, and the General Partner and/or Weeks LP Holdings
shall obtain the necessary shares of Common Stock in exchange for the issuance
of additional capital stock to Weeks.
5. Closing; Delivery of Closing Notice. The closing of the redemption of
-----------------------------------
Offered Partnership Units shall, unless otherwise mutually agreed, be held at
the principal office of the Partnership, as follows:
(a) Within ten (10) days after the receipt by the Partnership of the
Conversion Exercise Notice, the Partnership shall deliver a Closing
Notice to the Exercising Partner(s). The Closing Notice shall state a date
for the closing of the redemption of the Offered Partnership Units, which
date shall not be later than the later of (i) twenty (20) days after the
receipt by the Partnership of the Conversion Exercise Notice (forty-five
(45) days as to the Offered Partnership Units for which the Cash Purchase
Price will be paid), and (ii) the first (1st) business day after the
expiration or termination of the waiting period applicable to each
Exercising Partner, if any, under the Hart-Scott Act.
(b) If applicable, the Closing Notice shall (i) specify the
Partnership's election to pay the Cash Purchase Price for some or all of
the Offered Partnership Units and (ii) set forth the computation of the
Cash Purchase Price to be paid by the Partnership to such Exercising
Partner(s). The Cash Purchase Price shall be paid by wire transfer of
immediately available funds to such account of the Exercising Partner as is
designated in the Conversion Exercise Notice.
6. Assumption by the General Partner and/or Weeks LP Holdings.
----------------------------------------------------------
Notwithstanding anything in this Exhibit D to the contrary, the General Partner,
Weeks LP Holdings or any combination thereof (an "Assumer" or, collectively, the
"Assumers") may, in the sole and absolute discretion of the General Partner,
assume directly and satisfy the exercise of a Right by paying the Electing
Partner the Redemption Price. In such event, the Assumers shall acquire the
Offered Partnership Units and shall be treated for all purposes of this
Agreement as the owner of such Partnership Units, which shall be held by the
Assumers in their respective existing capacities as
C-3
<PAGE>
general partner or Limited Partners, as the case may be. In the event the
General Partner shall exercise the Assumers' right to satisfy a Right in the
manner described in this Paragraph 6, the Partnership shall have no obligation
to pay any amount to the Exercising Partner with respect to such Exercising
Partner's exercise of a Right; provided, however, that the Partnership shall
remain liable to the Exercising Partner to the extent that any such Exercising
Partner's Right is not fully satisfied; and each of the Exercising Partner, the
Partnership, and the Assumers shall treat the transaction between the Assumers
and the Exercising Partner as a sale of the Exercising Partner's Partnership
Units to the Assumers for federal income tax purposes. To the extent the
Assumers elect to pay the Stock Purchase Price, they shall obtain the necessary
shares of Common Stock in exchange for the issuance of additional capital stock
to Weeks. Each Exercising Partner agrees to execute such documents as the
General Partner may reasonably require in connection with the issuance of Common
Stock upon exercise of a Right.
7. Closing Deliveries. At the closing, payment of the Redemption Price
------------------
shall be accompanied by proper instruments of transfer and assignment for the
Offered Partnership Units and by the delivery of (i) representations and
warranties of (A) the Exercising Partner with respect to its due authority to
sell all of the right, title and interest in and to the Offered Partnership
Units and with respect to the status of the Offered Partnership Units being
sold, free and clear of all Liens, and (B) the Partnership or the Assumers, as
applicable, with respect to due authority for the redemption or purchase of such
Offered Partnership Units, and (ii) to the extent that shares of Common Stock
are issued in payment of the Stock Purchase Price, (A) an opinion of counsel for
Weeks, reasonably satisfactory to the Exercising Partner(s), to the effect that
such shares of Common Stock have been duly authorized, are validly issued,
fully-paid and nonassessable, and (b) a stock certificate or certificates
evidencing the Common Stock to be issued and registered in the name of the
Exercising Partner(s) or its (their) designee.
8. Covenants of Weeks. To facilitate the Partnership's and the Assumers'
------------------
ability to fully perform their obligations hereunder, Weeks covenants and agrees
as follows:
(a) At all times during the pendency of the Rights, Weeks shall
reserve for issuance such number of shares of Common Stock as may be
necessary to enable Weeks to issue shares of Common Stock in full payment
of the Stock Purchase Price in regard to all Partnership Units that are
from time to time outstanding and with respect to which Rights exist.
(b) During the pendency of the Rights, the Limited Partners shall
receive in a timely manner all communications transmitted from time to time
by Weeks to its shareholders generally.
9. Limited Partners' Covenants. Each Limited Partner covenants and
---------------------------
agrees that all Offered Partnership Units tendered in accordance with the
exercise of Rights shall be delivered free and clear of all Liens. Should any
Liens exist or arise with respect to such Offered Partnership Units, neither the
Assumers nor the Partnership shall be under any obligation to redeem or acquire
the same unless, in connection therewith, the General Partner has elected to pay
a portion of the Redemption Price in the form of the Cash Purchase Price in
circumstances in which such Cash
C-4
<PAGE>
Purchase Price will be sufficient to cause such existing Lien to be discharged
in full upon application of all or a part of the Cash Purchase Price. The
Partnership and the Assumers are expressly authorized to apply such portion of
the Cash Purchase Price as may be necessary to discharge such Lien in full. Each
Limited Partner further agrees that, in the event any state or local property
transfer tax is payable as a result of the transfer of its Offered Partnership
Units to the Partnership or the Assumers, such Limited Partner shall assume and
pay such transfer tax.
10. Antidilution Provisions
-----------------------
(a) The Conversion Factor shall be subject to adjustment from time to
time effective upon the occurrence of the following events and shall be
expressed as a percentage, calculated to the nearest one-thousandth of one
percent (.001%):
(i) In case Weeks shall pay or make a dividend or other
distribution on any class of stock of Weeks in shares of Common Stock,
the Conversion Factor in effect at the opening of business on the day
following the date fixed for the determination of shareholders
entitled to receive such dividend or other distribution shall be
increased in proportion to the increase in outstanding shares of
Common Stock resulting from such dividend or other distribution, such
increase to become effective immediately after the opening of business
on the day following the record date fixed for such dividend or other
distribution.
(ii) In case outstanding shares of Common Stock shall be
subdivided into a greater number of shares, the Conversion Factor in
effect at the opening of business on the day following the day upon
which such subdivision becomes effective shall be proportionately
increased, and, conversely, in case the outstanding shares of Common
Stock shall be combined into a smaller number of shares, the
Conversion Factor in effect at the opening of business on the day
following the day upon which such combination becomes effective shall
be proportionately reduced, such increase or reduction, as the case
may be, to become effective immediately after the opening of business
on the day following the day upon which such subdivision or
combination becomes effective.
(b) In case Weeks shall issue rights, options or warrants to all
holders of its shares of Common Stock entitling them to subscribe for or
purchase Common Stock or other securities convertible into shares of Common
Stock at a price per share less than the Current Per Share Market Price as
of the day before the "ex date" with respect to the issuance or
distribution, each Limited Partner holding Rights shall be entitled to
receive such number of such rights, options or warrants, as the case may
be, as he would have been entitled to receive had he exercised all of his
then existing Rights immediately prior to the record date for such issuance
by Weeks. The term "ex date" shall mean the first date on which shares of
Common Stock trade regular way without the right to receive such issuance
or distribution.
C-5
<PAGE>
(c) In case the shares of Common Stock shall be changed into the same
or a different number of shares of any class or classes of stock, whether
by capital reorganization, reclassification, or otherwise (other than
subdivision or combination of shares described in subparagraph (a) (ii) of
this Paragraph), then and in each such event the Limited Partners holding
Rights shall have the right thereafter to exercise their Rights for the
kind and amount of shares and other securities and property that would have
been received upon such reorganization, reclassification or other change by
holders of the number of shares of Common Stock with respect to which such
Rights could have been exercised immediately prior to such reorganization,
reclassification or change.
(d) The General Partner may, but shall not be required to, make such
adjustments to the number of shares of Common Stock issuable upon exercise
of Rights, in addition to those required by this Paragraph 10, as the
General Partner considers to be advisable in order that any event treated
for federal income tax purposes as a dividend of stock or stock rights
shall not be taxable to the recipients. The General Partner shall have the
power to resolve any ambiguity or correct any error in the adjustments made
pursuant to this Paragraph and its actions in so doing shall be final and
conclusive, absent manifest error by the General Partner in taking such
action.
11. Fractions of Shares. No fractional shares of Common Stock shall be
-------------------
issued upon exercise of Rights. If Rights shall be exercised with respect to
more than one Offered Partnership Unit at one time by the same Exercising
Partner, the number of full shares of Common Stock comprising the Stock Purchase
Price (or the cash equivalent amount thereof to the extent the Cash Purchase
Price is paid) shall be computed on the basis of the aggregate number of Offered
Partnership Units. Instead of any fractional share of Common Stock that would
otherwise be issuable upon exercise of Rights, the Partnership or the Assumers
shall pay a cash adjustment in respect of such fraction in an amount equal to
the Cash Purchase Price computed hereunder for such fraction of a share.
12. Notice of Adjustments of Conversion Factor. Whenever the Conversion
------------------------------------------
Factor is adjusted as herein provided:
(a) the General Partner shall compute the adjusted Conversion Factor
in accordance with Paragraph 10 hereof and shall prepare a certificate
signed by the chief financial officer or the Treasurer of the General
Partner setting forth the adjusted Conversion Factor and showing in
reasonable detail the facts upon which such adjustment is based; and
(b) notice stating that the Conversion Factor has been adjusted and
setting forth the adjusted Conversion Factor shall forthwith be mailed by
the General Partner to all holders of Rights at their last addresses on
record under this Agreement.
13. Notice of Certain Corporate Actions.
-----------------------------------
In case:
C-6
<PAGE>
(a) Weeks shall declare a dividend (or any other distribution) on its
Common Stock payable otherwise than in cash; or
(b) Weeks shall authorize the granting to the holders of its Common
Stock of rights, options or warrants to subscribe for or purchase any
shares of stock of any class or of any other rights; or
(c) of any reclassification of the shares of Common Stock (other than
a subdivision or combination of its outstanding Common Stock, or of any
consolidation, merger or share exchange to which Weeks is a party and for
which approval of any shareholders of Weeks is required), or of the sale or
transfer of all or substantially all of the assets of Weeks; or
(d) of the voluntary or involuntary dissolution, liquidation or
winding up of Weeks;
then the General Partner shall cause to be mailed to all holders of Rights at
their last addresses on record under this Agreement, at least 20 days (or 12
days in any case specified in clause (a) or (b) above) prior to the applicable
record date hereinafter specified, a notice stating (i) the date on which a
record is to be taken for the purpose of such dividend, distribution, rights,
options or warrants, or, if a record is not to be taken, the date as of which
the holders of shares of Common Stock of record to be entitled to such dividend,
distribution, rights, options or warrants are to be determined, or (ii) the date
on which such reclassification, consolidation, merger, share exchange, sale,
transfer, dissolution, liquidation or winding up is expected to become
effective, and the date as of which it is expected that holders of shares of
Common Stock of record shall be entitled to exchange their shares for
securities, cash or other property deliverable upon such reclassification,
consolidation, merger, share exchange, sale, transfer, dissolution, liquidation
or winding up.
14. Provisions in Case of Consolidation, Merger or Sale of Assets.
-------------------------------------------------------------
In case of any consolidation of Weeks with, or merger of Weeks into, any
other Person, any merger or consolidation of another Person into Weeks (other
than a merger that does not result in any reclassification, conversion, exchange
or cancellation of outstanding shares of Common Stock), any acquisition of the
outstanding Common Stock by share exchange, or any sale or transfer of all or
substantially all of the assets of Weeks, the Person formed by such
consolidation or resulting from such merger or that acquires the outstanding
Common Stock or such assets of Weeks as the case may be, shall execute and
deliver to each holder of Rights an agreement providing that such holder shall
have the right thereafter, during the period such rights shall be exercisable
(which shall be at least as long as the period for which the Rights can be
exercised under the other provisions of this Agreement), to exercise the Rights
for the kind and amount of securities, cash and other property receivable upon
such consolidation, merger, share exchange, sale or transfer by a holder of the
number of shares of Common Stock for which the Rights might have been exercised
immediately prior to such consolidation, merger, share exchange, sale or
transfer, assuming both that (a) such holder of shares of Common Stock is not a
Person with which Weeks consolidated or into which Weeks merged or that merged
into Weeks, or that acquired the outstanding Common Stock by share
C-7
<PAGE>
exchange, or to which such sale or transfer was made, as the case may be (a
"Constituent Person"), or an Affiliate of a Constituent Person, and that (b)
such holder does not exercise his right of election, if any, as to the kind or
amount of securities, cash or other property receivable upon such consolidation,
merger, share exchange, sale or transfer (provided that if the kind or amount of
--------
securities, cash and other property receivable upon such consolidation, merger,
share exchange, sale or transfer is not the same for each share of Common Stock
in respect of which such right of election, if any, is not exercised ("non-
electing Share"), then for the purpose of this Paragraph 14, the kind and amount
of securities, cash and other property receivable upon such consolidation,
merger, share exchange, sale or transfer by each non-electing Share shall be
deemed to be the kind and amount so receivable per non-electing Share by a
plurality of the non-electing Shares). Such agreement shall provide for
adjustments that, for events subsequent to the effective date of such agreement,
shall be as nearly equivalent as may be practicable to the adjustments provided
for in this Exhibit D.
The above provisions of this Paragraph 14 shall similarly apply to
successive consolidations, mergers, sales or transfers.
C-8
<PAGE>
SCHEDULE 1
CONVERSION EXERCISE NOTICE
--------------------------
To: Weeks Realty, L.P.
Reference is made to that certain Seventh Amendment (the "Amendment") to
the Second Amended and Restated Agreement of Limited Partnership of Weeks
Realty, L.P. (the "Partnership"). Capitalized terms used but not defined herein
shall have the meanings set forth in Amendment. Pursuant to Exhibit D to the
Amendment, the undersigned, being a limited partner of the Partnership (an
"Exercising Partner"), hereby elects to exercise its Rights as to the number of
Offered Partnership Units specified opposite its name below:
Number of Offered
Exercising Limited Partner Partnership Units
- -------------------------- -----------------
---------------------------------------
Signature of Exercising Limited Partner
Date:__________________________________
<PAGE>
SCHEDULE 2
CLOSING NOTICE
--------------
To: Exercising Limited Partner(s)
Reference is made to that certain Seventh Amendment (the "Amendment") to
the Second Amended and Restated Agreement of Limited Partnership of Weeks
Realty, L.P. (the "Partnership"). Capitalized terms used but not defined herein
shall have the meaning set forth in Amendment. The closing of the redemption of
the Offered Partnership Units shall occur at _______, ________, Georgia, on
___________. Pursuant to Exhibit D to the Amendment, the Partnership hereby
notifies the Exercising Partner(s) that it has elected to pay the Cash Purchase
Price to the Exercising Partner(s) for the number of Offered Partnership Units
set forth below, and that the computation of the Cash Purchase Price is set
forth on an attachment hereto.
NUMBER OF OFFERED CASH PURCHASE
EXERCISING PARTNER(S) PARTNERSHIP UNITS PRICE
- --------------------- ----------------- -------------
WEEKS REALTY, L.P.
By: Weeks GP Holdings, Inc., General Partner
By:_________________________________________
Title:______________________________________
Date:_______________________________________
<PAGE>
EXHIBIT 10.65
REGISTRATION RIGHTS AGREEMENT
-----------------------------
REGISTRATION RIGHTS AGREEMENT (the "Agreement") dated as of November 6,
1998, by and among Weeks Corporation, a Georgia corporation (the "Company"), and
each Holder (as hereinafter defined) executing a signature page hereto.
This Agreement is made pursuant to a certain Securities Purchase Agreement
(the "Securities Purchase Agreement") dated as of the date hereof by and among
the Company, Weeks Realty, L.P., a Georgia limited partnership (the "Operating
Partnership") and the purchaser named therein, pursuant to which the purchaser
shall purchase (i) a Warrant to purchase 1,046,729 shares of the Company's
Common Stock or 1,400,000 shares of Series A Preferred Stock (the "Warrant") and
(ii) 1,400,000 Series C Preferred Partnership Units of the Operating Partnership
(the "Operating Units"). In order to induce the purchasers to enter into the
Securities Purchase Agreement, the Company has agreed to provide the
registration rights set forth in this Agreement. The execution of this
Agreement is a condition to the closing of the transactions contemplated by the
Securities Purchase Agreement.
In consideration of the foregoing, the parties hereby agree as follows:
SECTION 1. DEFINITIONS.
-----------
As used in this Agreement, the following terms shall have the following
meanings:
"Advice" has the meaning set forth in Section 4.
------
"Affiliate" means, with respect to any specified Person, any other Person
---------
who, directly or indirectly, controls, is controlled by, or is under common
control with such specified Person.
"Business Day" means any day other than a Saturday or Sunday or a day on
------------
which commercial banking institutions in Boston, Massachusetts, New York, New
York or Atlanta, Georgia are authorized by law to be closed. Any reference to
"days" (unless Business Days are specified) shall mean calendar days.
"Commission" means the Securities and Exchange Commission.
----------
"Common Stock" means the common stock, par value $.01 per share, of the
------------
Company.
"Company" has the meaning set forth in the preamble and shall include the
-------
Company's successors by merger, acquisition, reorganization or otherwise.
"Controlling Persons" has the meaning set forth in Section 6(a).
-------------------
<PAGE>
"Damages" has the meaning set forth in Section 6(a).
-------
"Exchange Act" means the Securities Exchange Act of 1934, as amended from
------------
time to time, or any successor statute, and the rules and regulations of the
Commission promulgated thereunder.
"Holder" means (i) each Person (other than the Company and its Affiliates)
------
who is a signatory to this Agreement as listed on Schedule 1 hereto and (ii)
each Person (other than the Company and its Affiliates) to whom a Holder
transfers Securities if such Person acquires such Securities as Registrable
Securities.
"Inspectors" has the meaning set forth in Section 4(k).
----------
"Maximum Number" means such number of securities that may be included in an
--------------
underwritten public offering when the managing underwriters advise the Company
in writing that in their opinion the number of securities requested to be
included in such registration exceeds the maximum number which can be included
in such offering without adversely affecting the marketability of the offering.
"NASD" has the meaning set forth in Section 4(m).
----
"Nasdaq" has the meaning set forth in Section 4(m).
------
"Operating Partnership" has the meaning set forth in the preamble and shall
---------------------
include the Operating Partnership's successors.
"Operating Units" has the meaning set forth in the preamble.
---------------
"Person" means any individual, corporation, partnership, joint venture,
------
association, joint-stock company, trust, limited liability company,
unincorporated organization or government or other agency or political
subdivision thereof.
"Piggy-Back Registration" has the meaning set forth in Section 3(a).
-----------------------
"Prospectus" means the prospectus included in any Registration Statement
----------
(including, without limitation, a prospectus that discloses information
previously omitted from a prospectus filed as part of an effective Registration
Statement in reliance upon Rule 430A promulgated under the Securities Act), as
amended or supplemented by any prospectus supplement, with respect to the terms
of the offering of any portion of the Registrable Securities covered by such
Registration Statement, and all other amendments and supplements to the
prospectus, including post-effective amendments, and all material incorporated
by reference or deemed to be incorporated by reference in such prospectus.
"Records" has the meaning set forth in Section 4(k).
-------
"Registrable Securities" means the Securities; provided, however, that any
---------------------- -------- -------
Securities shall cease to be Registrable Securities when (i) a Registration
Statement covering such Securities has been declared effective and such
Registrable Securities have been disposed of by the holder thereof
2
<PAGE>
pursuant to such effective Registration Statement or any other effective
registration statement, (ii) such Securities are transferred by the holder
thereof to any Person other than a Holder pursuant to Rule 144 (or any successor
rule or similar provision then in effect, but not Rule 144A) under the
Securities Act, including a sale pursuant to the provisions of Rule 144(k),
(iii) such Securities shall have ceased to be outstanding or (iv) such
Securities are eligible for sale pursuant to Rule 144 under the Securities Act
and could be sold in one transaction in accordance with the volume limitations
contained in Rule 144(e)(1)(i) under the Securities Act.
"Registration Expenses" has the meaning set forth in Section 5.
---------------------
"Registration Statement" means any registration statement of the Company
----------------------
that covers any of the Registrable Securities pursuant to the provisions of this
Agreement and all amendments and supplements to any such registration statement,
including post-effective amendments, in each case including the Prospectus, all
exhibits, and all material incorporated by reference or deemed to be
incorporated by reference in such registration statement.
"Required Filing Date" has the meaning set forth in Section 2(a).
--------------------
"Securities" means (i) all shares of Common Stock or Series A Preferred
----------
Stock issued to any Holder upon the redemption or put of Operating Units or the
exercise or put of the Warrant and (ii) all shares of Common Stock or Series A
Preferred Stock or Other Securities directly or indirectly issued or issuable in
respect of the securities referred to in clause (i) above by way of stock
dividend or stock split or in connection with a combination of shares,
recapitalization, merger, consolidation, or other reorganization or issuable
upon exercise of the Warrant.
"Securities Act" means the Securities Act of 1933, as amended from time to
--------------
time, or any successor statute, and the rules and regulations of the Commission
promulgated thereunder.
"Securities Purchase Agreement" has the meaning set forth in the
-----------------------------
introduction.
"Series A Preferred Stock" means the 8% Series A Cumulative Redeemable
------------------------
Preferred Stock, par value $.01 per share, of the Company.
"Shelf Registration Statement" has the meaning set forth in Section 2(a).
----------------------------
"Suspension Notice" has the meaning set forth in Section 4.
-----------------
"Suspension Period" has the meaning set forth in Section 4.
-----------------
"Target Effective Date" means the date 45 days after the earlier of (i) a
---------------------
Required Filing Date or (ii) the date on which the Shelf Registration Statement
is actually filed with the Commission.
"Target Effective Period" means the period of time between the date on
-----------------------
which a Shelf Registration Statement is actually declared effective and the
later of (i) the date which is 24 months following the date hereof, and (ii) the
date which is three months after the date on which all Holders cease to be an
Affiliate of the Company.
3
<PAGE>
"Warrant" has the meaning set forth in the preamble.
-------
SECTION 2. SHELF REGISTRATION.
------------------
(a) Filing; Effectiveness. As soon as practicable but not later than
---------------------
the forty-fifth (45th) day following each of (i) the closing of the transactions
contemplated by the Securities Purchase Agreement, and (ii) to the extent not
covered by such first registration statement, each date that any Holder acquires
Securities (each a "Required Filing Date"), the Company shall prepare and file
--------------------
with the Commission a "shelf" registration statement (the "Shelf Registration
------------------
Statement") on the appropriate form for an offering to be made on a continuous
- ---------
basis pursuant to Rule 415 under the Securities Act (or any successor rule or
similar provision then in effect) covering all of the Registrable Securities.
The Company shall use its reasonable best efforts to have the Shelf Registration
Statement declared effective on or before the Target Effective Date and to keep
such Shelf Registration Statement continuously effective for the Target
Effective Period. Any Holder of Registrable Securities shall be permitted to
withdraw all or any part of the Registrable Securities from a Shelf Registration
Statement at any time prior to the effective date of such Shelf Registration
Statement, but the Company shall be under no further obligation to register such
Securities pursuant to this Section 2.
(b) Supplements; Amendments. The Company agrees, if necessary, to
-----------------------
supplement or amend the Shelf Registration Statement, as required by the rules,
regulations or instructions applicable to the registration form used by the
Company for such Shelf Registration Statement or by the Securities Act or as
requested (which request shall result in the filing of a supplement or
amendment) by any Holder of Registrable Securities to which such Shelf
Registration Statement relates including as necessary to reflect any increase in
the number or nature of Securities as a result of adjustments of the Warrant or
otherwise, and the Company agrees to furnish to the Holders, Holders' Counsel
and any managing underwriter copies of any such supplement or amendment prior to
its being used and/or filed with the Commission.
(c) Effective Registration. A registration will not be deemed to have
----------------------
been effected as a Shelf Registration Statement unless the Shelf Registration
Statement with respect thereto has been declared effective by the Commission and
the Company has complied in all material respects with its obligations under
this Agreement with respect thereto; provided, however, that if after the Shelf
-------- -------
Registration Statement has been declared effective, the offering of Registrable
Securities pursuant to such Shelf Registration Statement is interfered with by
any stop order, injunction or other order or requirement of the Commission or
any other governmental agency or court, such Shelf Registration Statement will
be deemed not to have become effective during the period of such interference
until the offering of Registrable Securities pursuant to such Shelf Registration
Statement may legally resume. If a registration requested pursuant to this
Section 2 is deemed not to have been effected, then the Company shall continue
to be obligated to effect a registration pursuant to this Section 2.
(d) Plan of Distribution. The Shelf Registration Statement shall
--------------------
describe the method of distribution of the Registrable Securities; provided,
--------
however, that the Company shall not
- -------
4
<PAGE>
be required to participate in any organized distribution efforts including,
without limitation, "road shows" and investor meetings.
SECTION 3. PIGGY-BACK REGISTRATION.
-----------------------
(a) Request for Registration. Each time the Company proposes to file
------------------------
a registration statement under the Securities Act with respect to an offering by
the Company for its own account or for the account of any of its security
holders of any class of equity security (other than (i) a registration statement
on Form S-4 or S-8 (or any substitute form that is adopted by the Commission) or
(ii) a registration statement filed in connection with an exchange offer or the
offering of securities solely to the Company's existing security holders), then
the Company shall give written notice of such proposed filing to each Holder of
Registrable Securities as soon as practicable (but in no event less than 20 days
before the anticipated filing date), and such notice shall offer such Holder the
opportunity to register such number of shares of Registrable Securities as each
such Holder may request (which request must be made in writing and shall specify
the Registrable Securities intended to be disposed of by such Holder and the
intended method of distribution thereof) (a "Piggy-Back Registration");
-----------------------
provided, however, that the Company shall not be required to include Registrable
- -------- -------
Securities in the securities to be registered pursuant to a registration
statement on any form which limits the amounts of securities which may be
registered by the issuer and/or selling security holders if, and to the extent
that, such inclusion would make the use of such form unavailable. In the event
that any Piggy-Back Registration shall be, in whole or in part, an underwritten
public offering of Common Stock, any request for inclusion by the Holder shall
specify that either (i) such Registrable Securities are to be included in the
underwriting on the same terms and conditions as the shares of Common Stock
otherwise being sold through underwriters under such registration, or (ii) such
Registrable Securities are to be sold in the open market without any
underwriting, on terms and conditions comparable to those normally applicable to
offerings of common stock in reasonably similar circumstances. The Company
shall permit, or, if the offering relating to a Piggy-Back Registration is an
underwritten offering, shall use its reasonable best efforts to cause the
managing underwriter or underwriters of such proposed underwritten offering to
permit, the Registrable Securities requested to be included in such Piggy-Back
Registration to be included on the same terms and conditions as any similar
securities of the Company or any other security holder included therein and
shall permit, or use its reasonable best efforts to cause such managing
underwriter or underwriters to permit, the sale or other disposition of such
Registrable Securities in accordance with such Holder's intended method of
distribution thereof. Any Holder shall have the right to withdraw its request
for inclusion of its Registrable Securities in any registration statement
pursuant to this Section 3 by giving written notice to the Company of such
withdrawal. The Company may withdraw such registration statement at any time
prior to the time it becomes effective, provided that the Company shall give
immediate notice of such withdrawal to the Holders who requested Registrable
Securities to be included in such Piggy-Back Registration.
(b) Priority on Primary Registrations. In the event a Piggy-Back
---------------------------------
Registration is an underwritten primary registration on behalf of the Company,
and the managing underwriters advise the Company in writing that in their
opinion the number of shares requested to be included in such registration
exceeds the Maximum Number, the Company will limit the number of shares included
in such registration to the Maximum Number, and the shares registered shall be
selected in the following order of priority: (i) first, securities the Company
proposes to sell, (ii) second,
5
<PAGE>
securities requested to be included in such registration pursuant to the
Registration Rights and Lock-Up Agreement dated as of August 24, 1994, by and
among Weeks Corporation and the Company Participants Listed on Schedule A
thereof and the Other Participants Listed on Schedule B thereof, (iii) third,
(a) securities covered by piggyback registration requests pursuant to the
Registration Rights and Lock-Up Agreement dated December 31, 1996, by and among
Weeks Corporation and Harold S. Lichtin, Noel A. Lichtin, Marie A. Robertson,
Amy R. Ehrman, Roland G. Robertson and Perimeter Park West Associates Limited
Partnership, (b) securities covered by piggyback registration requests pursuant
to the Registration Rights and Lock-Up Agreement for Post-June 30, 1998 Units
dated December 31, 1996, by and among Weeks Corporation and Harold S. Lichtin,
Noel A. Lichtin, Marie A. Robertson, Amy R. Ehrman, Roland G. Robertson and
Perimeter Park West Associates Limited Partnership, (c) securities covered by
piggyback registration requests pursuant to the Registration Rights and Lock-Up
Agreement dated as of November 1, 1996, by and among Weeks Corporation, NWI
Warehouse Group, L.P., Buckley & Company Real Estate, Inc., John W. Nelley, Jr.
and Albert W. Buckley, Jr., and (d) securities covered by piggyback registration
requests pursuant to the Registration Rights and Lock-Up Agreement for Post-
March 31, 1998 Shares and Units dated as of November 1, 1996, by and among Weeks
Corporation, NWI Warehouse Group, L.P. and Buckley & Company Real Estate, Inc.,
pro rata among the holders thereof on the basis of the number of shares
requested to be included in such registration, and (iv) fourth, Registrable
Securities covered by Piggy-Back Registration requests and all other securities
requested to be included in such registration, pro rata among the holders
thereof on the basis of the number of shares requested to be included in such
registration.
(c) Priority on Secondary Registrations. In the event a Piggy-Back
-----------------------------------
Registration is an underwritten secondary registration on behalf of holders of
the Company's securities, and the managing underwriters advise the Company in
writing that in their opinion the number of securities requested to be included
in such registration exceeds the Maximum Number, the Company will include in
such registration the shares requested to be included therein by the holders
requesting such registration and the Registrable Securities covered by Piggy-
Back Registration requests and any other securities requested to be included in
such registration, pro rata among the holders thereof on the basis of the number
of shares requested to be included in such registration; provided, however, that
-------- -------
if the holders requesting registration are doing so pursuant to demand
registration rights of such holders, such holders' shares shall take priority
over any Registrable Securities and any other securities requested to be
included, which shall be included on a pro rata basis.
(d) Continuing Obligations of the Company. Although the specific
-------------------------------------
shares of Common Stock or Series A Preferred Stock disposed of pursuant to a
Piggy-Back Registration will cease to be Registrable Securities, the mere
registration of Registrable Securities under this Section 3 shall not relieve
the Company of its obligation to effect or maintain a Shelf Registration
Statement pursuant to Section 2. No failure by the Holders to elect a Piggy-
Back Registration under this Section 3 or to complete the sale of Registrable
Securities pursuant to the registration statement effected in connection
therewith, and no withdrawal of Registrable Securities from a Piggy-Back
Registration, shall relieve the Company of any other obligation under this
Agreement, including without limitation, the Company's obligations under
Sections 4 and 5.
6
<PAGE>
SECTION 4. REGISTRATION PROCEDURES.
-----------------------
In connection with the obligations of the Company to effect or cause the
registration of any Registrable Securities pursuant to the terms and conditions
of this Agreement, the Company shall use its reasonable best efforts to effect
the registration and sale of such Registrable Securities in accordance with the
intended method of distribution thereof as quickly as practicable, and in
connection therewith:
(a) The Company shall prepare and file with the Commission a
Registration Statement on the appropriate form under the Securities Act, which
Registration Statement shall comply as to form in all material respects with the
requirements of the applicable form and include all financial statements
required by the Commission to be filed therewith, and use its reasonable best
efforts to cause such Registration Statement to become effective and remain
effective in accordance with the provisions of this Agreement; provided,
--------
however, that, at least ten Business Days prior to filing a Registration
- -------
Statement or Prospectus or any amendments or supplements thereto, including
documents incorporated by reference after the initial filing of the Registration
Statement, the Company shall furnish to the Holders of the Registrable
Securities covered by such Registration Statement, Holders' Counsel and the
underwriters, if any, draft copies of all such documents proposed to be filed,
which documents will be subject to the review of Holders' Counsel and the
underwriters, if any.
(b) The Company shall (i) prepare and file with the Commission such
amendments to such Registration Statement as may be necessary to keep such
Registration Statement effective for the applicable period; (ii) cause the
Prospectus to be amended or supplemented as required and to be filed as required
by Rule 424 or any similar rule that may be adopted under the Securities Act;
(iii) respond as promptly as practicable to any comments received from the SEC
with respect to the Shelf Registration Statement or any amendment thereto; and
(iv) comply with the provisions of the Securities Act with respect to the
disposition of all securities covered by such Registration Statement during the
applicable period in accordance with the intended method or methods of
distribution by the Holder covered thereby.
(c) The Company shall promptly furnish to any Holder and the
underwriters, if any, without charge, such number of conformed copies of such
Registration Statement and any post-effective amendment thereto and such number
of copies of the Prospectus (including each preliminary Prospectus) and any
amendments or supplements thereto, any documents incorporated by reference
therein and such other documents as any such Holder or underwriter may
reasonably request in order to facilitate the public sale or other disposition
of the Registrable Securities being sold by such Holder.
(d) The Company shall, on or prior to the date on which a Registration
Statement is declared effective, (i) use its best efforts to register or qualify
the Registrable Securities covered by such Registration Statement under the
securities or "blue sky" laws of each of the 50 states of the United States (or
such jurisdictions as any Holder, Holders' counsel or underwriter may request)
or obtain appropriate exemptions therefrom; (ii) do any and all other acts and
things which may be necessary or advisable to enable the Holders of Registrable
Securities included in such Registration Statement to consummate the disposition
of such Registrable Securities in accordance with their intended method of
distribution thereof; (iii) use its reasonable best efforts to keep each such
state
7
<PAGE>
securities or "blue sky" registration or qualification (or exemption therefrom)
effective during the period in which the Company is required to keep the
Registration Statement effective; and (iv) do any and all other acts or things
which may be necessary or advisable to enable the Holders of Registrable
Securities included in such Registration Statement to complete the disposition
in such jurisdictions of such Registrable Securities in accordance with their
intended method of distribution thereof except as otherwise provided in Section
9; provided, however, that the Company shall not be required (A) to qualify to
-------- -------
do business in any jurisdiction where it would not otherwise be required to so
qualify but for this Section 4(d), (B) to file any general consent to service of
process or (C) subject itself to taxation in any such jurisdiction where it is
not otherwise subject to taxation.
(e) The Company shall promptly notify each Holder, Holders' Counsel
and any underwriter and (if requested by any such Person) confirm such notice in
writing, (i) when a Registration Statement or a Prospectus or any post-effective
amendment or any Prospectus supplement has been filed and, with respect to a
Registration Statement or any post-effective amendment, when the same has become
effective, (ii) of any request by the Commission or any state securities
authority for amendments and supplements to a Registration Statement and
Prospectus or for additional information after the Registration Statement has
become effective, (iii) of the issuance by the Commission of any stop order
suspending the effectiveness of a Registration Statement or the initiation or
threatening of any proceedings for that purpose, (iv) of the issuance by any
state securities commission or other regulatory authority of any order
suspending the registration or qualification or exemption from registration or
qualification of any of the Registrable Securities under state securities or
"blue sky" laws or the initiation of any proceedings for that purpose, (v) if,
between the effective date of a Registration Statement and the closing of any
sale of Registrable Securities covered thereby, the representations and
warranties of the Company contained in any underwriting agreement, securities
sales agreement or other similar agreement, if any, relating to the offering of
such Registrable Securities cease to be true and correct in all material
respects, and (vi) of the happening of any event which makes any statement of a
material fact made in a Registration Statement or related Prospectus untrue or
which requires the making of any changes in such Registration Statement or
Prospectus so that such Registration Statement or Prospectus will not contain
any untrue statement of a material fact or omit to state any material fact
required to be stated therein or necessary to make the statements therein, in
light of the circumstances under which they were made, not misleading; and, as
promptly as practicable thereafter, prepare and file an amendment to such
Registration Statement with the Commission and furnish to the Holders and any
underwriter a supplement or amendment to such Prospectus so that, as thereafter
deliverable to the purchasers of such Registrable Securities, such Prospectus
will not contain any untrue statement of a material fact or omit to state a
material fact necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading.
(f) The Company shall make generally available to its security
holders an earnings statement satisfying the provisions of Section 11(a) of the
Securities Act as soon as practicable after the effective date of a Registration
Statement, which requirement will be deemed to be satisfied if the Company
timely files complete and accurate information on Forms 10-Q, 10-K and 8-K under
the Exchange Act and otherwise complies with Rule 158 under the Securities Act.
(g) The Company shall promptly use its reasonable best efforts to
prevent the issuance of any order suspending the effectiveness of a Registration
Statement, and, if any such order
8
<PAGE>
suspending the effectiveness of a Registration Statement is issued, shall
promptly use its reasonable best efforts to obtain the withdrawal of such order
at the earliest possible moment.
(h) The Company shall, if reasonably requested by the managing
underwriter or underwriters, if any, Holders' Counsel, or any Holder promptly
incorporate in a Prospectus supplement or post-effective amendment such
information as such managing underwriter or underwriters or Holder or Holders'
Counsel requests to be included therein, including, without limitation, with
respect to the Registrable Securities being sold by such Holder to such
underwriter or underwriters, the purchase price being paid therefor by such
underwriter or underwriters and any other terms of an underwritten offering of
the Registrable Securities to be sold in such offering, and the Company shall
promptly make all required filings of such Prospectus supplement or post-
effective amendment.
(i) The Company shall cooperate with the Holders and the managing
underwriter or underwriters, if any, to facilitate the timely preparation and
delivery of certificates (which shall not bear any restrictive legends unless
required under applicable law) representing Registrable Securities sold under a
Registration Statement to the purchasers thereof, and enable such Registrable
Securities to be in such denominations and registered in such names as the
managing underwriter or underwriters, if any, or such Holders may request and
keep available and make available to the Company's transfer agent prior to the
effectiveness of such Registration Statement a supply of such certificates.
(j) The Company shall enter into such customary agreements (including,
if applicable, an underwriting agreement in customary form) and take such other
actions as the Holders or the underwriters retained by the Holders participating
in an underwritten public offering, if any, may request in order to expedite or
facilitate the disposition of Registrable Securities (the Holders may, at their
option, require that any or all of the representations, warranties and covenants
of the Company to or for the benefit of any underwriters also be made to and for
the benefit of the Holders).
(k) The Company shall promptly make available to each Holder, any
underwriter participating in any disposition of Registrable Securities pursuant
to a Registration Statement, and any attorney, accountant or other agent or
representative retained by any such Holder or underwriter (collectively, the
"Inspectors"), all financial and other records, pertinent corporate documents
----------
and properties of the Company (collectively, the "Records"), as shall be
-------
reasonably necessary to enable them to exercise their due diligence
responsibility, and cause the Company's officers, directors and employees to
supply all information requested by any such Inspector in connection with such
Registration Statement; provided, however, that such Records which the Company
-------- -------
determines in good faith to be confidential and notifies such Inspectors in
writing that such Records are confidential shall not be disclosed by such
Inspectors unless (i) such disclosure is ordered pursuant to a subpoena or other
order from a court of competent jurisdiction or governmental agency, or (ii)
such Records become generally available to the public other than through a
breach of this Agreement.
(l) The Company shall furnish to each Holder of Registrable Securities
included in such offering and to each underwriter, if any, a signed counterpart,
addressed to such Holder or
9
<PAGE>
underwriter, of (i) an opinion or opinions of counsel to the Company, and (ii) a
comfort letter or comfort letters from the Company's independent public
accountants, each in customary form and covering matters of the type customarily
covered by opinions or comfort letters, as the case may be.
(m) The Company shall use its reasonable best efforts to cause the
Registrable Securities included in a Registration Statement (if the Company and
the Registrable Securities so qualify) (i) to be listed on each national
securities exchange, if any, on which similar securities issued by the Company
are then listed, or (ii) if similar securities of the Company are not then
listed, to be authorized for quotation or listing, as applicable, on the New
York Stock Exchange or the National Association of Securities Dealers, Inc.'s
("NASD") Nasdaq Stock Market ("Nasdaq").
---- ------
(n) The Company shall provide a CUSIP number for all Registrable
Securities covered by a Registration Statement not later than the effective date
of such Registration Statement.
(o) The Company shall cooperate with each Holder and each underwriter
participating in the disposition of Registrable Securities and their respective
counsel in connection with any filings required to be made with the NASD.
(p) The Company shall, during the period when the Prospectus is
required to be delivered under the Securities Act, promptly file all documents
required to be filed with the Commission pursuant to Sections 13(a), 13(c), 14
or 15(d) of the Exchange Act.
(q) The Company shall appoint or maintain a transfer agent and
registrar for all Registrable Securities covered by a Registration Statement not
later than the effective date of such Registration Statement.
(r) If the Registrable Securities are of a class of securities that is
listed on a national securities exchange, the Company shall file copies of any
Prospectus with such exchange in compliance with Rule 153 under the Securities
Act so that the Holders shall benefit from the prospectus delivery procedures
described therein.
In the case of a Shelf Registration Statement, each Holder, upon receipt of
any notice (a "Suspension Notice") from the Company of the happening of any
-----------------
event of the kind described in Section 4(e)(vi), shall forthwith discontinue
disposition of the Registrable Securities pursuant to the Shelf Registration
Statement covering such Registrable Securities until such Holder's receipt of
the copies of the supplemented or amended Prospectus contemplated by Section
4(e) or until such Holder is advised in writing (the "Advice") by the Company
------
that the use of the Prospectus may be resumed, and such Holder has received
copies of any additional or supplemental filings which are incorporated by
reference in the Prospectus, and, if so directed by the Company, such Holder
will, or will request the managing underwriter or underwriters, if any, to,
deliver to the Company (at the Company's expense) all copies, other than
permanent file copies then in such Holder's possession, of the Prospectus
covering such Registrable Securities current at the time of receipt of such
notice; provided, however, that the Company shall not give more than two
-------- -------
Suspension Notices during any period of 12 consecutive months and in no event
shall the period from the date on which any Holder receives a Suspension Notice
to the date on which any Holder receives either the Advice or copies of the
supplemented or amended Prospectus contemplated by Section 4(e) (the "Suspension
----------
Period") exceed 45 days. In the event that the Company shall give any
- ------
Suspension Notice, the Company shall
10
<PAGE>
use its reasonable best efforts and take such actions as are reasonably
necessary to render the Advice and end the Suspension Period as promptly as
practicable.
Each Holder also covenants and agrees that (i) such Holder will comply with
the provisions of Regulation M promulgated by the Commission as applicable to
them in connection with sales of Registrable Securities pursuant to the Shelf
Registration Statement and (ii) such Holder will comply with the prospectus
delivery requirements of the Securities Act as applicable to them in connection
with sales of Registrable Securities pursuant to the Shelf Registration
Statement.
If any Registration Statement refers to any Holder by name or otherwise as
the holder of any securities of the Company, then such Holder shall have the
right to require (i) the insertion therein of language, in form and substance
reasonably satisfactory to such Holder, to the effect that the holding by such
Holder of such securities is not to be construed as a recommendation by such
Holder of the investment quality of the Company's securities covered thereby and
that such holding does not imply that such Holder will assist in meeting any
future financial requirements of the Company, or (ii) in the event that such
reference to such Holder by name or otherwise is not required by the Securities
Act or any similar federal or state securities or "blue sky" statute and the
rules and regulations thereunder then in force, the deletion of the reference to
such Holder.
SECTION 5. REGISTRATION EXPENSES. Any and all expenses incident to the
---------------------
Company's performance of or compliance with this Agreement, including without
limitation, all Commission and securities exchange, Nasdaq or NASD registration,
listing and filing fees, all fees and expenses incurred in connection with
compliance with state securities or "blue sky" laws (including reasonable fees
and disbursements of counsel for any underwriters or Holder in connection with
the state securities or "blue sky" qualifications of the Registrable
Securities), printing expenses, messenger and delivery expenses, internal
expenses (including, without limitation, all salaries and expenses of the
Company's officers and employees performing legal or accounting duties), all
expenses for word processing, printing and distributing any Registration
Statement, any Prospectus, any amendments or supplements thereto, any
underwriting agreements, securities sales agreements and other documents
relating to the performance of and compliance with this Agreement, the fees and
expenses incurred in connection with the listing of the Registrable Securities,
the fees and disbursements of counsel for the Company and of the independent
certified public accountants of the Company (including the expenses of any
comfort letters or costs associated with the delivery by independent certified
public accountants of a comfort letter or comfort letter requested pursuant to
Section 4(l), Securities Act liability insurance (if the Company elects to
obtain such insurance), and the reasonable fees and expenses of any special
experts or other Persons retained by the Company in connection with any
registration, (but excluding underwriting discounts and commissions and transfer
taxes, if any, and fees and disbursements of Holder's legal counsel relating to
the sale or disposition of Registrable Securities) (all such expenses being
herein called "Registration Expenses"), will be borne by the Company whether or
---------------------
not the Shelf Registration Statement or Piggy-Back Registration to which such
expenses relate becomes effective.
SECTION 6. INDEMNIFICATION AND CONTRIBUTION.
--------------------------------
(a) Indemnification by the Company. The Company agrees to indemnify
------------------------------
and hold harmless, to the full extent permitted by law, each Holder, its
partners, officers, directors,
11
<PAGE>
trustees, stockholders, employees, agents and investment advisers, and each
Person who controls such Holder within the meaning of either Section 15 of the
Securities Act or Section 20 of the Exchange Act, or is under common control
with, or is controlled by, such Holder, together with the partners, officers,
directors, trustees, stockholders, employees, agents and investment advisors of
such controlling Person (collectively, the "Controlling Persons"), from and
-------------------
against all losses, claims, damages, liabilities and expenses (including,
without limitation, any legal or other fees and expenses incurred by any Holder
or any such Controlling Person in connection with defending or investigating any
action or claim in respect thereof) (collectively, the "Damages") to which such
-------
Holder, its partners, officers, directors, trustees, stockholders, employees,
agents and investment advisers, and any such Controlling Person, may become
subject under the Securities Act or otherwise, insofar as such Damages (or
proceedings in respect thereof) arise out of or are based upon any untrue or
alleged untrue statement of material fact contained in any Registration
Statement (or any amendment thereto) pursuant to which Registrable Securities
were registered under the Securities Act, including all documents incorporated
therein by reference, or are caused by any omission or alleged omission to state
therein a material fact necessary to make the statements therein, in light of
the circumstances under which they were made, not misleading, or arise out of or
are based upon any untrue statement or alleged untrue statement of a material
fact contained in any Prospectus (as amended or supplemented if the Company
shall have furnished any amendments or supplements thereto), or are caused by
any omission or alleged omission to state therein a material fact necessary to
make the statements therein, in light of the circumstances under which they were
made, not misleading; provided, however, that the Company shall not be liable
-------- -------
for Damages to any Holder under this Section 6(a) to the extent that any such
Damages (i) arise out of or are based upon any such untrue statement or omission
which is based upon information relating to such Holder furnished in writing to
the Company by such Holder expressly for use in any such Registration Statement
(or any amendment thereto) or Prospectus (or amendment or supplement thereto);
or (ii) were caused by the fact that such Holder sold Securities to a Person as
to whom it shall be established that there was not sent or given, or deemed sent
or given pursuant to Rule 153 under the Securities Act, at the time of or prior
to the written confirmation of such sale, a copy of the Prospectus as then
amended or supplemented if, and only if, (a) the Company has previously
furnished copies of such amended or supplemented Prospectus to such Holder and
(b) such Damages were caused by any untrue statement or omission or alleged
untrue statement or omission contained in the Prospectus so delivered which was
corrected in such amended or supplemented Prospectus. In connection with an
underwritten offering, the Company will indemnify the underwriters thereof,
their officers and directors and each Person who controls such underwriters
(within the meaning of either Section 15 of the Securities Act or Section 20 of
the Exchange Act) to the same extent as provided above with respect to the
indemnification of the Holders of Registrable Securities except with respect to
information provided by the underwriter specifically for inclusion therein.
(b) Indemnification by the Holders. Each Holder agrees, severally and
------------------------------
not jointly, to indemnify and hold harmless the Company, its directors and
officers and each Person, if any, who controls the Company within the meaning of
either Section 15 of the Securities Act or Section 20 of the Exchange Act from
and against all Damages to the same extent as the foregoing indemnity from the
Company to such Holder, but only to the extent such Damages arise out of or are
based upon any untrue statement of a material fact contained in any Registration
Statement (or any amendment thereto) or Prospectus (or any amendment or
supplement thereto) or are caused by any omission to state therein a material
fact necessary to make the statements therein, in light of the
12
<PAGE>
circumstances under which they were made, not misleading, which untrue statement
or omission is based upon information relating to such Holder furnished in
writing to the Company by such Holder expressly for use in any such Registration
Statement (or any amendment thereto) or any such Prospectus (or any amendment or
supplement thereto); provided, however, that such Holder shall not be obligated
-------- -------
to provide such indemnity to the extent that such Damages result from the
failure of the Company to promptly amend or take action to correct or supplement
any such Registration Statement or Prospectus on the basis of corrected or
supplemental information furnished in writing to the Company by such Holder
expressly for such purpose. In no event shall the liability of any Holder of
Registrable Securities hereunder be greater in amount than the amount of the
proceeds received by such Holder upon the sale of the Registrable Securities
giving rise to such indemnification obligation.
(c) Indemnification Procedures. In case any proceeding (including any
--------------------------
governmental investigation) shall be instituted involving any Person in respect
of which indemnity may be sought pursuant to either paragraph (a) or (b) above,
such Person (the "indemnified party") shall promptly notify the Person against
whom such indemnity may be sought (the "indemnifying party") in writing and the
indemnifying party, upon request of the indemnified party, shall retain counsel
reasonably satisfactory to the indemnified party to represent the indemnified
party and any others the indemnifying party may designate in such proceedings
and shall pay the fees and disbursements of such counsel relating to such
proceeding. The failure of an indemnified party to notify the indemnifying
party with respect to a particular proceeding shall not relieve the indemnifying
party from any obligation or liability (i) which it may have pursuant to this
Agreement if the indemnifying party is not substantially prejudiced by such
failure to so notify it or (ii) which it may have otherwise than pursuant to
this Agreement. In any such proceeding, any indemnified party shall have the
right to retain its own counsel, but the fees and expenses of such counsel shall
be at the expense of such indemnified party unless (i) the indemnifying party
and the indemnified party shall have mutually agreed to the retention of such
counsel, or (ii) the indemnifying party fails promptly to assume the defense of
such proceeding or fails to employ counsel reasonably satisfactory to such
indemnified party, or (iii) (A) the named parties to any such proceeding
(including any impleaded parties) include both such indemnified party or an
Affiliate of such indemnified party and any indemnifying party or an Affiliate
of such indemnifying party, (B) there may be one or more defenses available to
such indemnified party or any Affiliate of such indemnified party that are
different from or additional to those available to any indemnifying party or any
Affiliate of any indemnifying party and (C) such indemnified party shall have
been advised by such counsel that there may exist a conflict of interest between
or among such indemnified party or any Affiliate of such indemnified party and
such indemnifying party or any Affiliate of such indemnifying party, in which
case, if such indemnified party notifies the indemnifying party in writing that
it elects to employ separate counsel of its choice at the expense of the
indemnifying party, the indemnifying party shall not have the right to assume
the defense thereof and such counsel shall be at the expense of the indemnifying
party, it being understood, however, that unless there exists a conflict among
indemnified parties, the indemnifying parties shall not, in connection with any
one such proceeding or separate but substantially similar or related proceedings
in the same jurisdiction, arising out of the same general allegations or
circumstances, be liable for the fees and expenses of more than one separate
firm of attorneys (together with appropriate local counsel) at any time for such
indemnified parties. The indemnifying party shall not be liable for any
settlement of any proceeding effected without its written consent but, if
settled with such consent or if there be a
13
<PAGE>
final judgment for the plaintiff, the indemnifying party agrees to indemnify
each indemnified party from and against any loss or liability by reason of such
settlement or judgment. No indemnifying party shall, without the prior written
consent of each indemnified party, effect any settlement of any pending or
threatened proceeding in respect of which such indemnified party is a party, and
indemnity could have been sought hereunder by such indemnified party, unless
such settlement includes an unconditional release of such indemnified party from
all liability on all claims that are the subject matter of such proceeding with
no payment by such indemnified party of consideration in connection with such
settlement.
(d) Contribution. If the indemnification from the indemnifying
------------
party provided for in this Section 6 is found, pursuant to a final judicial
determination not subject to appeal, to be unavailable to an indemnified party
hereunder or insufficient in respect of any Damages incurred by such indemnified
party, then each indemnifying party, in lieu of indemnifying such indemnified
party, shall contribute to the Damages paid or payable by such indemnified party
in such proportion as is appropriate to reflect the relative fault of the
indemnifying party and the indemnified parties in connection with the actions or
omissions that resulted in such Damages, as well as any other relevant equitable
considerations. The relative fault of such indemnifying party and indemnified
parties shall be determined by reference to, among other things, whether any
action or omission in question, including any untrue or alleged untrue statement
of a material fact or the omission or alleged omission to state a material fact,
has been made by, or relates to information supplied by, such indemnifying party
or indemnified parties, and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such action. The amount paid
or payable by a party as a result of the Damages referred to above shall be
deemed to include, subject to the limitations set forth in Section 6(c), any
legal or other expenses reasonably incurred by such party in connection with any
investigation or proceeding.
The parties hereto agree that it would not be just or equitable if
contribution pursuant to this Section 6(d) were determined by pro rata
allocation or by any other method of allocation that does not take account of
the equitable considerations referred to in the immediately preceding paragraph.
Notwithstanding the provisions of this Section 6(d), no underwriter shall be
required to contribute any amount in excess of the amount by which the total
price at which the Registrable Securities underwritten by it and distributed to
the public were offered to the public (less any underwriting discounts or
commissions) exceeds the amount of any damages which such underwriter has
otherwise been required to pay by reason of such untrue or alleged untrue
statement or omission or alleged omission, and no selling Holder shall be
required to contribute any amount in excess of the amount by which the total net
proceeds received by such selling Holder with respect to Registrable Securities
sold by such selling Holder exceeds the amount of any damages which such selling
Holder has otherwise been required to pay by reason of such untrue statement or
alleged untrue statement or omission or alleged omission. Each Holder's
obligation to contribute pursuant to this Section 6(d) is several and not joint
and shall be determined by reference to the proportion that the proceeds of the
offering received by such Holder bears to the total proceeds of the offering
received by all the Holders. No person guilty of fraudulent misrepresentation
(within the meaning of Section 11(f) of the Securities Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation. The remedies provided for in this Section 6 are not
exclusive and shall not limit any rights or remedies that may otherwise be
available to any indemnified party at law or in equity.
14
<PAGE>
Notwithstanding the foregoing, if indemnification is available under
paragraph (a) or (b) of this Section 6, the indemnifying parties shall indemnify
each indemnified party to the full extent provided in such paragraphs without
regard to the relative fault of said indemnifying party or indemnified party or
any other equitable consideration provided for in this Section 6(d).
SECTION 7. RULE 144. The Company covenants that it will file any reports
---------
required to be filed by it under the Securities Act and the Exchange Act, and
the rules and regulations adopted by the Commission thereunder (or, if the
Company is not required to file such reports, it will, upon the request of any
Holder, make publicly available other information so long as necessary to permit
sales of the Registrable Securities under Rule 144 under the Securities Act),
and it will take such further action as any Holder may request, all to the
extent required from time to time to enable such Holder to sell Registrable
Securities without registration under the Securities Act within the limitation
of the exemptions provided by (a) Rule 144 under the Securities Act, as such
Rule may be amended from time to time, or (b) any successor rule or similar
provision or regulation hereafter adopted by the Commission. Upon the request
of any Holder, the Company will deliver to such Holder a written statement as to
whether it has complied with such requirements.
SECTION 8. RULE 144A. The Company covenants that it will file all reports
---------
required to be filed by it under the Securities Act and the Exchange Act, and
the rules and regulations adopted by the Commission thereunder (or if the
Company is not required to file such reports, it will, upon the request of any
Holder, make available other information so long as necessary to permit sales of
the Registrable Securities pursuant to Rule 144A under the Securities Act), and
it will take such further action as any Holder may request, all to the extent
required from time to time to enable such Holder to sell Registrable Securities
without registration under the Securities Act within the limitation of the
exemptions provided by (a) Rule 144A, as such rule may be amended from time to
time, or (b) any successor rule or similar provision or regulation hereafter
adopted by the Commission.
SECTION 9. HOLDBACK AGREEMENTS.
-------------------
(a) Except as otherwise provided in Section 9(b) below, the Holder
agrees not to effect any public sale or distribution (including sales pursuant
to Rule 144) of equity securities of the Company, or any securities convertible
into or exchangeable or exercisable for such securities, during the 7 days prior
to (provided that such Holder receives a notice from the Company of the
commencement of such 7-day period) and the 90-day period beginning on the
effective date of any underwritten offering of securities by the Company (except
as part of such underwritten registration), unless the underwriters managing the
registered public offering otherwise agree.
(b) Notwithstanding the provisions of Sections 9(a), if (i) the
Company elects not to include a Holder's Registrable Securities after receiving
a Holder's request for inclusion of its Registrable Securities pursuant to
Section 3(a), or the number of the Holder's Registrable Securities requested to
be included are reduced pursuant to Sections 3(b) or 3(c) hereof and (ii) other
securities are requested to be included in such Piggy-Back Registration
(pursuant to Section 3(b)(ii) or (iii)) and such securities are not so denied or
reduced, such Holder will have no obligation to comply with the foregoing
provisions of this Section 9.
15
<PAGE>
SECTION 10. MISCELLANEOUS.
-------------
(a) No Inconsistent Agreements. The Company has not entered into nor
--------------------------
will the Company on or after the date of this Agreement enter into any agreement
which is inconsistent with the rights granted to the Holders of Registrable
Securities in this Agreement or otherwise conflicts with the provisions hereof.
The rights granted to the Holders hereunder do not in any way conflict with and
are not inconsistent with the rights granted to the holders of the Company's
other issued and outstanding securities under any such agreements.
(b) Amendments and Waivers. The provisions of this Agreement,
----------------------
including the provisions of this sentence, may not be amended, modified or
supplemented, and waivers or consents to departures from the provisions hereof
may not be given unless the Company has obtained the written consent of Holders
of at least a majority in interest of the outstanding Registrable Securities
affected by such amendment, modification, supplement, waiver or consent;
provided, however, that, no amendment, modification, supplement, waiver or
- -------- -------
consent to any departure from the provisions of Section 4 hereof (other than any
immaterial amendment, modification, supplement, waiver or consent) shall be
effective as against any Holder of Registrable Securities unless consented to in
writing by such Holder.
(c) Notices. Except as otherwise provided in this Agreement, notices
-------
and other communications under this Agreement shall be in writing and shall be
delivered, or mailed by registered or certified mail, return receipt requested,
or by a nationally recognized overnight courier, postage prepaid, addressed, (a)
if to the Holder, at the address set forth on the signature page hereto or such
other address as the Holder shall have furnished to the Company in writing, or
(b) if to any other holder of any Securities, at such address as such other
holder shall have furnished to the Company in writing, or, until any such other
holder so furnishes to the Company an address, then to and at the address of the
last holder of such Securities who has furnished an address to the Company, or
(c) if to the Company, at its address set forth on the signature page hereto, or
at such other address the Company shall have furnished to the Holder and each
such other holder in writing. This Agreement and all documents entered into on
the date hereof in conjunction with the transactions contemplated by the
Securities Purchase Agreement and any such other documents delivered in
connection herewith or therewith embody the entire agreement and understanding
between the Holder and the Company and supersedes all prior agreements and
understandings relating to the subject matter hereof.
All such notices and communications shall be deemed to have been duly
given: at the time delivered by hand, if personally delivered; five Business
Days after being deposited in the mail, postage prepaid, if mailed; by confirmed
receipt of transmission, if telecopied; and on the next Business Day if timely
delivered to a courier guaranteeing overnight delivery.
(d) Successors and Assigns. No Holder shall transfer to any
----------------------
transferee fewer than 100,000 shares of Registrable Securities. This Agreement
shall inure to the benefit of and be binding upon the successors, assigns and
transferees of each of the parties, including, without limitation and without
the need for an express assignment, subsequent Holders. If any transferee of
any Holder shall acquire Registrable Securities in any manner, whether by
operation of law or otherwise, such
16
<PAGE>
Registrable Securities shall be held subject to all of the terms of this
Agreement, and by taking and holding such Registrable Securities such person
shall be conclusively deemed to have agreed to be bound by and to perform all of
the terms and provisions of this Agreement and such person shall be entitled to
receive the benefits hereof.
(e) Counterparts. This Agreement may be executed in any number of
------------
counterparts and by the parties hereto in separate counterparts, each of which
when so executed shall be deemed to be an original and all of which taken
together shall constitute one and the same agreement.
(f) Headings. The headings in this Agreement are for convenience of
--------
reference only and shall not limit or otherwise affect the meaning hereof.
(g) Governing Law. This Agreement shall be governed by and construed
-------------
in accordance with the laws of the State of Georgia without regard to principles
or rules of conflicts of law.
(h) Severability. In the event that any one or more of the provisions
------------
contained herein, or the application thereof in any circumstances, is held
invalid, illegal or unenforceable in any respect for any reason, the validity,
legality and enforceability of any such provision in every other respect and of
the remaining provisions contained herein shall not be in any way impaired
thereby, it being intended that all of the rights and privileges of the Holders
shall be enforceable to the fullest extent permitted by law.
(i) Entire Agreement. This Agreement is intended by the parties as a
----------------
final expression of their agreement and is intended to be the complete and
exclusive statement of the agreement and understanding of the parties hereto in
respect of the subject matter contained herein. There are no restrictions,
promises, warranties or undertakings, other than those set forth or referred to
herein. This Agreement supersedes all prior agreements and understandings
between the parties with respect to such subject matter.
(j) Attorneys' Fees. In any action or proceeding brought to enforce
---------------
any provision of this Agreement or where any provision hereof is validly
asserted as a defense, the successful party shall, to the extent permitted by
applicable law, be entitled to recover reasonable attorneys' fees in addition to
any other available remedy.
(k) Further Assurances. Each party shall cooperate and take such
------------------
action as may be reasonably requested by another party in order to carry out the
provisions and purposes of this Agreement and the transactions contemplated
hereby.
(l) Remedies. In the event of a breach or a threatened breach by any
--------
party to this Agreement of its obligations under this Agreement, any party
injured or to be injured by such breach will be entitled to specific performance
of its rights under this Agreement or to injunctive relief, in addition to being
entitled to exercise all rights provided in this Agreement and granted by law.
The parties agree that the provisions of this Agreement shall be specifically
enforceable, it being agreed by the parties that remedies at law for violations
hereof, including monetary damages, are inadequate
17
<PAGE>
and that the right to object in any action for specific performance or
injunctive relief hereunder on the basis that a remedy at law would be adequate
is waived.
(m) Senior Rights. Notwithstanding anything herein to the contrary,
-------------
the Company agrees that on and after the date of this Agreement, it shall not
grant to any person rights (as set forth in Section 3(b) and (c)) with respect
to primary or secondary registrations by the Company that are senior to those
rights held by any Holder pursuant to this Agreement.
[Remainder of Page Intentionally Left Blank]
18
<PAGE>
IN WITNESS WHEREOF, the parties have executed this Registration Rights
Agreement as of the date first written above.
WEEKS CORPORATION
By:__________________________________
Name:
Title:
Notice Information:
4497 Park Drive
Norcross, Georgia 30093
Attn: President
Telecopier: (404) 770-3310
with a copy to:
King & Spalding
191 Peachtree Street
Atlanta, Georgia 30303
Attn: William B. Fryer
Telecopier: (404) 572-5100
AEW TARGETED SECURITIES FUND, L.P.
By: AEW TSF, L.L.C., its General Partner
By: AEW TSF, INC., its Managing-Member
By:________________________
Name:
Title:
Notice Information:
c/o AEW Capital Management, Inc.
225 Franklin Street
Boston, MA 02125
Attn: Robert G. Gifford
Telecopier: (617) 261-9555
19
<PAGE>
with a copy to:
Goodwin, Procter & Hoar LLP
Exchange Place
Boston, Massachusetts 02109-2881
Attn: Laura Hodges Taylor, P.C.
Telecopier: (617) 523-1231
20
<PAGE>
EXHIBIT 10.66
========================================
REGISTRATION RIGHTS AGREEMENT
Dated as of November 12, 1998
by and between
WEEKS CORPORATION
and
GREENE STREET 1998
EXCHANGE FUND, L.P.
========================================
<PAGE>
REGISTRATION RIGHTS AGREEMENT
THIS REGISTRATION RIGHTS AGREEMENT (this "Agreement") is made and entered
into as of November 12, 1998 by and between WEEKS CORPORATION, a Georgia
corporation (the "Company"), and GREENE STREET 1998 EXCHANGE FUND, L.P., a
Delaware limited partnership (the "Holder", and together with the Holder's
assigns, the "Holders").
WHEREAS, this Agreement is made pursuant to the Private Placement Purchase
Agreement by and among the Company, Weeks Realty, L.P., a Georgia limited
partnership (the "Operating Partnership"), and the Holder dated as of even date
herewith (the "Contribution Agreement");
WHEREAS, the Holder will become the owner of Units (as defined below) in
the Operating Partnership in connection with the transactions described in the
Contribution Agreement; and
WHEREAS, in order to induce the Holder to enter into the transactions
described in the Contribution Agreement, the Company has agreed, with respect to
the Units issued pursuant to the Contribution Agreement, to provide the Holder
with the registration rights set forth in Sections 2 and 4 hereof;
NOW, THEREFORE, the parties hereto, in consideration of the foregoing, the
mutual covenants and agreements hereinafter set forth, and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, agree as follows:
1. Definitions.
-----------
As used in this Agreement, the following capitalized defined terms shall
have the following meanings:
"Common Stock" shall mean the Common Stock, par value $.01 per share, of
------------
the Company.
"Company" shall have the meaning set forth in the Preamble and also shall
-------
include the Company's successors.
"Contribution Agreement" shall have the meaning set forth in the Preamble.
----------------------
<PAGE>
"Control" shall mean the ability, whether by the direct or indirect
-------
ownership of shares or other equity interests, by contract or otherwise, to
select a majority of the directors of a corporation, to select the managing
partner of a partnership, to select the manager of a limited liability company
or otherwise to select, or have the power to remove and then select, a majority
of those persons exercising governing authority over an Entity. In the case of a
limited partnership, the sole general partner, each of the general partners that
has equal management control and authority, or the designated managing general
partner or managing general partners thereof shall be deemed to have control of
such partnership. In the case of a trust, any trustee thereof or any Person
having the right to select any such trustee shall be deemed to have control of
such trust.
"Entity" shall mean any general partnership, limited partnership,
------
corporation, limited liability company, joint venture, trust, business trust,
cooperative or association.
"Exchange Act" shall mean the Securities Exchange Act of 1934, as amended
------------
from time to time.
"Holders" shall have the meaning set forth in the Preamble. Holder shall
-------
mean each individual Holder.
"Maximum Number" means such number of securities that my be included in an
--------------
underwritten public offering when the managing underwriters advise the Company
in writing that in their opinion the number of securities requested to be
included in such registration exceeds the maximum number which can be included
in such offering without adversely affecting the marketability of the offering.
"NASD" shall mean the National Association of Securities Dealers, Inc.
----
"Operating Partnership" shall have the meaning set forth in the Preamble
---------------------
and also shall include the Operating Partnership's successors and assigns.
"Partnership Agreement" shall mean the Second Amended and Restated
---------------------
Agreement of Limited Partnership of the Operating Partnership, as amended.
"Person" shall mean any individual or Entity.
------
"Preferred Stock" shall mean the 8.625% Series D Cumulative Redeemable
---------------
Preferred Stock, par value $.01 per share, of the Company.
"SEC" shall mean the Securities and Exchange Commission.
---
"Securities Act" shall mean the Securities Act of 1933, as amended from
--------------
time to time.
-2-
<PAGE>
"Selling Expenses" shall mean all underwriting discounts and selling
----------------
commissions and transfer taxes applicable to the sale of Shelf Registrable
Securities and disbursements of underwriters.
"Shares" shall mean any Preferred Stock issued or issuable to the Holders
------
upon the exchange of Units.
"Shelf Prospectus" shall mean the prospectus included in the Shelf
----------------
Registration Statement, including any preliminary prospectus, and any amendment
or supplement thereto, including any supplement relating to the terms of the
offering of any portion of the Shelf Registrable Securities covered by the Shelf
Registration Statement, and in each case including all material incorporated by
reference therein.
"Shelf Registration" shall mean a registration required to be effected
------------------
pursuant to Section 2 hereof.
"Shelf Registrable Securities" shall mean the Shares held by the Holders,
----------------------------
excluding (i) Shares that have been registered under any other effective
registration statement, (ii) Shares sold or otherwise transferred pursuant to
Rule 144 under the Securities Act, and (iii) Shares held by the Holders if all
of such Shares are eligible for sale pursuant to Rule 144 under the Securities
Act and could be sold in one transaction in accordance with the volume
limitations contained in Rule 144(e)(1)(i) under the Securities Act.
"Shelf Registration Expenses" shall mean any and all expenses incident to
---------------------------
performance of or compliance with this Agreement, including, without limitation:
(i) all SEC, stock exchange and NASD registration and filing fees, (ii) all fees
and expenses incurred in connection with compliance with state securities or
"blue sky" laws (including reasonable fees and disbursements of counsel in
connection with qualification of any of the Shelf Registrable Securities under
any state securities or blue sky laws and the preparation of a blue sky
memorandum) and compliance with the rules of the NASD, (iii) all expenses of any
Persons in preparing or assisting in preparing, word processing, printing and
distributing the Shelf Registration Statement, any Shelf Prospectus,
certificates and other documents relating to the performance of and compliance
with this Agreement, (iv) all fees and expenses incurred in connection with the
listing, if any, of any of the Shelf Registrable Securities on any securities
exchange or exchanges pursuant to Section 3(l) hereof, (v) the fees and
disbursements of counsel for the Company and of the independent public
accountants of the Company, including the expenses of any special audits or
"cold comfort" letters required by or incident to such performance and
compliance, and (vi) all other costs and expenses normally associated with the
issuance and sale of newly issued public securities other than Selling Expenses.
"Shelf Registration Notice" shall have the meaning set forth in Section
-------------------------
3(b) hereof.
-3-
<PAGE>
"Shelf Registration Statement" shall mean a registration statement of the
----------------------------
Company (and any other entity required to be a registrant with respect to such
registration statement pursuant to the requirements of the Securities Act) that
covers all of the Shelf Registrable Securities to be offered on a delayed or
continuous basis pursuant to Rule 415 under the Securities Act, or any similar
rule that may be adopted by the SEC, and all amendments (including post-
effective amendments) to such registration statement, and all exhibits thereto
and materials incorporated by reference therein.
"Units" shall mean the limited partnership interests of the Operating
-----
Partnership issued to the Holders pursuant to the Contribution Agreement, which
interests are exchangeable for Preferred Stock.
2. Shelf Registration.
------------------
(a) Filing of Shelf Registration Statement. On or before the sixtieth
--------------------------------------
(60th) day following the date of this Agreement, or as soon as practicable
thereafter, the Company shall cause to be filed a Shelf Registration Statement
providing for the sale by the Holders of all Shelf Registrable Securities in
accordance with the terms hereof and will use its reasonable and diligent
efforts to cause such Shelf Registration Statement to be declared effective by
the SEC as soon as practicable thereafter. The Company agrees to use its
reasonable and diligent efforts to keep the Shelf Registration Statement with
respect to the Shelf Registrable Securities continuously effective so long as
the Holders hold such Shelf Registrable Securities. Subject to Section 3(b) and
Section 3(i), the Company further agrees to amend the Shelf Registration
Statement if and as required by the rules, regulations or instructions
applicable to the registration form used by the Company for such Shelf
Registration Statement or by the Securities Act or any rules and regulations
thereunder; provided, however, that the Company shall not be deemed to have used
-------- -------
its reasonable and diligent efforts to keep the Shelf Registration Statement
effective during the applicable period if it voluntarily takes any action that
would result in the Holders not being able to sell Shelf Registrable Securities
covered thereby during that period, unless such action is required under
applicable law or the Company has filed a post-effective amendment (other than
one which removes Shelf Registrable Securities from effective registration under
the Securities Act) to the Shelf Registration Statement and the SEC has not
declared it effective or except as otherwise permitted by the last three
sentences of Section 3(b).
(b) Expenses. The Company shall pay all Shelf Registration Expenses in
--------
connection with each registration pursuant to Section 2(a). Each Holder shall
pay all Selling Expenses and the fees and disbursements of counsel representing
such Holder, if any, relating to the sale or disposition of such Shelf
Registrable Securities pursuant to the Shelf Registration Statement.
(c) Inclusion in Shelf Registration Statement. If any Holder does not
-----------------------------------------
provide the information reasonably requested by the Company in connection with
the Shelf Registration Statement as promptly as practicable after receipt of
such request, but in no event later than ten (10) days thereafter, it shall not
be entitled to have its Shelf Registrable Securities included in the Shelf
Registration Statement.
-4-
<PAGE>
(d) Plan of Distribution. The Shelf Registration Statement shall provide
--------------------
for and permit distributions of the Shelf Registerable Securities through
secondary distributions, block trades, ordinary brokerage transactions, or a
combination of such methods of sale; provided, however, that the Company shall
-------- -------
not be required to participate in any organized distribution efforts, including,
without limitation, "road shows" and investor meetings.
3. Shelf Registration Procedures.
-----------------------------
In connection with the obligations of the Company with respect to the Shelf
Registration Statement contemplated by Section 2 hereof, the Company shall:
(a) prepare and file with the SEC, within the time period set forth
in Section 2 hereof, the Shelf Registration Statement, which Shelf
Registration Statement (i) shall be available for the sale of the Shelf
Registrable Securities in accordance with the intended method or methods of
distribution by the Holders covered thereby and (ii) shall comply as to
form in all material respects with the requirements of the applicable form
and include all financial statements required by the SEC to be filed
therewith;
(b) subject to the last three sentences of this Section 3(b) and
Section 3(i) hereof, (i) prepare and file with the SEC such amendments to
such Shelf Registration Statement as may be necessary to keep such Shelf
Registration Statement effective for the applicable period; (ii) cause the
Shelf Prospectus to be amended or supplemented as required and to be filed
as required by Rule 424 or any similar rule that may be adopted under the
Securities Act; (iii) respond as promptly as practicable to any comments
received from the SEC with respect to the Shelf Registration Statement or
any amendment thereto; and (iv) comply with the provisions of the
Securities Act with respect to the disposition of all securities covered by
such Shelf Registration Statement during the applicable period in
accordance with the intended method or methods of distribution by the
Holders covered thereby. Notwithstanding anything to the contrary contained
herein, the Company shall not be required to take any of the actions
described in clauses (i), (ii) or (iii) in this Section 3(b), Section 3(d)
or Section 3(i) with respect to the Shelf Registrable Securities (x) to the
extent that the Company is in possession of material non-public information
that it deems advisable not to disclose or is engaged in active
negotiations or planning for a merger or acquisition or disposition
transaction and it delivers written notice to the Holders to the effect
that the Holders may not make offers or sales under the Shelf Registration
Statement for a period not to exceed forty-five (45) days from the date of
such notice; provided, however, that the Company may deliver only two such
-------- -------
notices within any twelve-month period, and (y) unless and until the
Company has received a written notice (a "Shelf Registration Notice") from
the Holders that they intend to make offers or sales under the Shelf
Registration Statement as specified in such Shelf Registration Notice;
provided, however, that the Company shall have ten (10) business days to
-------- -------
prepare and file any such amendment or supplement after receipt of the
Shelf Registration Notice. Once the Holders have delivered a Shelf
Registration Notice to the Company, each Holder covered thereby
-5-
<PAGE>
shall promptly provide to the Company such information as the Company
reasonably requests in order to identify the method of distribution in a
post-effective amendment to the Shelf Registration Statement or a
supplement to the Shelf Prospectus. Such Holders also shall notify the
Company in writing upon completion of such offer or sale or at such time as
such Holders no longer intend to make offers or sales under the Shelf
Registration Statement;
(c) after the Holders have delivered a Shelf Registration Notice to
the Company, furnish each Holder covered thereby, without charge, as many
copies of each Shelf Prospectus and any amendment or supplement thereto in
order to facilitate the public sale or other disposition of the Shelf
Registrable Securities; the Company consents to the use of the Shelf
Prospectus and any amendment or supplement thereto by the Holders of Shelf
Registrable Securities in connection with the offering and sale of the
Shelf Registrable Securities covered by the Shelf Prospectus or amendment
or supplement thereto;
(d) use its reasonable and diligent efforts to register or qualify
the Shelf Registrable Securities by the time the Shelf Registration
Statement is declared effective by the SEC under all applicable state
securities or blue sky laws of such jurisdictions in the United States and
its territories and possessions as the Holders shall reasonably request in
writing, keep each such registration or qualification effective during the
period such Shelf Registration Statement is required to be kept effective
or during the period offers or sales are being made by the Holders after
they have delivered a Shelf Registration Notice to the Company, whichever
is shorter; provided, however, that in connection therewith, the Company
-------- -------
shall not be required to (i) qualify as a foreign corporation to do
business or to register as a broker or dealer in any such jurisdiction
where it would not otherwise be required to qualify or register but for
this Section 3(d), (ii) subject itself to taxation in any such jurisdiction
where is not otherwise subject to taxation, or (iii) file a general consent
to service of process in any such jurisdiction;
(e) notify the Holders promptly and confirm in writing, (i) when the
Shelf Registration Statement and any post-effective amendments thereto have
become effective, (ii) when any amendment or supplement to the Shelf
Prospectus has been filed with the SEC, (iii) of the issuance by the SEC or
any state securities authority of any stop order suspending the
effectiveness of the Shelf Registration Statement or any part thereof or
the initiation of any proceedings for that purpose, (iv) if the Company
receives any notification with respect to the suspension of the
qualification of the Shelf Registrable Securities for offer or sale in any
jurisdiction or the initiation of any proceeding for such purpose, and (v)
of the happening of any event during the period the Shelf Registration
Statement is effective as a result of which (A) such Shelf Registration
Statement contains any untrue statement of a material fact or omits to
state any material fact required to be stated therein or necessary to make
the statements therein not misleading or (B) the Shelf Prospectus as then
amended or supplemented contains any untrue statement of a material fact or
omits
-6-
<PAGE>
to state any material fact necessary in order to make the statements
therein, in light of the circumstances under which they were made, not
misleading;
(f) make every reasonable effort to obtain the withdrawal of any
order suspending the effectiveness of the Shelf Registration Statement or
any part thereof as promptly as possible;
(g) after the Holders have delivered a Shelf Registration Notice to
the Company, furnish to each Holder covered thereby, without charge, at
least one conformed copy of the Shelf Registration Statement and any post-
effective amendment thereto (without documents incorporated therein by
reference or exhibits thereto, unless requested);
(h) cooperate with each selling Holder to facilitate the timely
preparation and delivery of certificates representing Shelf Registrable
Securities to be sold and not bearing any Securities Act legend; and enable
certificates for such Shelf Registrable Securities to be issued for such
numbers of shares as each Holder may reasonably request at least two
business days prior to any sale of Shelf Registrable Securities;
(i) subject to the last three sentences of Section 3(b) hereof, upon
the occurrence of any event contemplated by clause (x) of Section 3(b) or
clause (v) of Section 3(e) hereof, use its reasonable and diligent efforts
promptly to prepare and file an amendment or a supplement to the Shelf
Prospectus or any document incorporated therein by reference or prepare,
file and obtain effectiveness of a post-effective amendment to the Shelf
Registration Statement, or file any other required document, in any such
case to the extent necessary so that, as thereafter delivered to the
purchasers of the Shelf Registrable Securities, such Shelf Prospectus as
then amended or supplemented will not contain any untrue statement of a
material fact or omit to state any material fact necessary in order to make
the statements therein, in the light of the circumstances under which they
are made, not misleading;
(j) after the Holders have provided a Shelf Registration Notice to
the Company, make available for inspection by each Holder covered thereby
and any counsel, accountants or other representatives retained by such
Holder all financial and other records, pertinent corporate documents and
properties of the Company and cause the officers, directors and employees
of the Company to supply all such records, documents or information
reasonably requested by such Holder, counsel, accountants or
representatives in connection with the Shelf Registration Statement;
provided, however, that such records, documents or information which the
-------- -------
Company determines in good faith to be confidential and notifies such
Holder, counsel, accountants or representatives in writing that such
records, documents or information are confidential shall not be disclosed
by such Holder, counsel, accountants or representatives unless (i) such
disclosure is ordered pursuant to a subpoena or other order from a court of
competent jurisdiction or governmental agency, or (ii) such
-7-
<PAGE>
records, documents or information become generally available to the public
other than through a breach of this Agreement;
(k) within a reasonable time prior to the filing of any Shelf
Registration Statement or any amendment thereto, or any Shelf Prospectus or
any amendment or supplement thereto, provide copies of such document (not
including any documents incorporated by reference therein unless requested)
to each Holder covered thereby after the Holders have provided a Shelf
Registration Notice to the Company;
(l) use its reasonable and diligent efforts to cause all Shelf
Registrable Securities to be listed on any securities exchange on which
similar securities issued by the Company are then listed;
(m) provide a CUSIP number for all Shelf Registrable Securities, not
later than the effective date of a Shelf Registration Statement; and
(n) use its reasonable efforts to make available to its security
holders, as soon as reasonably practicable, an earnings statement covering
at least 12 months which shall satisfy the provisions of Section 11(a) of
the Securities Act and Rule 158 thereunder or any similar rule as may be
adopted by the SEC.
The Company may require each Holder to furnish to the Company in writing
such information regarding the proposed distribution by such Holder as the
Company may from time to time reasonably request in writing.
In connection with and as a condition to the Company's obligations with
respect to the Shelf Registration Statement pursuant to Section 2 hereof and
this Section 3, each Holder covenants and agrees that (i) it will not offer or
sell any Shelf Registrable Securities under the Shelf Registration Statement
until it has provided a Shelf Registration Notice pursuant to Section 3(b) and
has received copies of the Shelf Prospectus as then amended or supplemented as
contemplated by Section 3(c) and notice from the Company that the Shelf
Registration Statement and any post-effective amendments thereto have become
effective as contemplated by Section 3(e); (ii) upon receipt of any notice from
the Company contemplated by Section 3(b) or Section 3(e) (in respect of the
occurrence of an event contemplated by clause (v) of Section 3(e)), such Holder
shall not offer or sell any Shelf Registrable Securities pursuant to the Shelf
Registration Statement until such Holder receives copies of the supplemented or
amended Shelf Prospectus contemplated by Section 3(i) hereof and receives notice
that any post-effective amendment has become effective, and, if so directed by
the Company, such Holder will deliver to the Company (at the expense of the
Company) all copies in its possession, other than permanent file copies then in
such Holder's possession, of the Shelf Prospectus as amended or supplemented at
the time of receipt of such notice; (iii) all offers and sales by such Holder
under the Shelf Registration Statement shall be completed within sixty (60) days
after the first date on which offers or sales can be made pursuant to clause (i)
above, and upon expiration of such sixty (60) day period, such Holder will not
offer or sell any Shelf Registrable Securities under the Shelf Registration
Statement until it has again complied with the
-8-
<PAGE>
provisions of clause (i) above; (iv) such Holder and any of its beneficial
owners, officers, directors or affiliates, if any, will comply with the
provisions of Regulation M promulgated by the SEC as applicable to them in
connection with sales of Shelf Registrable Securities pursuant to the Shelf
Registration Statement; (v) such Holder and any of its beneficial owners,
officers, directors or affiliates, if any, will comply with the prospectus
delivery requirements of the Securities Act as applicable to them in connection
with sales of Shelf Registrable Securities pursuant to the Shelf Registration
Statement; and (vi) such Holder and any of its beneficial owners, officers,
directors or affiliates, if any, will enter into such written agreements as the
Company shall reasonably request to ensure compliance with clause (iv) and (v)
above.
4. Piggyback Registrations.
-----------------------
(a) Right to Piggyback. If the Company at any time proposes to
------------------
register any of its preferred stock under the Securities Act for sale to the
public, whether for its own account or for the account of other shareholders or
both (except with respect to registration statements on Form S-8 or another form
not available for registering the Shelf Registrable Securities for sale to the
public) (a "Piggyback Registration"), the Company will promptly (but in any
event within 30 days) give written notice to the Holders of its intention to
effect such registration and a description of any underwriting agreement to be
entered into with respect thereto and will include in such registration all
Shelf Registrable Securities with respect to which the Company has received
written requests for inclusion within 15 days after the receipt of the Company's
notice (a "Piggyback Registration Request"); provided, however, that the Company
-------- -------
shall not be required to include Shelf Registrable Securities in the securities
to be registered pursuant to a registration statement on any form which limits
the amount of securities which may be registered by the issuer and/or selling
security holders if, and to the extent that, such inclusion would make the use
of such form unavailable. In the event that any Piggyback Registration shall be,
in whole or in part, an underwritten public offering of preferred stock, any
Piggyback Registration Request by the Holders shall specify that either (i) such
Shelf Registrable Securities are to be included in the underwriting on the same
terms and conditions as the shares of preferred stock otherwise being sold
through underwriters under such registration, or (ii) such Shelf Registrable
Securities are to be sold in the open market without any underwriting, on terms
and conditions comparable to those normally applicable to offerings of preferred
stock in reasonably similar circumstances.
(b) Priority on Primary Registrations. If a Piggyback Registration is an
---------------------------------
underwritten primary registration on behalf of the Company, and the managing
underwriters advise the Company in writing that in their opinion the number of
shares requested to be included in such registration exceeds the Maximum Number,
the Company will limit the number of shares included in such registration to the
Maximum Number, and the shares registered shall be selected in the following
order of priority: (i) first, securities the Company proposes to sell, (ii)
securities requested to be included in such registration pursuant to the
Registration Rights and Lock-Up Agreement dated as of August 24, 1994, by and
among the Company and the Company Participants Listed on Schedule A thereof and
the Other Participants Listed on Schedule B thereof, (iii) third, (a) securities
covered by piggyback registration requests pursuant to the Registration Rights
Agreement and Lock-Up
-9-
<PAGE>
Agreement dated December 31, 1996 by and among the Company and Harold S.
Lichtin, Noel A. Lichtin, Marie A. Robertson, Amy R. Ehrman, Roland G. Robertson
and Perimeter Park West Associates Limited Partnership, (b) securities covered
by piggyback registration requests pursuant to the Registration Rights and Lock-
Up Agreement for Post-June 30, 1998 Units dated as of the date hereof by and
among the Company and Harold S. Lichtin, Noel A. Lichtin, Marie A. Robertson,
Amy R. Ehrman, Roland G. Robertson and Perimeter Park West Associates Limited
Partnership, (c) securities covered by piggyback registration requests pursuant
to the Registration Rights and Lock-Up Agreement dated as of November 1, 1996,
by and among the Company, NWI Warehouse Group, L.P., Buckley & Company Real
Estate, Inc., John W. Nelley, Jr. and Albert W. Buckley, Jr., and (d) securities
covered by piggyback registration requests pursuant to the Registration Rights
and Lock-Up Agreement for Post-March 31, 1998 Shares and Units dated as of
November 1, 1996, by and among the Company, NWI Warehouse Group, L.P. and
Buckley & Company Real Estate, Inc., pro rata among the holders thereof on the
basis of the number of shares requested to be included in such registration,
(iv) fourth, (a) securities covered by piggyback registration requests pursuant
to the Registration Rights Agreement dated as of November 6, 1998, by and
between the Company and AEW Targeted Securities Fund, L.P., (b) Shelf
Registrable Securities covered by Piggyback Registration requests, and (c) all
other securities requested to be included in such registration, pro rata among
the holders thereof on the basis of the number of shares requested to be
included in such registration.
(c) Priority on Secondary Registrations. If a Piggyback Registration is an
-----------------------------------
underwritten secondary registration on behalf of holders of the Company's
securities, and the managing underwriters advise the Company in writing that in
their opinion the number of securities requested to be included in such
registration exceeds the Maximum Number, the Company will include in such
registration the shares requested to be included therein by the holders
requesting such registration and the Shelf Registrable Securities covered by
Piggyback Registration Requests and any other securities requested to be
included in such registration, pro rata among the holders thereof on the basis
of the number of shares requested to be included in such registration; provided,
--------
however, that if the holders requesting registration are doing so pursuant to
- -------
demand registration rights of such holders, such holders' shares shall take
priority over any Shelf Registrable Securities and any other securities
requested to be included, which shall be included on a pro rata basis.
5. Holdback Agreements. Each Holder agrees not to effect any public sale
-------------------
or distribution (including sales pursuant to Rule 144) of equity securities of
the Company, or any securities convertible into or exchangeable or exercisable
for such securities, during the 7 days prior to (provided that such Holder
receives a notice from the Company of the commencement of such 7-day period) and
the 90-day period beginning on the effective date of any underwritten offering
of securities by the Company (except as part of such underwritten registration),
unless the underwriters managing the registered public offering otherwise agree.
-10-
<PAGE>
6. Indemnification; Contribution.
-----------------------------
(a) Indemnification by the Company. The Company agrees to indemnify and
------------------------------
hold harmless each Holder and the beneficial owners, officers and directors and
each Person, if any, who controls each Holder within the meaning of Section 15
of the Securities Act as follows:
(i) against any and all loss, liability, claim, damage and expense
whatsoever, as incurred, to which each Holder, or any beneficial owner,
officer, director or controlling Person may become subject under the
Securities Act or otherwise (A) that arise out of or are based upon any
untrue statement or alleged untrue statement of a material fact contained
in the Shelf Registration Statement or any amendment thereto, or the
omission or alleged omission to state therein a material fact required to
be stated therein or necessary to make the statements therein not
misleading or (B) that arise out of or are based upon any untrue statement
or alleged untrue statement of a material fact contained in any Shelf
Prospectus or any amendment or supplement thereto, or the omission or
alleged omission to state therein a material fact necessary in order to
make the statements therein, in the light of the circumstances under which
they were made, not misleading;
(ii) against any and all loss, liability, claim, damage and expense
whatsoever, as incurred, to the extent of the aggregate amount paid in
settlement of any litigation, or investigation or proceeding by any
governmental agency or body, commenced or threatened, or of any claim
whatsoever based upon any such untrue statement or alleged untrue statement
or any omission or alleged omission, if such settlement is effected with
the written consent of the Company; and
(iii) subject to the limitations set forth in Section 6(c), against
any and all expense whatsoever, as incurred (including reasonable fees and
disbursements of counsel), reasonably incurred in investigating, preparing
or defending against any litigation, or investigation or proceeding by any
governmental agency or body, commenced or threatened, in each case whether
or not a party, or any claim whatsoever based upon any such untrue
statement or alleged untrue statement or omission or alleged omission, to
the extent that any such expense is not paid under subparagraph (i) or (ii)
above;
provided, however, that the indemnity provided pursuant to this Section 6(a)
- -------- -------
shall not apply with respect to any loss, liability, claim, damage or expense
that arises out of or are based upon any untrue statement or alleged untrue
statement or omission or alleged omission made in reliance upon and in
conformity with written information furnished to the Company by any Holder (i)
expressly for use in the Shelf Registration Statement or any amendment thereto,
or the Shelf Prospectus or any amendment or supplement thereto or (ii) pursuant
to any representation, warranty or other statement contained in the Contribution
Agreement or any admission amendment to the Partnership Agreement.
(b) Indemnification by the Holders. Each Holder severally agrees to
------------------------------
indemnify and hold harmless the Company, and each of its respective directors
and officers (including each director
-11-
<PAGE>
and officer of the Company who signed the Shelf Registration Statement), and
each Person, if any, who controls the Company within the meaning of Section 15
of the Securities Act, to the same extent as the indemnity contained in Section
6(a) hereof, but only insofar as such loss, liability, claim, damage or expense
arises out of or is based upon any untrue statement or alleged untrue statement
or omission or alleged omission made in the Shelf Registration Statement or any
amendment thereto, or the Shelf Prospectus or any amendment or supplement
thereto, in reliance upon and in conformity with written information furnished
to the Company by such Holder expressly for use therein. In no event, however,
shall the liability of a Holder exceed the cumulative net proceeds received by
such Holder from any offering made in connection with a Shelf Registration
Statement.
(c) Conduct of Indemnification Proceedings. Each indemnified party shall
--------------------------------------
give reasonably prompt notice to each indemnifying party of any action or
proceeding commenced against it in respect of which indemnity may be sought
hereunder, but failure to so notify an indemnifying party (i) shall not relieve
it from any liability which it may have under the indemnity agreement provided
in Section 6(a) or (b) above, unless and to the extent it did not otherwise
learn of such action and the lack of notice by the indemnified party materially
prejudices the indemnifying party or results in the forfeiture by the
indemnifying party of substantial rights and defenses and (ii) shall not, in any
event, relieve the indemnifying party from any obligations to any indemnified
party other than the indemnification obligation provided under Section 6(a) or
(b) above. After receipt of such notice, the indemnifying party shall be
entitled to participate in and, to the extent it shall wish, jointly with any
other indemnifying party so notified, to assume the defense of such action or
proceeding at such indemnifying party's own expense with counsel chosen by such
indemnifying party and approved by the indemnified party, which approval shall
not be unreasonably withheld; provided, however, that, if the defendants in any
-------- -------
such action or proceeding include both the indemnified party and the
indemnifying party and the indemnified party reasonably determines, upon advice
of counsel, that a conflict of interest exists or that there may be legal
defenses available to it or other indemnified parties that are different from or
in addition to those available to the indemnifying party, then the indemnified
party shall be entitled to separate counsel (which shall be limited to a single
law firm), the reasonable fees and expenses of which shall be paid by the
indemnifying party. If the indemnifying party does not assume the defense of any
such action or proceeding, after having received the notice referred to in the
first sentence of this paragraph, the indemnifying party will pay the reasonable
fees and expenses of counsel (which shall be limited to a single law firm) for
the indemnified party. In such event, however, the indemnifying party will not
be liable for any settlement effected without the written consent of such
indemnifying party. If the indemnifying party assumes the defense of any such
action or proceeding in accordance with this paragraph, such indemnifying party
shall not be liable for any fees and expenses of counsel for the indemnified
party incurred thereafter in connection with such action or proceeding, except
as set forth in the proviso in the second sentence of this Section 6(c).
(d) Contribution. In order to provide for just and equitable contribution
------------
in circumstances in which the indemnity agreement provided for in this Section 6
is for any reason held to be unenforceable although applicable in accordance
with its terms, the Company and the selling Holders shall contribute to the
aggregate losses, liabilities, claims, damages and expenses of the nature
contemplated by such indemnity agreement incurred by the Company and the selling
Holders,
-12-
<PAGE>
in such proportion as is appropriate to reflect the relative fault of and
benefits to the Company on the one hand and the selling Holders on the other (in
such proportion that the selling Holders are severally, not jointly, responsible
for the balance), in connection with the statements or omissions which resulted
in such losses, claims, damages, liabilities or expenses, as well as any other
relevant equitable considerations. The relative benefits to the indemnifying
party and indemnified parties shall be determined by reference to, among other
things, the total proceeds received by the indemnifying party and indemnified
parties in connection with the offering to which such losses, claims, damages,
liabilities or expenses relate. The relative fault of the indemnifying party and
indemnified parties shall be determined by reference to, among other things,
whether the action in question, including any untrue or alleged untrue statement
of a material fact or omission or alleged omission to state a material fact, has
been made by, or relates to information supplied by, such indemnifying party or
the indemnified parties, and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such action.
The parties hereto agree that it would not be just or equitable if
contribution pursuant to this Section 6(d) were determined by pro rata
allocation or by any other method of allocation which does not take account of
the equitable considerations referred to in the immediately preceding paragraph.
Notwithstanding the provisions of this Section 6(d), a Holder shall not be
required to contribute any amount in excess of the amount by which the total
price at which the Shelf Registrable Securities of such Holder were offered to
the public exceeds the amount of any damages which such Holder would otherwise
have been required to pay by reason of such untrue statement or omission.
Notwithstanding the foregoing, no Person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Securities Act)
shall be entitled to contribution from any Person who was not guilty of such
fraudulent misrepresentation. For purposes of this Section 6(d), each Person,
if any, who controls any Holder within the meaning of Section 15 of the
Securities Act and beneficial owners, directors and officers of any Holder shall
have the same rights to contribution as any member of the Holders, and each
director of the Company, each officer of the Company who signed the Shelf
Registration Statement, and each Person, if any, who controls the Company within
the meaning of Section 15 of the Securities Act shall have the same rights to
contribution as the Company.
(e) In the event any sale pursuant to a Shelf Registration is an
underwritten offering, then the Company agrees to indemnify and hold harmless
each underwriter of Shelf Registrable Securities to the same extent and on
substantially similar terms as the Company's indemnification of the members of
the Holders as set forth in Section 6(a) above.
7. Rule 144 Sales.
--------------
(a) Compliance. The Company covenants that, so long as it is subject to
----------
the reporting requirements of the Exchange Act, it will file the reports
required to be filed by it under the
-13-
<PAGE>
Exchange Act so as to enable the Holders to sell Shelf Registrable Securities
pursuant to Rule 144 under the Securities Act.
(b) Cooperation with the Holders. In connection with any sale, transfer or
----------------------------
other disposition by a Holder of any Shelf Registrable Securities pursuant to
Rule 144 under the Securities Act, the Company shall cooperate with such Holder
to facilitate the timely preparation and delivery of certificates representing
Shelf Registrable Securities to be sold and not bearing any Securities Act
legend, and enable certificates for such Shelf Registrable Securities to be for
such number of shares as such Holder may reasonably request at least two
business days prior to any sale of Shelf Registrable Securities.
8. Miscellaneous.
-------------
(a) Amendments and Waivers. The provisions of this Agreement, including
----------------------
the provisions of this sentence, may not be amended, modified, supplemented or
waived, nor may consent to departures therefrom be given, without the written
consent of the Company and the Holders.
(b) Notices. All notices and other communications provided for or
-------
permitted hereunder shall be made in writing by hand-delivery, registered first-
class mail, telex, telecopier, or any courier guaranteeing overnight delivery,
(i) if to the Holder, at the address set forth in the Contribution Agreement, or
(ii) if to the Company, at 4497 Park Drive, Norcross, Georgia 30093, Attention:
A. R. Weeks, Jr.
All such notices and communications shall be deemed to have been duly
given: at the time delivered by hand, if personally delivered; five business
days after being deposited in the mail, postage prepaid, if mailed; when
answered back, if telexed; when receipt is acknowledged, if telecopied; or at
the time delivered if delivered by an air courier guaranteeing overnight
delivery.
(c) No Assignment. This Agreement shall inure to the benefit of and be
-------------
binding upon the parties hereto and, where applicable, their successors and
permitted assigns. No party to this Agreement may assign or delegate all or any
portion of its rights, obligations, or liabilities under this Agreement without
the prior written consent of each other party to this Agreement; provided,
--------
however, that the registration rights of any Holder under this Agreement may be
- -------
transferred to (a) any transferee of such Shelf Registrable Securities who
acquires at least 25% of the total number of Shelf Registrable Securities
(adjusted for stock splits and consolidations after the date hereof) or (b) an
affiliate of such Holder; provided further that the transferring Holder shall
-------- -------
give the Company written notice prior to the time of such transfer stating the
name and address of the transferee and identifying the number of Shelf
Registrable Securities so transferred. Nothing expressed or implied herein is
intended or shall be construed to confer upon or give to any third party any
rights or remedies by virtue hereof.
(d) Third Party Beneficiaries. There shall be no third party beneficiaries
-------------------------
or intended beneficiaries of this Agreement
-14-
<PAGE>
(e) Counterparts. This Agreement may be executed in any number of
------------
counterparts and by the parties hereto in separate counterparts, each of which
when so executed shall be deemed to be an original and all of which taken
together shall constitute one and the same agreement.
(f) Headings. The headings in this Agreement are for convenience of
--------
reference only and shall not limit or otherwise affect the meaning hereof.
(g) Governing Law. This Agreement shall be governed by and construed in
-------------
accordance with the laws of the State of Georgia without giving effect to the
conflicts of law provisions thereof.
(h) Specific Performance. The parties hereto acknowledge that there would
--------------------
be no adequate remedy at law if any party fails to perform any of its
obligations hereunder, and accordingly agree that each party, in addition to any
other remedy to which it may be entitled at law or in equity, shall be entitled
to compel specific performance of the obligations of any other party under this
Agreement in accordance with the terms and conditions of this Agreement in any
court of the United States or any State thereof having jurisdiction.
(i) Entire Agreement. This Agreement is intended by the parties as a final
----------------
expression of their agreement and intended to be a complete and exclusive
statement of the agreement and understanding of the parties hereto in respect of
the subject matter contained herein. This Agreement supersedes all prior
agreements and understandings between the parties with respect to such subject
matter.
-15-
<PAGE>
IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
first written above
WEEKS CORPORATION
By:____________________________
Name:
Title:
GREENE STREET 1998 EXCHANGE
FUND, L.P.
By: Goldman Sachs Management Partners, L.P., its General Partner
By: Goldman Sachs Management,
Inc., its
General Partner
By:______________________________
Name:
Title:
<PAGE>
EXHIBIT 10.67
FOURTEENTH AMENDMENT TO THE
SECOND AMENDED AND RESTATED
AGREEMENT OF LIMITED PARTNERSHIP
OF
WEEKS REALTY, L.P.
This Fourteenth Amendment to the Second Amended and Restated Agreement of
Limited Partnership of Weeks Realty, L.P. (this "Amendment") is entered into as
of November 6, 1998, by and among Weeks GP Holdings, Inc., a Georgia corporation
(the "General Partner"), AEW Targeted Securities Fund, L.P., a Delaware limited
partnership ("AEW Fund"), and Weeks LP Holdings, Inc., a Georgia corporation,
solely in its capacity as holder of the Series A Preferred Partnership Units.
All capitalized terms used herein shall have the meanings given to them in the
Second Amended and Restated Agreement of Limited Partnership of Weeks Realty,
L.P., dated October 30, 1996, as amended by the First Amendment to the
Partnership Agreement dated November 1, 1996, the Second Amendment to the
Partnership Agreement dated December 31, 1996, the Third Amendment to the
Partnership Agreement dated January 31, 1997, the Fourth Amendment to the
Partnership Agreement dated August 1, 1997, the Fifth Amendment to the
Partnership Agreement dated October 7, 1997, the Sixth Amendment to the
Partnership Agreement dated October 27, 1997, the Seventh Amendment to the
Partnership Agreement dated December 30, 1997 and effective as of August 1,
1997, the Eighth Amendment to the Partnership Agreement dated January 9, 1998,
the Ninth Amendment to the Partnership Agreement dated January 20, 1998, the
Tenth Amendment to the Partnership Agreement dated April 3, 1998, the Eleventh
Amendment to the Partnership Agreement dated May 26, 1998, the Twelfth Amendment
to the Partnership Agreement dated June 3, 1998, and the Thirteenth Amendment to
the Partnership Agreement dated August 7, 1998 (the "Partnership Agreement").
Capitalized terms used in this Amendment without definition shall have the
meanings given to them in the Partnership Agreement.
WHEREAS, pursuant to that certain Securities Purchase Agreement dated the
date hereof by and among AEW Fund, Weeks and the Partnership (the "Securities
Purchase Agreement"), AEW Fund desires to contribute $33,862,500 to the
Partnership in exchange for partnership interests in the Partnership as set
forth herein;
WHEREAS, pursuant to the Securities Purchase Agreement, AEW Fund desires to
contribute $1,137,500 million to Weeks in exchange for a warrant which
represents the right to purchase either (i) 1,046,729 shares of Common Stock or
(ii) 1,400,000 shares of Series A Preferred Stock;
WHEREAS, Weeks will contribute the proceeds from the warrant, either
through the General Partner or Weeks LP, or both, to the Partnership in exchange
for a reciprocal warrant issuable to Weeks; and
WHEREAS, as provided in Section 9.3 of the Partnership Agreement, the
General Partner is authorized to cause the Partnership to issue additional
interests in the Partnership in exchange for such contribution.
<PAGE>
NOW THEREFORE, in consideration of the mutual covenants herein contained,
and other good and valuable consideration, the receipt and sufficiency of which
is hereby acknowledged, the parties hereto agree as follows:
1. Contribution.
------------
AEW Fund hereby contributes to the Partnership $33,862,500 million as a
contribution to the capital of the Partnership.
2. Issuance of Series C Preferred Partnership Units; Rights.
--------------------------------------------------------
In consideration of the contribution to the Partnership pursuant to Section
1 hereof, the Partnership hereby issues to AEW Fund 1,400,000 Series C Preferred
Partnership Units (as defined herein). Exhibit S to the Partnership Agreement,
---------
attached hereto, is hereby inserted into the Partnership Agreement. AEW Fund
hereby agrees that it shall not have any rights with respect to the "Rights"
provided for in Section 11.1 and Exhibit B-1 to the Partnership Agreement.
3. Definitions.
-----------
In addition to those terms defined in the Partnership Agreement, the
following definitions shall be for all purposes, unless otherwise clearly
indicated to the contrary, inserted into the Partnership Agreement and applied
to the terms used in the Partnership Agreement and in this Amendment:
"AEW Warrant" means the right to purchase (i) an aggregate of
-----------
1,046,729 shares of Common Stock or (ii) an aggregate of 1,400,000 shares
of Series A Preferred Stock pursuant to the terms of that certain Warrant
dated November 6, 1998 issued by Weeks."
"Series C Preferred Partnership Unit" means a Partnership Unit issued
-----------------------------------
by the Partnership to AEW Fund in consideration of the contribution by AEW
Fund to the Partnership of $24.1875. The Series C Preferred Partnership
Units shall constitute Preferred Partnership Units. The Series C Preferred
Partnership Units shall have the voting powers, designation, preferences
and relative, participating, optional or other special rights and
qualifications, limitations or restrictions as are set forth in Exhibit S,
---------
attached hereto.
In addition, the definition of "Liquidation Preference Amount" appearing in
Article I of the Partnership Agreement is hereby deleted in its entirety and the
following definition is inserted in its place:
"Liquidation Preference Amount" means, with respect to any Preferred
-----------------------------
Partnership Unit, the amount payable with respect to such Preferred
Partnership Unit
-2-
<PAGE>
(as established by the instrument designating such Preferred Partnership
Units) upon the voluntary or involuntary dissolution, liquidation or
winding up of the Partnership, or upon the earlier redemption of such
Preferred Partnership Units, as the case may be, other than accrued and
unpaid quarterly distributions in arrears.
4. Allocations and Other Tax and Accounting Matters.
------------------------------------------------
Exhibit F to the Partnership Agreement is hereby deleted in its entirety
---------
and Exhibit F attached hereto is hereby inserted in its place.
---------
5. Admission. AEW Fund is hereby admitted to the Partnership as a
---------
Limited Partner, effective as of the date hereof, and AEW Fund hereby agrees to
be bound by the terms of the Partnership Agreement.
6. Exhibits to Partnership Agreement.
---------------------------------
The General Partner shall maintain the information set forth in Exhibit A
---------
to the Partnership Agreement, as such information shall change from time to
time, in such form as the General Partner deems appropriate for the conduct of
the Partnership affairs, and Exhibit A shall be deemed amended from time to time
---------
to reflect the information so maintained by the General Partner, whether or not
a formal amendment to the Partnership Agreement has been executed amending such
Exhibit A. In addition to the issuance of Series C Preferred Partnership Units
- ---------
pursuant to this Amendment, such information shall reflect (and Exhibit A shall
---------
be deemed amended from time to time to reflect) the issuance of any additional
Partnership Units to any Person, the transfer of Partnership Units and the
redemption of any Partnership Units, all as contemplated herein.
7. Miscellaneous. This Amendment shall be governed by and construed in
-------------
conformity with the laws of the State of Georgia. For the purposes of the
notice provisions of the Partnership Agreement, the address of AEW Fund is as
set forth on the signature page hereof. Except as expressly amended hereby, the
Partnership Agreement shall remain in full force and effect. This Amendment and
all the terms and provisions hereof shall be binding upon and shall inure to the
benefit of the parties, and their legal representatives, heirs, successors and
permitted assigns.
-3-
<PAGE>
IN WITNESS WHEREOF, the parties hereto have executed this Amendment as of
the date first written above.
GENERAL PARTNER:
WEEKS GP HOLDINGS, INC.,
a Georgia corporation
By: ___________________________________
Name:
Title:
LIMITED PARTNER:
AEW TARGETED SECURITIES FUND, L.P.,
a Delaware limited partnership
By: AEW TSF, L.L.C., a Delaware limited liability
By: AEW TSF, INC., a Delaware corporation,
By: ___________________________
Name:
Title:
Address: 225 Franklin Street
Boston, MA 02109
Attn: AEW TSF, Inc.
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SOLELY IN ITS CAPACITY AS HOLDER OF THE
SERIES A PREFERRED PARTNERSHIP UNITS:
LIMITED PARTNER:
WEEKS LP HOLDINGS, INC.,
a Georgia corporation
By:_____________________________________
Name:
Title:
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EXHIBIT F
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WEEKS REALTY, L.P.
ALLOCATIONS
Section 1. Allocation of Net Income and Net Loss.
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(a) Net Income. After giving effect to the special allocations
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set forth in Section 2 hereof, Net Income for any fiscal year or other
applicable period shall be allocated in the following manner and order of
priority:
(1) To the General Partner until the cumulative allocations of
Net Income under this Section 1(a)(1) equal the cumulative Net
Losses allocated to the General Partner under Section 1(b)(5)
hereof.
(2) To those Partners who have received allocations of Net Loss
under Section 1(b)(4) hereof until the cumulative allocations of
Net Income under this Section 1(a)(2) equal such cumulative
allocations of Net Loss (such allocation of Net Income to be in
proportion to the cumulative allocations of Net Loss under such
section to each such Partner).
(3) To the Partners holding Preferred Partnership Units until
the cumulative allocations of Net Income under this Section
1(a)(3) equal the cumulative allocations of Net Loss to such
Partners under Section 1(b)(3) hereof (such allocation of Net
Income being in proportion to the cumulative allocations of Net
Loss under such section to each such Partner).
(4) To those Partners who have received allocations of Net Loss
under Section 1(b)(2) hereof until the cumulative allocations of
Net Income under this Section 1(a)(4) equal such cumulative
allocations of Net Loss (such allocation of Net Income to be in
proportion to the cumulative allocations of Net Loss under such
section to each such Partner).
(5) To the Partners until the cumulative allocations of Net
Income under this Section 1(a)(5) equal the cumulative
allocations of Net Loss to such Partners under Section 1(b)(1)
hereof (such allocation of Net Income to be in proportion to the
cumulative allocations of Net Loss under such section to each
such Partner).
(6) Any remaining Net Income shall be allocated to the Partners
who hold Common Partnership Units in proportion to their
respective Percentage Interests as holders of Common Partnership
Units.
F-1
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(b) Net Losses. After giving effect to the special allocations
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set forth in Section 2 hereof, Net Losses shall be allocated to the
Partners as follows:
(1) To the Partners who hold Common Partnership Units in
accordance with their respective Percentage Interests as holders
of Common Partnership Units, except as otherwise provided in this
Section 1(b).
(2) To the extent that an allocation of Net Loss under Section
1(b)(1) would cause a Partner to have an Adjusted Capital Account
Deficit at the end of such taxable year (or increase any existing
Adjusted Capital Account Deficit of such Partner), such Net Loss
shall instead be allocated to those Partners who hold Common
Partnership Units, if any, for whom such allocation of Net Loss
would not cause or increase an Adjusted Capital Account Deficit.
Solely for purposes of this Section 1(b)(2), the Adjusted Capital
Account Deficit, in the case of those Partners who also hold
Preferred Partnership Units, shall be determined without regard
to the amount credited to such Partners' Capital Accounts for the
aggregate Liquidation Preference Amount attributable to such
Preferred Partnership Units, and in the case of a Principal or a
Principal-Controlled Partnership, shall be determined without
regard to such Partner's deficit Capital Account restoration
obligation under Section 8.7(b) of the Partnership Agreement. The
Net Loss allocated under this Section 1(b)(2) shall be allocated
among the Partners who may receive such allocation in proportion
to their respective Percentage Interests in Common Partnership
Units.
(3) Any remaining Net Loss shall be allocated to the holders of
Preferred Partnership Units in accordance with their respective
Percentage Interests as holders of Preferred Partnership Units to
the extent that such allocation of Net Loss would not cause or
increase an Adjusted Capital Account Deficit of such Partners.
(4) Any remaining Net Loss shall be allocated to the Principals
and the Principal-Controlled Partnerships in accordance with
their respective Percentage Interests in Common Partnership
Units; provided that if, after the death of a Principal, the
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estate of such Principal or any Principal-Controlled Partnership
with respect to such Principal elects pursuant to Section 8.7(c)
of the Partnership Agreement to eliminate or reduce its deficit
Capital Account restoration obligation under Section 8.7(b) of
the Partnership Agreement, Net Losses shall not be allocated to
such Partner to the extent that such allocation would cause such
Partner to have an Adjusted Capital Account Deficit (or would
increase any existing Adjusted Capital Account Deficit of such
Partner) as of the end of such taxable year, and instead shall be
allocated to those Principals and Principal-Controlled
Partnerships as to whom the foregoing limitation does not apply.
(5) Any remaining Net Loss shall be allocated to the General
Partner.
Section 2. Special Allocations. Notwithstanding any provisions of paragraph
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1 of this Exhibit F, the following special allocations shall be made in the
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following order:
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(a) Minimum Gain Chargeback (Nonrecourse Liabilities). If there is a net
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decrease in Partnership Minimum Gain for any Partnership fiscal year (except as
a result of certain conversions or refinancings of Partnership indebtedness,
certain capital contributions, or certain revaluations of Property as further
outlined in Regulation Sections 1.704-2(d)(4), (f)(2) or (f)(3)), each Partner
shall be specially allocated items of Partnership income and gain for such year
(and, if necessary, subsequent years) in an amount equal to that Partner's share
of the net decrease in Partnership Minimum Gain. The items to be so allocated
shall be determined in accordance with Regulation Section 1.704-2(f). This
paragraph (a) is intended to comply with the minimum gain chargeback requirement
in said section of the Regulations and shall be interpreted consistently
therewith. Allocations pursuant to this paragraph (a) shall be made in
proportion to the respective amounts required to be allocated to each Partner
pursuant hereto.
(b) Minimum Gain Attributable to Partner Nonrecourse Debt. If there is a
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net decrease in Minimum Gain Attributable to Partner Nonrecourse Debt during any
fiscal year (other than due to the conversion, refinancing or other change in
the debt instrument causing it to become partially or wholly nonrecourse,
certain capital contributions, or certain revaluations of Property as further
outlined in Regulation Section 1.704-2(i)(4)), each Partner shall be specially
allocated items of Partnership income and gain for such year (and, if necessary,
subsequent years) in an amount equal to that Partner's share of the net decrease
in the Minimum Gain Attributable to Partner Nonrecourse Debt. The items to be
so allocated shall be determined in accordance with Regulation Sections 1.704-
2(i)(4) and (j)(2). This paragraph (b) is intended to comply with the minimum
gain chargeback requirement with respect to Partner Nonrecourse Debt contained
in said sections of the Regulations and shall be interpreted consistently
therewith. Allocations pursuant to this paragraph (b) shall be made in
proportion to the respective amounts required to be allocated to each Partner
pursuant hereto.
(c) Qualified Income Offset. In the event any Partner unexpectedly
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receives any adjustments, allocations or distributions described in Regulation
Section 1.704-1(b)(2)(ii)(d)(4), (5), or (6), and such Partner has an Adjusted
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Capital Account Deficit, items of Partnership income and gain shall be specially
allocated to such Partner in an amount and manner sufficient to eliminate the
Adjusted Capital Account Deficit as quickly as possible. This paragraph (c) is
intended to constitute a "qualified income offset" under Regulation Section
1.704-1(b)(2)(ii)(d) and shall be interpreted consistently therewith.
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(d) Nonrecourse Deductions. Nonrecourse Deductions for any fiscal year or
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other applicable period shall be allocated to the Partners in accordance with
their respective Percentage Interests in Common Partnership Units.
(e) Partner Nonrecourse Deductions. Partner Nonrecourse Deductions for any
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fiscal year or other applicable period shall be specially allocated to the
Partner that bears the economic risk of loss for the debt in respect of which
such Partner Nonrecourse Deductions are attributable (as determined under
Regulations Sections 1.704-2(b)(4) and (i)(1)).
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(f) Curative Allocations. The Regulatory Allocations (as hereinafter
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defined) shall be taken into account in allocating other items of income, gain,
loss, and deduction among the Partners so that, to the extent possible, the
cumulative net amount of allocations of Partnership items under Sections 1 and 2
of this Exhibit F shall be equal to the net amount that would have been
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allocated to each Partner if the Regulatory Allocations had not occurred. This
paragraph (f) is intended to minimize, to the extent possible and to the extent
necessary, any economic distortions which may result from application of the
Regulatory Allocations and shall be interpreted in a manner consistent
therewith. For purposes hereof, "Regulatory Allocations" shall mean all the
allocations provided under this Section 2 other than paragraphs (f), (g), (h)
and (i).
(g) Priority Allocation With Respect To Preferred Partnership Units. All
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or a portion of the remaining items of Partnership gross income or gain for the
Partnership fiscal year, if any, shall be specially allocated to the holders of
the outstanding Series A Preferred Partnership Units and Series C Preferred
Partnership Units (the "Preferred Unit Holders") in an amount equal to the
excess, if any, of the cumulative distributions received by the Preferred Unit
Holders pursuant to Section 6.2(i) of the Partnership Agreement, as amended, for
the current Partnership fiscal year and all prior Partnership fiscal years
(other than any distributions that are treated as being in satisfaction of the
Liquidation Preference Amount for any Preferred Partnership Units) over the
cumulative allocations of Partnership gross income and gain to the Preferred
Unit Holders under this Section 2(g) for all prior Partnership fiscal years.
Such allocations shall be made in proportion to relative excess amounts
determined for each such holder. Solely for purposes of making the required
allocation under this Section 2(g) in the fiscal year in which the Partnership
is liquidated, the amount of any accrued but unpaid distributions in arrears in
respect of the Preferred Partnership Units (determined in accordance with the
relevant provisions of Exhibit R and Exhibit S to the Agreement) shall be
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treated as having been distributed to the Preferred Unit Holders immediately
prior to such liquidation under Section 6.2(i) hereof.
(h) Special Additional Priority Allocations With Respect to Series C
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Preferred Partnership Units. In addition to the priority allocations set forth
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in paragraph (g), the following allocations shall be made only in the taxable
years as specified in this Section 2(h), and shall be made prior to making the
allocations in Section 2(g), and in the following priority:
(A) Items of Partnership gross income or gain for the Partnership
fiscal year shall be specially allocated to the holder of the outstanding
Series C Preferred Partnership Units until the cumulative allocations under
this Section 2(h)(A) equal the difference between the aggregate Liquidation
Preference Amounts with respect to such Units and the amount contributed to
the Partnership with respect to such Units.
(B) If the Series C Preferred Partnership Units are redeemed pursuant
to Section 5(a) or 5(b) or put pursuant to Section 6 of Exhibit S to this
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Agreement, additional items of Partnership gross income or gain for the
Partnership fiscal year shall be specially allocated to the holder of the
redeemed Series C Preferred Partnership Units until such holder's Capital
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Account balance equals (i) if the Series C Preferred Partnership Units are
redeemed pursuant to Section 5(b) or put pursuant to Section 6, the
Liquidation Preference Amount, plus the amount of any accrued but unpaid
quarterly distributions (the "Target Balance"), and (ii) if the Series C
Preferred Partnership Units are redeemed pursuant to Section 5(a), the sum
of (X) the Target Balance, plus (Y) if the AEW Warrant has not been
exercised on or before the Expiration Date of the AEW Warrant (as defined
therein), the Target Balance with respect to the Series C Preferred
Partnership Units redeemed, multiplied by the following applicable
percentage based on the time of redemption of such Units:
Redemption on or after November 6, Percentage
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2003 4%
2004 3%
2005 2%
2006 1%
2007 0%
(C) If the Series C Preferred Partnership Units are redeemed pursuant
to Section 5(c) of Exhibit S to this Agreement, additional items of
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Partnership gross income or gain for the Partnership fiscal year shall be
specially allocated to the holder of the redeemed Series C Preferred
Partnership Units until such holder's Capital Account balance equals the
sum of (i) the Target Balance, plus (ii) the Target Balance with respect to
the Series C Preferred Partnership Units redeemed, multiplied by the
following applicable percentage based on the time of redemption of such
Units:
Redemption on or after November 6, Percentage
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1998 10%
1999 9%
2000 8%
2001 7%
2002 6%
(D) The priority allocations provided by this paragraph (h) shall
only be made with respect to: (i) any fiscal year, or portion thereof, in
which a Redemption Date or Exchange Date falls (as defined in Exhibit S to
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this Agreement); (ii) solely with respect to the allocation provided by
paragraph (h)(A) above, the fiscal year in which the partnership interest
of a holder of Series C Preferred Partnership Units is "liquidated" within
the meaning of Regulations Section 1.704-1(b)(2)(ii)(g); and (iii) any
fiscal year immediately prior to any of the fiscal years referenced in
clauses (i) and (ii) to the extent that the Exchange Date, the Redemption
Date or liquidating distributions occur on or before the due date (not
including extensions) for filing the Partnership's federal income tax
return for such prior fiscal year.
(i) Allocation of Nonrecourse Liabilities. The "excess nonrecourse
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liabilities" of the Partnership (as defined in Regulations Section 1.752-
3(a)(3)) shall be allocated among the Partners in proportion to their respective
interests in Common Partnership Units.
F-6
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Section 3. Tax Allocations.
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(a) Generally. Subject to paragraphs (b) and (c) hereof, items of
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income, gain, loss, deduction and credit to be allocated for income tax purposes
(collectively, "Tax Items") shall be allocated among the Partners on the same
basis as their respective book items.
(b) Sections 1245/1250 Recapture. If any portion of gain from the
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sale of property is treated as gain which is ordinary income by virtue of the
application of Code Sections 1245 or 1250 ("Affected Gain"), then (A) such
Affected Gain shall be allocated among the Partners in the same proportion that
the depreciation and amortization deductions giving rise to the Affected Gain
were allocated and (B) other Tax Items of gain of the same character that would
have been recognized, but for the application of Code Sections 1245 and/or 1250,
shall be allocated away from those Partners who are allocated Affected Gain
pursuant to Clause (A) so that, to the extent possible, the other Partners are
allocated the same amount, and type, of capital gain that would have been
allocated to them had Code Sections 1245 and/or 1250 not applied. For purposes
hereof, in order to determine the proportionate allocations of depreciation and
amortization deductions for each fiscal year or other applicable period, such
deductions shall be deemed allocated on the same basis as Net Income and Net
Loss for such respective period.
(c) Allocations Respecting Section 704(c) and Revaluations.
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Notwithstanding paragraph (b) hereof, Tax Items with respect to Property that is
subject to Code Section 704(c) and/or Regulation Section 1.704-1(b)(2)(iv)(f)
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(collectively "Section 704(c) Tax Items") shall be allocated in accordance with
said Code section and/or Regulation Section 1.704-1(b)(4)(i), as the case may
be. Specifically, the allocation of all Section 704(c) Tax Items shall be made
in accordance with the "traditional method" set forth in Regulation Section
1.704-3(b)(1) and thus shall be subject to the ceiling rule stated in said
section of the Regulations.
(d) Return of Capital Determination. For purposes of computing the
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return on the capital of the holder of Series C Preferred Partnership Units, the
capital of a holder of the Series C Preferred Partnership Units attributable to
each such Unit shall be treated as returned (x) when the Unit is redeemed by the
Partnership or (y) to the extent that the Partnership has distributed with
respect to such Unit an amount that exceeds the cumulative quarterly
distributions accrued thereon, plus the difference between $25 and the amount
contributed to the Partnership with respect to such Unit. Such return of capital
determination is solely for the internal tax accounting purposes of the holders
of the Series C Preferred Partnership Units and shall not in any way affect the
distributions to the Partners under this Agreement or the allocations of Net
Profit, Net Loss and other items under this Exhibit F.
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F-7
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EXHIBIT S
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WEEKS REALTY, L.P.
DESIGNATION OF THE VOTING POWERS, DESIGNATION, PREFERENCES AND
RELATIVE, PARTICIPATING, OPTIONAL OR OTHER SPECIAL RIGHTS AND
QUALIFICATIONS, LIMITATIONS OR RESTRICTIONS
The following are the terms of the Series C Preferred Partnership Units
established pursuant to this Amendment:
8. NUMBER. The maximum number of authorized units of the Series C
Preferred Partnership Units shall be 1,400,000.
9. RELATIVE SENIORITY. In respect of rights to receive distributions (as
provided in Section 3 below), the Series C Preferred Partnership Units shall
rank (a) senior to any class or series of Partnership Units of the Partnership
ranking, as to the payment of distributions, junior to the Series C Preferred
Partnership Units (collectively, "Junior Partnership Units"), and (b) on a
parity with any class or series of Partnership Units of the Partnership if the
holders of such class or series of Partnership Units and the Series C Preferred
Partnership Units shall be entitled to the receipt of distributions and of
amounts distributable upon liquidation, dissolution or winding up (taking into
account the effects of allocations of Net Profits, Net Losses and other items)
in proportion to their respective amounts of accrued and unpaid distributions
per unit or liquidation preferences, without preference or priority one over the
other, whether or not the distribution rates, distribution payment dates,
liquidation preferences or redemption prices per unit thereof are different from
those of the Series C Preferred Partnership Units (collectively, "Parity
Partnership Units"). The Series A Preferred Partnership Units are Parity
Partnership Units with the Series C Preferred Partnership Units, and all Common
Partnership Units shall rank junior to Preferred Partnership Units as to rights
to receive distributions and rights upon liquidation, dissolution or winding up
of the Partnership. Upon liquidation, dissolution or winding up of the
Partnership, the holders of the Series A Preferred Partnership Units and Series
C Preferred Partnership Units shall be entitled to such distributions as are
provided in Section 8.2 of this Agreement, taking into account the required
allocations of Net Profits, Net Losses and other items to the Partners as
provided in Exhibit F to this Agreement. Nothing contained in Exhibit F or
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Exhibit S to this Agreement shall prohibit the Partnership from issuing
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additional Partnership Units which are Parity Partnership Units with the Series
C Preferred Partnership Units.
10. QUARTERLY DISTRIBUTIONS.
1. The holder of the then outstanding Series C Preferred Partnership
Units shall be entitled to receive, when, as and if declared by the General
Partner out of funds legally available therefor, cumulative distributions
at the rate of $2.00 per unit per year, payable in equal amounts of $.50
per unit (plus the amount of any accrued but unpaid distributions from
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prior periods) quarterly in cash on the last day of each January, April,
July and October or, if not a Business Day (as hereinafter defined), the
next succeeding Business Day. Quarterly distributions shall begin to
accrue and shall be fully cumulative from the first date on which the
pertinent units of the Series C Preferred Partnership Units are issued and
sold and shall first be payable on January 31, 1999 (each such payment date
being hereafter called a "Quarterly Distribution Date" and each period
ending on a Quarterly Distribution Date being hereinafter called a
"Quarterly Distribution Period"). Quarterly distributions shall be payable
to holder of record as it appears in the records of the Partnership at the
close of business on the applicable record date (the "Record Date"), which
shall be the 15th day of the calendar month in which the applicable
Quarterly Distribution Date falls on or such other date designated by the
General Partner for the payment of quarterly distributions that is not more
than 50 nor less than 10 days prior to such Quarterly Distribution Date.
The amount of any quarterly distribution payable for any Quarterly
Distribution Period shorter than a full Quarterly Distribution Period shall
be prorated and computed on the basis of the actual number of days in such
period on the basis of a 360-day year of twelve 30-day months. Quarterly
distributions paid on the Series C Preferred Partnership Units in an amount
less than the total amount of such quarterly distributions at the time
accrued and payable on such units shall be allocated pro rata on a per unit
basis among all such units at the time outstanding.
"Business Day" shall mean any day, other than a Saturday or
Sunday, that is neither a legal holiday nor a day on which banking
institutions in New York, New York or Atlanta, Georgia are authorized or
required by law, regulation or executive order to close.
2. The amount of any quarterly distributions accrued on any Series C
Preferred Partnership Units at any Quarterly Distribution Date shall be the
amount of any unpaid quarterly distributions accumulated thereon, to and
including such Quarterly Distribution Date, whether or not earned or
declared, plus an amount equivalent to interest at the rate of eight
percent (8%) per annum compounded quarterly in arrears on any accrued and
unpaid quarterly distributions accrued to and including the most recent
prior Quarterly Distribution Date. The amount of quarterly distributions
accrued on any Series C Preferred Partnership Units at any date other than
a Quarterly Distribution Date shall be equal to the sum of the amount of
any unpaid quarterly distributions accumulated thereon, to and including
the last preceding Quarterly Distribution Date, whether or not earned or
declared, plus an amount equivalent to interest at the rate of eight
percent (8%) per annum compounded quarterly in arrears on any accrued and
unpaid quarterly distributions accrued to and including the most recent
prior Quarterly Distribution Date, and plus an amount calculated on the
basis of the quarterly distribution rate of $.50 per unit for the period
after such last preceding Quarterly Distribution Date to and including the
date as of which the calculation is made based on the actual number of days
in such period on the basis of a 360-day year of twelve 30-day months.
3. Except as provided herein, the Series C Preferred Partnership
Units will not be entitled to any quarterly distributions in excess of full
cumulative quarterly distributions
S-2
<PAGE>
as described above and shall not be entitled to participate in the earnings
or assets of the Partnership, and no interest, or sum of money in lieu of
interest, shall be payable in respect of any quarterly distribution payment
or payments on the Series C Preferred Partnership Units which may be in
arrears, except as otherwise provided herein.
4. Any quarterly distribution payment made on the Series C Preferred
Partnership Units shall first be credited against the earliest accrued but
unpaid distribution due with respect to such units which remains payable.
5. No quarterly distributions on the Series C Preferred Partnership
Units shall be authorized by the General Partner or be paid or set apart
for payment by the Partnership at such time as the terms and provisions of
any agreement of the Partnership, including any agreement relating to its
indebtedness, prohibit such authorization, payment or setting apart for
payment or provide that such authorization, payment or setting apart for
payment would constitute a breach thereof or a default thereunder, or if
such authorization or payment shall be restricted or prohibited by law.
Notwithstanding the foregoing, quarterly distributions on the Series C
Preferred Partnership Units will accrue whether or not the Partnership has
earnings, whether or not there are funds legally available for the payment
of such quarterly distributions and whether or not such quarterly
distributions are authorized.
6. So long as any Series C Preferred Partnership Units remain
outstanding, no distributions, except as described in the immediately
following sentence, shall be declared or paid or set apart for payment on
any class or series of Parity Partnership Units for any period unless full
cumulative quarterly distributions have been or contemporaneously are
declared and paid or declared and a sum sufficient for the payment thereof
set apart for such payment on the Series C Preferred Partnership Units for
all Quarterly Distribution Periods terminating on or prior to the
distribution payment date for such class or series of Parity Partnership
Units. When quarterly distributions are not paid in full or a sum
sufficient for such payment is not set apart, as aforesaid, all
distributions declared upon Series C Preferred Partnership Units and all
distributions declared upon any other class or series of Parity Partnership
Units shall be declared ratably in proportion to the respective amounts of
distributions accumulated and unpaid on the Series C Preferred Partnership
Units and accumulated and unpaid on such Parity Partnership Units.
7. So long as any Series C Preferred Partnership Units remain
outstanding, no distributions (other than distributions paid solely in
units of, or options, warrants or rights to subscribe for or purchase,
Junior Units) shall be declared or paid or set apart for payment or other
distribution declared or made upon Junior Units, nor shall any Junior Units
be redeemed, purchased or otherwise acquired (other than a redemption,
purchase or other acquisition of Common Units made for purposes of any
employee incentive or benefit plan of the Partnership or any subsidiary)
for any consideration (or any monies be paid to or made available for a
sinking fund for the redemption of any such units) by the Partnership,
directly or indirectly (except by conversion into or exchange for Junior
Units), unless in each case (i) the full cumulative quarterly distributions
on all outstanding Series C Preferred
S-3
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Partnership Units shall have been or contemporaneously are declared and
paid or declared and set apart for payment for all past Quarterly
Distribution Periods with respect to the Series C Preferred Partnership
Units and (ii) sufficient funds shall have been or contemporaneously are
declared and paid or declared and set apart for the payment of the
quarterly distribution for the current Quarterly Distribution Period with
respect to the Series C Preferred Partnership Units.
11. LIQUIDATION RIGHTS.
1. Upon the voluntary or involuntary liquidation, dissolution or
winding up of the Partnership, the holder of the Series C Preferred
Partnership Units then outstanding shall be entitled to receive and to be
paid out of the assets of the Partnership available for distribution to its
Partners, before any payment or distribution shall be made on any Junior
Units, the amount of $25.00 per unit, plus accrued and unpaid quarterly
distributions thereon, plus an amount equivalent to interest at the rate of
eight percent (8%) per annum compounded quarterly in arrears on any accrued
and unpaid quarterly distributions accrued to and including such
liquidation date; provided, however, that in no event shall such amount
exceed such holder's Capital Account balance on the date of such
distribution.
2. Neither a consolidation nor a merger of any other entity into or
with the Partnership or Weeks, nor a statutory share exchange by Weeks
shall be deemed to be a dissolution, liquidation or winding up, voluntary
or involuntary, for the purposes hereof. A sale, transfer or conveyance of
all or substantially all of the property or business of the Partnership
shall be deemed to be a dissolution, liquidation or winding up for the
purposes hereof.
12. REDEMPTION.
1. OPTIONAL REDEMPTION. On and after November 6, 2003, the
Partnership may, at its option, redeem at any time all, but not part, of
the Series C Preferred Partnership Units at a price per unit equal to the
Redemption Price (as defined below). For purposes of this Section 5(a),
and for purposes of Sections 5(b) and 5(c), the "Redemption Price" shall
equal the portion of the Capital Account balance of the holder of such
Units attributable to such Units, as determined after taking into account
all contributions and distributions, to and including the date fixed for
redemption (the "Redemption Date"), as well as all allocations of Net
Profit, Net Losses and other items to such holder with respect to the
portion of the fiscal year ending on the Redemption Date (including without
limitation the allocations provided by Sections 2(g) and 2(h) of Exhibit F
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to this Agreement, to the extent applicable to the type of redemption
involved). The Redemption Price shall be paid to the holder of the Series
C Preferred Partnership Units (X) if the Current Per Share Market Price is
less than or equal to the Common Stock Exercise Price (as defined in the
AEW Warrant), in cash, or (Y) if the Current Per Share Market Price is
greater than the Common Stock Exercise Price (as defined in the AEW
Warrant), in cash, or at the option of the Partnership, in a number of
shares of Common Stock equal to (i) the aggregate Redemption
S-4
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Price to be paid by the Partnership, divided by (ii) the Current Per Share
Market Price. In addition, if an additional amount of income or gain is
allocated or allocable to the holder of the Series C Preferred Partnership
Units pursuant to Section 2(h)(B)(ii)(Y) of Exhibit F to this Agreement,
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then on the Expiration Date of the AEW Warrant (as defined therein), an
additional cash payment shall be paid to such holder in the amount of such
allocation.
2. REDEMPTION FOLLOWING EXERCISE OF THE AEW WARRANT. If the AEW
Warrant is exercised for shares of Common Stock and the Series C Preferred
Partnership Units have not previously been redeemed, the Partnership may,
at its option, redeem, on or before the 30th day following the exercise of
the AEW Warrant, all, but not part, of the Series C Preferred Partnership
Units at the Redemption Price per unit, and such Redemption Price shall be
paid to the holder in cash, or at the option of the Partnership, in a
number of shares of Common Stock equal to (i) the aggregate Redemption
Price to be paid by the Partnership for such Series C Preferred Partnership
Units, divided by (ii) the Current Per Share Market Price. If the AEW
Warrant is exercised for shares of Series A Preferred Stock, the Series C
Preferred Partnership Units have not previously been redeemed, and the
exercise price is paid for by the holder in cash, the Partnership may, at
its option, redeem, on or before the 30th day following the exercise of the
AEW Warrant, all, but not part, of the Series C Preferred Partnership Units
at the Redemption Price per unit, and such Redemption Price shall be paid
to the holder in cash.
3. REDEMPTION FOLLOWING CERTAIN CONSOLIDATIONS OR MERGERS OF THE
PARTNERSHIP WITHIN FIVE YEARS. If, prior to November 6, 2003, (i) the
Partnership shall effect or consummate a consolidation with or a merger of
the Partnership with or into another entity, and the surviving entity is
not taxed as a partnership for federal income tax purposes, and (ii) the
AEW Warrant has not been exercised on or before the date of the
consummation of such transaction (the "Merger Date"), the Partnership shall
redeem on the Merger Date, all, but not part, of the Series C Preferred
Partnership Units at the Redemption Price per unit. The Redemption Price
shall be paid to the holder of the Series C Preferred Partnership Units in
cash, or at the option of the Partnership, in a number of shares of Common
Stock equal to (i) the aggregate Redemption Price to be paid by the
Partnership, divided by (ii) the Current Per Share Market Price.
4. PROCEDURES OF REDEMPTION.
(1) Notice of redemption will be mailed by the Partnership to the
holder of the Series C Preferred Partnership Units to be redeemed not
less than 5 days nor more than 30 days prior to the Redemption Date at
the address set forth in the Partnership's records. Any notice mailed
in the manner provided herein shall be conclusively presumed to have
been given on the date mailed whether or not the holder received the
notice. In addition to any information required by law, such notice
shall state: (a) the Redemption Date; (b) the Redemption Price; and
(c) that distributions on the units to be redeemed will cease to
accumulate on the Redemption Date.
S-5
<PAGE>
(2) If notice has been mailed in accordance with subparagraph (1)
above and provided that on or before the Redemption Date specified in
such notice all funds necessary for such redemption shall have been
irrevocably set aside by the Partnership, separate and apart from its
other funds in trust for the benefit of the holder of the Series C
Preferred Partnership Units so called for redemption, so as to be, and
to continue to be available therefor, then, from and after the
Redemption Date, distributions on the Series C Preferred Partnership
Units so called for redemption shall cease to accumulate, and said
units shall no longer be deemed to be outstanding and shall not have
the status of Series C Preferred Partnership Units and all rights of
the holder thereof as a partner of the Partnership (except the right
to receive the Redemption Price) shall cease. Upon surrender, in
accordance with such notice, of the Series C Preferred Partnership
Units so redeemed, such Series C Preferred Partnership Units shall be
redeemed by the Partnership at the Redemption Price.
(3) Any funds deposited with a bank or trust company for the
purpose of redeeming Series C Preferred Partnership Units shall be
irrevocably deposited except that:
(a) the Partnership shall be entitled to receive from such
bank or trust company the interest or other earnings, if any,
earned on any money so deposited in trust, and the holder of any
Series C Preferred Partnership Units redeemed shall have no claim
to such interest or other earnings; and
(b) any balance of monies so deposited by the Partnership
and unclaimed by the holder of the Series C Preferred Partnership
Units entitled thereto at the expiration of two years from the
applicable Redemption Date shall be repaid, together with any
interest or other earnings earned thereon, to the Partnership,
and after any such repayment, the holder of the units entitled to
the funds so repaid to the Partnership shall look only to the
Partnership for payment without interest or other earnings.
(4) Unless full accumulated distributions on all Series C
Preferred Partnership Units and any other class or series of Parity
Partnership Units shall have been or contemporaneously are declared
and paid or declared and a sum sufficient for the payment thereof set
apart for payment for all past Quarterly Distribution Periods and the
then current Quarterly Distribution Period, no Series C Preferred
Partnership Units or Parity Partnership Units shall be redeemed or
purchased or otherwise acquired directly or indirectly; provided,
however, that the foregoing provision shall not restrict or otherwise
adversely affect the rights of the holder of the Series C Preferred
Partnership Units under Section 6 hereof.
S-6
<PAGE>
(5) If the Redemption Date is after a Record Date and before the
related Quarterly Distribution Date, the distribution payable on such
Quarterly Distribution Date shall be paid on the Redemption Date to
the holder in whose name the Series C Preferred Partnership Units to
be redeemed are registered at the close of business on such Record
Date notwithstanding the redemption thereof between such Record Date
and the related Quarterly Distribution Date.
13. PUT RIGHTS.
1. EXERCISE OF PUT RIGHT. The holder of the Series C Preferred
Partnership Units shall have the right, at its option, to put (the "Put
Right") to the Partnership at any time all, but not part, of the Series C
Preferred Partnership Units at a price per unit (the "Put Price") equal to
the portion of the Capital Account balance of the holder of such Units
attributable to such Units, as determined after taking into account all
contributions and distributions, to and including the date fixed for such
exchange (the "Exchange Date"), as well as all allocations of Net Profit,
Net Losses and other items to such holder with respect to the fiscal year
in which the Exchange Date falls (including without limitation the
allocations provided by Sections 2(g) and 2(h) of Exhibit F to this
---------
Agreement, to the extent applicable to the exchange). The Put Price shall
be paid to the holder, at the option of the Partnership, in (i) cash, or
(ii) a number of shares of Common Stock equal to either (x) the aggregate
Put Price to be paid by the Partnership divided by the Current Per Share
Market Price, if the Current Per Share Market Price is greater than
$33.4375 per share (the "Put Exchange Price"), or (y) 1,046,729 shares of
Common Stock, if the Current Per Share Market Price is less than or equal
to the Put Exchange Price (the "Put Share Exchange Rate").
2. PROCEDURES OF PUT RIGHT.
(1) The Put Right shall terminate at the close of business on (i)
the Redemption Date set pursuant to Section 5 hereof, or (ii) if the
Partnership shall so elect and state in the notice of redemption, the
date on which the Partnership irrevocably deposits with a designated
bank or trust company money sufficient to pay, on the Redemption Date,
the Redemption Price, unless the Partnership shall default in making
payment of the amount payable upon such redemption.
(2) In order to exercise the Put Right, the holder of the Series
C Preferred Partnership Units shall mail notice of the exercise of
such right to the Partnership not less than 5 days nor more than 30
days prior to the Exchange Date and shall surrender to the Partnership
the units to be exchanged on the Exchange Date. If the Exchange Date
is after a Record Date and before the related Quarterly Distribution
Date, the distribution payable on such Quarterly Distribution Date
shall be paid on the Exchange Date to the holder in whose name the
Series C Preferred Partnership Units to be exchanged are registered at
the close of business on such Record Date notwithstanding the exchange
thereof between such Record Date and the related Quarterly
Distribution Date.
S-7
<PAGE>
(3) The Put Share Exchange Rate shall be adjusted from time to
time as follows:
(i) In case Weeks shall, after the date of original issuance
ofthe Series C Preferred Partnership Units, (A) pay an
extraordinary dividend or make an extraordinary distribution on
its Common Stock in shares of its Common Stock, (B) subdivide or
split its outstanding Common Stock into a greater number of
shares, (C) combine its outstanding Common Stock into a smaller
number of shares or (D) issue any shares of capital stock by
reclassification of its Common Stock, the Put Share Exchange Rate
in effect immediately prior thereto shall be adjusted so that the
holder of any Series C Preferred Partnership Units thereafter
surrendered for exchange shall be entitled to receive the number
of shares of Common Stock of Weeks which such holder would have
owned or have been entitled to receive after the occurrence of
any of the events described above had such units been surrendered
for exchange immediately prior to the occurrence of such event or
the record date therefor, whichever is earlier. An adjustment
made pursuant to this clause (i) shall become effective
immediately after the close of business on the record date for
determination of shareholders entitled to receive such
extraordinary dividend or extraordinary distribution in the case
of an extraordinary dividend or extraordinary distribution
(except as provided in subparagraph (6) below) and shall become
effective immediately after the close of business on the
effective date in the case of a subdivision, split, combination
or reclassification.
(ii) No adjustment in the Put Share Exchange Rate shall be
required unless such adjustment would require an increase or
decrease of at least 1%; provided, however, that any adjustments
-------- -------
which by reason of this subparagraph (ii) are not required to be
made shall be carried forward and taken into account in any
subsequent adjustment. All calculations under this subparagraph
(3) shall be made to the nearest 1/100th of a share (with .005 of
a share being rounded upward).
(4) Whenever the Put Share Exchange Rate is adjusted in
accordance with subparagraph (3), the Put Exchange Price shall be
adjusted by multiplying such Put Exchange Price immediately prior to
such adjustment by a fraction, of which the numerator shall be the
number of shares of Common Stock issuable upon exchange immediately
prior to such adjustment, and of which the denominator shall be the
number of shares of Common Stock issuable upon exchange immediately
thereafter.
(5) In any case in which subparagraph (3) above provides that
an adjustment shall become effective immediately after a record date
for an event and
S-8
<PAGE>
the date fixed for exchange occurs after such record date but before
the occurrence of such event, the Partnership may defer until the
actual occurrence of such event (i) issuing to the holder of the
Series C Preferred Partnership Units surrendered for exchange the
additional shares of Common Stock issuable upon such exchange by
reason of the adjustment required by such event over and above the
Common Stock issuable upon such exchange before giving effect to such
adjustment and (ii) paying to such holder any amount in cash in lieu
of any fraction pursuant to Section 12.
(6) Notwithstanding any other provision herein to the contrary,
the issuance of any shares of Common Stock pursuant to any plan
providing for the reinvestment of dividends or interest payable on
securities of Weeks and the investment of additional optional amounts
in shares of Common Stock under any such plan shall not be deemed to
constitute an issuance of Common Stock. There shall be no adjustment
of the Put Share Exchange Rate in case of the issuance of any stock of
Weeks in a reorganization, acquisition, stock sale or other similar
transaction except as specifically set forth in Section 11. If any
action or transaction would require adjustment of the Put Share
Exchange Rate pursuant to more than one provision, only one adjustment
shall be made and such adjustment shall be the amount of adjustment
which has the highest absolute value.
(7) Subject to the provision of Section 12(a), Weeks shall not
take any action which results in adjustment of the number of shares of
Common Stock issuable upon exchange of Series C Preferred Partnership
Units if the total number of shares of Common Stock issuable after
such action upon exchange of the Series C Preferred Partnership Units
then outstanding, together with the total number of shares of Common
Stock then outstanding, would exceed the total number of shares of
Common Stock then authorized under Weeks' Articles of Incorporation.
Subject to the foregoing, Weeks shall take all such actions as it may
deem reasonable under the circumstances to provide for the issuance of
such number of shares of Common Stock as would be necessary to allow
for the exchange from time to time, and taking into account
adjustments as herein provided, of the outstanding Series C Preferred
Partnership Units in accordance with the terms and provisions of
Weeks' Articles of Incorporation.
14. VOTING RIGHTS. Except as required by law, the holder of the Series C
Preferred Partnership Units shall not be entitled to vote at any meeting of the
Partners or for any other purpose or otherwise to participate in any action
taken by the Partnership or the Partners, or to receive notice of any meeting of
the Partners; provided, however that so long as the Series C Preferred
Partnership Units remain outstanding, the Partnership will not, without the
affirmative vote or consent of the holder of the Series C Preferred Partnership
Units, (i) authorize or create a class or series of Partnership Units ranking
prior to the Series C Preferred Partnership Units, as to the payment of
distributions or as to the distribution of assets upon liquidation, dissolution
or winding up (taking into account the effects of allocations of Net Profits,
Net Losses and other items), (ii) amend, alter or repeal the provisions of the
Partnership Agreement so as to materially and adversely affect any
S-9
<PAGE>
right, preference, privilege or voting power of the Series C Preferred
Partnership Units (provided that the amendment of the provisions of the
Partnership Agreement so as to authorize or create or to increase the authorized
amount of any class of Units that are not senior in any respect to the Series C
Preferred Partnership Units, or any Parity Partnership Units, shall not be
deemed to adversely affect the rights, preferences, privileges or voting power
of the Series C Preferred Partnership Units); or (iii) effect or consummate a
consolidation with or a merger of the Partnership with or into another entity,
unless each Series C Preferred Partnership Unit (x) shall remain outstanding
without a material and adverse change to its terms and rights or (y) shall be
converted into or exchanged for preferred units of the surviving entity having
preferences, voting powers, restrictions, limitations as to distributions,
qualifications and terms or conditions of redemption thereof identical to that
of a Series C Preferred Partnership Unit (except for changes that do not
materially and adversely affect the holder of Series C Preferred Partnership
Units). The foregoing voting provisions will not apply if, at or prior to the
time when the act with respect to which such vote would otherwise be required
shall be effected, all outstanding Series C Preferred Partnership Units shall
have been redeemed or called for redemption pursuant to Section 5 or 6 hereof
and sufficient funds shall have been deposited in trust to effect such
redemption. Nothing contained in this Section 7 shall adversely affect the
rights granted to AEW Fund pursuant to that certain Management Rights Letter (as
defined in the Securities Purchase Agreement).
15. CONVERSION. Except as otherwise set forth herein, the Series C
Preferred Partnership Units are not convertible into or exchangeable for any
other property or securities of the Partnership.
16. NO MATURITY. The Series C Preferred Partnership Units shall have no
stated maturity and will not be subject to any sinking fund or mandatory
redemption provisions.
17. RESTRICTIONS ON TRANSFER. The Series C Preferred Partnership Units
may only be transferred in whole and not in part. The Series C Preferred
Partnership Units are subject to the transfer restrictions set forth in Article
IX of the Partnership Agreement. For this purpose, no Restricted Period shall
apply with respect to the Series C Preferred Partnership Units, and the "Rights"
applicable shall be the Put Right and the other provisions of Section 6 hereof.
18. PROVISIONS IN CASE OF CONSOLIDATION, MERGER OR SALE OF ASSETS. In
case of any consolidation of Weeks with, or merger of Weeks into, any other
Person, any merger or consolidation of another Person into Weeks (other than a
merger that does not result in any reclassification, conversion, exchange or
cancellation of outstanding shares of Common Stock), any acquisition of the
outstanding Common Stock by share exchange, or any sale or transfer of all or
substantially all of the assets of Weeks, the Person formed by such
consolidation or resulting from such merger or that acquires the outstanding
Common Stock or such assets of Weeks as the case may be, shall execute and
deliver to the holder of Series C Preferred Partnership Units an agreement
providing that such holder shall have the rights provided herein, during the
period such rights shall be exercisable (which shall be at least as long as the
period for which such rights can be exercised pursuant to the terms hereof), to
exercise such rights for the kind and amount of securities, cash and other
property receivable upon such consolidation, merger, share exchange, sale or
transfer
S-10
<PAGE>
by a holder of the number of shares of Common Stock for which such rights might
have been exercised immediately prior to such consolidation, merger, share
exchange, sale or transfer, assuming both that (a) such holder of shares of
Common Stock is not a Person with which Weeks consolidated or into which Weeks
merged or that merged into Weeks, or that acquired the outstanding Common Stock
by share exchange, or to which such sale or transfer was made, as the case may
be (a "Constituent Person"), or an Affiliate of a Constituent Person, and that
(b) such holder does not exercise his right of election, if any, as to the kind
or amount of securities, cash or other property receivable upon such
consolidation, merger, share exchange, sale or transfer (provided that if the
--------
kind or amount of securities, cash and other property receivable upon such
consolidation, merger, share exchange, sale or transfer is not the same for each
share of Common Stock in respect of which such right of election, if any, is not
exercised ("non-electing Share"), then for the purpose of this Section 11, the
kind and amount of securities, cash and other property receivable upon such
consolidation, merger, share exchange, sale or transfer by each non-electing
Share shall be deemed to be the kind and amount so receivable per non-electing
Share by a plurality of the non-electing Shares). Such agreement shall provide
for adjustments that, for events subsequent to the effective date of such
agreement, shall be as nearly equivalent as may be practicable to the
adjustments provided for herein.
19. GENERAL.
a. All shares of Common Stock delivered upon exchange or redemption
of the Series C Preferred Partnership Units will upon delivery be duly and
validly issued and fully paid and nonassessable. Weeks covenants that it
will at all times reserve and keep available, free from preemptive rights,
out of the aggregate of its authorized but unissued shares of Common Stock
or its issued shares of Common Stock held in its treasury, or both, for the
purpose of effecting the exchange or redemption of the Series C Preferred
Partnership Units, the full number of shares of Common Stock deliverable
upon the exchange or redemption of all outstanding shares of Series C
Preferred Partnership Units not theretofore exchanged or redeemed.
b. In connection with the exchange or redemption of any Series C
Preferred Partnership Units, fractions of such units may be converted;
however, no fractional shares or scrip representing fractions of shares of
Common Stock shall be issued upon exchange or redemption of the Series C
Preferred Partnership Units. Instead of any fractional interest in a share
of Common Stock which would otherwise be deliverable upon the exchange or
redemption of a share of Series C Preferred Partnership Units (or fraction
thereof), the Partnership shall pay to the holder of such unit an amount in
cash (computed to the nearest cent) equal to the Current Per Share Market
Price immediately preceding the date of exchange or redemption multiplied
by the fraction of a share of Common Stock represented by such fractional
interest
c. For purposes hereof, the number of shares of Common Stock at any
time outstanding shall not include any shares of Common Stock then owned or
held by or for the account of Weeks or any entity controlled by Weeks.
S-11
<PAGE>
d. Neither the General Partner nor the Partnership shall have any
obligation or authority to redeem or exchange any Series C Preferred
Partnership Units to the extent that issuance of shares of Common Stock
would result (i) in the violation of the General Ownership Limit (as such
term is defined in the Articles of Incorporation), (ii) would cause Weeks
to fail the stock ownership test of Section 856(a)(6) of the Code, or (iii)
would otherwise cause Weeks to fail to qualify as a REIT; provided that in
any such case, the General Partner or the Partnership shall purchase for
cash those Series C Preferred Partnership Units which may not be redeemed
or exchanged with shares of Common Stock. Each holder shall provide to the
General Partner such information as the General Partner may request
regarding such holder's actual and constructive ownership of Common Stock
and Preferred Stock (and of individuals, and entities related to such
holder) in order for the General Partner to determine, in its sole
discretion, whether an exchange or redemption of the Series C Preferred
Partnership Units for shares of Common Stock would result in a violation of
such restrictions.
e. To the extent the Partnership issues shares of Common Stock, it
shall obtain the necessary shares of Common Stock in exchange for the
issuance of additional Partnership Interests to the General Partner, Weeks
LP Holdings, or any combination thereof, as determined by the General
Partner in its sole discretion, and the General Partner and/or Weeks LP
Holdings may obtain the necessary shares of Common Stock from Weeks.
f. Notwithstanding anything herein to the contrary, the General
Partner, Weeks LP Holdings or any combination thereof (an "Assumer" or,
collectively, the "Assumers") may, in the sole and absolute discretion of
the General Partner, assume directly and satisfy the exercise of a
redemption or exchange right by paying the holder of Series C Preferred
Partnership Units the Redemption Price or Put Price, as applicable. In
such event, the Assumers shall acquire the Series C Preferred Partnership
Units and shall be treated for all purposes as the owner of such Series C
Preferred Partnership Units, which shall be held by the Assumers in their
respective existing capacities as general partner or Limited Partners, as
the case may be. In the event the General Partner shall exercise the
Assumers' right to satisfy a redemption or exchange right in the manner
described in this paragraph, the Partnership shall have no obligation to
pay any amount to such holder with respect to such holder's exercise of
such right; provided, however, that the Partnership shall remain liable to
the holder to the extent that any such holder's right is not fully
satisfied; and each of the holder, the Partnership, and the Assumers shall
treat the transaction between the Assumers and the holder as a sale of the
holder's Series C Preferred Partnership Units to the Assumers for federal
income tax purposes. To the extent the Assumers issue shares of Common
Stock, they may obtain the necessary shares of Common Stock from Weeks.
Each holder agrees to execute such documents as the General Partner may
reasonably require in connection with the issuance of Common Stock.
g. Redemption or exchange of Series C Preferred Partnership Units
shall be accompanied by proper instruments of transfer and assignment for
such Series C Preferred
S-12
<PAGE>
Partnership Units and by the delivery of (i) representations and warranties
of (A) such holder with respect to its due authority to transfer all of the
right, title and interest in and to such Series C Preferred Partnership
Units and with respect to the status of the Series C Preferred Partnership
Units being transferred, free and clear of all Liens, and (B) the
Partnership or the Assumers, as applicable, with respect to due authority
for the redemption or exchange of such Series C Preferred Partnership
Units, and (ii) to the extent that shares of Common Stock are issued, (A)
an opinion of counsel for Weeks, reasonably satisfactory to the holder(s),
to the effect that such shares of Common Stock have been duly authorized,
are validly issued, fully-paid and nonassessable, and (b) a stock
certificate or certificates evidencing the Common Stock to be issued and
registered in the name of the holder or its designee.
h. The holder of Series C Preferred Partnership Units covenants and
agrees that all such Partnership Units redeemed or exchanged shall be
delivered free and clear of all Liens. Should any Liens exist or arise
with respect to such Series C Preferred Partnership Units, neither the
Assumers nor the Partnership shall be under any obligation to redeem or
acquire the same unless, in connection therewith, the General Partner has
elected to pay a portion of the Redemption Price or the Put Price, as
applicable, in the form of the cash in circumstances in which such cash
will be sufficient to cause such existing Lien to be discharged in full
upon application of all or a part of the cash. The Partnership and the
Assumers are expressly authorized to apply such portion of the cash as may
be necessary to discharge such Lien in full. The holder further agrees
that, in the event any state or local property transfer tax is payable as a
result of the transfer of its Series C Preferred Partnership Units to the
Partnership or the Assumers, such holder shall assume and pay such transfer
tax.
i. The rights of the holder of the Series C Preferred Partnership
Units, in its capacity as a holder of the Series C Preferred Partnership
Units, are in addition to and not in limitation on any other rights or
authority of the holder of the Series C Preferred Partnership Units, in any
other capacity, under the Partnership Agreement. In addition, nothing
contained herein shall be deemed to limit or otherwise restrict any rights
or authority of the holder of the Series C Preferred Partnership Units
under the Partnership Agreement, other than in its capacity as a holder of
the Series C Preferred Partnership Units.
S-13
<PAGE>
EXHIBIT 10.68
FIFTEENTH AMENDMENT TO THE
SECOND AMENDED AND RESTATED
AGREEMENT OF LIMITED PARTNERSHIP
OF
WEEKS REALTY, L.P.
This Fifteenth Amendment to the Second Amended and Restated Agreement of
Limited Partnership of Weeks Realty, L.P. (this "Amendment") is entered into as
of November 12, 1998, by and between Weeks GP Holdings, Inc., a Georgia
corporation (the "General Partner"), and Greene Street 1998 Exchange Fund, L.P.,
a Delaware limited partnership ("Greene Street Fund"). All capitalized terms
used herein shall have the meanings given to them in the Second Amended and
Restated Agreement of Limited Partnership of Weeks Realty, L.P., dated October
30, 1996, as amended by the First Amendment to the Partnership Agreement dated
November 1, 1996, the Second Amendment to the Partnership Agreement dated
December 31, 1996, the Third Amendment to the Partnership Agreement dated
January 31, 1997, the Fourth Amendment to the Partnership Agreement dated August
1, 1997, the Fifth Amendment to the Partnership Agreement dated October 7, 1997,
the Sixth Amendment to the Partnership Agreement dated October 27, 1997, the
Seventh Amendment to the Partnership Agreement dated December 30, 1997 and
effective as of August 1, 1997, the Eighth Amendment to the Partnership
Agreement dated January 9, 1998, the Ninth Amendment to the Partnership
Agreement dated January 20, 1998, the Tenth Amendment to the Partnership
Agreement dated April 3, 1998, the Eleventh Amendment to the Partnership
Agreement dated May 26, 1998, the Twelfth Amendment to the Partnership Agreement
dated June 3, 1998, the Thirteenth Amendment to the Partnership Agreement dated
August 7, 1998, and the Fourteenth Amendment to the Partnership Agreement dated
November 6, 1998 (the "Partnership Agreement").
WHEREAS, pursuant to that certain Private Placement Purchase Agreement
dated the date hereof by and among Greene Street Fund, Weeks and the Partnership
(the "Purchase Agreement"), Greene Street Fund desires to contribute $65 million
to the Partnership in exchange for partnership interests in the Partnership as
set forth herein; and
WHEREAS, as provided in Section 9.3 of the Partnership Agreement, the
General Partner is authorized to cause the Partnership to issue additional
interests in the Partnership in exchange for such contribution.
NOW THEREFORE, in consideration of the mutual covenants herein contained,
and other good and valuable consideration, the receipt and sufficiency of which
is hereby acknowledged, the parties hereto agree as follows:
<PAGE>
1. Contribution.
------------
Greene Street Fund hereby contributes to the Partnership $65 million as a
contribution to the capital of the Partnership.
2. Issuance of Series D Preferred Partnership Units; Rights.
--------------------------------------------------------
In consideration of the contribution to the Partnership pursuant to Section
1 hereof, the Partnership hereby issues to Greene Street Fund 2,600,000 Series D
Preferred Partnership Units (as defined herein). Exhibit T to the Partnership
---------
Agreement, attached hereto, is hereby inserted into the Partnership Agreement.
Greene Street Fund hereby agrees that it shall not have any rights with respect
to the "Rights" provided for in Section 11.1 and Exhibit B-1 to the Partnership
Agreement.
3. Definitions.
-----------
In addition to those terms defined in the Partnership Agreement, the
following definitions shall be for all purposes, unless otherwise clearly
indicated to the contrary, inserted into the Partnership Agreement and applied
to the terms used in the Partnership Agreement and in this Amendment:
"Series D Preferred Partnership Unit" means a Partnership Unit issued
-----------------------------------
by the Partnership to Greene Street Fund in consideration of the
contribution by Greene Street Fund to the Partnership of $25.00. The
Series D Preferred Partnership Units shall constitute Preferred Partnership
Units. The Series D Preferred Partnership Units shall have the voting
powers, designation, preferences and relative, participating, optional or
other special rights and qualifications, limitations or restrictions as are
set forth in Exhibit T, attached hereto.
---------
"Series D Preferred Stock" means the 8.625% Series D Cumulative
------------------------
Redeemable Preferred Stock, par value $0.01 per share, having a liquidation
preference equal to $25.00 per share issued by Weeks.
In addition, the definition of "Liquidation Preference Amount" appearing in
Article I of the Partnership Agreement is hereby deleted in its entirety and the
following definition is inserted in its place:
"Liquidation Preference Amount" shall have the meaning set forth in
-----------------------------
Exhibit F to the Partnership Agreement.
---------
4. Allocations and Other Tax and Accounting Matters.
------------------------------------------------
Exhibit F to the Partnership Agreement is hereby deleted in its entirety
---------
and Exhibit F attached hereto is hereby inserted in its place.
---------
-2-
<PAGE>
5. Admission. Greene Street Fund is hereby admitted to the Partnership
---------
as a Limited Partner, effective as of the date hereof, and Greene Street Fund
hereby agrees to be bound by the terms of the Partnership Agreement.
6. Exhibits to Partnership Agreement.
---------------------------------
The General Partner shall maintain the information set forth in Exhibit A
---------
to the Partnership Agreement, as such information shall change from time to
time, in such form as the General Partner deems appropriate for the conduct of
the Partnership affairs, and Exhibit A shall be deemed amended from time to time
---------
to reflect the information so maintained by the General Partner, whether or not
a formal amendment to the Partnership Agreement has been executed amending such
Exhibit A. In addition to the issuance of Series D Preferred Partnership Units
- ---------
pursuant to this Amendment, such information shall reflect (and Exhibit A shall
---------
be deemed amended from time to time to reflect) the issuance of any additional
Partnership Units to any Person, the transfer of Partnership Units and the
redemption of any Partnership Units, all as contemplated herein.
7. Miscellaneous. This Amendment shall be governed by and construed in
-------------
conformity with the laws of the State of Georgia. For the purposes of the
notice provisions of the Partnership Agreement, the address of Greene Street
Fund is as set forth on the signature page hereof. Except as expressly amended
hereby, the Partnership Agreement shall remain in full force and effect. This
Amendment and all the terms and provisions hereof shall be binding upon and
shall inure to the benefit of the parties, and their legal representatives,
heirs, successors and permitted assigns.
-3-
<PAGE>
IN WITNESS WHEREOF, the parties hereto have executed this Amendment as of
the date first written above.
GENERAL PARTNER:
WEEKS GP HOLDINGS, INC.,
a Georgia corporation
By:________________________
Name:
Title:
LIMITED PARTNER:
GREENE STREET 1998 EXCHANGE FUND. L.P.
a Delaware limited partnership
By: Goldman Sachs Management Partners, L.P., its
By: Goldman Sachs Management, Inc., its
General Partner
By:______________________________
Name:
Title:
Address: c/o Goldman, Sachs & Co.
One New York Plaza
New York, New York 10004
Attn: Elizabeth Groves
<PAGE>
EXHIBIT F
---------
WEEKS REALTY, L.P.
ALLOCATIONS
Section 1. Allocation of Net Income and Net Loss.
-------------------------------------
(a) Net Income. After giving effect to the special allocations set
----------
forth in Section 2 hereof, Net Income for any fiscal year or other
applicable period shall be allocated in the following manner and order of
priority:
(1) To the General Partner until the cumulative allocations of Net
Income under this Section 1(a)(1) equal the cumulative Net Losses
allocated to the General Partner under Section 1(b)(5) hereof.
(2) To those Partners who have received allocations of Net Loss under
Section 1(b)(4) hereof until the cumulative allocations of Net Income
under this Section 1(a)(2) equal such cumulative allocations of Net
Loss (such allocation of Net Income to be in proportion to the
cumulative allocations of Net Loss under such section to each such
Partner).
(3) To the Partners holding Preferred Partnership Units until the
cumulative allocations of Net Income under this Section 1(a)(3) equal
the cumulative allocations of Net Loss to such Partners under Section
1(b)(3) hereof (such allocation of Net Income being in proportion to
the cumulative allocations of Net Loss under such section to each such
Partner).
(4) To those Partners who have received allocations of Net Loss under
Section 1(b)(2) hereof until the cumulative allocations of Net Income
under this Section 1(a)(4) equal such cumulative allocations of Net
Loss (such allocation of Net Income to be in proportion to the
cumulative allocations of Net Loss under such section to each such
Partner).
(5) To the Partners until the cumulative allocations of Net Income
under this Section 1(a)(5) equal the cumulative allocations of Net
Loss to such Partners under Section 1(b)(1) hereof (such allocation of
Net Income to be in proportion to the cumulative allocations of Net
Loss under such section to each such Partner).
(6) To the holders of Series D Preferred Partnership Units until the
cumulative allocations of Net Income under this Section 1(a)(6) equal
the cumulative quarterly distributions that have accrued on such Units
for the current and all prior fiscal years under Section 3(a) and 3(b)
of Exhibit T (irrespective of whether such accrued
---------
<PAGE>
amounts have been paid to such holders or remain unpaid as of the time
such allocation is being made).
(7) Any remaining Net Income shall be allocated to the Partners who
hold Common Partnership Units in proportion to their respective
Percentage Interests as holders of Common Partnership Units.
(b) Net Losses. After giving effect to the special allocations set
-----------
forth in Section 2 hereof, Net Losses shall be allocated to the Partners as
follows:
(1) To the Partners who hold Common Partnership Units in accordance
with their respective Percentage Interests as holders of Common
Partnership Units, except as otherwise provided in this Section 1(b).
(2) To the extent that an allocation of Net Loss under Section
1(b)(1) would cause a Partner to have an Adjusted Capital Account
Deficit at the end of such taxable year (or increase any existing
Adjusted Capital Account Deficit of such Partner), such Net Loss shall
instead be allocated to those Partners who hold Common Partnership
Units, if any, for whom such allocation of Net Loss would not cause or
increase an Adjusted Capital Account Deficit. Solely for purposes of
this Section 1(b)(2), the Adjusted Capital Account Deficit, in the
case of those Partners who also hold Preferred Partnership Units,
shall be determined without regard to the amount credited to such
Partners' Capital Accounts for the aggregate Liquidation Preference
Amount attributable to such Preferred Partnership Units, and in the
case of a Principal or a Principal-Controlled Partnership, shall be
determined without regard to such Partner's deficit Capital Account
restoration obligation under Section 8.7(b) of the Partnership
Agreement. The Net Loss allocated under this Section 1(b)(2) shall be
allocated among the Partners who may receive such allocation in
proportion to their respective Percentage Interests in Common
Partnership Units.
(3) Any remaining Net Loss shall be allocated to the holders of
Preferred Partnership Units in accordance with their respective
Percentage Interests as holders of Preferred Partnership Units to the
extent that such allocation of Net Loss would not cause or increase an
Adjusted Capital Account Deficit of such Partners.
(4) Any remaining Net Loss shall be allocated to the Principals and
the Principal-Controlled Partnerships in accordance with their
respective Percentage Interests in Common Partnership Units; provided
--------
that if, after the death of a Principal, the estate of such Principal
----
or any Principal-Controlled Partnership with respect to such Principal
elects pursuant to Section 8.7(c) of the Partnership Agreement to
eliminate or reduce its deficit Capital Account restoration obligation
under Section 8.7(b) of the Partnership Agreement, Net Losses shall
not be allocated to such Partner to the extent that such allocation
would cause such Partner to have an Adjusted Capital Account Deficit
(or would increase any existing Adjusted
F-3
<PAGE>
Capital Account Deficit of such Partner) as of the end of such taxable
year, and instead shall be allocated to those Principals and
Principal-Controlled Partnerships as to whom the foregoing limitation
does not apply.
(5) Any remaining Net Loss shall be allocated to the General Partner.
(c) Definition of Liquidation Preference Amount. For purposes of this
-------------------------------------------
Exhibit F, the term "Liquidation Preference Amount" means, with respect to any
- ---------
Preferred Partnership Unit, the amount payable with respect to such Preferred
Partnership Unit (as established by the instrument designating such Preferred
Partnership Units) upon the voluntary or involuntary dissolution, liquidation or
winding up of the Partnership, as the case may be, other than accrued and unpaid
quarterly distributions in arrears.
Section 2. Special Allocations. Notwithstanding any provisions of paragraph 1
-------------------
of this Exhibit F, the following special allocations shall be made in the
---------
following order:
(a) Minimum Gain Chargeback (Nonrecourse Liabilities). If there is a net
-------------------------------------------------
decrease in Partnership Minimum Gain for any Partnership fiscal year (except as
a result of certain conversions or refinancings of Partnership indebtedness,
certain capital contributions, or certain revaluations of Property as further
outlined in Regulation Sections 1.704-2(d)(4), (f)(2) or (f)(3)), each Partner
shall be specially allocated items of Partnership income and gain for such year
(and, if necessary, subsequent years) in an amount equal to that Partner's share
of the net decrease in Partnership Minimum Gain. The items to be so allocated
shall be determined in accordance with Regulation Section 1.704-2(f). This
paragraph (a) is intended to comply with the minimum gain chargeback requirement
in said section of the Regulations and shall be interpreted consistently
therewith. Allocations pursuant to this paragraph (a) shall be made in
proportion to the respective amounts required to be allocated to each Partner
pursuant hereto.
(b) Minimum Gain Attributable to Partner Nonrecourse Debt. If there is a
-----------------------------------------------------
net decrease in Minimum Gain Attributable to Partner Nonrecourse Debt during any
fiscal year (other than due to the conversion, refinancing or other change in
the debt instrument causing it to become partially or wholly nonrecourse,
certain capital contributions, or certain revaluations of Property as further
outlined in Regulation Section 1.704-2(i)(4)), each Partner shall be specially
allocated items of Partnership income and gain for such year (and, if necessary,
subsequent years) in an amount equal to that Partner's share of the net decrease
in the Minimum Gain Attributable to Partner Nonrecourse Debt. The items to be
so allocated shall be determined in accordance with Regulation Sections 1.704-
2(i)(4) and (j)(2). This paragraph (b) is intended to comply with the minimum
gain chargeback requirement with respect to Partner Nonrecourse Debt contained
in said sections of the Regulations and shall be interpreted consistently
therewith. Allocations pursuant to this paragraph (b) shall be made in
proportion to the respective amounts required to be allocated to each Partner
pursuant hereto.
(c) Qualified Income Offset. In the event any Partner unexpectedly
-----------------------
receives any adjustments, allocations or distributions described in Regulation
Section 1.704-1(b)(2)(ii)(d)(4), (5), or (6), and such Partner has an Adjusted
- - - -
Capital Account Deficit, items of Partnership income and
F-4
<PAGE>
gain shall be specially allocated to such Partner in an amount and manner
sufficient to eliminate the Adjusted Capital Account Deficit as quickly as
possible. This paragraph (c) is intended to constitute a "qualified income
offset" under Regulation Section 1.704-1(b)(2)(ii)(d) and shall be interpreted
-
consistently therewith.
(d) Nonrecourse Deductions. Nonrecourse Deductions for any fiscal year or
----------------------
other applicable period shall be allocated to the Partners in accordance with
their respective Percentage Interests in Common Partnership Units.
(e) Partner Nonrecourse Deductions. Partner Nonrecourse Deductions for any
------------------------------
fiscal year or other applicable period shall be specially allocated to the
Partner that bears the economic risk of loss for the debt in respect of which
such Partner Nonrecourse Deductions are attributable (as determined under
Regulations Sections 1.704-2(b)(4) and (i)(1)).
(f) Curative Allocations. The Regulatory Allocations (as hereinafter
--------------------
defined) shall be taken into account in allocating other items of income, gain,
loss, and deduction among the Partners so that, to the extent possible, the
cumulative net amount of allocations of Partnership items under Sections 1 and 2
of this Exhibit F shall be equal to the net amount that would have been
---------
allocated to each Partner if the Regulatory Allocations had not occurred. This
paragraph (f) is intended to minimize, to the extent possible and to the extent
necessary, any economic distortions which may result from application of the
Regulatory Allocations and shall be interpreted in a manner consistent
therewith. For purposes hereof, "Regulatory Allocations" shall mean all the
allocations provided under this Section 2 other than paragraphs (f), (g), (h),
(i), (j) and (k).
(g) Priority Allocation With Respect To Preferred Partnership Units. All
---------------------------------------------------------------
or a portion of the remaining items of Partnership gross income or gain for the
Partnership fiscal year, if any, shall be specially allocated to the holders of
the outstanding Series A Preferred Partnership Units and Series C Preferred
Partnership Units (the "Preferred Unit Holders") in an amount equal to the
excess, if any, of the cumulative distributions received by the Preferred Unit
Holders pursuant to Section 6.2(i) of the Partnership Agreement, as amended, for
the current Partnership fiscal year and all prior Partnership fiscal years
(other than any distributions that are treated as being in satisfaction of the
Liquidation Preference Amount for any Preferred Partnership Units) over the
cumulative allocations of Partnership gross income and gain to the Preferred
Unit Holders under this Section 2(g) for all prior Partnership fiscal years.
Such allocations shall be made in proportion to relative excess amounts
determined for each such holder. Solely for purposes of making the required
allocation under this Section 2(g) in the fiscal year in which the Partnership
is liquidated, the amount of any accrued but unpaid distributions in arrears in
respect of the Preferred Partnership Units (determined in accordance with the
relevant provisions of Exhibit R and Exhibit S to the Partnership Agreement)
--------- ---------
shall be treated as having been distributed to the Preferred Unit Holders
immediately prior to such liquidation under Section 6.2(i) hereof.
(h) Special Additional Priority Allocations With Respect to Series C
----------------------------------------------------------------
Preferred Partnership Units. In addition to the priority allocations set forth
- ---------------------------
in paragraph (g), the following allocations shall be made only in the taxable
years as specified in this Section 2(h), and shall be made prior to making the
allocations in Section 2(g), and in the following priority:
F-5
<PAGE>
(A) Items of Partnership gross income or gain for the Partnership
fiscal year shall be specially allocated to the holder of the outstanding
Series C Preferred Partnership Units until the cumulative allocations under
this Section 2(h)(A) equal the difference between the aggregate Liquidation
Preference Amounts with respect to such Units and the amount contributed to
the Partnership with respect to such Units.
(B) If the Series C Preferred Partnership Units are redeemed pursuant
to Section 5(a) or 5(b) or put pursuant to Section 6 of Exhibit S to this
---------
Partnership Agreement, additional items of Partnership gross income or gain
for the Partnership fiscal year shall be specially allocated to the holder
of the redeemed Series C Preferred Partnership Units until such holder's
Capital Account balance equals (i) if the Series C Preferred Partnership
Units are redeemed pursuant to Section 5(b) or put pursuant to Section 6,
the Liquidation Preference Amount, plus the amount of any accrued but
unpaid quarterly distributions (the "Target Balance"), and (ii) if the
Series C Preferred Partnership Units are redeemed pursuant to Section 5(a),
the sum of (X) the Target Balance, plus (Y) if the AEW Warrant has not been
exercised on or before the Expiration Date of the AEW Warrant (as defined
therein), the Target Balance with respect to the Series C Preferred
Partnership Units redeemed, multiplied by the following applicable
percentage based on the time of redemption of such Units:
Redemption on or after November 6, Percentage
---------------------------------- ----------
2003 4%
2004 3%
2005 2%
2006 1%
2007 0%
(C) If the Series C Preferred Partnership Units are redeemed pursuant
to Section 5(c) of Exhibit S to this Partnership Agreement, additional
---------
items of Partnership gross income or gain for the Partnership fiscal year
shall be specially allocated to the holder of the redeemed Series C
Preferred Partnership Units until such holder's Capital Account balance
equals the sum of (i) the Target Balance, plus (ii) the Target Balance with
respect to the Series C Preferred Partnership Units redeemed, multiplied by
the following applicable percentage based on the time of redemption of such
Units:
Redemption on or after November 6, Percentage
---------------------------------- ----------
1998 10%
1999 9%
2000 8%
2001 7%
F-6
<PAGE>
2002 6%
(D) The priority allocations provided by this paragraph (h) shall
only be made with respect to: (i) any fiscal year, or portion thereof, in
which a Redemption Date or Exchange Date falls (as defined in Exhibit S to
---------
this Partnership Agreement); (ii) solely with respect to the allocation
provided by paragraph (h)(A) above, the fiscal year in which the
partnership interest of a holder of Series C Preferred Partnership Units is
"liquidated" within the meaning of Regulations Section 1.704-
1(b)(2)(ii)(g); and (iii) any fiscal year immediately prior to any of the
fiscal years referenced in clauses (i) and (ii) to the extent that the
Exchange Date, the Redemption Date or liquidating distributions occur on or
before the due date (not including extensions) for filing the Partnership's
federal income tax return for such prior fiscal year.
(i) Special Additional Priority Allocation of Gross Income With Respect to
----------------------------------------------------------------------
Series D Preferred Partnership Units. Prior to making the priority allocation
- ------------------------------------
in Section 2(g) hereof, in the event that the Series D Preferred Partnership
Units are redeemed under Sections 5(a) or 6(f) of Exhibit T, the holder shall be
---------
allocated items of Partnership gross income and gain for the Partnership fiscal
year in which such redemption or exchange occurs until the holder's Capital
Account balance equals the sum of the Liquidation Preference Amount of such
Units plus the amount of any accrued but unpaid quarterly distributions with
respect to such Units as of the date of such redemption or exchange.
(j) Priority Rule if More Than One Class of Preferred Partnership Units is
----------------------------------------------------------------------
Redeemed in a Fiscal Year. In the event that units of more than one class of
- -------------------------
Preferred Partnership Units are redeemed in a fiscal year, and there is
insufficient Partnership gross income and gain for such fiscal year (or portion
thereof) to make all of the required gross income allocations provided in
Sections 2(h) and (i) hereof, then the available gross income and gain shall be
allocated pari passu to the holders of each such class of Units in proportion to
the amounts of gross income and gain they would otherwise have been allocated
under such Sections.
(k) Allocation of Nonrecourse Liabilities. The "excess nonrecourse
-------------------------------------
liabilities" of the Partnership (as defined in Regulations Section 1.752-
3(a)(3)) shall be allocated among the Partners in proportion to their respective
interests in Common Partnership Units.
Section 3. Tax Allocations.
----------------
(a) Generally. Subject to paragraphs (b) and (c) hereof, items of income,
---------
gain, loss, deduction and credit to be allocated for income tax purposes
(collectively, "Tax Items") shall be allocated among the Partners on the same
basis as their respective book items.
F-7
<PAGE>
(b) Sections 1245/1250 Recapture. If any portion of gain from the sale of
----------------------------
property is treated as gain which is ordinary income by virtue of the
application of Code Sections 1245 or 1250 ("Affected Gain"), then (A) such
Affected Gain shall be allocated among the Partners in the same proportion that
the depreciation and amortization deductions giving rise to the Affected Gain
were allocated and (B) other Tax Items of gain of the same character that would
have been recognized, but for the application of Code Sections 1245 and/or 1250,
shall be allocated away from those Partners who are allocated Affected Gain
pursuant to Clause (A) so that, to the extent possible, the other Partners are
allocated the same amount, and type, of capital gain that would have been
allocated to them had Code Sections 1245 and/or 1250 not applied. For purposes
hereof, in order to determine the proportionate allocations of depreciation and
amortization deductions for each fiscal year or other applicable period, such
deductions shall be deemed allocated on the same basis as Net Income and Net
Loss for such respective period.
(c) Allocations Respecting Section 704(c) and Revaluations.
------------------------------------------------------
Notwithstanding paragraph (b) hereof, Tax Items with respect to Property that is
subject to Code Section 704(c) and/or Regulation Section 1.704-1(b)(2)(iv)(f)
-
(collectively "Section 704(c) Tax Items") shall be allocated in accordance with
said Code section and/or Regulation Section 1.704-1(b)(4)(i), as the case may
be. Specifically, the allocation of all Section 704(c) Tax Items shall be made
in accordance with the "traditional method" set forth in Regulation Section
1.704-3(b)(1) and thus shall be subject to the ceiling rule stated in said
section of the Regulations.
(d) Return of Capital Determination. For purposes of computing the return
-------------------------------
on the capital of the holder of Series C Preferred Partnership Units, the
capital of a holder of the Series C Preferred Partnership Units attributable to
each such Unit shall be treated as returned (x) when the Unit is redeemed by the
Partnership or (y) to the extent that the Partnership has distributed with
respect to such Unit an amount that exceeds the cumulative quarterly
distributions accrued thereon, plus the difference between $25 and the amount
contributed to the Partnership with respect to such Unit. Such return of capital
determination is solely for the internal tax accounting purposes of the holders
of the Series C Preferred Partnership Units and shall not in any way affect the
distributions to the Partners under this Partnership Agreement or the
allocations of Net Income, Net Loss and other items under this Exhibit F.
---------
F-8
<PAGE>
EXHIBIT T
---------
WEEKS REALTY, L.P.
DESIGNATION OF THE VOTING POWERS, DESIGNATION, PREFERENCES AND RELATIVE,
PARTICIPATING, OPTIONAL OR OTHER SPECIAL RIGHTS AND QUALIFICATIONS, LIMITATIONS
OR RESTRICTIONS
The following are the terms of the Series D Preferred Partnership Units
established pursuant to this Amendment:
8. NUMBER. The maximum number of authorized units of the Series D
Preferred Partnership Units shall be 2,600,000.
9. RELATIVE SENIORITY. In respect of rights to receive distributions (as
provided in Section 3 below), the Series D Preferred Partnership Units shall
rank (a) senior to any class or series of Partnership Units of the Partnership
ranking, as to the payment of distributions, junior to the Series D Preferred
Partnership Units (collectively, "Junior Partnership Units"), and (b) on a
parity with any class or series of Partnership Units of the Partnership if the
holders of such class or series of Partnership Units and the Series D Preferred
Partnership Units shall be entitled to the receipt of distributions and of
amounts distributable upon liquidation, dissolution or winding up (taking into
account the effects of allocations of Net Income, Net Losses and other items) in
proportion to their respective amounts of accrued and unpaid distributions per
unit or liquidation preferences, without preference or priority one over the
other, whether or not the distribution rates, distribution payment dates,
liquidation preferences or redemption prices per unit thereof are different from
those of the Series D Preferred Partnership Units (collectively, "Parity
Partnership Units"). The Series A Preferred Partnership Units, the Series C
Preferred Partnership Units and the Series D Preferred Partnership Units are
Parity Partnership Units with each other, and all Common Partnership Units shall
rank junior to Preferred Partnership Units as to rights to receive distributions
and rights upon liquidation, dissolution or winding up of the Partnership. Upon
liquidation, dissolution or winding up of the Partnership, the holders of the
Series A Preferred Partnership Units, Series C Preferred Partnership Units and
Series D Preferred Partnership Units shall be entitled to such distributions as
are provided in Section 8.2 of this Partnership Agreement, taking into account
the required allocations of Net Income, Net Losses and other items to the
Partners as provided in Exhibit F to this Partnership Agreement. Nothing
---------
contained in Exhibit F or Exhibit T to this Partnership Agreement shall prohibit
--------- ---------
the Partnership from issuing additional Partnership Units which are Parity
Partnership Units with the Series D Preferred Partnership Units.
10. QUARTERLY DISTRIBUTIONS.
(a) The holder of the then outstanding Series D Preferred Partnership
Units shall be entitled to receive, when, as and if declared by the General
Partner out of funds legally available therefor, cumulative distributions
at the rate of $2.15625 per unit per year, payable
T-1
<PAGE>
in equal amounts of $.5390625 per unit (plus the amount of any accrued but
unpaid distributions from prior periods) quarterly in cash on the last day
of each January, April, July and October or, if not a Business Day (as
hereinafter defined), the next succeeding Business Day, except that if such
Business Day falls in the next calendar year, such payment will be made on
the immediately preceding Business Day, in each case with the same force
and effect as if made on such date. Quarterly distributions shall begin to
accrue and shall be fully cumulative from the first date on which the
pertinent units of the Series D Preferred Partnership Units are issued and
sold and shall first be payable on January 31, 1999 (each such payment date
being hereafter called a "Quarterly Distribution Date" and each period
ending on a Quarterly Distribution Date being hereinafter called a
"Quarterly Distribution Period"). Quarterly distributions shall be payable
to the holder of record as it appears in the records of the Partnership at
the close of business on the applicable record date (the "Record Date"),
which shall be the 15th day of the calendar month in which the applicable
Quarterly Distribution Date falls on (or the preceding month if the
Quarterly Distribution Date has been moved because the last day of January,
April, July or October is not a Business Day) or such other date designated
by the General Partner for the payment of quarterly distributions that is
not more than 50 nor less than 10 days prior to such Quarterly Distribution
Date. The amount of any quarterly distribution payable for any Quarterly
Distribution Period shorter than a full Quarterly Distribution Period shall
be prorated and computed on the basis of the actual number of days in such
period on the basis of a 360-day year of twelve 30-day months. Quarterly
distributions paid on the Series D Preferred Partnership Units in an amount
less than the total amount of such quarterly distributions at the time
accrued and payable on such units shall be allocated pro rata on a per unit
basis among all such units at the time outstanding.
"Business Day" shall mean any day, other than a Saturday or
Sunday, that is neither a legal holiday nor a day on which banking
institutions in New York, New York or Atlanta, Georgia are authorized or
required by law, regulation or executive order to close.
(b) The amount of any quarterly distributions accrued on any Series D
Preferred Partnership Units at any Quarterly Distribution Date shall be the
amount of any unpaid quarterly distributions accumulated thereon, to and
including such Quarterly Distribution Date, whether or not earned or
declared. The amount of quarterly distributions accrued on any Series D
Preferred Partnership Units at any date other than a Quarterly Distribution
Date shall be equal to the sum of the amount of any unpaid quarterly
distributions accumulated thereon, to and including the last preceding
Quarterly Distribution Date, whether or not earned or declared, plus an
amount calculated on the basis of the quarterly distribution rate of
$.5390625 per unit for the period after such last preceding Quarterly
Distribution Date to and including the date as of which the calculation is
made based on the actual number of days in such period on the basis of a
360-day year of twelve 30-day months.
(c) Except as provided herein, the Series D Preferred Partnership
Units will not be entitled to any quarterly distributions in excess of full
cumulative quarterly distributions as described above and shall not be
entitled to participate in the earnings or assets of the
T-2
<PAGE>
Partnership, and no interest, or sum of money in lieu of interest, shall be
payable in respect of any quarterly distribution payment or payments on the
Series D Preferred Partnership Units which may be in arrears, except as
otherwise provided herein.
(d) Any quarterly distribution payment made on the Series D Preferred
Partnership Units shall first be credited against the earliest accrued but
unpaid distribution due with respect to such units which remains payable.
(e) No quarterly distributions on the Series D Preferred Partnership
Units shall be authorized by the General Partner or be paid or set apart
for payment by the Partnership at such time as the terms and provisions of
any agreement of the Partnership, including any agreement relating to its
indebtedness, prohibit such authorization, payment or setting apart for
payment or provide that such authorization, payment or setting apart for
payment would constitute a breach thereof or a default thereunder, or if
such authorization or payment shall be restricted or prohibited by law.
Notwithstanding the foregoing, quarterly distributions on the Series D
Preferred Partnership Units will accrue whether or not the Partnership has
earnings, whether or not there are funds legally available for the payment
of such quarterly distributions and whether or not such quarterly
distributions are authorized.
(f) So long as any Series D Preferred Partnership Units remain
outstanding, no distributions, except as described in the immediately
following sentence, shall be declared or paid or set apart for payment on
any class or series of Parity Partnership Units for any period unless full
cumulative quarterly distributions have been or contemporaneously are
declared and paid or declared and a sum sufficient for the payment thereof
set apart for such payment on the Series D Preferred Partnership Units for
all Quarterly Distribution Periods terminating on or prior to the
distribution payment date for such class or series of Parity Partnership
Units. When quarterly distributions are not paid in full or a sum
sufficient for such payment is not set apart, as aforesaid, all
distributions declared upon Series D Preferred Partnership Units and all
distributions declared upon any other class or series of Parity Partnership
Units shall be declared ratably in proportion to the respective amounts of
distributions accumulated and unpaid on the Series D Preferred Partnership
Units and accumulated and unpaid on such Parity Partnership Units.
(g) So long as any Series D Preferred Partnership Units remain
outstanding, no distributions (other than distributions paid solely in
units of, or options, warrants or rights to subscribe for or purchase,
Junior Units) shall be declared or paid or set apart for payment or other
distribution declared or made upon Junior Units, nor shall any Junior Units
be redeemed, purchased or otherwise acquired (other than a redemption,
purchase or other acquisition of Common Units made for purposes of any
employee incentive or benefit plan of the Partnership or any subsidiary)
for any consideration (or any monies be paid to or made available for a
sinking fund for the redemption of any such units) by the Partnership,
directly or indirectly (except by conversion into or exchange for Junior
Units), unless in each case the full cumulative quarterly distributions on
all outstanding Series D Preferred Partnership Units shall have been or
contemporaneously are declared and paid or declared and set apart
T-3
<PAGE>
for payment for all past Quarterly Distribution Periods with respect to the
Series D Preferred Partnership Units.
11. LIQUIDATION RIGHTS.
(a) Upon the voluntary or involuntary liquidation, dissolution or
winding up of the Partnership, the holder of the Series D Preferred
Partnership Units then outstanding shall be entitled to receive and to be
paid out of the assets of the Partnership available for distribution to its
Partners, before any payment or distribution shall be made on any Junior
Units, the amount of $25.00 per unit, plus accrued and unpaid quarterly
distributions thereon; provided, however, that in no event shall such
amount exceed such holder's Capital Account balance on the date of such
distribution.
(b) Neither a consolidation nor a merger of any other entity into or
with the Partnership or Weeks, nor a statutory share exchange by Weeks
shall be deemed to be a dissolution, liquidation or winding up, voluntary
or involuntary, for the purposes hereof. A sale, transfer or conveyance of
all or substantially all of the property or business of the Partnership
shall be deemed to be a dissolution, liquidation or winding up for the
purposes hereof.
12. REDEMPTION.
(a) OPTIONAL REDEMPTION. On and after November 12, 2003, the
Partnership may, at its option, redeem at any time all, but not part, of
the Series D Preferred Partnership Units at a price per unit equal to the
Redemption Price. For purposes of this Section 5(a), the "Redemption
Price" shall equal the portion of the Capital Account balance of the holder
of such Units attributable to such Units, as determined after taking into
account all contributions and distributions through and including the date
fixed for redemption (the "Redemption Date"), as well as all allocations of
Net Income, Net Losses and other items to such holder with respect to the
portion of the fiscal year ending on the Redemption Date. The Redemption
Price shall be paid to the holder of the Series D Preferred Partnership
Units in cash.
(b) PROCEDURES OF REDEMPTION.
(1) Notice of redemption will be mailed by the Partnership to
the holder of the Series D Preferred Partnership Units to be redeemed
not less than 30 days nor more than 60 days prior to the Redemption
Date at the address set forth in the Partnership's records. Any notice
mailed in the manner provided herein shall be conclusively presumed to
have been given on the date mailed whether or not the holder received
the notice. In addition to any information required by law, such
notice shall state: (a) the Redemption Date; (b) the Redemption Price;
and (c) that distributions on the units to be redeemed will cease to
accumulate on the Redemption Date.
T-4
<PAGE>
(2) If notice has been mailed in accordance with subparagraph
(1) above and provided that on or before the Redemption Date specified
in such notice all funds necessary for such redemption shall have been
irrevocably set aside by the Partnership, separate and apart from its
other funds in trust for the benefit of the holder of the Series D
Preferred Partnership Units so called for redemption, so as to be, and
to continue to be available therefor, then, from and after the
Redemption Date, distributions on the Series D Preferred Partnership
Units so called for redemption shall cease to accumulate, and said
units shall no longer be deemed to be outstanding and shall not have
the status of Series D Preferred Partnership Units and all rights of
the holder thereof as a partner of the Partnership (except the right
to receive the Redemption Price) shall cease. Upon surrender, in
accordance with such notice, of the Series D Preferred Partnership
Units so redeemed, such Series D Preferred Partnership Units shall be
redeemed by the Partnership at the Redemption Price.
(3) Any funds deposited with a bank or trust company for the
purpose of redeeming Series D Preferred Partnership Units shall be
irrevocably deposited except that:
(i) the Partnership shall be entitled to receive from such
bank or trust company the interest or other earnings, if any,
earned on any money so deposited in trust, and the holder of any
Series D Preferred Partnership Units redeemed shall have no claim
to such interest or other earnings; and
(ii) any balance of monies so deposited by the Partnership
and unclaimed by the holder of the Series D Preferred Partnership
Units entitled thereto at the expiration of two years from the
applicable Redemption Date shall be repaid, together with any
interest or other earnings earned thereon, to the Partnership,
and after any such repayment, the holder of the units entitled to
the funds so repaid to the Partnership shall look only to the
Partnership for payment without interest or other earnings.
(4) Except as otherwise provided herein, unless full accumulated
distributions on all Series D Preferred Partnership Units and any
other class or series of Parity Partnership Units shall have been or
contemporaneously are declared and paid or declared and a sum
sufficient for the payment thereof set apart for payment for all past
Quarterly Distribution Periods and the then current Quarterly
Distribution Period, no Series D Preferred Partnership Units or Parity
Partnership Units shall be redeemed or purchased or otherwise acquired
directly or indirectly.
(5) If the Redemption Date is after a Record Date and before the
related Quarterly Distribution Date, the distribution payable on such
Quarterly Distribution Date shall be paid on the Redemption Date to
the holder in whose name the Series
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<PAGE>
D Preferred Partnership Units to be redeemed are registered at the
close of business on such Record Date notwithstanding the redemption
thereof between such Record Date and the related Quarterly
Distribution Date.
13. EXCHANGE RIGHTS.
(a) OPTIONAL EXCHANGE AFTER NOVEMBER 12, 2008. On and after November
12, 2008, the holder of the Series D Preferred Partnership Units shall have
the right, at its option, to exchange (the "Exchange Right") at any time
all, but not part, of the Series D Preferred Partnership Units at the rate
(the "Share Exchange Rate") of one Series D Preferred Partnership Unit for
one share of Series D Preferred Stock, subject to certain adjustments
below.
(b) OPTIONAL EXCHANGE FOLLOWING CERTAIN EVENTS. At any time (i)
after full distributions have not have been timely made on the Series D
Preferred Partnership Units with respect to six prior Quarterly
Distribution Periods, whether or not consecutive (provided that a
distribution in respect of the Series D Preferred Partnership Units shall
be considered timely made if made within two Business Days after the
applicable Quarterly Distribution Date if at the time of such late payment
there shall not be any prior Quarterly Distribution Periods in respect of
which full distributions were not timely made), (ii) upon receipt by the
holder of the Series D Preferred Partnership Units of (A) notice from the
General Partner that the General Partner has taken the position that the
Partnership is, or upon the consummation of an identified event in the
immediate future will be, a "Publicly Traded Partnership" within the
meaning of Section 7704 of the Code (a "PTP"), and (B) an opinion rendered
by independent legal counsel familiar with such matters addressed to the
holder of the Series D Preferred Partnership Units, that the Partnership is
or likely is, or upon the occurrence of a defined event in the immediate
future will be or likely will be, a PTP, or (iii) prior to November 12,
2008, if the Partnership shall effect or consummate a consolidation with or
a merger of the Partnership with or into another entity, and the surviving
entity is not taxed as a partnership for federal income tax purposes, the
holder of the Series D Preferred Partnership Units shall have the right, at
its option, to exercise its Exchange Right at any time for all, but not
part, of the Series D Preferred Partnership Units at the Share Exchange
Rate, subject to certain adjustments below.
(c) OPTIONAL EXCHANGE AFTER NOVEMBER 12, 2001 AND PRIOR TO NOVEMBER
12, 2008. If on and after November 12, 2001 and prior to November 12,
2008, the holder of the Series D Preferred Partnership Units shall deliver
to the General Partner either (A) a private ruling letter addressed to the
holder of the Series D Preferred Partnership Units or (B) an opinion of
independent legal counsel based on the enactment of temporary or final
Treasury Regulations or the publication of a Revenue Ruling, in either case
to the effect that the ability to exchange the Series D Preferred
Partnership Units would not cause the Series D Preferred Partnership Units
to be considered "stocks and securities" within the meaning of Section
351(e) of the Code for purposes of determining whether the holder of the
Series D Preferred Partnership Units is an "investment company" under
Section 721(b) of
T-6
<PAGE>
the Code if an exchange is permitted at such earlier date, the holder of
the Series D Preferred Partnership Units shall have the right, at its
option exercisable at any time after such private letter ruling or legal
opinion has been delivered, to exercise its Exchange Right for all, but not
part, of the Series D Preferred Partnership Units at the Share Exchange
Rate, subject to certain adjustments below.
(d) OPTIONAL EXCHANGE FOLLOWING OWNERSHIP OF EXCESS PARTNERSHIP
INTEREST. If the holder of the Series D Preferred Partnership Units
determines, in the reasonable judgment of such holder, that based on
results or projected results there exists an imminent and substantial risk
that such holder's interest in the Partnership represents or will represent
more than 19.5% of the total profits or capital interests in the
Partnership for a taxable year, determined in accordance with Treasury
Regulations Section 1.731-2(e)(4) (the "19.5% Limit"), the holder of the
Series D Preferred Partnership Units shall have the right, at its option,
to exercise its Exchange Right for such number of the Series D Preferred
Partnership Units which are in excess of the 19.5% Limit, at the Share
Exchange Rate, subject to certain adjustments below.
(e) PROCEDURES OF EXCHANGE RIGHT.
(1) The Exchange Right shall terminate at the close of business
on (i) the Redemption Date set pursuant to Section 5 hereof, or (ii)
if the Partnership shall so elect and state in the notice of
redemption, the date on which the Partnership irrevocably deposits
with a designated bank or trust company money sufficient to pay, on
the Redemption Date, the Redemption Price (as defined in Section 6(f)
below) unless the Partnership shall default in making payment of the
amount payable upon such redemption.
(2) In order to exercise the Exchange Right, the holder of the
Series D Preferred Partnership Units shall mail notice of the exercise
of such right to the Partnership not less than 30 days nor more than
60 days prior to the Exchange Date and shall surrender to the
Partnership the units to be exchanged on the Exchange Date. If the
Exchange Date is after a Record Date and before the related Quarterly
Distribution Date, the distribution payable on such Quarterly
Distribution Date shall be paid on the Exchange Date to the holder in
whose name the Series D Preferred Partnership Units to be exchanged
are registered at the close of business on such Record Date
notwithstanding the exchange thereof between such Record Date and the
related Quarterly Distribution Date.
(3) The Share Exchange Rate shall be adjusted from time to time
as follows:
(i) In case Weeks shall (A) pay an extraordinary dividend
or make an extraordinary distribution on its Series D Preferred
Stock in shares of its Series D Preferred Stock, (B) subdivide or
split its
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<PAGE>
outstanding Series D Preferred Stock into a greater number of
shares, (C) combine its outstanding Series D Preferred Stock into
a smaller number of shares or (D) issue any shares of capital
stock by reclassification of its Series D Preferred Stock, the
Share Exchange Rate in effect immediately prior thereto shall be
adjusted so that the holder of any Series D Preferred Partnership
Units thereafter surrendered for exchange shall be entitled to
receive the number of shares of Series D Preferred Stock which
such holder would have owned or have been entitled to receive
after the occurrence of any of the events described above had
such units been surrendered for exchange immediately prior to the
occurrence of such event or the record date therefor, whichever
is earlier. An adjustment made pursuant to this clause (i) shall
become effective immediately after the close of business on the
record date for determination of shareholders entitled to receive
such extraordinary dividend or extraordinary distribution in the
case of an extraordinary dividend or extraordinary distribution
(except as provided in subparagraph (6) below) and shall become
effective immediately after the close of business on the
effective date in the case of a subdivision, split, combination
or reclassification.
(ii) No adjustment in the Share Exchange Rate shall be
required unless such adjustment would require an increase or
decrease of at least 1%; provided, however, that any adjustments
-------- -------
which by reason of this subparagraph (ii) are not required to be
made shall be carried forward and taken into account in any
subsequent adjustment. All calculations under this subparagraph
(3) shall be made to the nearest 1/100th of a share (with .005 of
a share being rounded upward).
(4) In any case in which subparagraph (3) above provides that
an adjustment shall become effective immediately after a record date
for an event and the date fixed for exchange occurs after such record
date but before the occurrence of such event, the Partnership may
defer until the actual occurrence of such event (i) issuing to the
holder of the Series D Preferred Partnership Units surrendered for
exchange the additional shares of Series D Preferred Stock issuable
upon such exchange by reason of the adjustment required by such event
over and above the Series D Preferred Stock issuable upon such
exchange before giving effect to such adjustment and (ii) paying to
such holder any amount in cash in lieu of any fraction pursuant to
Section 12.
(5) There shall be no adjustment of the Share Exchange Rate in
case of the issuance of any stock of Weeks in a reorganization,
acquisition, stock sale or other similar transaction except as
specifically set forth in Section 11. If any action or transaction
would require adjustment of the Share Exchange Rate pursuant to more
than one provision, only one adjustment shall be made and such
adjustment shall be the amount of adjustment which has the highest
absolute value.
T-8
<PAGE>
(6) Subject to the provisions of Section 12(a), Weeks shall not
take any action which results in adjustment of the number of shares of
Series D Preferred Stock issuable upon exchange of Series D Preferred
Partnership Units if the total number of shares of Series D Preferred
Stock issuable after such action upon exchange of the Series D
Preferred Partnership Units then outstanding, together with the total
number of shares of Series D Preferred Stock then outstanding, would
exceed the total number of shares of Series D Preferred Stock then
authorized under the Articles of Incorporation. Subject to the
foregoing, Weeks shall take all such actions as it may deem reasonable
under the circumstances to provide for the issuance of such number of
shares of Series D Preferred Stock as would be necessary to allow for
the exchange from time to time, and taking into account adjustments as
herein provided, of the outstanding Series D Preferred Partnership
Units in accordance with the terms and provisions of the Articles of
Incorporation.
(f) REDEMPTION RIGHT OF PARTNERSHIP. Notwithstanding anything to the
contrary contained in Sections 6(a), (b), (c) or (d), the Partnership may,
at its option, after receipt of notice from the holder of the Series D
Preferred Partnership Units that it has exercised its Exchange Right,
redeem all, but not part (or, in the case of Section 6(d), such number of
Units that are in excess of the 19.5% Limit), of the Series D Preferred
Partnership Units at a price per unit equal to the Redemption Price. In
such event, the Redemption Price shall be paid to the holder of the Series
D Preferred Partnership Units in cash on the Exchange Date. For purposes
of this Section 6(f), the "Redemption Price" shall equal the portion of the
Capital Account balance of the holder of such Units attributable to such
Units, as determined after taking into account all contributions and
distributions through and including the date fixed for redemption, as well
as all allocations of Net Income, Net Losses and other items to such holder
with respect to the portion of the fiscal year ending on the date of such
redemption.
14. VOTING RIGHTS. Except as required by law, the holder of the Series D
Preferred Partnership Units shall not be entitled to vote at any meeting of the
Partners or for any other purpose or otherwise to participate in any action
taken by the Partnership or the Partners, or to receive notice of any meeting of
the Partners; provided, however that so long as the Series D Preferred
Partnership Units remain outstanding, the Partnership will not, without the
affirmative vote or consent of the holder of the Series D Preferred Partnership
Units, (i) authorize or create a class or series of Partnership Units ranking
prior to the Series D Preferred Partnership Units, as to the payment of
distributions or as to the distribution of assets upon liquidation, dissolution
or winding up (taking into account the effects of allocations of Net Income, Net
Losses and other items), (ii) amend, alter or repeal the provisions of the
Partnership Agreement so as to materially and adversely affect any right,
preference, privilege or voting power of the Series D Preferred Partnership
Units (provided that the amendment of the provisions of the Partnership
Agreement so as to authorize or create or to increase the authorized amount of
any class of Units that are not senior in any respect to the Series D Preferred
Partnership Units, or any Parity Partnership Units, shall not be deemed to
adversely affect the rights, preferences, privileges or voting power of the
Series D Preferred
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<PAGE>
Partnership Units); or (iii) except for a consolidation or merger set forth in
Section 6(b)(iii) hereof, effect or consummate a consolidation with or a merger
of the Partnership with or into another entity, unless each Series D Preferred
Partnership Unit (x) shall remain outstanding without a material and adverse
change to its terms and rights or (y) shall be converted into or exchanged for
preferred units of the surviving entity having preferences, voting powers,
restrictions, limitations as to distributions, qualifications and terms or
conditions of redemption thereof identical to that of a Series D Preferred
Partnership Unit (except for changes that do not materially and adversely affect
the holder of Series D Preferred Partnership Units). The foregoing voting
provisions will not apply if, at or prior to the time when the act with respect
to which such vote would otherwise be required shall be effected, all
outstanding Series D Preferred Partnership Units shall have been redeemed or
called for redemption pursuant to Section 5 hereof and sufficient funds shall
have been deposited in trust to effect such redemption.
15. CONVERSION. Except as otherwise set forth herein, the Series D
Preferred Partnership Units are not convertible into or exchangeable for any
other property or securities of the Partnership.
16. NO MATURITY. The Series D Preferred Partnership Units shall have no
stated maturity and will not be subject to any sinking fund or mandatory
redemption provisions.
17. RESTRICTIONS ON TRANSFER. The Series D Preferred Partnership Units
may only be transferred in whole and not in part. The Series D Preferred
Partnership Units are subject to the transfer restrictions set forth in Article
IX of the Partnership Agreement; provided, however, that if the holder of the
Series D Preferred Partnership Units determines, in the reasonable judgment of
such holder, that based on results or projected results, there exists an
imminent and substantial risk that such holder's interest in the Partnership
represents or will represent more than the 19.5% Limit, then such holder shall
be permitted to transfer its Series D Preferred Partnership Units without the
prior consent of the General Partner. For this purpose, no Restricted Period
shall apply with respect to the Series D Preferred Partnership Units, and the
"Rights" applicable shall be the Exchange Right and the other provisions of
Section 6 hereof.
18. PROVISIONS IN CASE OF CONSOLIDATION, MERGER OR SALE OF ASSETS. In
case of any consolidation of Weeks with, or merger of Weeks into, any other
Person, any merger or consolidation of another Person into Weeks (other than a
merger that does not result in any reclassification, conversion, exchange or
cancellation of outstanding shares of Series D Preferred Stock), any acquisition
of the outstanding Common Stock by share exchange, or any sale or transfer of
all or substantially all of the assets of Weeks, the Person formed by such
consolidation or resulting from such merger or that acquires the outstanding
Common Stock or such assets of Weeks as the case may be, shall execute and
deliver to the holder of Series D Preferred Partnership Units an agreement
providing that such holder shall have the rights provided herein, during the
period such rights shall be exercisable (which shall be at least as long as the
period for which such rights can be exercised pursuant to the terms hereof), to
exercise such rights for the kind and amount of securities, cash and other
property receivable upon such consolidation, merger, share exchange, sale or
transfer by a holder of the number of shares of Series D Preferred Stock for
which such rights
T-10
<PAGE>
might have been exercised immediately prior to such consolidation, merger, share
exchange, sale or transfer, assuming both that (a) such holder is not a Person
with which Weeks consolidated or into which Weeks merged or that merged into
Weeks, or that acquired the outstanding Common Stock by share exchange, or to
which such sale or transfer was made, as the case may be (a "Constituent
Person"), or an Affiliate of a Constituent Person, and that (b) such holder does
not exercise his right of election, if any, as to the kind or amount of
securities, cash or other property receivable upon such consolidation, merger,
share exchange, sale or transfer (provided that if the kind or amount of
securities, cash and other property receivable upon such consolidation, merger,
share exchange, sale or transfer is not the same for each share of capital stock
in respect of which such right of election, if any, is not exercised ("non-
electing Share"), then for the purpose of this Section 11, the kind and amount
of securities, cash and other property receivable upon such consolidation,
merger, share exchange, sale or transfer by each non-electing Share shall be
deemed to be the kind and amount so receivable per non-electing Share by a
plurality of the non-electing Shares). Such agreement shall provide for
adjustments that, for events subsequent to the effective date of such agreement,
shall be as nearly equivalent as may be practicable to the adjustments provided
for herein.
19. GENERAL.
(a) All shares of Series D Preferred Stock delivered upon exchange of
the Series D Preferred Partnership Units will upon delivery be duly and
validly issued and fully paid and nonassessable. Weeks covenants that it
will at all times reserve and keep available, free from preemptive rights,
out of the aggregate of its authorized but unissued shares of Series D
Preferred Stock for the purpose of effecting the exchange of the Series D
Preferred Partnership Units, the full number of shares of Series D
Preferred Stock deliverable upon the exchange of all outstanding shares of
Series D Preferred Partnership Units.
(b) In connection with the exchange of any Series D Preferred
Partnership Units, fractions of such units may be converted; however, no
fractional shares or scrip representing fractions of shares of Series D
Preferred Stock shall be issued upon exchange of the Series D Preferred
Partnership Units. Instead of any fractional interest in a share of Series
D Preferred Stock which would otherwise be deliverable upon the exchange or
redemption of a share of Series D Preferred Partnership Units (or fraction
thereof), the Partnership shall pay to the holder of such unit an amount in
cash (computed to the nearest cent) equal to $25.00 multiplied by the
fraction of a share of Series D Preferred Stock represented by such
fractional interest
(c) Neither the General Partner nor the Partnership shall have any
obligation or authority to exchange any Series D Preferred Partnership
Units to the extent that issuance of shares of Series D Preferred Stock
would result (i) in the violation of the General Ownership Limit (as such
term is defined in the Articles of Incorporation), (ii) would cause Weeks
to fail the stock ownership test of Section 856(a)(6) of the Code, or (iii)
would otherwise cause Weeks to fail to qualify as a REIT; provided that in
any such case, the General Partner or the Partnership shall purchase for
cash those Series D Preferred Partnership Units which may not be exchanged
with shares of Series D Preferred Stock.
T-11
<PAGE>
Each holder shall provide to the General Partner such information as the
General Partner may request regarding such holder's actual and constructive
ownership of Common Stock and Preferred Stock (and of individuals, and
entities related to such holder) in order for the General Partner to
determine, in its sole discretion, whether an exchange of the Series D
Preferred Partnership Units for shares of Series D Preferred Stock would
result in a violation of such restrictions.
(d) To the extent the Partnership issues shares of Series D Preferred
Stock, it shall obtain the necessary shares of Series D Preferred Stock in
exchange for the issuance of additional Partnership Interests to the
General Partner, Weeks LP Holdings, or any combination thereof, as
determined by the General Partner in its sole discretion, and the General
Partner and/or Weeks LP Holdings may obtain the necessary shares of Series
D Preferred Stock from Weeks.
(e) Notwithstanding anything herein to the contrary, the General
Partner, Weeks LP Holdings or any combination thereof (an "Assumer" or,
collectively, the "Assumers") may, in the sole and absolute discretion of
the General Partner, assume directly and satisfy the exercise of a
redemption or exchange right by paying the holder of Series D Preferred
Partnership Units the Redemption Price or Exchange Price, as applicable.
In such event, the Assumers shall acquire the Series D Preferred
Partnership Units and shall be treated for all purposes as the owner of
such Series D Preferred Partnership Units, which shall be held by the
Assumers in their respective existing capacities as General Partner or
Limited Partner, as the case may be. In the event the General Partner
shall exercise the Assumers' right to satisfy a redemption or exchange
right in the manner described in this paragraph, the Partnership shall have
no obligation to pay any amount to such holder with respect to such
holder's exercise of such right; provided, however, that the Partnership
shall remain liable to the holder to the extent that any such holder's
right is not fully satisfied; and each of the holder, the Partnership, and
the Assumers shall treat the transaction between the Assumers and the
holder as a sale of the holder's Series D Preferred Partnership Units to
the Assumers for federal income tax purposes. To the extent the Assumers
issue shares of Series D Preferred Stock, they may obtain the necessary
shares of Series D Preferred Stock from Weeks. Each holder agrees to
execute such documents as the General Partner may reasonably require in
connection with the issuance of Series D Preferred Stock.
(f) Redemption or exchange of Series D Preferred Partnership Units
shall be accompanied by proper instruments of transfer and assignment for
such Series D Preferred Partnership Units and by the delivery of (i)
representations and warranties of (A) such holder with respect to its due
authority to transfer all of the right, title and interest in and to such
Series D Preferred Partnership Units and with respect to the status of the
Series D Preferred Partnership Units being transferred, free and clear of
all Liens, and (B) the Partnership or the Assumers, as applicable, with
respect to due authority for the redemption or exchange of such Series D
Preferred Partnership Units, and (ii) to the extent that shares of Series D
Preferred Stock are issued, (A) an opinion of counsel for Weeks, reasonably
satisfactory to the holder, to the effect that such shares of Series D
Preferred Stock have been duly
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<PAGE>
authorized, are validly issued, fully-paid and nonassessable, and (b) a
stock certificate or certificates evidencing the Series D Preferred Stock
to be issued and registered in the name of the holder or its designee.
(g) The holder of Series D Preferred Partnership Units covenants and
agrees that all such Partnership Units redeemed or exchanged shall be
delivered free and clear of all Liens. Should any Liens exist or arise
with respect to such Series D Preferred Partnership Units, neither the
Assumers nor the Partnership shall be under any obligation to redeem or
acquire the same unless, in connection therewith, the General Partner has
elected to pay a portion of the Redemption Price or the Exchange Price, as
applicable, in the form of cash in circumstances in which such cash will be
sufficient to cause such existing Lien to be discharged in full upon
application of all or a part of the cash. The Partnership and the Assumers
are expressly authorized to apply such portion of the cash as may be
necessary to discharge such Lien in full. The holder further agrees that,
in the event any state or local property transfer tax is payable as a
result of the transfer of its Series D Preferred Partnership Units to the
Partnership or the Assumers, such holder shall assume and pay such transfer
tax.
(h) The certificates representing the Series D Preferred Stock issued
upon exchange of the Series D Preferred Partnership Units shall contain the
following legend:
THE SHARES REPRESENTED BY THIS CERTIFICATE MAY NOT BE TRANSFERRED,
SOLD, ASSIGNED, PLEDGED, HYPOTHECATED OR OTHERWISE DISPOSED OF EXCEPT
(A) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), AND ANY APPLICABLE
STATE LAW, OR (B) IF WEEKS HAS BEEN FURNISHED WITH A SATISFACTORY
OPINION OF COUNSEL FOR THE HOLDER OF THE SHARES REPRESENTED HEREBY, OR
OTHER EVIDENCE SATISFACTORY TO WEEKS, THAT SUCH TRANSFER, SALE,
ASSIGNMENT, PLEDGE, HYPOTHECATION OR OTHER DISPOSITION IS EXEMPT FROM
THE PROVISIONS OF SECTION 5 OF THE ACT AND THE RULES AND REGULATIONS
THEREUNDER AND ANY APPLICABLE STATE LAW.
(i) The rights of the holder of the Series D Preferred Partnership
Units, in its capacity as a holder of the Series D Preferred Partnership
Units, are in addition to and not in limitation on any other rights or
authority of the holder of the Series D Preferred Partnership Units, in any
other capacity, under the Partnership Agreement. In addition, nothing
contained herein shall be deemed to limit or otherwise restrict any rights
or authority of the holder of the Series D Preferred Partnership Units
under the Partnership Agreement, other than in its capacity as a holder of
the Series D Preferred Partnership Units.
T-13
<PAGE>
- --------------------------------------------------------------------------------
SYNDICATED TERM LOAN AGREEMENT
BY AND AMONG
WEEKS REALTY, L.P.,
AS BORROWER,
AND
WEEKS CORPORATION, WEEKS GP HOLDINGS, INC.
AND WEEKS LP HOLDINGS, INC.,
AS GUARANTORS,
AND
EACH BANK THAT IS OR BECOMES A SIGNATORY HERETO,
AS BANKS,
AND
WACHOVIA BANK, N.A.,
AS ADMINISTRATIVE AGENT,
AND
FIRST UNION NATIONAL BANK,
AS SYNDICATION AGENT,
AND
NATIONSBANK, N.A.,
AS DOCUMENTATION AGENT
IN THE PRINCIPAL AMOUNT OF
$85,000,000
DECEMBER 4, 1998
- --------------------------------------------------------------------------------
<PAGE>
TABLE OF CONTENTS
-----------------
<TABLE>
<CAPTION>
PAGE
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<S> <C>
ARTICLE I DEFINITIONS AND CONSTRUCTION................................................ 2
1.01 Defined Terms......................................................... 2
"Administrative Agent"................................................ 2
"Affected Bank"....................................................... 2
"Affiliate"........................................................... 2
"Agreement"........................................................... 2
"Annualized NOI"...................................................... 2
"Applicable Margin"................................................... 2
"Assignee"............................................................ 3
"Assignment and Acceptance"........................................... 3
"Authorized Signatory"................................................ 3
"Banks"............................................................... 3
"Base Rate"........................................................... 3
"Base Rate Tranche"................................................... 3
"BBA"................................................................. 3
"Breakage Costs"...................................................... 3
"Breakage Period"..................................................... 3
"Capitalized Lease Obligation"........................................ 3
"Change in Control,".................................................. 3
"Code"................................................................ 4
"Commitment".......................................................... 4
"Commitment Share".................................................... 4
"Consolidated Entity"................................................. 5
"Control"............................................................. 5
"Debt"................................................................ 5
"Debt Rating"......................................................... 5
"Debt Rating Table"................................................... 5
"Default"............................................................. 6
"Development in Progress"............................................. 6
"Development in Progress Value"....................................... 6
"Direct Financing Lease".............................................. 6
"Direct Financing Lease Value"........................................ 6
"Documentation Agent"................................................. 6
"Dollars" or "$"...................................................... 6
"Domestic Business Day"............................................... 6
"Employee Benefit Plan"............................................... 6
"Environmental Laws".................................................. 7
"ERISA"............................................................... 7
</TABLE>
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<TABLE>
<S> <C>
"Euro-Dollar Business Day"............................................. 7
"Federal Funds Rate"................................................... 7
"Fixed Charges"........................................................ 7
"Fixed Charge Coverage Ratio".......................................... 7
"Floating Rate"........................................................ 7
"Funds from Operations"................................................ 7
"Full Recourse Covenants".............................................. 8
"GAAP"................................................................. 8
"Guaranty" or "Guarantee,"............................................. 8
"Income"............................................................... 8
"Income Property"...................................................... 8
"Income Property Value"................................................ 9
"Indebtedness for Money Borrowed"...................................... 9
"Initial Date"......................................................... 9
"Initial Permitted Mortgage Debt"...................................... 9
"Intercompany Debt".................................................... 9
"Interest Coverage Ratio".............................................. 9
"Interest Expense"..................................................... 9
"Interest Period"...................................................... 10
"Interest Rate Election"............................................... 10
"Key Executives"....................................................... 10
"Land Held for Future Development"..................................... 11
"Land Value"........................................................... 11
"Lending Office"....................................................... 11
"Leverage Ratio"....................................................... 11
"LIBOR Rate"........................................................... 11
"LIBOR Rate Tranche"................................................... 11
"Lien"................................................................. 11
"Loan"................................................................. 12
"Loan Documents"....................................................... 12
"Mandate Letter"....................................................... 12
"Margin Stock"......................................................... 12
"Material Venture"..................................................... 12
"Maturity Date"........................................................ 12
"Measurement Date"..................................................... 12
"Measurement Period"................................................... 12
"Minority Interests"................................................... 12
"Moody's".............................................................. 12
"Mortgage"............................................................. 12
"Mortgage Debt"........................................................ 12
"MPPAA"................................................................ 12
</TABLE>
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<PAGE>
<TABLE>
<S> <C>
"Multiemployer Plan"................................................... 12
"Non-Consolidated Subsidiary".......................................... 13
"Non-Consolidated Subsidiary Value".................................... 13
"Non-Consolidated Venture"............................................. 13
"Non-Consolidated Venture Value"....................................... 13
"Note"................................................................. 13
"Notes Receivable Value"............................................... 13
"Notice of Borrowing".................................................. 13
"Obligations".......................................................... 14
"Operating Expenses"................................................... 14
"Participant".......................................................... 14
"PBGC"................................................................. 14
"Performance Pricing Determination Date"............................... 14
"Permitted Borrowing".................................................. 15
"Permitted Encumbrances"............................................... 15
"Permitted Guaranties"................................................. 16
"Permitted Mortgage Debt".............................................. 17
"Permitted Tax-Exempt Financing"....................................... 17
"Person"............................................................... 17
"Preferred Dividends".................................................. 17
"Prime Rate"........................................................... 18
"Property"............................................................. 18
"Property Interest(s)"................................................. 18
"Related Parties"...................................................... 18
"Reportable Event"..................................................... 18
"Required Banks"....................................................... 18
"Restricted Investment"................................................ 18
"SEC".................................................................. 19
"Standard and Poor's".................................................. 19
"Subsidiary"........................................................... 19
"Substances"........................................................... 19
"Swing Bank"........................................................... 19
"Swing Credit Agreement"............................................... 20
"Syndicated Credit Agreement".......................................... 20
"Syndicated Term Loan Guaranties"...................................... 20
"Syndication Agent".................................................... 20
"Taxes"................................................................ 20
"Total Annualized NOI"................................................. 20
"Total Asset Value".................................................... 20
"Total Debt"........................................................... 20
"Total Interest Bearing Debt".......................................... 20
</TABLE>
-iii-
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<TABLE>
<S> <C>
"Total Secured Debt".................................................. 20
"Total Unsecured Debt"................................................ 21
"Tranche"............................................................. 21
"Transferee".......................................................... 21
"Unencumbered Property Value"......................................... 21
1.02 Accounting Terms and Determinations................................... 21
1.03 References............................................................ 21
1.04 Use of Defined Terms.................................................. 22
1.05 Terminology........................................................... 22
ARTICLE II SYNDICATED TERM LOAN....................................................... 22
2.01 Syndicated Term Loan.................................................. 22
2.02 Rate of Interest on Loan.............................................. 22
2.03 Notice of Interest Rate Elections..................................... 22
2.04 Interest Period Presumption........................................... 23
2.05 Funding of the Loan................................................... 24
2.06 Interest Payments on Loan............................................. 25
2.07 Maturity.............................................................. 25
2.08 Notes................................................................. 25
2.09 Use of Loan Proceeds.................................................. 25
2.10 Prepayment of Loan.................................................... 25
2.11 General Provisions as to Payments..................................... 26
2.12 Default Rate of Interest.............................................. 28
2.13 Commitment Fee........................................................ 29
2.14 Increased Costs; Illegality; Capital Adequacy......................... 29
2.15 Calculation of Compensation to Banks;
Required Transfer by Banks........................................... 30
ARTICLE III THE AGENTS................................................................ 31
3.01 Appointment of Administrative Agent;
Powers and Immunities................................................. 31
3.02 Reliance by Administrative Agent...................................... 32
3.03 Defaults.............................................................. 32
3.04 Rights of Administrative Agent as a Bank.............................. 32
3.05 Indemnification....................................................... 33
3.06 Consequential Damages................................................. 33
3.07 Payee of Note Treated as Owner........................................ 33
3.08 Nonreliance on Administrative Agent and
Other Banks........................................................... 34
3.09 Failure to Act........................................................ 34
3.10 Resignation or Removal of Administrative Agent........................ 34
3.11 Directions to Administrative Agent.................................... 35
3.12 Appointment of Syndication Agent...................................... 35
</TABLE>
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<TABLE>
<S> <C>
3.13 Appointment of Documentation Agent.................................... 36
ARTICLE IV CONDITIONS TO TERM LOAN.................................................... 36
4.01 Borrower's Authority.......................................... 36
4.02 Guarantors' Authority......................................... 36
4.03 Financial Statements.......................................... 37
4.04 Certificate of Compliance..................................... 37
4.05 Representations and Warranties................................ 37
4.06 Payment of Fees............................................... 37
4.07 Notes......................................................... 37
4.08 Syndicated Term Loan Guaranties............................... 37
4.09 Certificates of Incumbency.................................... 37
4.10 REIT Status................................................... 37
4.11 Opinion of Counsel............................................ 37
4.12 Interest Rate Election........................................ 37
4.13 Notice of Borrowing........................................... 38
4.14 Intercreditor Agreement....................................... 38
4.15 Other Documentation........................................... 38
4.16 Key Executives................................................ 38
4.17 No Material Adverse Change.................................... 38
4.18 Full Compliance............................................... 38
4.19 No Default; No Claims......................................... 38
4.20 Debt Rating................................................... 39
ARTICLE V [THIS ARTICLE IS INTENTIONALLY OMITTED.].................................... 39
ARTICLE VI ENVIRONMENTAL MATTERS...................................................... 39
6.01 Representations, Warranties................................... 39
6.02 Continued Compliance.......................................... 40
ARTICLE VII REPRESENTATIONS AND WARRANTIES............................................ 40
7.01 Related Parties............................................... 40
7.02 Corporate Organization........................................ 40
7.03 Limited Partnership Organization.............................. 41
7.04 General Partnership Organization.............................. 41
7.05 Limited Liability Company Organization........................ 41
7.06 Power and Authority........................................... 41
7.07 Enforceability................................................ 41
7.08 Violation of Organizational Documents......................... 42
7.09 Conflicts..................................................... 42
7.10 Title......................................................... 42
7.11 Existence of Liens............................................ 42
7.12 Financial Condition........................................... 42
7.13 Litigation.................................................... 42
</TABLE>
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7.14 Foreign Qualifications........................................ 43
7.15 Tax Obligations............................................... 43
7.16 Capital Stock................................................. 43
7.17 Insolvency.................................................... 43
7.18 Margin Stock.................................................. 43
7.19 Franchises, Licenses, Etc..................................... 44
7.20 ERISA......................................................... 44
7.21 Financial Statements.......................................... 45
7.22 Misrepresentations............................................ 45
ARTICLE VIII AFFIRMATIVE COVENANTS.................................................... 45
8.01 Location of Records........................................... 45
8.02 Inspection.................................................... 46
8.03 Financial and Other Information............................... 46
8.04 Governmental Obligations...................................... 48
8.05 Insurance..................................................... 48
8.06 Operation of Properties, Inspection........................... 48
8.07 Preservation of Business...................................... 49
8.08 Maintenance of Records........................................ 49
8.09 Notice of Adverse Changes..................................... 49
8.10 Notice of Litigation.......................................... 50
8.11 Payment of Obligations........................................ 50
8.12 REIT Status................................................... 50
8.13 Compliance With Laws.......................................... 50
8.14 Notice of Exercise of Remedies Under Mortgages................ 51
8.15 Management.................................................... 51
8.16 Deposit Accounts.............................................. 51
8.17 Intercompany Transactions..................................... 51
8.18 Debt Rating................................................... 51
ARTICLE IX NEGATIVE COVENANTS......................................................... 51
9.01 Guaranties.................................................... 51
9.02 Merger, Consolidation, etc.................................... 52
9.03 Disposition of Assets......................................... 52
9.04 Judgments..................................................... 52
9.05 Indebtedness of Weeks Corporation and Borrower................ 52
9.06 Indebtedness of Subsidiaries.................................. 53
9.07 Secured Indebtedness.......................................... 53
9.08 Indebtedness and Activities of GP Holdings
and LP Holdings............................................... 53
9.09 Dividends and Distributions................................... 54
9.10 Environmental Matters......................................... 54
9.11 Change in Control............................................. 54
</TABLE>
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<TABLE>
<S> <C>
9.12 Advances, Loans and Other Restricted
Investments................................................... 54
9.13 Liens......................................................... 55
ARTICLE X FINANCIAL COVENANTS......................................................... 55
10.01 Minimum Interest Coverage Ratio............................... 55
10.02 Minimum Fixed Charge Coverage Ratio........................... 55
10.03 Maximum Leverage.............................................. 55
10.04 Maximum Unsecured Debt........................................ 55
10.05 Maximum Secured Debt.......................................... 55
10.06 Minimum Debt Yield............................................ 55
ARTICLE XI DEFAULT.................................................................... 55
11.01 Nonpayment of Obligations..................................... 56
11.02 Other Monetary Defaults....................................... 56
11.03 Defaults of Material Ventures................................. 56
11.04 Breach of Warranty or Representation.......................... 56
11.05 Breach of Covenants........................................... 56
11.06 Weeks Realty Partnership Agreement
Defaults...................................................... 57
11.07 Permitted Mortgage Debt Defaults.............................. 57
11.08 Voluntary Insolvency Proceedings.............................. 57
11.09 Involuntary Insolvency Proceedings............................ 57
11.10 Voluntary Receivership........................................ 57
11.11 Involuntary Receivership...................................... 57
11.12 Assignment for the Benefit of Creditors....................... 57
11.13 Insolvency.................................................... 58
11.14 Interest Rate Agreements...................................... 58
11.15 Syndicated Term Loan Guaranties............................... 58
11.16 Syndicated Credit Agreement................................... 58
11.17 Swing Credit Agreement........................................ 58
ARTICLE XII RIGHTS AND REMEDIES....................................................... 58
12.01 Prior to Default.............................................. 58
12.02 Upon Default.................................................. 58
12.03 Cure of Defaults.............................................. 59
12.04 Costs of Collection........................................... 59
12.05 Setoff........................................................ 60
12.06 Sharing of Collections........................................ 60
ARTICLE XIII FEES AND EXPENSES; INDEMNIFICATION....................................... 61
13.01 Fees and Expenses............................................. 61
13.02 Administrative Agent's Operations Fee......................... 61
13.03 Amendment, Waiver and Prepayment Fees......................... 61
</TABLE>
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13.04 Indemnification............................................... 62
ARTICLE XIV MISCELLANEOUS............................................................. 62
14.01 Cumulative Rights; Non-waiver................................. 62
14.02 No Obligation to Third Parties................................ 63
14.03 Successors and Assigns........................................ 63
14.04 Governing Law................................................. 65
14.05 Survival of Obligations....................................... 66
14.06 Entire Agreement.............................................. 66
14.07 Invalidity.................................................... 66
14.08 Headings...................................................... 66
14.09 Changes in Forms.............................................. 66
14.10 Notices....................................................... 66
14.11 Amendments and Waivers........................................ 68
14.12 Time of the Essence........................................... 69
14.13 Execution in Counterparts..................................... 69
14.14 Attorneys' Fees............................................... 69
14.15 Confidentiality............................................... 69
14.16 Representations by Banks...................................... 70
14.17 Miscellaneous................................................. 70
</TABLE>
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<PAGE>
TABLE OF EXHIBITS AND SCHEDULES
-------------------------------
EXHIBIT DESCRIPTION
- ------- -----------
A Form of Notice of Borrowing
B Form of Assignment and Acceptance
C Form of Syndicated Term Note
D Form of Syndicated Term Loan Guaranty
E Form of Certificate of Chief Financial Officer
F Form of Interest Rate Election
SCHEDULE DESCRIPTION
- -------- -----------
1 Initial Permitted Mortgage Debt
2 Commitments and Commitment Shares
7.01 Related Parties
9.06 Indebtedness for Money Borrowed
-ix-
<PAGE>
SYNDICATED TERM LOAN AGREEMENT
------------------------------
THIS SYNDICATED TERM LOAN AGREEMENT (the "AGREEMENT") is made and entered
---------
into as of December 4, 1998, by and among WEEKS REALTY, L.P., a Georgia limited
partnership ("BORROWER"), WEEKS CORPORATION, a Georgia corporation ("WEEKS
-------- -----
CORPORATION"), WEEKS GP HOLDINGS, INC., a Georgia corporation ("GP HOLDINGS"),
- ----------- -----------
WEEKS LP HOLDINGS, INC., a Georgia corporation ("LP HOLDINGS") (Weeks
-----------
Corporation, GP Holdings and LP Holdings, collectively, "GUARANTORS," and each,
----------
individually, a "GUARANTOR"), each Bank that is or becomes a signatory hereto
---------
(collectively, "BANKS," and each, individually, a "BANK"), WACHOVIA BANK, N.A.,
----- ----
a national banking association ("WACHOVIA"), in its capacity as Banks'
--------
administrative agent hereunder (including any successor, "ADMINISTRATIVE
--------------
AGENT"), FIRST UNION NATIONAL BANK, a national banking association ("FUNB"), in
- ----- ----
its capacity as syndication agent hereunder (including its successors,
"SYNDICATION AGENT"), and NATIONSBANK, N.A., a national banking association
-----------------
("NATIONSBANK"), in its capacity as documentation agent hereunder (including any
------------
successors, "DOCUMENTATION AGENT").
-------------------
W I T N E S S E T H:
- - - - - - - - - -
WHEREAS, Borrower desires to borrow from Banks the sum of $85,000,000 for a
fixed term, on the terms and conditions set forth herein; and
WHEREAS, Banks are willing to make a term loan to Borrower, in the
principal sum of $85,000,000, on the terms and conditions set forth herein; and
WHEREAS, Weeks Corporation is the owner of 100% of the issued and
outstanding capital stock of GP Holdings and 100% of the issued and outstanding
capital stock of LP Holdings; and
WHEREAS, GP Holdings constitutes the sole general partner of Borrower, and
LP Holdings holds a majority interest in Borrower as a limited partnership
interest; and
WHEREAS, the term loan will be to the direct financial interest and
advantage of Guarantors, and in order to induce Banks to enter into this
Agreement and to make a term loan to Borrower pursuant to its terms, Guarantors
have agreed to guaranty the full and prompt payment and performance when due of
the Obligations (as defined herein), to become parties to this Agreement and to
become bound by the terms and conditions hereof;
<PAGE>
NOW, THEREFORE, for and in consideration of the premises and the mutual
covenants contained herein, and for other good and valuable consideration, the
receipt, adequacy and sufficiency of which are hereby acknowledged by the
parties hereto, the parties hereto agree as follows:
ARTICLE I
---------
DEFINITIONS AND CONSTRUCTION
----------------------------
1.1 DEFINED TERMS. In addition to those terms defined elsewhere in this
-------------
Agreement, as used in this Agreement, the following terms shall have the
following meanings, unless the context otherwise requires:
"ADMINISTRATIVE AGENT" shall mean Wachovia, in its capacity as the
--------------------
administrative agent for Banks in accordance with the appointment as
administrative agent pursuant to the provisions of Article III.
"AFFECTED BANK" shall have the meaning ascribed to such term in Section
-------------
2.15(c).
"AFFILIATE" of a Person shall mean any other Person which, directly and/or
---------
indirectly, owns or Controls, on an aggregate basis, including all beneficial
ownership and ownership or Control as a trustee, guardian or other fiduciary, in
excess of twenty percent (20%) of the outstanding capital stock having ordinary
voting power to elect a majority of the board of directors (irrespective of
whether, at the time, stock of any other class or classes of such Person shall
have or might have voting power by reason of the happening of any contingency)
of such Person.
"AGREEMENT" shall mean this Syndicated Term Loan Agreement, together with
---------
any amendments or supplements hereto and schedules or exhibits hereto.
"ANNUALIZED NOI" shall mean, with respect to an Income Property or a
--------------
Property subject to a Direct Financing Lease, as of any given date, the annual
net operating income from the collection of rents and reimbursements according
to leases in good standing, including income from property accounted for as
Direct Financing Leases, after deducting all Operating Expenses, calculated by
annualizing the income received and Operating Expenses incurred during the
quarterly period ending most recently prior to such date, reported in accordance
with GAAP. "ANNUALIZED NOI" for properties acquired by the owner thereof during
--------------
any Measurement Period may be adjusted to reflect the actual performance of such
property for the entire
2
<PAGE>
quarterly period irrespective of the date such property was acquired.
"APPLICABLE MARGIN" shall mean, as of any given day, the percentage rate
-----------------
per annum determined by reference to the Debt Rating Table and based on the Debt
Rating, if any, as determined by Administrative Agent, or lack of a Debt Rating,
in effect as of such day, if such day is a Performance Pricing Determination
Date, or otherwise as of the Performance Pricing Determination Date immediately
preceding such day.
"ASSIGNEE" shall have the meaning ascribed to said term in Section
--------
14.03(c).
"ASSIGNMENT AND ACCEPTANCE" shall mean an Assignment and Acceptance
-------------------------
executed in accordance with the provisions of Section 14.03(c) and in the form
of Exhibit B.
---------
"AUTHORIZED SIGNATORY" shall mean, with respect to a Person, such senior
--------------------
personnel of such Person as may be duly authorized and designated in writing by
such Person to execute documents, agreements and instruments, including the Loan
Documents, on behalf of such Person.
"BANKS" shall mean all Banks that are or become signatories to this
-----
Agreement. "BANK" means any one of such Banks.
----
"BASE RATE" shall mean the higher of (a) the Prime Rate or (b) .50% per
---------
annum (50 basis points) plus the Federal Funds Rate.
"BASE RATE TRANCHE" shall mean each Tranche which accrues interest at the
-----------------
Floating Rate in accordance with Section 2.03(c).
"BBA" shall mean the British Bankers Association.
---
"BREAKAGE COSTS" shall mean, with respect to any outstanding principal
--------------
amount of any LIBOR Rate Tranche being paid before the last day of the Interest
Period therefor, such amount or amounts as shall compensate Banks for any actual
loss, cost or expense incurred by Banks (but excluding lost profits) as a result
of such payment being made before the last day of the Interest Period,
including, without limitation, an amount equal to the excess, if any, of (a) the
amount of interest which would have accrued on the amount so paid for the period
from the date of such payment to the last day of the Interest Period (such
period herein referred to as the "BREAKAGE PERIOD") at the applicable LIBOR
---------------
Rate, less the Applicable Margin, over (b) the amount of interest (as reasonably
determined by Administrative Agent) Banks would have paid on deposits in Dollars
of comparable amounts for a term comparable to
3
<PAGE>
the Breakage Period placed with Banks by leading banks in the London interbank
market.
"CAPITALIZED LEASE OBLIGATION" shall mean that portion of any obligation of
----------------------------
a Person, as a lessee under a lease, which at the time would be required to be
capitalized on the balance sheet of such Person in accordance with GAAP.
"CHANGE IN CONTROL," in the case of any entity which is a partnership,
-----------------
shall mean: (a) a change in the identity of any general partner thereof,(b) the
sale of all or substantially all of its assets, or (c) its liquidation or
dissolution or its adoption of any plan of liquidation or dissolution or its
public announcement of its intention to liquidate or dissolve; and in the case
of any entity which is a corporation, shall mean (a) any transaction, whether by
merger, consolidation, asset sale, tender offer, reverse stock split or
otherwise, which results in the acquisition of beneficial ownership (as such
term is defined under rules and regulations promulgated under the Securities
Exchange Act of 1934, as amended) by any Person of 25% or more of the
outstanding shares of all classes of equity securities of any such corporation
having ordinary voting rights, other than A.R. Weeks, Jr., or any of his
siblings, or any of their respective estates, or any trusts or family
partnerships pursuant to which voting control of such equity securities may be
exercised by A.R. Weeks, Jr. or any of his siblings, individually or as a
trustee or pursuant to contractual rights, (b) the sale of all or substantially
all of the assets of such entity, or (c) its liquidation or dissolution or its
adoption of any plan of liquidation or dissolution or its public announcement of
its intention to liquidate or dissolve. In determining the acquisition or
beneficial ownership of the outstanding shares of equity securities by any
individual for purposes of the definition of "CHANGE IN CONTROL" hereunder, the
-----------------
term "individual" shall have the meaning ascribed to such term in Section
542(a)(2) of the Code, and an individual shall be deemed to have acquired or to
have beneficial ownership of all shares that would be attributed to or treated
as held by such individual for purposes of determining whether the corporation
is closely held in accordance with Sections 856(a)(6) and 856(h) of the Code.
"CODE" shall mean the Internal Revenue Code of 1986, as amended, together
----
with the Treasury Regulations promulgated pursuant thereto.
"COMMITMENT" shall mean, with respect to each Bank, as of any given date,
----------
an amount equal to the product obtained by multiplying such Bank's Commitment
Share by the outstanding principal amount of the Loan on such date. The
Commitment of each Bank as in effect on the date of this Agreement and as in
effect on the date of each amendment hereto shall be set forth on Schedule 2.
----------
4
<PAGE>
"COMMITMENT SHARE" shall mean, with respect to each Bank, the Commitment
----------------
Share set forth opposite such Bank's name on the signature pages hereof or on
any amendment to this Agreement, or, in the case of any Bank which has made an
assignment of a percentage interest in its rights and obligations under this
Agreement or accepted an assignment of a percentage interest in another Bank's
rights and obligations under this Agreement, in either case pursuant to an
Assignment and Acceptance, such Bank's Commitment Share immediately prior to its
making or accepting such assignment, plus the percentage interest purchased or
minus the percentage interest sold, as the case may be, pursuant to the
Assignment and Acceptance. The Commitment Share of each Bank as in effect on the
date of this Agreement and as in effect on the date of each amendment hereto
shall be set forth on Schedule 2.
----------
"CONSOLIDATED ENTITY" shall mean Borrower or any other entity which is
-------------------
under the Control of either Weeks Corporation or Borrower and whose accounts are
consolidated under GAAP in the financial statements of Weeks Corporation.
"CONTROL" shall mean, with respect to any entity, the power to direct the
-------
management and policies of such entity, directly or indirectly, whether through
the ownership of voting securities or otherwise.
"DEBT" of any Person means, at any date, without duplication, (a) all
----
Indebtedness for Money Borrowed owing by such Person, (b) all Capitalized Lease
Obligations of such Person, (c) all obligations of such Person to reimburse any
bank or other Person in respect of amounts paid or to be paid under a letter of
credit or similar instrument, to the extent such obligations would be required,
in accordance with GAAP, to be included as a liability on such Person's balance
sheet, and (d) all Debt of others secured by a Lien on any asset of such Person,
whether or not such Debt is assumed by such Person, which Debt at the time would
be required to be capitalized on the balance sheet of such Person in accordance
with GAAP; provided, however, that the term Debt shall not include any such
-------- -------
obligations to the extent such obligations have been the subject of a "legal"
defeasance, a "covenant" defeasance or an "in substance" defeasance in
accordance with GAAP.
"DEBT RATING" shall mean, as of any given day, whichever is the higher of
-----------
(a) the higher of the rating, if any, of Borrower's senior unsecured, unenhanced
debt (or, if no such rating exists, its issuer credit rating, if any, for debt
of such type) given by Moody's or Standard and Poor's (as such rating may change
from time to time) (provided that in the event of a double or greater split
--------
rating, the rating immediately below the highest rating shall apply), or, if
only one of them rates Borrower's senior unsecured,
5
<PAGE>
unenhanced debt, such rating, or (b) the higher of the rating, if any, of Weeks
Corporation's senior unsecured,unenhanced debt (or, if no such rating exists,
its issuer credit rating, if any, for debt of such type) given by Moody's or
Standard and Poor's (as such rating may change from time to time) (provided that
--------
in the event of a double or greater split rating, the rating immediately below
the highest rating shall apply), or, if only one of them rates Weeks
Corporation's senior unsecured, unenhanced debt, such rating; or, if Moody's or
Standard and Poor's rates such debt of only Borrower or only Weeks Corporation
but not both, the higher of such ratings of such one entity.
"DEBT RATING TABLE" shall mean the following:
-----------------
- ----------------------------------------------------------------------
PERFORMANCE SENIOR UNSECURED APPLICABLE MARGIN
PRICING LEVEL DEBT RATING
S&P/MOODY'S
- ----------------------------------------------------------------------
I Above 0.95%
BBB+/Baal
- ----------------------------------------------------------------------
II BBB+/Baa1 1.10%
- ----------------------------------------------------------------------
III BBB/Baa2 1.25%
- ----------------------------------------------------------------------
IV BBB-/Baa3 1.45%
- ----------------------------------------------------------------------
V Below BBB-/Baa3 1.90%
- ----------------------------------------------------------------------
"DEFAULT" shall mean any of the events or conditions described in Article
-------
XI.
"DEVELOPMENT IN PROGRESS" shall mean a Property that will or is intended to
-----------------------
be income producing upon completion and that is being improved with a building
which is under construction.
"DEVELOPMENT IN PROGRESS VALUE" shall mean, with respect to a Development
-----------------------------
in Progress, the book value of such property, including the improvements upon
such property and the underlying land, all determined in accordance with GAAP.
"DIRECT FINANCING LEASE" shall mean a lease of Property under which Weeks
----------------------
Corporation or a Consolidated Entity is the lessor and which is required, in
accordance with GAAP, to be capitalized on the balance sheet of the lessee
thereunder and classified as a long term receivable on the balance sheet of the
lessor thereunder.
"DIRECT FINANCING LEASE VALUE" shall mean, with respect to a Direct
----------------------------
Financing Lease, the book value of such Direct Financing Lease, determined in
accordance with GAAP.
6
<PAGE>
"DOCUMENTATION AGENT" shall mean NationsBank, in its capacity as the
-------------------
documentation agent in accordance with its appointment as documentation agent
pursuant to the provisions of Article III.
"DOLLARS" or "$" means dollars in lawful currency of the United States of
------- -
America.
"DOMESTIC BUSINESS DAY" means any day except a Saturday, Sunday or other
---------------------
day on which commercial banks in Georgia are authorized by law to close
(including, without limitation, any day which is a federal banking holiday in
the United States of America).
"EMPLOYEE BENEFIT PLAN" shall mean any employee welfare benefit plan or any
---------------------
employee pension benefit plan, as those terms are defined in Section 3(1) and
3(2) of ERISA, for the benefit of the employees of Weeks Corporation or any
Consolidated Entity which is a member of a controlled group or under common
control with any such Person, as such terms are defined in Section 4001(a)(14)
of ERISA.
"ENVIRONMENTAL LAWS" shall mean all state, federal or local environmental
------------------
laws and regulations.
"ERISA" shall mean the Employee Retirement Income Security Act of 1974, as
-----
amended from time to time.
"EURO-DOLLAR BUSINESS DAY" means any Domestic Business Day on which
------------------------
dealings in Dollar deposits are carried out in the London interbank market.
"FEDERAL FUNDS RATE" shall mean, for any day, the rate per annum (rounded
------------------
upward, if necessary, to the next higher 1/100 of 1%) equal to the weighted
average of the rates on overnight Federal funds transactions with members of the
Federal Reserve System arranged by federal funds brokers on such day, as
published by the Federal Reserve Bank of New York, on the Domestic Business Day
next succeeding such day, provided that(a) if the day for which such rate is to
--------
be determined is not a Domestic Business Day, the "FEDERAL FUNDS RATE" for such
------------------
day shall be such rate on such transactions on the next preceding Domestic
Business Day as so published on the next succeeding Domestic Business Day, and
(b) if such rate is not so published for any day, the "FEDERAL FUNDS RATE" for
------------------
such day shall be the average rate charged to Administrative Agent on such day
on such transactions, as determined by Administrative Agent.
"FIXED CHARGES" shall mean the sum of (a) Interest Expense, and (b)
-------------
Preferred Dividends.
7
<PAGE>
"FIXED CHARGE COVERAGE RATIO" shall mean, as of any Measurement Date, the
---------------------------
ratio of Income for the Measurement Period ending on such Measurement Date to
Fixed Charges for such Measurement Period.
"FLOATING RATE" shall mean the Base Rate minus .25% per annum (25 basis
-------------
points).
"FUNDS FROM OPERATIONS" shall mean net income (loss) of Weeks Corporation,
---------------------
determined on a consolidated basis in accordance with GAAP, before deducting the
------
portion of such net income (loss) allocable to Minority Interests, Preferred
Dividends, gains (or losses) from debt restructuring and sales of income
producing Property, depreciation and amortization, and after adjustments for
-----
unconsolidated partnerships and joint ventures. Adjustments for unconsolidated
partnerships and joint ventures will be calculated to reflect "FUNDS FROM
----------
OPERATIONS" on the same basis. It is acknowledged that the computation of
- ----------
"FUNDS FROM OPERATIONS" may be adjusted from time to time to be consistent with
- ----------------------
the conventions adopted by the National Association of Real Estate Investment
Trusts.
"FULL RECOURSE COVENANTS" shall mean those full recourse covenants,
-----------------------
warranties and representations typically found in secured, non-recourse real
property financing documents, including covenants and indemnities with respect
to environmental matters, liability for payment of taxes, payment of rents after
an event of default, fraud and similar matters.
"GAAP" means generally accepted accounting principles applied on a basis
----
consistent with those which, in accordance with Section 1.02, are to be used in
making the calculations for purposes of determining compliance with the terms of
this Agreement.
"GUARANTY" or "GUARANTEE," as applied to an obligation (each a "primary
-------- ---------
obligation"), shall mean and include: (a) any guaranty, direct or indirect, in
any manner, of any part or all of such primary obligation; (b) any agreement,
direct or indirect, contingent or otherwise, the intended or practical effect of
which is to assure in any way the payment or performance (or payment of damages
in the event of non-performance) of any part or all of such primary obligation,
including, without limiting the foregoing, any reimbursement obligations as to
amounts drawn by beneficiaries under letters of credit; and (c) any obligation,
whether or not contingent, (i) to purchase any such primary obligation or any
property or asset constituting direct or indirect security therefor, (ii) to
advance or supply funds (A) for the purchase or payment of such primary
obligation or (B) to maintain working capital, equity capital or the net worth,
cash flow, solvency or other balance sheet or income statement condition of any
other
8
<PAGE>
person, (iii) to purchase property, assets, securities or services primarily for
the purpose of assuring the owner or holder of any primary obligation of the
ability of the primary obligor with respect to such primary obligation to make
payment thereof, or (iv) otherwise to assure or hold harmless the owner or
holder of such primary obligation against loss in respect thereof.
"INCOME" shall mean the net income of Weeks Corporation, determined on a
------
consolidated basis in accordance with GAAP, before deducting (a) Interest
------
Expense and Preferred Dividends, (b) the portion of such net income allocable to
Minority Interests, (c) losses on the sale of income producing Property, (d)
federal, state and local income tax, (e) depreciation and amortization, and (f)
losses owing to debt restructuring, and before adding (g) gains on the sale of
------
income producing Property, and (h) gains owing to debt restructuring.
"INCOME PROPERTY" shall mean an income producing Property which is wholly-
---------------
owned by Weeks Corporation or a Consolidated Entity and improved with a
completed building, but which is not leased under a Direct Financing Lease.
"INCOME PROPERTY VALUE" shall mean, with respect to any Income Property,
---------------------
the quotient obtained by dividing the Annualized NOI for such property by a
capitalization rate of 9.50%.
"INDEBTEDNESS FOR MONEY BORROWED" of any Person means, at any date, without
-------------------------------
duplication, all indebtedness for money borrowed by such Person, all
indebtedness evidenced by notes, bonds, debentures or similar instruments
payable by such Person (secured or unsecured, full recourse or non-recourse),
all obligations of such Person to reimburse any bank or other Person in respect
of amounts paid or to be paid under a banker's acceptance, all indebtedness of
such Person issued or assumed as full or partial payment for property or
services (excluding unsecured accounts payable and other unsecured obligations
incurred in the ordinary and regular course of the business of such Person), all
obligations of such Person for reimbursement with respect to letters of credit
procured for the account of such Person as a credit enhancement for any of the
foregoing, and including interest which is accrued on any such indebtedness but
not paid on the original due date therefor or within any applicable cure or
grace period as provided by the underlying contract for such interest.
"INITIAL DATE" shall have the meaning ascribed to such term in Section
------------
2.11(c).
"INITIAL PERMITTED MORTGAGE DEBT" shall mean those loans identified on
-------------------------------
Schedule 1, together with all extensions, renewals, modifications and
- ----------
refinancings thereof.
9
<PAGE>
"INTERCOMPANY DEBT" shall mean Debt owing by Weeks Corporation or any
-----------------
Subsidiary, on the one hand, to Weeks Corporation or another Subsidiary, on the
other hand.
"INTEREST COVERAGE RATIO" shall mean, as of any Measurement Date, the ratio
-----------------------
of Income for the Measurement Period ending on such Measurement Date to Interest
Expense for such Measurement Period.
"INTEREST EXPENSE" shall mean, with respect to any period, an amount equal
----------------
to the sum of (a) the interest payable during such period with respect to
Indebtedness for Money Borrowed of Weeks Corporation and the Consolidated
Entities and reported as an expense in accordance with GAAP and not as a
capitalized item, and (b) the interest component of Capitalized Lease
Obligations of Weeks Corporation and the Consolidated Entities payable during
such period.
"INTEREST PERIOD" shall mean:
---------------
(1) With respect to each LIBOR Rate Tranche, the period commencing on
the effective date of the applicable Interest Rate Election and ending on the
numerically corresponding day in the first, second, third or sixth month
thereafter, as Borrower may elect in the applicable Interest Rate Election;
provided that:
- --------
(1) any Interest Period (subject to subparagraph (iii) below)
which would otherwise end on a day which is not a Euro-Dollar Business
Day shall be extended to the next succeeding Euro-Dollar Business Day
unless such Euro-Dollar Business Day falls in another calendar month,
in which case such Interest Period shall end on the next preceding
Euro-Dollar Business Day;
(2) any Interest Period which begins on the last Euro-Dollar
Business Day of a calendar month (or on a day for which there is no
numerically corresponding day in the appropriate subsequent calendar
month) shall, subject to subparagraph (iii) below, end on the last
Euro-Dollar Business Day of the appropriate subsequent calendar month;
and
(3) no Interest Period may be selected which would end after the
Maturity Date unless an Interest Period ending on the numerically
corresponding day in the first month after the effective date of the
applicable Interest Rate Election would otherwise end after the
Maturity
10
<PAGE>
Date, in which case the Interest Period shall end on the Maturity
Date; and
(2) With respect to each Base Rate Tranche, the period commencing on
the effective date of the applicable Interest Rate Election and ending on the
earlier of 30 days thereafter or the Maturity Date; provided that:
--------
(1) any Interest Period (subject to subparagraph (ii) below)
which would otherwise end on a day which is not a Domestic Business
Day shall be extended to the next succeeding Domestic Business Day;
and
(2) no Interest Period shall end after the Maturity Date.
"INTEREST RATE ELECTION" shall mean an election of an Interest Rate for a
----------------------
Tranche, in the form of Exhibit F.
---------
"KEY EXECUTIVES" shall have the meaning ascribed to such term in Section
--------------
4.16.
"LAND HELD FOR FUTURE DEVELOPMENT" shall mean a Property which is neither
--------------------------------
an Income Property, nor a Development in Progress, nor a Property subject to a
Direct Financing Lease.
"LAND VALUE" shall mean the book value of Land Held for Future Development,
----------
determined in accordance with GAAP.
"LENDING OFFICE" shall mean, as to each Bank, its office located at its
--------------
address set forth on the signature pages hereof (or identified on the signatures
pages hereof as its Lending Office) or such other office as such Bank may
hereafter designate as its Lending Office by notice to Borrower, Administrative
Agent and each other Bank.
"LEVERAGE RATIO" shall mean the ratio of Total Debt (but excluding Minority
--------------
Interests and liabilities consisting of accruals and valuation reserves) to
Total Asset Value.
"LIBOR RATE" shall mean the prevailing London Interbank Offered Rate
----------
(LIBOR) for any Interest Period, as published by the BBA and reported by Dow
Jones Market Services, Inc. (Page 3750) (or, in the absence or unavailability of
Dow Jones Market Services, Inc. (Page 3750), as such rate is determined by any
other comparable interest rate reporting service available to Administrative
Agent) for the second Euro-Dollar Business Day immediately preceding the first
day of the Interest Period (provided that if no prevailing London Interbank
--------
Offered Rate (LIBOR) for a selected Interest Period is published by BBA, such
rate shall be determined by Administrative
11
<PAGE>
Agent by interpolation or extrapolation with reference to the prevailing London
Interbank Offered Rate (LIBOR) published by BBA for periods of shorter and/or
longer durations), PLUS THE APPLICABLE MARGIN, as said rate may be adjusted by
Administrative Agent from time to time as necessary to compensate Banks for any
loss of yield to Banks on LIBOR Rate Tranches which would otherwise result from
any change in applicable law, rules, regulations, treaties, or governmental or
judicial directives, in the interpretation or administration thereof, or in
Banks' compliance therewith.
"LIBOR RATE TRANCHE" shall mean each Tranche which accrues interest at the
------------------
LIBOR Rate in accordance with the terms and conditions of this Agreement.
"LIEN" shall mean, with respect to any Property Interest, any Mortgage and
----
any other claim of lien, pledge, assignment, charge, security interest, title
retention agreement, levy, execution, attachment, garnishment, encumbrance or
servitude of any kind, whether by consensual agreement or by operation of
statute or other law, and whether voluntary or involuntary, and whether or not
choate, vested or perfected.
"LOAN" shall mean the term loan made by Banks ratably in accordance with
----
their respective Commitments pursuant to Article II.
"LOAN DOCUMENTS" shall mean this Agreement, the Notes, the Syndicated Term
--------------
Loan Guaranties, and all other documents, agreements, certificates, and reports
called for herein or executed in connection herewith or contemplated hereby, as
the same may be amended from time to time.
"MANDATE LETTER" shall mean that certain Mandate Letter dated October 8,
--------------
1998, from Wachovia to Weeks Corporation and Borrower, outlining the proposed
terms and conditions of the financing evidenced by this Agreement.
"MARGIN STOCK" shall mean margin stock, as defined in Section 221.2(h) (or
------------
any successor provision) of the Regulations of the Board of Governors of the
Federal Reserve System.
"MATERIAL VENTURE" shall mean a Non-Consolidated Venture having a Non-
----------------
Consolidated Venture Value in excess of $10,000,000 and with respect to which
Weeks Corporation or a Subsidiary, either alone or together with each other or
one or more other Subsidiaries, has Control.
"MATURITY DATE" shall mean December 31, 2001.
-------------
12
<PAGE>
"MEASUREMENT DATE" shall mean September 30, 1998, and each December 31,
----------------
March 31, June 30, and September 30 thereafter.
"MEASUREMENT PERIOD" shall mean the three (3) month period ending on a
------------------
Measurement Date.
"MINORITY INTERESTS" shall mean the partnership interests in Borrower held
------------------
by limited partners other than LP Holdings.
"MOODY'S" shall mean Moody's Investor Services, Inc. and its successors and
-------
assigns succeeding to its rating agency business.
"MORTGAGE" shall mean any mortgage, deed of trust, deed to secure debt or
--------
other security instrument pursuant to which, under applicable law, an interest
in real estate is voluntarily conveyed as security for a debt.
"MORTGAGE DEBT" shall mean all Indebtedness for Money Borrowed which is
-------------
secured by a Mortgage.
"MPPAA" shall mean the Multiemployer Pension Plan Amendments Act of 1980,
-----
amending Title IV of ERISA.
"MULTIEMPLOYER PLAN" shall have the meaning set forth in Section 4001(a)(3)
------------------
of ERISA.
"NON-CONSOLIDATED SUBSIDIARY" shall mean a Subsidiary which is not a
---------------------------
Consolidated Entity. "NON-CONSOLIDATED SUBSIDIARIES" shall mean, collectively,
-----------------------------
all such Non-Consolidated Subsidiaries.
"NON-CONSOLIDATED SUBSIDIARY VALUE" shall mean the aggregate book value,
---------------------------------
before accumulated depreciation, of the assets of all Non-Consolidated
Subsidiaries (excluding all Intercompany Debt owing to any Non-Consolidated
Subsidiary and excluding goodwill and other intangible assets to the extent the
aggregate book value of such good will and other intangible assets exceeds 33
1/3% of the aggregate book value of all the assets), determined in accordance
with GAAP, as reflected on the most recent consolidated financial statements of
Weeks Corporation (whether quarterly or annual) delivered pursuant to Section
8.03 or, prior to the initial delivery of financial statements pursuant to
Section 8.03, the consolidated financial statements of Weeks Corporation for its
fiscal quarter ending September 30, 1998.
"NON-CONSOLIDATED VENTURE" shall mean any enterprise of any nature
------------------------
whatsoever (including, without limitation, a joint venture, general partnership,
limited partnership, limited liability company, corporation or trust) formed by
Weeks Corporation and/or any Consolidated Entity, as parties to the enterprise,
and any
13
<PAGE>
other Persons, as other parties to the enterprise, which enterprise is not a
Subsidiary.
"NON-CONSOLIDATED VENTURE VALUE" shall mean the net book value, before
------------------------------
accumulated depreciation, of all interests of Weeks Corporation and all
Consolidated Entities in Non-Consolidated Ventures (excluding goodwill and other
intangible assets), determined in accordance with GAAP, as reflected on the most
recent consolidated financial statements of Weeks Corporation (whether quarterly
or annual) delivered pursuant to Section 8.03 or, prior to the initial delivery
of financial statements pursuant to Section 8.03, the consolidated financial
statements of Weeks Corporation for its fiscal quarter ending September 30,
1998.
"NOTE" shall mean a Syndicated Term Note, made by Borrower payable to the
----
order of a Bank and in the form of Exhibit C, evidencing the ratable share of
---------
the Loan made by such Bank to Borrower, and any extension, renewal, modification
or restatement thereof made by Borrower to the order of such Bank. "NOTES"
-----
shall mean all such Syndicated Term Notes.
"NOTES RECEIVABLE VALUE" shall mean the book value, determined in
----------------------
accordance with GAAP, of those promissory notes which are from third parties to
Weeks Corporation or any Consolidated Entity and are secured by Mortgages.
"NOTICE OF BORROWING" shall mean a request made by Borrower in the form of
-------------------
Exhibit A that the Banks make the Loan.
- ---------
"OBLIGATIONS" shall mean the aggregate amount of all indebtedness,
-----------
liabilities and obligations of Borrower to Banks under, pursuant to or arising
out of this Agreement, including, without limiting the generality of the
foregoing: any and all indebtedness, liabilities and obligations of Borrower to
Banks evidenced by the Notes; all principal and interest owing thereunder; all
Administrative Agent's and Banks' fees authorized under the terms of this
Agreement; all charges and expenses of or incidental to the preparation,
renewal, modification or enforcement of any of the foregoing and any and all
extensions or renewals thereof in whole or in part; whether or not any of the
foregoing is absolute, contingent, mature, unmatured, or otherwise; and all
Administrative Agent's and Banks' charges, expenses, and costs of collection of
any or all of the foregoing, including reasonable attorneys' fees (if collected
by or through an attorney).
"OPERATING EXPENSES" shall mean, with respect to a Property, all expenses
------------------
incurred to operate the Property, including, without limitation, expenses for
---------
administration, utilities, insurance, property taxes, repairs and maintenance,
hypothetical management fees of three percent (3%) of rent, and an accrued
structural
14
<PAGE>
reserve of $0.0125 per square foot for each square foot of the building area of
such Property in existence at the end of the period (the equivalent of $0.05 per
square foot per annum), but excluding interest expense or debt service payments
---------
under any indebtedness secured by a Lien on the Property.
"PARTICIPANT" shall have the meaning ascribed to said term in Section
-----------
14.03(b).
"PBGC" shall mean the Pension Benefit Guaranty Corporation.
----
"PERFORMANCE PRICING DETERMINATION DATE" shall mean (a) the date of this
--------------------------------------
Agreement, and (b) any of the following dates: January 1, 1999, and the first
day of each calendar quarter (April 1, July 1, October 1, and January 1)
thereafter as of which day the Debt Rating, as determined by Administrative
Agent, shall be either (i) lower than the Debt Rating, as determined by
Administrative Agent, in effect on the immediately preceding Performance Pricing
Determination Date, or (ii) higher than the Debt Rating, as determined by
Administrative Agent, in effect on the immediately preceding Performance Pricing
Determination Date, if Borrower shall have given Administrative Agent written
notice on or before such day of Borrower's determination that the Debt Rating as
of such day is or shall be higher than the Debt Rating in effect on such
immediately preceding Performance Pricing Determination Date. For purposes of
this definition, if there is no Debt Rating in effect on a Performance Pricing
Determination Date there shall nevertheless be deemed to be a Debt Rating in
effect on such date which is below Standard and Poor's BBB- rating and below
Moody's Investor Service Baa3 rating.
"PERMITTED BORROWING" shall mean non-revolving Indebtedness for Money
-------------------
Borrowed incurred by Weeks Corporation or Borrower (a) which is neither secured
by a Lien on any Property Interest of Borrower or any Consolidated Entity nor
subject to an agreement that it shall be secured, upon the lapse of time, the
occurrence of any event, the failure to satisfy any condition, or otherwise, by
a Lien on any Property Interest of Borrower or any Consolidated Entity, (b)
which matures not less than one year after the date it shall have been made, (c)
which, if evidenced by a security (within the meaning of applicable federal
securities laws and state Blue Sky laws), is evidenced by a security issued in a
private placement, public offering or otherwise made in compliance with all
applicable federal securities laws and state Blue Sky laws, and (d) which has a
payment seniority no higher than that of the Loan.
"PERMITTED ENCUMBRANCES" shall mean any or all of the following:
----------------------
15
<PAGE>
(a) inchoate Liens arising in the ordinary course of business and
incident to construction or maintenance of real property, or Liens arising in
the ordinary course of business and incident to construction or maintenance of
real property now or hereafter filed of record which are being contested in good
faith by appropriate proceedings and have not proceeded to a judgment which has
remained outstanding for more than ten (10) days after the entering thereof,
provided that, by reason of such proceedings no such real property is subject to
- --------
a material risk of loss or forfeiture;
(b) Liens arising in the ordinary course of business for taxes,
assessments and brokerage commission on real property which are not yet past
due, or are being contested in good faith by appropriate proceedings and have
not proceeded to a judgment which has remained outstanding for more than ten
(10) days after the entering thereof, provided that, by reason of nonpayment, no
--------
such real property is subject to a material risk of loss or forfeiture;
(3) minor defects and irregularities in title to any real property
which in the aggregate do not materially impair the value or use of the real
property for the purposes for which it is or may reasonably be expected to be
held;
(4) easements, exceptions, reservations, or other agreements for the
purpose of pipelines, conduits, cables, wire communication lines, power lines
and substations, streets, trails, walkways, drainage, irrigation, water, and
sewerage purposes, dikes, canals, ditches, the removal of oil, gas, coal, or
other minerals, and other like purposes affecting real property, facilities, or
equipment which in the aggregate do not materially burden or impair the value or
use of such property for the purposes for which it is or may reasonably be
expected to be held;
(5) easements, exceptions, reservations, or other agreements for the
purpose of facilitating the joint or common use of property in an industrial
park or similar real property project affecting real property which in the
aggregate do not materially burden or impair the value or use of such property
for the purposes for which it is or may reasonably be expected to be held;
(6) rights reserved to or vested in any governmental agency to control
or regulate the use of any real property;
(7) any obligations or duties affecting any real property to any
governmental agency with respect to any right, power, franchise, grant, license,
or permit;
(8) present or future zoning laws and ordinances or other laws and
ordinances restricting the occupancy, use, or enjoyment of real property;
16
<PAGE>
(9) statutory Liens, other than those described in clauses (a) or (b)
above, arising in the ordinary course of business with respect to obligations
which are not delinquent or are being contested in good faith, provided, that
--------
adequate reserves have been set aside with respect thereto and, by reason of
nonpayment, no property is subject to a material risk of loss or forfeiture;
(10) covenants, conditions, and restrictions affecting the use of real
property which (i) do not, and will not, interfere in any material respect with
the intended use of the property by any tenant under any lease in effect with
respect to such property, which use is consistent with such tenant's rights
under its lease; (ii) do not contain any restrictions upon Borrower's
transferability of title to such property or the ability of Borrower to encumber
said property; and (iii) which in the aggregate do not materially impair the
value or use of the real property for the purposes for which it is or may
reasonably be expected to be operated and held, including the present or
intended use by all tenants under leases currently in effect with respect to the
property; and
(11) rights of tenants under space leases covering real property
entered into in the ordinary course of business of the owner thereof.
"PERMITTED GUARANTIES" shall mean: (a) the Syndicated Term Loan Guaranties,
--------------------
(b) any Guaranty of the indebtedness of Borrower, not to exceed the principal
amount of $225,000,000 at any one time outstanding, now or hereafter owing to
Banks (as defined in the Syndicated Credit Agreement) under the Syndicated
Credit Agreement, (c) any Guaranty of the indebtedness of Borrower, not to
exceed the principal amount of $30,000,000 at any one time outstanding, now or
hereafter owing to Swing Bank under the Swing Credit Agreement, (d) Guaranties
of the obligations of Weeks Corporation or any Subsidiary, (e) Guaranties of
loans secured by real property owned by a Non-Consolidated Subsidiary or a Non-
Consolidated Venture, provided that the aggregate amount of all indebtedness
guaranteed by such Guaranties shall not exceed, at any one time, five percent
(5%) of Total Asset Value, (f) Guaranties of the payment or performance of
obligations of a Subsidiary with respect to obligations undertaken in the normal
course of the business operations of such Subsidiary, other than Indebtedness
for Money Borrowed of such Subsidiary, and (g) Guaranties of the payment and
performance of Weeks Construction Services, Inc. or any of its wholly-owned
subsidiaries engaged in construction contracting with respect to such Person's
construction contracts and surety bonds, provided the sum of the uncompleted
--------
contract values guaranteed by such Guaranties shall not exceed $50,000,000 at
any one time.
"PERMITTED MORTGAGE DEBT" shall mean any debt financing which is secured by
-----------------------
a first priority Mortgage granted by Weeks
17
<PAGE>
Corporation or any Subsidiary on real property and which is (a) Initial
Permitted Mortgage Debt; or (b) a debt financing which meets the following
conditions: (i) the holder of the Mortgage has recourse only to the collateral
securing the debt financing and not to the general assets of Weeks Corporation
or any Consolidated Entity or Non-Consolidated Subsidiary, except for liability
for Full Recourse Covenants, (ii) the debt financing has an original term of
five (5) years or more, and (iii) the debt financing would not result in a
violation of the restriction set forth in Section 10.04; (c) a Permitted Tax
Exempt Financing, or (d) a debt financing which is not described in clause (a),
clause (b) or clause (c) and which has a principal amount which, when aggregated
with the principal amount of all other such debt financings described in this
clause (d), does not exceed $20,000,000 at any one time.
"PERMITTED TAX-EXEMPT FINANCING" shall mean a Debt owing by Weeks
------------------------------
Corporation or any Subsidiary arising out of the issuance of tax-exempt
industrial revenue bonds issued by a public or quasi-public authority.
"PERSON" shall mean an individual, a corporation, a partnership, an
------
unincorporated association, a trust or any other entity or organization,
including, but not limited to, a government or political subdivision or an
agency or instrumentality thereof.
"PREFERRED DIVIDENDS" shall mean, for any period, without duplication of
-------------------
such amounts as constitute intercompany debts or distributions, the sum of (a)
dividends or distributions due and payable or accrued during such period on
preferred stock issued by Weeks Corporation or a Subsidiary, and (b)
distributions which are the functional equivalent of preferred dividends (i.e.,
which the issuer is required to make prior to distributions on another class or
other classes of partnership interests) and which are due and payable or accrued
during such period on preferred partnership interests issued by Borrower or any
other Subsidiary.
"PRIME RATE" shall mean the interest rate denominated as Wachovia's "prime
----------
rate" and set by Wachovia in its sole discretion from time to time as an
interest rate basis for borrowings, which is one of several interest rate bases
used by Wachovia, and which rate is not the lowest interest rate available from
Wachovia. Loans are made by Wachovia from time to time at interest rates equal
to, above or below its "prime rate." In the event Wachovia shall abolish or
abandon the practice of establishing its "prime rate," Administrative Agent
shall designate a comparable reference rate which shall be deemed to be the
"PRIME RATE" hereunder.
----------
"PROPERTY" shall mean real property owned from time to time by Weeks
--------
Corporation or any Consolidated Entity.
18
<PAGE>
"PROPERTY INTEREST(S)" shall mean any interest in any property or asset of
--------------------
any kind, whether real, personal or mixed, or tangible or intangible.
"RELATED PARTIES" shall mean, collectively, (a) Weeks Corporation, (b) all
---------------
Subsidiaries (except Borrower), (c) all Non-Consolidated Ventures in which Weeks
Corporation and/or any Consolidated Entities own at least 20% of the equity
interests and over which Weeks Corporation and/or any Consolidated Entities have
Control, and (d) all Non-Consolidated Ventures in which Weeks Corporation and/or
any Consolidated Entities own at least 50% of the equity interests. "RELATED
-------
PARTY" shall mean any one such Person.
- -----
"REPORTABLE EVENT" shall mean any of the events described in Section
----------------
4043(b) of ERISA.
"REQUIRED BANKS" shall mean, at any time prior to the maturity of the Notes
--------------
(whether by acceleration or otherwise), any Bank or Banks whose Commitment or
Commitments constitute at least 66-2/3% of the outstanding principal amount of
the Loan.
"RESTRICTED INVESTMENT" shall mean any acquisition of Property Interests by
---------------------
Weeks Corporation, Borrower or any other Subsidiary in exchange for cash or
other Property Interests, whether in the form of an acquisition of stock, debt
security, or other indebtedness or obligation, or the purchase or acquisition of
any other Property Interests, or by loan, advance, capital contribution, or
subscription, except the following: (a) tangible and intangible assets
------
including real property to be used in the business of Borrower or a Related
Party so long as the acquisition costs thereof constitute capital expenditures
not otherwise prohibited hereunder; (b) goods held for sale or lease or to be
used in the provision of services by Borrower or a Related Party in the ordinary
course of business; (c) current assets purchased for use, or arising from the
sale or lease of goods or the rendering of services, in the ordinary course of
business of Borrower or a Related Party; (d) direct obligations of the United
States of America, or any agency thereof, or obligations guaranteed by the
United States of America, provided that such obligations mature within one year
--------
from the date of acquisition thereof; (e) certificates of deposit maturing
within one year from the date of acquisition, bankers acceptances, Eurodollar
bank deposits, or overnight bank deposits, in each case issued by, created by,
or with a bank or trust company organized under the laws of the United States or
any state thereof having capital and surplus aggregating at least $100,000,000;
(f) commercial paper given the highest rating by a national credit rating
agency, including, without limitation, Standard and Poor's or Moody's, and
maturing not more
19
<PAGE>
than 270 days from the date of creation thereof; (g) tender bonds the payment of
the principal of and interest on which is fully supported by a letter of credit
issued by a bank organized or licensed under the laws of the United States or
any state thereof whose long-term certificates of deposit are rated at least AA
or the equivalent thereof by Standard and Poor's, or Aa or the equivalent
thereof by Moody's; and (h) investments in debt or equity securities rated at
least BBB+ or the equivalent thereof by Standard and Poor's, or at least Baa1 or
the equivalent thereof by Moody's not exceeding an aggregate amount outstanding
at any one time of $5,000,000.
"SEC" shall mean the Securities and Exchange Commission.
---
"STANDARD AND POOR'S" shall mean Standard and Poor's Ratings Services and
-------------------
its successors and assigns succeeding to its rating agency business.
"SUBSIDIARY" means (a) any Consolidated Entity, and (b) any other
----------
corporation or entity the majority of the shares of the non-voting capital stock
or other equivalent ownership interests of which (except directors' qualifying
shares) are at the time directly or indirectly owned by Weeks Corporation and/or
Borrower, and the majority of the shares of the voting capital stock or other
equivalent ownership interests of which (except directors' qualifying shares)
are at the time directly or indirectly owned by Weeks Corporation or any
Consolidated Entity, and/or any officer of Weeks Corporation.
"SUBSTANCES" shall mean all hazardous or toxic substances or wastes,
----------
including, but not limited to, asbestos, PCBs, petroleum products, fertilizers
and pesticides.
"SWING BANK" shall mean Wachovia, as lender under the Swing Credit
----------
Agreement, or Wachovia or any other institutional lender under any other Swing
Credit Agreement.
"SWING CREDIT AGREEMENT" shall mean that certain Swing Credit Agreement,
----------------------
dated July 1, 1998, by and among Borrower, as borrower, Weeks Corporation, GP
Holdings and LP Holdings, as guarantors, and Swing Bank, as lender, or any
extension, renewal, modification or replacement thereof.
"SYNDICATED CREDIT AGREEMENT" shall mean that certain Syndicated Credit
---------------------------
Agreement, dated July 1, 1998, by and among Borrower, as borrower, Weeks
Corporation, GP Holdings and LP Holdings, as guarantors, each Bank that was,
became or becomes a signatory thereto, as Banks, and Wachovia, as Administrative
Agent.
20
<PAGE>
"SYNDICATED TERM LOAN GUARANTIES" shall mean, collectively, an
-------------------------------
unconditional guaranty of payment and performance, in the form of Exhibit D,
---------
executed by each Guarantor, in favor of Banks, whereby such Guarantor
unconditionally guaranties the payment and performance when due of all
Obligations of Borrower to Banks, and a "SYNDICATED TERM LOAN GUARANTY" shall
-----------------------------
mean any such unconditional guaranty.
"SYNDICATION AGENT" shall mean FUNB, in its capacity as the syndication
-----------------
agent in accordance with its appointment as syndication agent pursuant to the
provisions of Article III.
"TAXES" shall have the meaning ascribed to such term in Section 2.11(c).
-----
"TOTAL ANNUALIZED NOI" shall mean the aggregate Annualized NOI with respect
--------------------
to all Income Property and all Property subject to a Direct Financing Lease.
"TOTAL ASSET VALUE" shall mean, at any Measurement Date, the sum, without
-----------------
duplication, of (a) the Income Property Value of all Income Property, (b) the
Direct Financing Lease Value of all Direct Financing Leases, (c) the Development
in Progress Value of all Developments in Progress, (d) the Land Value of all
Land Held for Future Development, (e) the Notes Receivable Value, (f) the Non-
Consolidated Subsidiary Value, and (g) the Non-Consolidated Venture Value.
"TOTAL DEBT" shall mean, without duplication, all Debt (other than
----------
Intercompany Debt) owing by Weeks Corporation or any Subsidiary.
"TOTAL INTEREST BEARING DEBT" shall mean, without duplication, all Debt
---------------------------
(other than Intercompany Debt) of Weeks Corporation or any Subsidiary consisting
of Capitalized Lease Obligations or Indebtedness for Money Borrowed.
"TOTAL SECURED DEBT" shall mean, without duplication, all Debt (other than
------------------
Intercompany Debt) of Weeks Corporation or any Subsidiary consisting of: (a)
Capitalized Lease Obligations; or (b) Indebtedness for Money Borrowed, which in
either case is secured by a Mortgage on any real property.
"TOTAL UNSECURED DEBT" means, without duplication, all Debt (other than
--------------------
Intercompany Debt) of Weeks Corporation or any Subsidiary which is not secured
by a Mortgage on any real property.
"TRANCHE" shall mean a segment of the Loan constituting a specified
-------
principal amount thereof equal to $10,000,000 or a larger
21
<PAGE>
integral multiple of $1,000,000 (up to and including the entire principal amount
of the Loan) for which an Interest Rate Election, made by Borrower in accordance
with Section 2.03, shall be in effect.
"TRANSFEREE" shall have the meaning ascribed to such term in Section
----------
14.03(d).
"UNENCUMBERED PROPERTY VALUE" shall mean the Income Property Value of all
---------------------------
Income Property, plus the Direct Financing Lease Value of each Direct Financing
Lease, in each case that is free and clear of Mortgage Debt. The factors in the
foregoing calculation shall be determined with respect to Weeks Corporation and
the Subsidiaries, without duplication, or, where the context requires that such
calculation shall be determined with respect solely to Borrower, solely to
Borrower.
1.2 ACCOUNTING TERMS AND DETERMINATIONS. Unless otherwise specified
-----------------------------------
herein, all terms of an accounting character used herein shall be interpreted,
all accounting determinations hereunder shall be made, and all financial
statements required to be delivered hereunder shall be prepared, in accordance
with GAAP, applied on a basis consistent (except for changes concurred in by
Borrower's independent public accountants or otherwise required by a change in
GAAP) with the most recent audited consolidated financial statements of Weeks
Corporation delivered to Banks, unless with respect to any such change concurred
in by the Borrower's independent public accountants or required by GAAP, in
determining compliance with any of the provisions of this Agreement or any of
the other Loan Documents: (a) Weeks Corporation or Borrower shall have objected
to determining such compliance on such basis at the time of delivery of such
financial statements, or (b) the Required Banks shall so object in writing
within thirty (30) days after the delivery of such financial statements, in
either of which events such calculations shall be made on a basis consistent
with those used in the preparation of the latest financial statements as to
which such objection shall not have been made (which, if objection is made in
respect of the first financial statements delivered under Section 8.03, shall
mean the financial statements referred to in Section 7.12).
1.3 REFERENCES. Unless otherwise indicated, references in this Agreement
----------
to "Articles," "Exhibits," "Schedules," "Sections" and other subdivisions or
paragraphs are references to articles, exhibits, schedules, sections and other
subdivisions or paragraphs hereof.
1.4 USE OF DEFINED TERMS. All terms defined in this Agreement shall have
--------------------
the same defined meanings when used in any of
22
<PAGE>
the other Loan Documents, unless otherwise defined therein or unless the context
shall require otherwise.
1.5 TERMINOLOGY. All personal pronouns used in this Agreement, whether
-----------
used in the masculine, feminine or neuter gender, shall include all other
genders; the singular shall include the plural, and the plural shall include the
singular. Titles of Articles and Sections in this Agreement are for convenience
only and neither limit nor amplify the provisions of this Agreement. When
anything is described or referred to in the Loan Documents in general terms and
one or more examples or components of what has been described or referred to
generally is associated with that description (whether or not following the word
"including"), the examples or components shall be deemed illustrative only and
shall not be construed as limiting the generality of the description or
reference in any way.
ARTICLE II
----------
SYNDICATED TERM LOAN
--------------------
1.6 SYNDICATED TERM LOAN. Upon the satisfaction, on or before December 31,
--------------------
1998, of each of the conditions of Article IV and subject to all other terms and
conditions of this Agreement, Banks shall make a term loan to Borrower under
which Banks will, ratably in accordance with their respective Commitments, make
the Loan to Borrower in the amount of $85,000,000.
1.7 RATE OF INTEREST ON LOAN. Interest shall accrue on the unpaid
------------------------
principal amount of the Loan at the LIBOR Rate or LIBOR Rates elected by
Borrower in accordance with the provisions of Section 2.03, provided that no
--------
more than five (5) LIBOR Rates shall be in effect at any one time.
1.8 NOTICE OF INTEREST RATE ELECTIONS.
---------------------------------
(1) Borrower shall give Administrative Agent, prior to 10:00 a.m.
(Atlanta, Georgia time) on a Euro-Dollar Business Day which is at least three
(3) Euro-Dollar Business Days before the making of the Loan, to be effective on
the day the Loan is to be made, (i) an Interest Rate Election for a Tranche
constituting the entire principal amount of the Loan or (ii) Interest Rate
Elections for a number, not to exceed five (5), of Tranches (each in the
principal amount of $10,000,000 or a larger integral multiple of $1,000,000),
which in the aggregate constitute the entire principal amount of the Loan.
23
<PAGE>
(2) Borrower shall give Administrative Agent, prior to 10:00 a.m.
(Atlanta, Georgia time) on a Euro-Dollar Business Day which is at least three
(3) Euro-Dollar Business Days before the last day of the Interest Period in
effect for each Tranche, to be effective on the day after the last day of the
then expiring Interest Period, (i) in the case of any Tranche as to which the
Interest Period is expiring, an Interest Rate Election for the entire Tranche or
(ii) in the case of a Tranche in the principal amount of $20,000,000 or more as
to which the Interest Period is expiring, Interest Rate Elections for more than
one Tranche (each in the principal amount of $10,000,000 or a larger integral
multiple of $1,000,000) which, in the aggregate, have a principal amount equal
to the amount of the Tranche as to which the Interest Period is expiring or
(iii) in the case of more than one Tranche as to which the Interest Period is
expiring, an Interest Rate Election for a single Tranche in the aggregate of the
principal amounts of all such Tranches as to which the Interest Period is
expiring, or Interest Rate Elections for a number of Tranches (each in the
principal amount of $10,000,000 or a larger integral multiple of $1,000,000),
which in the aggregate constitute the aggregate of the principal amounts of all
such Tranches as to which the Interest Period is expiring.
(3) Each Interest Rate Election shall specify (i) the effective date
of the Interest Rate Election, (ii) the amount of the Tranche for which the
Interest Rate Election is being made, (iii) the Interest Period elected, and
(iv) such other information called for in the form of the Interest Rate
Election. Any such Interest Rate Election which Administrative Agent believes in
good faith to have been given by a duly authorized agent of Borrower shall be
deemed given by Borrower. Notwithstanding any provision of this Agreement to the
contrary, if, after Administrative Agent's receipt of Borrower's Interest Rate
Election, Administrative Agent determines in good faith that it is not possible
to determine the applicable LIBOR Rate or the LIBOR Rate shall not cover the
actual cost to Banks of obtaining United States dollar deposits in the Interbank
Eurodollar Market plus the Applicable Margin, then Administrative Agent shall
promptly notify Borrower and Banks of such determination, and the Tranche
subject to the Interest Rate Election shall bear interest at the Floating Rate.
(4) Upon receipt of an Interest Rate Election, Administrative Agent
shall promptly notify each Bank of the contents thereof. Such Interest Rate
Election, once received by Administrative Agent, shall not thereafter be
revocable.
1.9 INTEREST PERIOD PRESUMPTION. In the event that Administrative Agent
---------------------------
shall not receive an Interest Rate Election at least three (3) Euro-Dollar
Business Days before the last day of an Interest Period applicable to a Tranche,
the Interest Period for the Tranche shall be, effective on the day after the
last day of
24
<PAGE>
the expiring Interest Period, the same as the expiring Interest Period, provided
--------
that if an Interest Period which is the same as the expiring Interest Period
would expire after the Maturity Date, the Interest Period for the Tranche shall
be, effective on the day after the last day of the expiring Interest Period, the
longest Interest Period that would be available to Borrower under the terms and
conditions of this Agreement that would not expire after the Maturity Date.
1.10 FUNDING OF THE LOAN. Not later than 2:00 p.m. (Atlanta, Georgia time)
-------------------
on the day the Loan is to be made, each Bank shall make available its ratable
share of the Loan, in federal or other funds immediately available in Atlanta,
Georgia, to Administrative Agent at its address determined pursuant to Section
14.10. Unless Administrative Agent determines that any applicable condition
specified in Article IV has not been satisfied, Administrative Agent will make
the funds so received from Banks available to Borrower by crediting a checking
account maintained by Borrower with Administrative Agent. Unless Administrative
Agent receives notice from a Bank at Administrative Agent's address specified
pursuant to Section 14.10, no later than 4:00 p.m. (Atlanta, Georgia time) on
the day the Loan is to be made, stating that such Bank will not make available
its ratable share of the Loan, Administrative Agent shall be entitled to assume
that such Bank will make available its ratable share of the Loan and, in
reliance on such assumption, Administrative Agent may (but shall not be
obligated to) make such Bank's ratable share of the Loan available to Borrower
for the account of such Bank. If Administrative Agent makes such Bank's ratable
share of the Loan available to Borrower as provided above, and if such Bank does
not in fact make its ratable share of the Loan available on such day,
Administrative Agent shall be entitled to recover such Bank's ratable share of
the Loan from such Bank or Borrower (and for such purpose shall be entitled to
charge such amount to any account of Borrower maintained with Administrative
Agent), together with interest thereon for each day during the period from the
date of the Loan until such sum shall be paid in full at a rate per annum equal
to the rate at which Administrative Agent determines that it obtained (or could
have obtained) overnight federal funds to cover such amount for each such day
during such period, provided that (i) any such payment by Borrower of such
--------
Bank's ratable share of the Loan and interest thereon shall be without prejudice
to any rights that Borrower may have against such Bank, and (ii) until such Bank
has paid its ratable share of the Loan, together with interest pursuant to the
foregoing, it will have no interest in or rights with respect to the Loan for
any purpose hereunder. If Administrative Agent determines not to exercise its
option to advance funds for the account of such Bank, it shall forthwith notify
Borrower of such determination.
25
<PAGE>
1.11 INTEREST PAYMENTS ON LOAN. Accrued and unpaid interest on the unpaid
-------------------------
principal amount of each Tranche shall be due and payable on the last day of the
Interest Period applicable thereto and, if earlier, three (3) months after the
first day of the Interest Period applicable thereto. Interest payable on the
Loan shall be computed on the basis of a hypothetical year of 360 days for the
actual number of days elapsed.
1.12 MATURITY. The entire unpaid principal amount of the Loan, together
--------
with all accrued and unpaid interest thereon, shall be due and payable on the
Maturity Date.
1.13 NOTES. (a) The ratable share of the Loan made by each Bank shall be
-----
evidenced by a Note made by Borrower payable to the order of such Bank in an
amount equal to the original principal amount of such Bank's Commitment.
(b) Upon receipt of each Bank's Note pursuant to Section 4.07,
Administrative Agent shall deliver such Note to such Bank.
(c) In the event of loss, theft, destruction, total or partial
obliteration, mutilation or inappropriate cancellation of a Note, Borrower will
execute and deliver, in lieu thereof, a replacement Note identical in form and
substance to such Note and dated as of the date of such Note.
1.14 USE OF LOAN PROCEEDS. The proceeds of the Loan will be used by
--------------------
Borrower solely (a) to prepay Borrower's obligations under the Syndicated Credit
Agreement (including the amount of compensation, if any, determined to be due
pursuant to Section 2.10(e) of the Syndicated Credit Agreement and the fee due
pursuant to Section 13.03 of the Syndicated Credit Agreement) to Agent (as
defined in the Syndicated Credit Agreement), in such amount as Borrower shall
direct, and (b) to prepay Borrower's obligations under the Swing Credit
Agreement to Swing Bank, in such amount as Borrower shall direct.
1.15 PREPAYMENT OF LOAN. (a) Borrower may, upon at least five (5) Euro-
------------------
Dollar Business Days' notice to Administrative Agent, prepay the Loan in whole,
but not in part, by paying the entire outstanding principal amount of the Loan,
plus, if such prepayment is not made on the last day of the Interest Periods
applicable to the LIBOR Rate Tranches, if any, the amount of compensation, if
any, determined to be due pursuant to paragraph (c) of this Section 2.10 and the
fee due pursuant to Section 13.03.
(b) Upon receipt of a notice of prepayment pursuant to this Section
2.10, Administrative Agent shall promptly notify each Bank of the contents
thereof and of such Bank's ratable share of
26
<PAGE>
such prepayment. Such notice, once received by Administrative Agent, shall not
thereafter be revocable by Borrower.
(c) Upon prepayment of the Loan in accordance with paragraph (a) of
this Section 2.10 or as a result of an acceleration of the maturity of the Loan
upon a Default, Borrower shall pay to Administrative Agent, to be applied
ratably to each Bank's pro rata portion of the Loan, compensation with respect
to the prepayment of the LIBOR Rate Tranches, if any, not made on the last day
of the Interest Periods applicable thereto, equal to Banks' Breakage Costs with
respect thereto.
1.16 GENERAL PROVISIONS AS TO PAYMENTS. (a) Borrower shall make each
---------------------------------
payment of interest on, and the payment of principal on, the Loan and of fees
hereunder, not later than 1:00 p.m. (Atlanta, Georgia time) on the day when due,
in federal or other funds immediately available in Atlanta, Georgia, to
Administrative Agent at its address referred to in Section 14.10. All such
payments of principal of, and interest on, the Loan and of fees hereunder shall
be credited to the account of Borrower on the day so received by Administrative
Agent, if received before 1:00 p.m. (Atlanta, Georgia time), or on the next
Domestic Business Day, if so received after 1:00 p.m. (Atlanta, Georgia time).
Administrative Agent will promptly distribute to each Bank its ratable share of
each such payment received by Administrative Agent for the account of Banks. If
Administrative Agent fails to distribute to any Bank its ratable share of any
such payment on the day received, if received not later than 1:00 p.m. (Atlanta,
Georgia time) on such day, or on the next Domestic Business Day, if received
after 1:00 p.m. (Atlanta, Georgia time) on such day, such Bank shall be entitled
to recover such Bank's ratable share of such payment from Administrative Agent,
together with interest thereon for each day during the period from the date the
distribution of such Bank's ratable share of such payment shall have become due
until such distribution shall be made, at a rate per annum equal to the rate at
which Administrative Agent determines that it obtained (or could have obtained)
overnight federal funds in such amount for each such day during such period.
(1) Whenever any payment of principal of, or interest on, Base Rate
Tranches or fees hereunder shall be due on a day which is not a Domestic
Business Day, the date for payment thereof shall be extended to the next
succeeding Domestic Business Day. Whenever any payment of principal of or
interest on LIBOR Rate Tranches shall be due on a day which is not a Euro-Dollar
Business Day, the date for payment thereof shall be extended to the next
succeeding Euro-Dollar Business Day, unless such Euro-Dollar Business Day falls
in another calendar month, in which case the date for payment thereof shall be
the next preceding Euro-Dollar Business Day.
27
<PAGE>
(2) All payments of principal, interest and fees and all other amounts
to be made by Borrower pursuant to this Agreement with respect to the Loan or
fees relating thereto shall be paid without deduction for, and free from, any
taxes, imposts, levies, deductions, or withholdings now or hereafter imposed by
any governmental authority or by any taxing authority thereof or therein,
excluding in the case of each Bank or Administrative Agent (i) any taxes imposed
by the United States or any political subdivision thereof on the effectively
connected net income of it or its Lending Office or any franchise taxes imposed
by such jurisdiction, (ii) taxes imposed on the net income of, or franchise
taxes imposed upon, it by the jurisdiction under the laws of which it is
organized or by any political subdivision thereof, (iii) taxes imposed on the
net income of its Lending Office, and franchise taxes imposed on it, by the
jurisdiction of its Lending Office, or any political subdivision thereof, (iv)
any taxes imposed on it by Section 884(a) of the Internal Revenue Code of 1986,
as amended (and any successor statute to Section 884(a)), and (v) any United
States withholding tax payable with respect to any payments to it under the laws
(including, without limitation, any treaty, ruling, judicial or administrative
determination or regulation) in effect on the Initial Date (as hereinafter
defined), but not excluding any United States withholding tax payable or
-----------------
increased as a result of any change in any law, treaty, ruling, judicial or
administrative determination or regulation, or interpretation thereof occurring
after said Initial Date (all such non-excluded taxes, levies, imposts,
deductions and withholdings hereinafter referred to as "TAXES"). For purposes
-----
hereof, the term "INITIAL DATE" shall mean, in the case of each Bank or
------------
Administrative Agent party hereto on the date hereof, the date of this
Agreement, and in the case of each other Bank or Administrative Agent, the
effective date of the Assignment and Acceptance, or other instrument pursuant to
which it became a Bank or other party hereunder.
In the event that Borrower is required by applicable law to make any such
withholding or deduction of Taxes with respect to any Loan or fee or other
amount, Borrower shall pay such deduction or withholding to the applicable
taxing authority, shall promptly furnish to the Affected Bank in respect of
which such deduction or withholding is made all receipts and other documents
evidencing such payment, and shall pay to the Affected Bank additional amounts
as may be necessary in order that the amount received by the Affected Bank after
the required withholding or other payment shall equal the amount it would have
received had no such withholding or other payment been made. If in such event no
withholding or deduction of Taxes are payable in respect to any Loan or fee
relating thereto, Borrower shall furnish the Affected Bank, at its written
request, a certificate from each applicable taxing authority or an opinion of
counsel reasonably acceptable to it, in either case stating that such payments
are exempt from or not
28
<PAGE>
subject to withholding or deduction of Taxes. If Borrower fails to provide such
original or certified copy of a receipt evidencing payment of Taxes or
certificate(s) or opinion of counsel described in the preceding sentence,
Borrower hereby agrees to compensate the Affected Bank for, and indemnify it
with respect to, the tax consequences of Borrower's failure to provide evidence
of tax payments or tax exemption; provided, however, that Borrower shall not be
-------- -------
obligated to indemnify any party for penalties, additions to tax, interest or
expenses associated with the payment of Taxes if the Affected Bank's liability
for such Taxes has arisen as a result of the violation by it of the terms of
this Agreement. Such compensation or indemnification payment shall be made
within 30 days from the date such Affected Bank makes written request therefor.
Any such request shall be made within 90 days after the date on which such
payment of Taxes was made. Each such request shall be accompanied by a copy of
the statement from the taxing authority demanding payment by the Affected Bank
of such Taxes or by a certificate from the Affected Bank which certificate shall
set forth in reasonable detail the basis for any additional amount payable to
such party under this Section 2.11(c) (together with reasonable evidence of
payment of such Taxes).
Each Bank or Administrative Agent which is not organized under the laws of
the United States or any state thereof agrees, as soon as practicable after
receipt by it of a request by Borrower to do so, to file all appropriate forms
and take other appropriate action to obtain a certificate or other appropriate
document from the appropriate governmental authority in the jurisdiction
imposing the relevant Taxes, establishing that it is entitled to receive
payments of principal and interest under this Agreement and the Notes without
deduction and free from withholding of any Taxes imposed by such jurisdiction;
provided that if it is unable, for any reason, to establish such exemption or to
- --------
file such forms, in any event, during such period of time as such request for
exemption is pending, Borrower shall nonetheless remain obligated under the
terms of the immediately preceding paragraph.
In the event any Affected Bank receives a refund of any Taxes paid by
Borrower pursuant to this Section 2.11(c), it will pay to Borrower the amount of
such refund promptly upon receipt thereof; provided that if at any time
--------
thereafter it is required to return such refund, Borrower shall promptly repay
to it the amount of such refund.
Without prejudice to the survival of any other agreement of Borrower
hereunder, the agreements and obligations of Borrower, Banks and Administrative
Agent contained in this Section 2.11(c) shall be applicable with respect to any
Transferee, and any calculations required by such provisions (i) shall be made
based upon the circumstances of such Transferee, and (ii) constitute a
continuing agreement and shall survive the termination of this Agreement and the
payment in full or cancellation of the Notes.
29
<PAGE>
1.17 DEFAULT RATE OF INTEREST. If a Default shall occur under this
------------------------
Agreement, interest shall accrue on the entire unpaid principal amount of the
Loan from and after the date of such occurrence through and including the date
on which such Default shall have been cured at a rate of interest equal to the
highest rate otherwise applicable to any Tranche plus an additional two percent
(2.00%) per annum (200 basis points).
1.18 COMMITMENT FEE. In consideration of Banks' agreement to make the Loan
--------------
in accordance with the terms and conditions of this Agreement, Borrower shall
pay Administrative Agent, for the ratable benefit of Banks, a Commitment Fee,
which shall be due and payable on the effective date of this Agreement, equal to
0.50% (50 basis points) of the principal amount of the Loan.
1.19 INCREASED COSTS; ILLEGALITY; CAPITAL ADEQUACY. (a) If any Bank should
---------------------------------------------
suffer any increased cost in connection with the Loan, as a result of any change
subsequent to the date hereof causing the imposition or increase of any reserve,
insurance, tax or assessment requirement (other than a tax assessable on the
Bank's overall net income or gross receipts) or the compliance with any
guidelines or requests from any governmental authority issued subsequent to the
date hereof (whether or not having the force of law), such Bank shall, upon
becoming aware of such increased costs, certify to Borrower the amount thereof
(and such certification shall be deemed prima facie correct), whereupon Borrower
----- -----
shall have the option either to: (i) prepay in full the Notes in accordance with
the provisions of Section 2.10, or (ii) pay such Bank on subsequent interest
payment dates such additional amounts as will compensate such Bank, from the
date of receipt of certification, for such increased costs.
(1) In the event that the introduction of or any change subsequent to
the date hereof in any applicable law, rule or regulation or in the
interpretation or administration thereof or compliance by any Bank with any
request or directive (whether or not having the force of law) of any
governmental authority shall, in the determination of such Bank (which
determination shall be made in good faith and shall be deemed prima facie
----- -----
correct) make it unlawful or impractical for such Bank to make, fund or maintain
the Loan, such Bank shall promptly, upon becoming aware of such event, notify
Borrower thereof, whereupon Borrower shall, upon receipt of such notice, pay in
full such amounts as will compensate such Bank for any losses (not including
lost profits) or expenses which such Bank shall have sustained or incurred as a
result of such event (and the determination of which by such Bank shall be
deemed prima facie correct, as certified by such Bank).
----- -----
(2) If, after the date hereof, the adoption of any applicable law,
rule or regulation regarding capital adequacy, or
30
<PAGE>
any change in the interpretation or administration thereof by any governmental
authority, central bank or comparable agency charged with the administration
thereof, or compliance by any Bank with any request or directive regarding
capital adequacy (whether or not having the force of law) of any such authority,
central bank or comparable agency, affects the amount of capital required or
expected to be maintained by such Bank or any person or entity in Control of
such Bank and such Bank determines that the amount of said capital is increased
by or based upon such Bank's obligations hereunder, then such Bank will promptly
notify Borrower thereof, and from time to time, upon demand by such Bank,
Borrower shall pay to such Bank such additional amount or amounts as will
compensate such Bank in light of such circumstances, to the extent that such
Bank reasonably determines such increase in capital is allocable to its
obligations hereunder.
1.20 CALCULATION OF COMPENSATION TO BANKS; REQUIRED TRANSFER BY BANKS.
----------------------------------------------------------------
(1) Any Bank or Administrative Agent requiring compensation pursuant
to Section 2.11(c) or subparagraphs (a), (b) and (c) of Section 2.14 shall
deliver to Borrower a certificate setting forth in reasonable detail the
calculations of any additional amounts required in order to compensate such Bank
or Administrative Agent under Section 2.11(c) or subparagraphs (a), (b) and (c)
of Section 2.14. In determining any such amounts, the Affected Bank may use
any reasonable averaging and attribution method, provided such Affected Bank
--------
shall use such methods in good faith, and such methods shall be in accordance
with those generally used by such Bank for this purpose for other comparable
credit facilities.
(2) Any Bank or other Person entitled to claim any additional amounts
payable pursuant to Section 2.11 or Section 2.14 shall endeavor in good faith
(consistent with its internal policy and legal and regulatory restrictions) to
retain the jurisdiction of its Lending Office or change the jurisdiction of its
Lending Office, as the case may be, if such retention or change would avoid the
need for, or reduce the amount of, any such additional amounts which may
thereafter accrue and such retention or change would not, in its reasonable
judgment, be otherwise materially disadvantageous to it, provided that nothing
--------
contained in this Section 2.15(b) shall be deemed to require any Bank or other
Person to retain, maintain or establish an office in any jurisdiction for the
sole purpose of avoiding the need for, or reducing the amount of, any such
additional amounts which may thereafter accrue.
(3) Notwithstanding the foregoing, in the event Borrower is required
to pay any Bank or Administrative Agent amounts pursuant to Section 2.11 or
Section 2.14 and the designation of a different Lending Office pursuant to
Section 2.15(b) will not avoid
31
<PAGE>
the need for compensation to such Bank or Administrative Agent, as the case may
be (an "AFFECTED BANK"), Borrower may give notice to such Affected Bank (with
-------------
copies to Administrative Agent) that it wishes to seek one or more assignees
(which may be one or more of the Banks) to assume the Commitment of such
Affected Bank and to purchase its ratable share of the outstanding Loan and its
Note; provided, that if there is more than one Affected Bank that has requested
--------
substantially and proportionally equal compensation hereunder, Borrower shall
elect to seek an assignee to assume the Commitments of all such Affected Banks.
Each Affected Bank agrees to sell its Commitment, its ratable share of the Loan,
its Note and its interest in this Agreement in accordance with Section 14.03(c)
to any such assignee for an amount equal to the sum of the outstanding unpaid
principal of and accrued interest on its ratable share of the such Loan and its
Note, plus all other fees and amounts (including, without limitation, any
compensation due to such Affected Banks under Section 2.11 or Section 2.14)
calculated, in each case, to the date such ratable share of the Loan, Note and
interest are purchased. Upon such sale or prepayment, each such Affected Bank
shall have no further commitment or other obligation to Borrower hereunder or
under any Note, except as provided in Section 2.11(c).
ARTICLE III
-----------
THE AGENTS
----------
32
<PAGE>
1.21 APPOINTMENT OF ADMINISTRATIVE AGENT; POWERS AND IMMUNITIES. Each Bank
----------------------------------------------------------
hereby irrevocably appoints and authorizes Administrative Agent to act as its
administrative agent hereunder and under the other Loan Documents with such
powers as are specifically delegated to Administrative Agent by the terms hereof
and thereof, together with such other powers as are reasonably incidental
thereto. Administrative Agent: (a) shall have no duties or responsibilities
except as expressly set forth in this Agreement and the other Loan Documents,
and shall not by reason of this Agreement or any other Loan Document be a
trustee for any Bank; (b) shall not be responsible to Banks for any recitals,
statements, representations or warranties contained in this Agreement or any
other Loan Document, or in any certificate or other document referred to or
provided for in, or received by any Bank under, this Agreement or any other Loan
Document, or for the validity, effectiveness, genuineness, enforceability or
sufficiency of this Agreement or any other Loan Document or any other document
referred to or provided for herein or therein or for any failure by Borrower to
perform any of its obligations hereunder or thereunder; (c) shall not be
required to initiate or conduct any litigation or collection proceedings
hereunder or under any other Loan Document except to the extent requested by the
Required Banks, and then only on terms and conditions satisfactory to
Administrative Agent, and (d) shall not be responsible for any action taken or
omitted to be taken by it hereunder or under any other Loan Document or any
other document or instrument referred to or provided for herein or therein or in
connection herewith or therewith, except for its own gross negligence or wilful
misconduct. Administrative Agent may employ agents and attorneys-in-fact and
shall not be responsible for the negligence or misconduct of any such agents or
attorneys-in-fact selected by it with reasonable care. The provisions of this
Article III are solely for the benefit of Administrative Agent and Banks, and
Borrower shall not have any rights as a third party beneficiary of any of the
provisions hereof. In performing its functions and duties under this Agreement
and under the other Loan Documents, Administrative Agent shall act solely as
agent of Banks and does not assume and shall not be deemed to have assumed any
obligation towards or relationship of agency or trust with or for Borrower. The
duties of Administrative Agent shall be ministerial and administrative in
nature, and Administrative Agent shall not have by reason of this Agreement or
any other Loan Document a fiduciary relationship in respect of any Bank.
Administrative Agent shall administer the Loan and the Loan Documents with the
same degree of care as that customarily employed by Administrative Agent in the
administration of similar credit facilities for its own account.
1.22 RELIANCE BY ADMINISTRATIVE AGENT. Administrative Agent shall be
--------------------------------
entitled to rely upon any certification, notice or other communication
(including any thereof by telephone, telecopier, telegram or cable) believed by
it to be genuine and correct and to
33
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have been signed or sent by or on behalf of the proper person or persons, and
upon advice and statements of legal counsel, independent accountants or other
experts selected by Administrative Agent. As to any matters not expressly
provided for by this Agreement or any other Loan Document, Administrative Agent
shall in all cases be fully protected in acting, or in refraining from acting,
hereunder and thereunder in accordance with instructions signed by the Required
Banks, and such instructions of the Required Banks in any action taken or
failure to act pursuant thereto shall be binding on all Banks.
1.23 DEFAULTS. Administrative Agent shall not be deemed to have knowledge
--------
of the occurrence of a Default (other than the nonpayment of principal of or
interest on the Loan) unless Administrative Agent has received notice from a
Bank or Borrower specifying such Default and stating that such notice is a
"Notice of Default." In the event that Administrative Agent receives such a
notice of the occurrence of a Default, Administrative Agent shall give prompt
notice thereof to Banks. Administrative Agent shall give each Bank prompt notice
of each nonpayment of principal of or interest on the Loan whether or not it has
received any notice of the occurrence of such nonpayment. Administrative Agent
shall (subject to Article XII) take such action hereunder with respect to such
Default as shall be directed by the Required Banks, provided that, unless and
--------
until Administrative Agent shall have received such directions, Administrative
Agent may (but shall not be obligated to) take such action, or refrain from
taking such action, with respect to such Default as it shall deem advisable in
the best interests of the Banks.
1.24 RIGHTS OF ADMINISTRATIVE AGENT AS A BANK. With respect to the ratable
----------------------------------------
share of the Loan made by Wachovia in its capacity as a Bank hereunder, Wachovia
in its capacity as a Bank hereunder shall have the same rights and powers
hereunder as any other Bank and may exercise the same as though Wachovia were
not acting as Administrative Agent, and the term "BANK" or "BANKS" shall, unless
---- -----
the context otherwise indicates, include Wachovia in its individual capacity.
Wachovia may (without having to account therefor to any Bank) accept deposits
from, lend money to, and generally engage in any kind of banking, trust or other
business with Borrower (and any of Borrower's Affiliates) as if Wachovia were
not acting as Administrative Agent, and Wachovia and any Affiliate of Wachovia
may accept fees and other consideration from Borrower (in addition to any agency
fees and arrangement fees heretofore agreed to between Borrower and
Administrative Agent) for services in connection with this Agreement or any
other Loan Document or otherwise without having to account for the same to
Banks.
1.25 INDEMNIFICATION. Each Bank severally agrees to indemnify
---------------
Administrative Agent, to the extent Administrative Agent shall not have been
reimbursed by Borrower, ratably in accordance with its
34
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Commitment, for any and all liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses (including, without
limitation, counsel fees and disbursements) or disbursements of any kind and
nature whatsoever which may be imposed on, incurred by or asserted against
Administrative Agent in any way relating to or arising out of this Agreement or
any other Loan Document or any other documents contemplated by or referred to
herein or therein or the transactions contemplated hereby or thereby (excluding,
unless a Default has occurred and is continuing, the normal administrative costs
and expenses incident to the performance of its agency duties hereunder) or the
enforcement of any of the terms hereof or thereof or any such other documents;
provided that no Bank shall be liable for any of the foregoing to the extent
- --------
they arise from the gross negligence or wilful misconduct of Administrative
Agent. If any indemnity furnished to Administrative Agent for any purpose shall,
in the opinion of Administrative Agent, be insufficient or become impaired,
Administrative Agent may call for additional indemnity and cease, or not
commence, to do the acts indemnified against until such additional indemnity is
furnished.
1.26 CONSEQUENTIAL DAMAGES. AGENT SHALL NOT BE RESPONSIBLE OR LIABLE TO
---------------------
ANY BANK, BORROWER OR ANY OTHER PERSON OR ENTITY FOR ANY PUNITIVE, EXEMPLARY OR
CONSEQUENTIAL DAMAGES WHICH MAY BE ALLEGED AS A RESULT OF THIS AGREEMENT, THE
OTHER LOAN DOCUMENTS OR ANY OF THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY.
1.27 PAYEE OF NOTE TREATED AS OWNER. Administrative Agent may deem and
------------------------------
treat the payee of any Note as the owner thereof for all purposes hereof unless
and until a written notice of the assignment or transfer thereof shall have been
filed with Administrative Agent and the provisions of Section 14.03(c) have been
satisfied. Any requests, authority or consent of any person who at the time of
making such request or giving such authority or consent is the holder of any
Note shall be conclusive and binding on any subsequent holder, Transferee or
Assignee of that or of any Note or Notes issued in exchange therefor or
replacement thereof.
1.28 NONRELIANCE ON ADMINISTRATIVE AGENT AND OTHER BANKS. Each Bank agrees
---------------------------------------------------
that it has, independently and without reliance on Administrative Agent or any
other Bank, and based on such documents and information as it has deemed
appropriate, made its own credit analysis of Borrower and decision to enter into
this Agreement and that it will, independently and without reliance upon
Administrative Agent or any other Bank, and based on such documents and
information as it shall deem appropriate at the time, continue to make its own
analysis and decisions in taking or not taking action under this Agreement or
any of the other Loan Documents. Administrative Agent shall not be required to
keep itself (or any Bank) informed as to the performance or observance by
Borrower of this Agreement or any of the other Loan Documents or any other
35
<PAGE>
document referred to or provided for herein or therein or to inspect the
properties or books of Borrower or any other Person. Except for notices, reports
and other documents and information expressly required to be furnished to Banks
by Administrative Agent hereunder or under the other Loan Documents,
Administrative Agent shall not have any duty or responsibility to provide any
Bank with any credit or other information concerning the affairs, financial
condition or business of Borrower or any other Person (or any of their
Affiliates) which may come into the possession of Administrative Agent; provided
--------
that Administrative Agent shall make available to any Bank, upon such Bank's
request, (a) copies of Administrative Agent's records with respect to all sums
received or expended by Administrative Agent in connection with the Loan and the
Loan Documents, and (b) information as to the amount of the then outstanding
Loan.
1.29 FAILURE TO ACT. Except for action expressly required of
--------------
Administrative Agent hereunder or under the other Loan Documents, Administrative
Agent shall in all cases be fully justified in failing or refusing to act
hereunder and thereunder unless it shall receive further assurances to its
satisfaction by Banks of their indemnification obligations under Section 3.05
against any and all liability and expense which may be incurred by
Administrative Agent by reason of taking, continuing to take, or failing to take
any such action.
1.30 RESIGNATION OR REMOVAL OF ADMINISTRATIVE AGENT. Subject to the
----------------------------------------------
appointment and acceptance of a successor Administrative Agent as provided
below, Administrative Agent may resign at any time by giving notice thereof to
Banks and Borrower, and Administrative Agent may be removed at any time with or
without cause by the Required Banks. Upon any such resignation or removal,
Required Banks shall have the right to appoint a successor Administrative Agent,
subject to the approval of Borrower, which approval shall not be unreasonably
withheld or delayed; provided, however, that no such approval of Borrower shall
--------
be required if a Default is in existence. If no successor Administrative Agent
shall have been so appointed by the Required Banks and shall have accepted such
appointment within thirty (30) days after the retiring Administrative Agent's
notice of resignation or the Required Banks' removal of the retiring
Administrative Agent, then the retiring Administrative Agent may, on behalf of
Banks, appoint a successor Administrative Agent, subject to the approval of
Borrower, which approval shall not be unreasonably withheld or delayed;
provided, however, that no such approval of Borrower shall be required if a
- --------
Default is in existence. Any successor Administrative Agent shall be a bank
which has a combined capital and surplus of at least $500,000,000. Upon the
acceptance of any appointment as Administrative Agent hereunder by a successor
Administrative Agent, such successor Administrative Agent shall thereupon
succeed to and become vested with all the rights, powers,
36
<PAGE>
privileges and duties of the retiring Administrative Agent, and the retiring
Administrative Agent shall be discharged from its duties and obligations
hereunder. After any retiring Administrative Agent's resignation or removal
hereunder as Administrative Agent, the provisions of this Article III shall
continue in effect for its benefit in respect of any actions taken or omitted to
be taken by it while it was acting as the Administrative Agent hereunder.
1.31 DIRECTIONS TO ADMINISTRATIVE AGENT. Whenever a provision of this
----------------------------------
Agreement provides that the giving, making or taking, as the case may be, of a
consent, approval, instruction, direction, acceptance, request or other action
by the Required Banks is required as a condition to the right or duty of Weeks
Corporation or Borrower or Administrative Agent to take or refrain from taking
any action or to the existence of any status or condition, and Administrative
Agent shall have notified all Banks of the action, status or condition for which
such consent, approval, instruction, direction, acceptance, request or other
action is required, such consent, approval, instruction, direction, acceptance,
request or other action may be, at the option of Administrative Agent, deemed
given, made or taken, as the case may be, by each Bank, unless such Bank shall
have given Administrative Agent contrary instructions within seven (7) Domestic
Business Days after its receipt of such notice from Administrative Agent.
Notwithstanding the foregoing, Administrative Agent reserves the right to
refrain from acting on any matter which requires the consent, approval,
direction, instruction, acceptance, request or other action of one or more Banks
unless and until Administrative Agent shall have actually received the same from
such party or parties as provided for herein.
1.32 APPOINTMENT OF SYNDICATION AGENT. Each Bank hereby irrevocably
--------------------------------
appoints and authorizes Syndication Agent to act as its syndication agent
hereunder and under the other Loan Documents with such powers as may from time
to time be specifically delegated to Syndication Agent and assumed by
Syndication Agent by the terms of a separate written instrument signed by all
Banks, the Administrative Agent and the Syndication Agent, together with such
other powers as are reasonably incidental thereto. Syndication Agent shall have
no duties or responsibilities as of the date of this Agreement, no such separate
written instrument having been signed, and shall hereafter have no duties or
responsibilities except as expressly set forth in any such written instrument.
1.33 APPOINTMENT OF DOCUMENTATION AGENT. Each Bank hereby irrevocably
----------------------------------
appoints and authorizes Documentation Agent to act as its documentation agent
hereunder and under the other Loan Documents with such powers as may from time
to time be specifically delegated to Documentation Agent and assumed by
Documentation Agent by the terms of a separate written instrument signed by all
Banks, the Administrative Agent and the Documentation Agent, together with
37
<PAGE>
such other powers as are reasonably incidental thereto. Documentation Agent
shall have no duties or responsibilities as of the date of this Agreement, no
such separate written instrument having been signed, and shall hereafter have no
duties or responsibilities except as expressly set forth in any such written
instrument.
ARTICLE IV
----------
CONDITIONS TO TERM LOAN
-----------------------
The obligation of Banks to make the Loan is subject to the satisfaction, on
or before December 31, 1998, of the following conditions:
1.34 BORROWER'S AUTHORITY. Administrative Agent shall have received a
--------------------
Certificate of General Partner of Borrower, in form and substance acceptable to
Administrative Agent, authorizing the execution, delivery and performance of
this Agreement and the borrowing by it hereunder, together with such other
papers, certifications or other documents as Administrative Agent may require to
evidence that Borrower has the legal power and authority to enter into this
Agreement, the other Loan Documents, and the transactions contemplated hereby.
1.35 GUARANTORS' AUTHORITY. Administrative Agent shall have received
---------------------
certified copies of resolutions of Weeks Corporation's, GP Holdings' and LP
Holdings' respective Boards of Directors authorizing the execution, delivery and
performance of this Agreement and the Syndicated Term Loan Guaranty executed by
it, together with such other papers, certifications or documents of Guarantors
as Administrative Agent may require to evidence that each such Guarantor has the
power and authority to enter into this Agreement, the Syndicated Term Loan
Guaranty executed by it, and the transactions contemplated hereby.
1.36 FINANCIAL STATEMENTS. Banks shall have received the quarterly
--------------------
unaudited financial statements of Weeks Corporation for the quarter ending
September 30, 1998, in the form and certified by Weeks Corporation's chief
financial officer as required by the provisions of Section 8.03(a) of the
Syndicated Credit Agreement.
1.37 CERTIFICATE OF COMPLIANCE. Banks shall have received a certificate of
-------------------------
Weeks Corporation's chief financial officer certifying compliance by Borrower
and Weeks Corporation with the provisions of the Syndicated Credit Agreement,
including the financial covenants set forth in Article X thereof, as of the end
of the quarter ending September 30, 1998, and containing a computation
evidencing compliance with such financial covenants as
38
<PAGE>
of such period and in accordance with GAAP, as required by the provisions of
Section 8.03(b) of the Syndicated Credit Agreement.
1.38 REPRESENTATIONS AND WARRANTIES. The representations and warranties of
------------------------------
Borrower and Weeks Corporation set forth in Articles VI and VII, and in all
agreements, documents and instruments executed and delivered pursuant hereto
shall be true and correct in all material respects when made or deemed made
hereunder or thereunder.
1.39 PAYMENT OF FEES. Administrative Agent shall have received payment in
---------------
full of all fees, charges, and expenses as required by or otherwise due in
connection with the Mandate Letter and this Agreement, including attorneys' fees
and expenses of Administrative Agent's counsel and the Commitment Fee due
pursuant to Section 2.13.
1.40 NOTES. Administrative Agent shall have received the original Notes,
-----
duly executed and delivered by Borrower.
1.41 SYNDICATED TERM LOAN GUARANTIES. Administrative Agent shall have
-------------------------------
received the original Syndicated Term Loan Guaranties, duly executed and
delivered by Guarantors.
1.42 CERTIFICATES OF INCUMBENCY. Administrative Agent shall have received
--------------------------
an original Certificate of Incumbency from Borrower and each Guarantor with
respect to the Authorized Signatory of each such party.
1.43 REIT STATUS. Weeks Corporation shall be qualified as a real estate
-----------
investment trust under the Code.
1.44 OPINION OF COUNSEL. Administrative Agent shall have received a
------------------
favorable opinion letter from King & Spalding, counsel to Borrower and
Guarantors, in form and substance satisfactory to Administrative Agent and its
counsel.
1.45 INTEREST RATE ELECTION. Administrative Agent shall have received an
----------------------
Interest Rate Election, executed by an Authorized Signatory of Borrower, in
accordance with the provisions of Section 2.03(a).
1.46 NOTICE OF BORROWING. Administrative Agent shall have received a
-------------------
Notice of Borrowing, executed by an Authorized Signatory of Borrower.
1.47 INTERCREDITOR AGREEMENT. Banks and Agent (as said terms are defined
-----------------------
in the Syndicated Credit Agreement), Banks and Administrative Agent (as said
terms are defined herein), Borrower and Guarantors shall have entered into an
intercreditor agreement
39
<PAGE>
providing for the application of collections made on the Loans (as defined in
the Syndicated Credit Agreement) and the Loan (as defined herein), in the event
of a Default (as defined in the Syndicated Credit Agreement) or a Default (as
defined in this Agreement).
1.48 OTHER DOCUMENTATION. Administrative Agent shall have received such
-------------------
other loan documentation as deemed reasonably necessary or desirable by
Administrative Agent or its counsel, satisfactory in form and substance to
Administrative Agent, providing for the Loan to be made.
1.49 KEY EXECUTIVES. The Key Executives shall be A. R. Weeks, Jr., Thomas
--------------
D. Senkbeil and Forrest W. Robinson.
1.50 NO MATERIAL ADVERSE CHANGE. There shall not have occurred any
--------------------------
material adverse change in the financial condition, properties, or operations of
Borrower and the Related Parties (all of the foregoing taken as a whole) or
Borrower (standing alone) since June 30, 1998, nor shall any change have
occurred in the financial condition of Borrower and the Related Parties (all of
the foregoing taken as a whole) or of Borrower (standing alone) which (a) shall
have materially adversely affected the rights or remedies of Administrative
Agent or any Bank under any of the Loan Documents, or (b) which the Required
Banks have in good faith determined has caused, or is likely to cause, as of the
end of the fiscal quarter of Borrower ending December 31, 1998, a default by
Borrower in the payment of amounts owing hereunder or a default by Borrower in
respect of the financial covenants set forth in Article X.
1.51 FULL COMPLIANCE. Borrower and Weeks Corporation shall be in full
---------------
compliance with all the terms and conditions of this Agreement.
1.52 NO DEFAULT; NO CLAIMS. No Default or an event that upon notice or
---------------------
lapse of time or both, would constitute a Default shall have occurred, and there
will be no claim, action, suit or proceeding pending or threatened against
Borrower or any Related
Party that would result in a material adverse change in the financial condition,
assets, or operations of Borrower and the Related Parties (all of the foregoing
taken as a whole) or of Borrower (standing alone).
1.53 DEBT RATING. The Debt Rating shall be better than or equal to the
-----------
Debt Rating designated in the Debt Rating Table for Performance Pricing Level
IV.
ARTICLE V
---------
40
<PAGE>
[THIS ARTICLE IS INTENTIONALLY OMITTED.]
ARTICLE VI
----------
ENVIRONMENTAL MATTERS
---------------------
1.54 REPRESENTATIONS, WARRANTIES. Weeks Corporation and Borrower represent
---------------------------
and warrant to Administrative Agent and Banks that, except as otherwise
disclosed in writing by Borrower to Administrative Agent, (a) no real property
of Borrower or any Related Parties is now being used in violation of any
Environmental Laws, except such use as would not have a material adverse effect
on the financial condition, operations, or properties of Borrower and the
Related Parties (all of the foregoing taken as a whole) or Borrower (standing
alone) or would constitute a breach of the provisions of Section 9.10; (b) that
no proceedings have been commenced against Borrower or any Related Party
concerning any alleged material violations of any Environmental Laws on or
related to any of their respective real properties; (c) neither Weeks
Corporation nor Borrower has any reason to know of any such alleged violations,
except such alleged violations as would not have a material adverse effect on
the financial condition, operations, or properties of Borrower and the Related
Parties (all of the foregoing taken as a whole) or Borrower (standing alone) or
would constitute a breach of the provisions of Section 9.10; (d) the real
properties of Borrower and the Related Parties are free of any Substances and
are not being used for the storage, treatment or disposal of any Substances, or
if there are any Substances on any such real properties, Weeks Corporation or a
Related Party, as the case may be, is maintaining them in accordance with all
applicable laws, except to the extent such failure so to maintain such
Substances would not have a material adverse effect on the financial condition,
operations, or properties of Weeks Corporation and the Related Parties (all of
the foregoing taken as a whole) or Borrower (standing alone) or would constitute
a breach of the provisions of Section 9.10; (e) if Borrower or any Related
Party, as the case may be, is transporting any Substances, such transportation
is being conducted in compliance with all applicable laws, except to the extent
such failure so to conduct such transportation would not have a material adverse
effect on the financial condition, operations, or properties of Borrower and the
Related Parties (all of the foregoing taken as a whole) or Borrower (standing
alone) or would constitute a breach of the provisions of Section 9.10; (f) Weeks
Corporation and the Related Parties, as the case may be, have all required
permits for the use and discharge of any Substances on their respective real
properties and all uses and discharges on such properties are being made in
compliance with such permits, except to the extent that the failure to have a
required permit or failure to make such uses and discharges in compliance with
such permits would not have a material adverse
41
<PAGE>
effect on the financial condition, operations, or properties of Borrower and the
Related Parties (all of the foregoing taken as a whole) or Borrower (standing
alone) or would constitute a breach of the provisions of Section 9.10; and (g)
Weeks Corporation and Borrower have made a complete disclosure to Administrative
Agent and Banks of all facts which might indicate a material environmental risk
or the material violation of any Environmental Laws on or related to the real
properties of Borrower and the Related Parties.
1.55 CONTINUED COMPLIANCE. Weeks Corporation and Borrower covenant that
--------------------
Borrower will promptly inform Administrative Agent in writing of any material
environmental risk or material violation of any Environmental Laws on or related
to any real properties of Borrower or any Related Party or the commencement of
any proceedings against Borrower or any Related Party or receipt of any notices
by any such Person concerning any alleged material violation of Environmental
Laws on or related to any such real property. Should Administrative Agent or any
Bank be reasonably concerned that any such real property may be at risk of
suffering a material impairment in value owing to environmental contamination or
other environmental matters, at such Person's request, Borrower shall obtain and
deliver to Administrative Agent and such Person (if not Administrative Agent) an
environmental audit covering such real property from experts reasonably
acceptable to Administrative Agent or such Bank, as the case may be, at
Borrower's sole expense.
ARTICLE VII
-----------
REPRESENTATIONS AND WARRANTIES
------------------------------
In order to induce Administrative Agent, Syndication Agent, Documentation
Agent and Banks to enter into the Loan Documents and to make the Loan as
contemplated hereby, Borrower and Weeks Corporation represent and warrant to
Administrative Agent, Syndication Agent, Documentation Agent and Banks, each of
which representations and warranties is deemed to be material, that:
1.56 RELATED PARTIES. Schedule 7.01 sets forth the identity of each of the
--------------- -------------
Related Parties in existence as of November 1, 1998.
1.57 CORPORATE ORGANIZATION. Weeks Corporation, Weeks Construction
----------------------
Services, Inc. ("CONSTRUCTION"), Weeks Realty Services, Inc. ("REALTY"), GP
------------ ------
Holdings and LP Holdings each is a corporation duly organized, validly existing
and in good standing under the laws of the State of Georgia and has full right,
power and authority to conduct its business as currently conducted; each
maintains its principal place of business and its chief executive office at 4497
Park Drive, Norcross, Georgia 30093.
42
<PAGE>
1.58 LIMITED PARTNERSHIP ORGANIZATION. Borrower, Weeks Financing Limited
--------------------------------
Partnership ("FINANCING"), Weeks NC Financing Limited Partnership,
---------
Codina/Tradewind, Ltd., Codina/Tradewind No. 4, Ltd., and Raha Associates, Ltd.
each is a limited partnership duly organized and validly existing and in good
standing under the laws of the State of Georgia and has full right, power and
authority to conduct its business as currently conducted; each maintains its
principal place of business and its chief executive office at 4497 Park Drive,
Norcross, Georgia 30093.
1.59 GENERAL PARTNERSHIP ORGANIZATION. Weeks Development Partnership, New
--------------------------------
World Partners Joint Venture, New World Partners Joint Venture Number Two, New
World Partners Joint Venture Number Three and New World Partners Joint Venture
Number Four each is a general partnership duly organized and validly existing
under the laws of the State of Georgia and has full right, power and authority
to conduct its business as currently conducted; each maintains its principal
place of business and its chief executive office at 4497 Park Drive, Norcross,
Georgia 30093.
1.60 LIMITED LIABILITY COMPANY ORGANIZATION. Weeks Special Purpose, LLC,
--------------------------------------
Weeks SPV Financing, LLC, and Weeks Beacon Centre LLC each is a limited
liability company duly organized and validly existing and in good standing under
the laws of the State of Georgia and has full right, power and authority to
conduct its business as currently conducted; each maintains its principal place
of business and its chief executive office at 4497 Park Drive, Norcross, Georgia
30093.
1.61 POWER AND AUTHORITY. Borrower and Guarantors each has full right,
-------------------
power and authority to enter into the Loan Documents and to consummate the
transactions contemplated hereby and has taken all necessary action to authorize
the execution, delivery and performance of this Agreement and the documents
contemplated to be executed and delivered hereby.
1.62 ENFORCEABILITY. The Loan Documents constitute valid obligations of
--------------
the parties executing the same, legally binding upon Borrower and each
Guarantor, as the case may be, and enforceable in accordance with their terms,
except as enforcement may be affected by bankruptcy, insolvency and other laws
and equitable principals affecting the rights and remedies of creditors
generally and except as may be limited by general principals of equity. No
consent, license, or approval of any governmental authority, bureau or agency is
required in connection with the execution, delivery, performance, validity or
enforceability of the Loan Documents.
1.63 VIOLATION OF ORGANIZATIONAL DOCUMENTS. The execution, delivery and
-------------------------------------
performance of the Loan Documents will not violate the provisions of the
Articles of Incorporation or By-Laws of Weeks
43
<PAGE>
Corporation, GP Holdings or LP Holdings, or the partnership agreement or
certificate of Borrower.
1.64 CONFLICTS. The execution, delivery and performance of the Loan
---------
Documents will not violate the provisions of any Mortgage, indenture, security
agreement, contract, undertaking or other agreement to which Borrower or any
Guarantor, or any combination thereof is a party, or which purports to be
binding upon Borrower or any Guarantor or any combination thereof, or any of
their respective properties or assets. No consent, approval, authorization,
waiver or notice to any other person or entity is required for the execution,
delivery and performance of the Loan Documents by Borrower and Guarantors,
except for such consents, approvals, authorizations, and waivers which have been
obtained, are unconditional and are in full force and effect, and such notices
which have been given.
1.65 TITLE. Borrower and the Related Parties each has good and marketable
-----
title to all of its respective properties, subject to the Permitted Encumbrances
and the Liens permitted pursuant to Section 9.13.
1.66 EXISTENCE OF LIENS. No Mortgage, financing statement, notice of lien,
------------------
security agreement, or any other agreement or instrument creating or giving
notice of a security interest in or an encumbrance, Lien, or charge against any
property of Borrower or any Related Party is in existence or on file in any
public office, except as permitted by Section 9.13.
1.67 FINANCIAL CONDITION. All financial statements and all other financial
-------------------
information of Borrower and Weeks Corporation furnished to Administrative Agent
or any Bank are complete and correct in all material respects and accurately
reflect their respective financial conditions and the results of operations for
the respective periods to which such statements relate. There are no material
liabilities, direct or indirect, fixed or contingent, of Borrower or Weeks
Corporation required to be reflected or disclosed therein that are not so
reflected or disclosed therein or in the Notes thereto.
1.68 LITIGATION. There is no litigation, proceeding, or investigation
----------
pending or, to the knowledge of Borrower or Weeks Corporation, threatened, that
is reasonably expected to result in any materially adverse change in the
operations, properties or financial conditions of Borrower and the Related
Parties (all of the foregoing taken as a whole) or Borrower (standing alone) or
that question the validity of any action taken or to be taken by Borrower or
Weeks Corporation pursuant to or in connection with the transactions
contemplated by the Loan Documents, nor does Borrower or Weeks Corporation know
or have any reasonable grounds to know
44
<PAGE>
the basis for the institution of any such litigation, proceeding or
investigation.
1.69 FOREIGN QUALIFICATIONS. Borrower, Construction, Realty, Financing,
----------------------
Weeks Corporation, GP Holdings and LP Holdings are qualified to do business in
all states where required by applicable law, except where the failure to be so
qualified would not have a material adverse effect on Borrower and the Related
Parties (all of the foregoing taken as a whole) or Borrower (standing alone).
1.70 TAX OBLIGATIONS. Neither Borrower nor Weeks Corporation has knowledge
---------------
of any tax return required to be filed by them that has not been filed with the
appropriate governmental agency or for which they have not received an extension
beyond the date hereof; neither Borrower nor Weeks Corporation will be, as of
the date of this Agreement, in default with respect to such filings. Borrower
and Weeks Corporation have paid or will have paid as of the date of this
Agreement all taxes now or then claimed to be due by any federal, state or local
taxing authority. Except as otherwise disclosed to Administrative Agent pursuant
to this Agreement, neither the Internal Revenue Service nor any other taxing
authority is now asserting, or to the knowledge of Borrower or Weeks
Corporation, has threatened to assert, any deficiency claim for additional taxes
against them in any material amount, and no waivers of the Statute of
Limitations have been granted to the Commissioner of Internal Revenue or any
other taxing authority by Borrower or Weeks Corporation.
1.71 CAPITAL STOCK. All capital stock, debentures, bonds, Notes and all
-------------
other securities of Borrower and each Related Party presently issued and
outstanding are validly and properly issued in accordance with all applicable
laws, including, but not limited to, the "Blue Sky" laws of all applicable
states and the federal securities laws.
1.72 INSOLVENCY. After giving effect to the execution and delivery of the
----------
Loan Documents and the making of the Loan, neither Borrower nor any Guarantor
will be "insolvent," within the meaning of such term as used in O.C.G.A. (S) 18-
2-22 or as defined in Section 101 of the United States Bankruptcy Code, as
amended, or will be unable to pay its debts generally as such debts become due,
or have an unreasonably small capital.
1.73 MARGIN STOCK. Neither Borrower nor Weeks Corporation is engaged
------------
principally or as one of its important activities, in the business of purchasing
or carrying Margin Stock, and no part of the proceeds of the Loan made pursuant
to this Agreement will be used to purchase or carry any Margin Stock or to
extend credit to others for the purpose of purchasing or carrying any Margin
Stock, or be used for any purpose which violates, or which is inconsistent with,
45
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the provisions of Regulation X of the Board of Governors of the Federal Reserve
System.
1.74 FRANCHISES, LICENSES, ETC. Borrower and each Related Party each
-------------------------
possesses all franchises, certificates, licenses, permits and other
authorizations from governmental or political authorities or subdivisions or
regulatory authorities, and all patents, trademarks, service marks, trade names,
copyrights, licenses and other rights, free from burdensome restrictions, that
are necessary for the ownership, maintenance and operation of any of its
property and assets, and the absence of which would have a material adverse
effect on the financial condition, operations, or properties of Borrower and the
Related Parties (all of the foregoing taken as a whole) or Borrower (standing
alone). Neither Borrower nor any Related Party is in violation of any thereof
which is reasonably expected to have a material adverse effect on the financial
condition, operations, or properties of Borrower and the Related Parties (all of
the foregoing taken as a whole) or Borrower (standing alone).
1.75 ERISA. If Borrower or any Related Party is subject to any provision
-----
of ERISA as of the date hereof or at any time during the term of this Agreement,
then (a) each such member is in compliance with the requirements of ERISA with
respect to each Employee Benefit Plan, where the failure so to comply would have
a material adverse effect on the financial condition, operations, or properties
of Borrower and the Related Parties (all of the foregoing taken as a whole) or
Borrower (standing alone), (b) no fact, including, but not limited to, any
Reportable Event exists in connection with any Employee Benefit Plan which, more
likely than not, would constitute grounds for the termination of any such Plan
by the PBGC or for the appointment by the appropriate United States District
Court of a Trustee to administer any such Plan, where such termination would
result in a material adverse change in the financial condition, operations, or
properties of Borrower and the Related Parties (all of the foregoing taken as a
whole) or Borrower (standing alone), (c) no such member either maintains or
contributes to any Employee Benefit Plan that has an "accumulated funding
deficiency" (as defined in Section 412 of the Code) in an amount greater than
$500,000, (d) no such member either maintains or contributes to any Employee
Benefit Plan which has incurred any material liability to the PBGC (other than
for premium payments due in the ordinary course of business, which premiums will
be paid when due and payable), (e) no such member either maintains or
contributes to any Employee Benefit Plan which has insufficient assets to
qualify for a standard termination pursuant to Section 4041 of ERISA, (f) except
as otherwise disclosed to Administrative Agent in writing, no such member is
required pursuant to the terms of any applicable collective bargaining agreement
to pay or accrue any contributions with respect to any Employee Benefit Plan
that is a Multiemployer Plan and there has been no complete or partial
46
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withdrawal by any such member from any such Multiemployer Plan within the
contemplation of MPPAA, (g) except as otherwise disclosed to Administrative
Agent in writing, no such member either maintains or contributes to any Employee
Benefit Plan that provides medical benefits, life insurance benefits or other
welfare benefits as defined in Section 3(1) of ERISA (excluding health
continuation coverage required under Section 601 of ERISA) for former employees
of such member, (h) except as otherwise disclosed to Administrative Agent in
writing, no such member either maintains or contributes to any non-qualified,
unfunded deferred compensation plan, and (i) no such member or any fiduciary
with respect to any Employee Benefit Plan has engaged in a "prohibited
transaction" within the meaning of Section 4975 of the Code or Section 406 of
ERISA with respect to any Employee Benefit Plan which is reasonably expected to
have a material adverse effect on the financial condition, operations or
properties of Borrower and the Related Parties (all of the foregoing taken as a
whole) or Borrower (standing alone).
1.76 FINANCIAL STATEMENTS. None of the financial statements delivered by
--------------------
Borrower or Weeks Corporation to Administrative Agent or any Bank pursuant to
this Agreement contains, as of the date of delivery thereof, any untrue
statement of material fact nor do such financial statements and such written
statements, taken as a whole, omit to state a material fact or any fact
necessary to make the statements contained therein not misleading.
1.77 MISREPRESENTATIONS. No representation or warranty by Borrower or
------------------
Weeks Corporation made herein and no statement or certificate to be furnished to
Administrative Agent or any Bank pursuant hereto in connection with the
transactions contemplated hereby contains or will contain any untrue statement
of a material fact or omits or will omit to state a material fact necessary to
make the statements contained therein not misleading.
ARTICLE VII
-----------
AFFIRMATIVE COVENANTS
---------------------
In order to induce Administrative Agent, Syndication Agent, Documentation
Agent and Banks to enter into the Loan Documents and to make the Loan
contemplated hereby, Borrower and Weeks Corporation covenant and agree with
Administrative Agent, Syndication Agent, Documentation Agent and Banks that from
and after the date hereof, and so long as any Obligations remain outstanding or
this Agreement remains in effect, that:
1.78 LOCATION OF RECORDS. Borrower and Weeks Corporation shall maintain
-------------------
all their books and records at Borrower's chief executive office as set forth in
this Agreement or at such other location in the State of Georgia disclosed in a
written notice
47
<PAGE>
given by Borrower to Administrative Agent prior to moving said books and records
to such other location.
1.79 INSPECTION. Borrower and Weeks Corporation shall permit each of
----------
Administrative Agent and any Bank, or any persons duly designated by it to call
at their respective places of business at any reasonable time, and without
hindrance or delay, to inspect, audit, check and make extracts from their
respective books, records, journals, orders, receipts and any correspondence or
other data relating to its business or any other transactions between or among
the parties hereto.
1.80 FINANCIAL AND OTHER INFORMATION. Borrower and Weeks Corporation shall
-------------------------------
furnish to Administrative Agent and each Bank the following financial
information:
(1) Quarterly, not later than forty-five (45) days after the end of
each of the first three (3) fiscal quarters of each fiscal year of Weeks
Corporation, unaudited financial statements of Weeks Corporation, including the
accounts of Weeks Corporation and all Consolidated Entities reported on a
consolidated basis in accordance with GAAP (subject to customary adjustments and
the absence of notes thereto), as of the end of such quarter, including a
balance sheet and detailed statement of profit and loss, in the form included by
Weeks Corporation in its Quarterly Report on Form 10-Q filed in respect of such
quarterly period with the SEC or otherwise in form reasonably acceptable to
Administrative Agent and the Required Banks, all certified by Weeks
Corporation's chief financial officer. Weeks Corporation's chief financial
officer shall certify with respect to all such financial statements that the
financial statements submitted (i) are in accordance with Borrower's and the
Related Parties' books and records; (ii) present fairly in all material respects
the financial position and results of operations as of and for the periods
specified; (iii) set forth all material claims and liabilities, contingent or
otherwise, required by GAAP to be disclosed therein; and (iv) fully disclose the
existence of any Default hereunder, including the nature and period of existence
thereof.
(2) Not later than the date on which quarterly or annual financial
statements are required to be delivered pursuant to Section 8.03(a) or 8.03(c),
a certificate of Weeks Corporation's chief financial officer, in the form of
Exhibit E, certifying compliance by Borrower and Weeks Corporation with this
- ---------
Agreement, including the financial covenants set forth in Article X as of the
end of such quarter or year, as the case may be, and containing a computation
evidencing compliance with such financial covenants as of such period and in
accordance with GAAP. Said certificates shall also include a statement by such
officer as to the outstanding principal balance of the Loan.
48
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(3) Annually, not later than one hundred twenty (120) days after the
end of Weeks Corporation's fiscal year end, financial statements of Weeks
Corporation, including the accounts of Weeks Corporation and all Consolidated
Entities reported on a consolidated basis in accordance with GAAP, as of and for
the period ending at such fiscal year end, including a balance sheet and
detailed statement of profit and loss, in the form included by Weeks Corporation
in its Annual Report on Form 10-K filed in respect of such annual period with
the SEC or otherwise in form reasonably acceptable to Administrative Agent and
the Required Banks, audited by an independent practicing certified public
accountant of recognized national standing or otherwise reasonably acceptable to
Administrative Agent and the Required Banks, together with an auditor's opinion
of such accountant without material qualification.
(4) On the due date therefor (taking into account any extensions
granted by the SEC), or upon the filing thereof with the SEC, if sooner, all
notices and reports filed by Borrower or any Related Party with the SEC.
(5) From time to time (but not more frequently than quarterly) at
Administrative Agent's or any Bank's request, summary reports on the net
operating income of Income Properties, rent rolls and property level reports
supporting the calculation of Annualized NOI, in form and content reasonably
satisfactory to Administrative Agent or such Bank, as the case may be.
(6) If requested by Administrative Agent or any Bank, quarterly, not
later than forty-five (45) days after the end of each fiscal quarter of each
Non-Consolidated Subsidiary, to the extent not disclosed in the consolidated
financial statements of Weeks Corporation or the notes thereto, unaudited
financial statements of each such Non-Consolidated Subsidiary, reported in
accordance with GAAP (subject to customary adjustments and the absence of notes
thereto), as of the end of such quarter, including a balance sheet and detailed
statement of profit and loss, in form reasonably acceptable to Administrative
Agent or such Bank, as the case may be, each certified by the chief financial
officer of such Non-Consolidated Subsidiary. Such chief financial officer shall
certify with respect to such financial statements that the financial statements
submitted (i) are in accordance with such Non-Consolidated Subsidiary's books
and records; (ii) present fairly in all material respects the financial position
and results of operations as of and for the periods specified; and (iii) set
forth all material claims and liabilities, contingent or otherwise, required by
GAAP to be disclosed therein.
(7) Such other or more frequent data, information, and reports with
respect to Borrower or any Related Party as
49
<PAGE>
Administrative Agent or any Bank may reasonably request from time to time.
1.81 GOVERNMENTAL OBLIGATIONS. Borrower and Weeks Corporation will pay and
------------------------
discharge promptly or cause to be paid and discharged promptly all taxes,
assessments, and governmental charges or levies imposed upon them or upon their
income or property, real, personal, or mixed, or upon any part thereof, as well
as all claims of any kind (including claims for labor, materials and supplies),
which, if unpaid, might by law become a lien or charge against said property;
provided, however, that neither Borrower nor Weeks Corporation shall be required
to pay any such tax, assessment, charge, levy, or claim if (a) the amount,
applicability or validity thereof shall currently be contested in good faith by
appropriate proceedings, and if they shall have set aside on their books
reserves (segregated to the extent required by sound accounting practice) deemed
by Administrative Agent or Banks adequate with respect thereto, and by reason of
such nonpayment no material property of Borrower or Weeks Corporation is subject
to a material risk of loss or forfeiture, or (b) the amount of such unpaid
taxes, assessments, governmental charges or levies, or other such claims not so
paid or discharged does not exceed $250,000 in the aggregate and with respect to
which they shall not have set aside reserves pursuant to the foregoing clause
(a).
1.82 INSURANCE. Borrower and the Related Parties each shall maintain or
---------
cause to be maintained adequate and customary insurance with respect to its or
their general operations and their real properties, including coverage for
public liability, director's liability, casualty, business interruption, loss of
rents and workers' compensation with financially sound and reputable insurers in
such amounts as are customary in the case of firms of established reputations
engaged in the same or a similar business and similarly situated.
1.83 OPERATION OF PROPERTIES, INSPECTION. Borrower and Weeks Corporation
-----------------------------------
shall operate and maintain their material properties in good condition and
repair (normal wear and tear, casualty and obsolescence excepted), shall not
commit or suffer any waste to any of such properties or do or suffer to be done
anything which would increase the risk of casualty to any of such properties or
any part thereof or which would result in the cancellation of any insurance
policy carried with respect to any of such properties. Borrower and Weeks
Corporation shall comply promptly with all applicable laws, rules, ordinances,
regulations, judgments, governmental determinations, restrictive covenants and
easements affecting any of such properties or any part thereof (the
REQUIREMENTS") and shall cause such properties to comply at all times and in
- -------------
all respects with all Requirements, and shall at all times operate such
properties, and perform any construction of any portion thereof, in all respects
in accordance with all Requirements, except in each
50
<PAGE>
case where failure to do so would not have a material adverse effect on the
financial condition, operations or properties of Borrower and the Related
Parties (all of the foregoing taken as a whole) or Borrower (standing alone).
Borrower and Weeks Corporation shall promptly repair, restore or replace any
part of such properties which may be damaged by fire or other casualty or which
may be affected by any condemnation proceeding, except where such repair,
restoration, or replacement is not, in the judgment of the Key Executives of
Weeks Corporation, required for the operation of the business of Borrower or
Weeks Corporation, as the case may be. Administrative Agent, Banks and any
persons authorized by Administrative Agent and Banks shall have the right at all
reasonable times and upon reasonable prior notice to inspect such properties,
any improvements existing or being constructed thereon and all materials used or
to be used in such improvements; provided, however, that nothing contained
herein shall be deemed to impose upon Administrative Agent or Banks any
obligation to undertake such inspections or any liability for the failure to
detect or failure to act with respect to any defect which was or might have been
disclosed by such inspections.
1.84 PRESERVATION OF BUSINESS. Borrower and Weeks Corporation shall take
------------------------
all appropriate action necessary to protect their businesses and assets
consistent with normal practices and conduct their respective businesses in a
sound and businesslike manner; Weeks Corporation, GP Holdings and LP Holdings
each shall do or cause to be done all things necessary to preserve and keep in
full force and effect its corporate existence and all its material rights; and
Borrower, Development and Financing each shall do or cause to be done all things
necessary to preserve and keep in full force and effect its partnership
existence and its material rights.
1.85 MAINTENANCE OF RECORDS. Borrower and Weeks Corporation shall keep
----------------------
adequate records and books of accounts, in which complete entries will be made,
reflecting all their respective financial transactions.
51
<PAGE>
1.86 NOTICE OF ADVERSE CHANGES. Borrower and Weeks Corporation shall, as
-------------------------
soon as possible, and in any event within five (5) Domestic Business Days after
they become aware of the occurrence of a material adverse change in their
businesses, properties, operations, or conditions (financial or other),
including notice of (a) any default occurring with respect to any of their
obligations owed to any other creditor where the total liability of Borrower or
Weeks Corporation with respect thereto is in excess of $500,000, (b)
acceleration of any part or demand for payment in full of any of their
respective outstanding obligations in an amount in excess of $500,000 earlier
than the scheduled date, or (c) Borrower's or Weeks Corporation's receiving
notice of intent by any person, firm, corporation or any other entity to whom
Borrower or Weeks Corporation is indebted in an amount in excess of $500,000 to
declare any debt due, or determine that any provision of any agreement between
such party and Borrower or Weeks Corporation has been violated, furnish to
Administrative Agent and Banks a statement setting forth details of such
material adverse change and the action that it proposes to take with respect
thereto.
1.87 NOTICE OF LITIGATION. Borrower and Weeks Corporation shall promptly
--------------------
notify Administrative Agent and Banks in the event of any legal action filed
against Borrower or any Related Party which, if adversely determined, would have
a material adverse effect on the financial condition or operations of Borrower
and the Related Parties (all of the foregoing taken as a whole) or Borrower
(standing alone).
1.88 PAYMENT OF OBLIGATIONS. Borrower and Weeks Corporation shall pay or
----------------------
cause to be paid the principal of, and, if any, the interest and premium on all
indebtedness heretofore or hereafter incurred or assumed by them when and as the
same shall become due and payable, unless such indebtedness be renewed or
extended; and faithfully observe, perform and discharge all the covenants,
conditions and obligations that are imposed upon them by any and all indentures
and other agreements securing or evidencing such indebtedness or pursuant to
which such indebtedness is issued, and not permit the continuance of any act or
omission that is, or the provisions thereof may be declared to be, a default in
the payment of principal and interest, unless waived, pursuant to the provisions
thereof; provided, however, that Borrower and Weeks Corporation shall not be
--------
required to make any payment or to take any other action pursuant to this
Section 8.11 at any time while they shall be currently contesting in good faith
by appropriate proceedings their obligations to make such a payment or to take
such action, if they shall have set aside on their books, reserves (segregated
to the extent required by sound accounting practices) deemed adequate with
respect thereto; and provided further that this Section 8.11 shall not be
----------------
applicable to (a) real property mortgage debt (held by parties other than Banks)
on properties
52
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owned by entities which neither Weeks Corporation nor Borrower Control and in
which Borrower and Weeks Corporation, in the aggregate, own less than a 50%
beneficial interest, or (b) indebtedness outstanding in principal amounts
aggregating less than $500,000.
1.89 REIT STATUS. Weeks Corporation shall at all times be and remain
-----------
qualified as a real estate investment trust under the Code.
1.90 COMPLIANCE WITH LAWS. Borrower and Weeks Corporation shall conduct
--------------------
and maintain their respective businesses in a regular manner and in compliance
with all laws, regulations and ordinances, including but not limited to any
applicable securities laws, zoning laws, ordinances and regulations affecting
Borrower's and Weeks Corporation's operations, including but not limited to all
Environmental Laws and ecological laws, ordinances and regulations, except where
the failure to do so would not have a material adverse effect on the financial
condition, operations or properties of Borrower and the Related Parties (all of
the foregoing taken as a whole) or Borrower (standing alone).
1.91 NOTICE OF EXERCISE OF REMEDIES UNDER MORTGAGES. Borrower and Weeks
----------------------------------------------
Corporation shall give prompt written notice to Administrative Agent and Banks
of the giving of a notice of any event of default under any Mortgage to which
Weeks Corporation is or Borrower is a party by the holder thereof, or upon the
holder of any such Mortgage taking any action to enforce its rights and remedies
thereunder, including, without limitation, any self-help or judicial remedies
with respect to collateral or any legal action to collect any indebtedness.
1.92 MANAGEMENT. Weeks Corporation and Borrower shall have management
----------
reasonably satisfactory to Administrative Agent and the Required Banks.
1.93 DEPOSIT ACCOUNTS. Weeks Corporation and Borrower shall maintain their
----------------
principal depository accounts with one or more Banks.
1.94 INTERCOMPANY TRANSACTIONS. Any and all transactions, agreements or
-------------------------
undertakings of any nature whatsoever between Borrower or any Related Party, on
the one hand, and any Affiliate of such Person, on the other hand, shall be
arms-length and upon terms and conditions at least as favorable to Borrower or
such Related Party, as the case may be, as could reasonably be obtained in a
similar transaction with a party that is not an Affiliate of such Person.
1.95 DEBT RATING. Borrower shall give written notice to Administrative
-----------
Agent promptly of any change in the Debt Rating.
53
<PAGE>
ARTICLE IX
----------
NEGATIVE COVENANTS
------------------
In order to induce Administrative Agent, Syndication Agent, Documentation
Agent and Banks to enter into the Loan Documents and to make the Loan as
contemplated hereby, Borrower and Weeks Corporation covenant and agree with
Administrative Agent, Syndication Agent, Documentation Agent and Banks that from
and after the date hereof, and so long as any Obligations remain outstanding or
this Agreement remains in effect, without the prior written consent of the
Required Banks:
1.96 GUARANTIES. Neither Weeks Corporation nor Borrower nor any other
----------
Subsidiary shall guarantee, endorse, become surety with respect to, become
obligated under any partnership or joint venture, or otherwise become directly
or contingently liable for, or in connection with, the obligations of any other
person, firm, corporation, or any other entity pursuant to any Guaranties,
except for the Permitted Guaranties.
1.97 MERGER, CONSOLIDATION, ETC. Neither Weeks Corporation nor Borrower
--------------------------
nor any other Subsidiary shall enter into any merger, reorganization or
consolidation, except with each other, or acquire in a single transaction a
portfolio of properties (whether through the payment of cash, exchange of
property, assumption of debt or the issuance or exchange of equity or debt
securities) that, upon completion thereof, (a) shall, in the case of a merger,
reorganization or consolidation, not result in Weeks Corporation or Borrower
being the surviving entity; or (b) shall increase Total Asset Value by more
than twenty percent (20%) of Total Asset Value prior to such transaction.
1.98 DISPOSITION OF ASSETS. Weeks Corporation, Borrower and the other
---------------------
Subsidiaries shall not in the aggregate sell or dispose of, during any twelve
(12) month period, Income Property having an aggregate book value in excess of
five percent (5%) of Total Asset Value (except for sales occurring pursuant to
the exercise of purchase options under lease agreements), nor shall Weeks
Corporation and Borrower, on an aggregate basis, sell all or substantially all
of their assets or take any action that would make it impossible for them to
carry out their business as now conducted, nor shall Weeks Corporation or
Borrower sell, transfer, or otherwise dispose of any assets other than (a)
assets sold or otherwise disposed of in the ordinary course of business; (b)
assets that are not in the judgment of the Board of Directors of Weeks
Corporation required in the operation of the business of Borrower and that do
not comprise a significant portion of Borrower's and Weeks Corporation's
consolidated assets; and
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(c) assets sold or otherwise disposed of as permitted in this Agreement,
provided that nothing in this Section 9.03 shall prohibit the sale of real
- --------
property to a tenant pursuant to a purchase option granted to such tenant.
1.99 JUDGMENTS. Weeks Corporation and Borrower shall not allow any number
---------
of judgments for the payment of money in excess of the aggregate sum of
$1,000,000, excluding such judgments to the extent payment thereof is covered by
insurance, to remain unsatisfied against Borrower or any Related Party for a
period of thirty (30) consecutive days, unless execution thereof is stayed.
1.000INDEBTEDNESS OF WEEKS CORPORATION AND BORROWER. Neither Weeks
----------------------------------------------
Corporation nor Borrower shall incur, assume or otherwise become liable for any
Indebtedness for Money Borrowed, except for Indebtedness for Money Borrowed that
------
constitutes (a) Indebtedness for Money Borrowed from Banks under this Agreement,
(b) Indebtedness for Money Borrowed, not to exceed the principal amount of
$225,000,000 at any one time outstanding, from Banks (as defined in the
Syndicated Credit Agreement) under the Syndicated Credit Agreement, (c)
Indebtedness for Money Borrowed, not to exceed the principal amount of
$30,000,000 at any one time outstanding, from Swing Bank under the Swing Credit
Agreement, (d) unsecured Intercompany Debt, (e) Permitted Borrowings, (f)
unsecured, non-revolving Indebtedness for Money Borrowed incurred by Weeks
Corporation or Borrower in connection with the acquisition of Properties or an
interest in a business enterprise, (g) other unsecured Indebtedness for Money
Borrowed in an aggregate principal amount not to exceed $20,000,000 having a
payment seniority no higher than that of the Loan, (h) secured Indebtedness for
Money Borrowed not prohibited in accordance with Section 9.07, or (i)
Indebtedness for Money Borrowed for which such Person shall have become
obligated solely pursuant to a Permitted Guaranty.
1.101INDEBTEDNESS OF SUBSIDIARIES. No Subsidiary (other than Borrower, GP
----------------------------
Holdings and LP Holdings) shall incur, assume or otherwise become obligated for
any Indebtedness for Money Borrowed, except for Indebtedness for Money Borrowed
------
that constitutes (a) Indebtedness outstanding on the date of this Agreement and
described on Schedule 9.06, or any extension, renewal, modification or
-------------
refinancing thereof, (b) Intercompany Debt, (c) secured Indebtedness for Money
Borrowed not prohibited in accordance with Section 9.07, or (d) Indebtedness for
Money Borrowed for which such Person shall have become obligated solely pursuant
to a Permitted Guaranty.
1.102SECURED INDEBTEDNESS. Neither Weeks Corporation nor Borrower nor any
--------------------
other Subsidiary (other than GP Holdings and LP Holdings) shall incur, assume or
otherwise become obligated for secured Indebtedness for Money Borrowed, except
------
for secured Indebtedness for Money Borrowed that constitutes (a) Permitted
55
<PAGE>
Mortgage Debt, (b) Permitted Tax Exempt Financings, (c) other secured
Indebtedness for Money Borrowed (including purchase or non-purchase money debt
secured by any real or personal property) that does not exceed, when aggregated
with all other secured Indebtedness for Money Borrowed permitted under this
Agreement solely by virtue of this subsection (c) of this Section 9.07,
$20,000,000, or (d) secured Indebtedness for Money Borrowed for which such
Person shall have become obligated solely pursuant to a Permitted Guaranty.
1.103INDEBTEDNESS AND ACTIVITIES OF GP HOLDINGS AND LP HOLDINGS. Neither
----------------------------------------------------------
GP Holdings nor LP Holdings shall (a) incur, assume or otherwise become
obligated for any Indebtedness for Money Borrowed, except for such Indebtedness
------
for Money Borrowed as may be incurred or assumed by GP Holdings solely by virtue
of its status as the general partner of Borrower and the incurrence or
assumption by Borrower of Indebtedness for Money Borrowed not prohibited by the
terms and conditions of this Agreement, (b) hold any assets, except for its
partnership interests in Borrower, (c) conduct any business activities, except
activities related or incidental to its ownership of partnership interests in
Borrower, or (d) derive any revenue, except from its ownership of partnership
interests in Borrower.
1.104DIVIDENDS AND DISTRIBUTIONS. The aggregate sum (but without
---------------------------
duplication) of all dividends paid by Weeks Corporation and all distributions
made by Borrower to its limited partners (excluding any special dividends and
---------
distributions representing the gain from the sale or disposition of Properties)
shall not exceed 95% of Funds from Operations for any fiscal year of Weeks
Corporation, unless such dividends or distributions are necessary in order to
maintain the status of Weeks Corporation as a real estate investment trust under
the Code or are necessary to allow Weeks Corporation or Borrower to make
distributions so that Weeks Corporation will not incur federal income or excise
tax.
1.105ENVIRONMENTAL MATTERS. Neither Weeks Corporation nor Borrower nor any
---------------------
other Subsidiary shall suffer an impairment of its assets which exceeds, when
aggregated with all other such impairments of Weeks Corporation's or Borrower's
assets, the sum of $20,000,000 in book value owing to environmental
contamination or other environmental matters, including, without limitation, the
violation of Environmental Laws or permits and the storage, treatment,
transportation or disposal of Substances.
1.106CHANGE IN CONTROL. No Change in Control of Borrower or Weeks
-----------------
Corporation shall occur, there shall be no transfer by Weeks Corporation of its
ownership of any of the capital stock of GP Holdings, GP Holdings shall issue no
capital stock to any Person other than Weeks Corporation, there shall be no
transfer of any right, title or interest of GP Holdings in its general partner
56
<PAGE>
interest in Borrower, and no general partner shall be admitted to Borrower other
than GP Holdings.
1.107ADVANCES, LOANS AND OTHER RESTRICTED INVESTMENTS. Neither Weeks
------------------------------------------------
Corporation nor Borrower nor any other Subsidiary shall make any Restricted
Investments, except (a) investments in and advances to Non-Consolidated
Subsidiaries in an aggregate amount outstanding at any one time not to exceed
ten percent (10%) of Total Asset Value, (b) investments in and advances to Non-
Consolidated Ventures in an aggregate amount outstanding at any one time not to
exceed ten percent (10%) of Total Asset Value, (c) investments in and advances
to Consolidated Entities, (d) other loans, advances and extensions of credit
constituting Intercompany Debt, (e) loans, advances or extensions of credit made
under any incentive compensation plan approved by the Board of Directors of
Weeks Corporation, (f) other loans, advances or extensions of credit to any
Person, including its stockholders, partners, officers, or other executives, and
other Restricted Investments that do not exceed in the aggregate the sum of
$10,000,000 at any one time outstanding, and (g) deposits required by government
agencies or public utilities.
1.108LIENS. Neither Weeks Corporation nor Borrower nor any other
-----
Subsidiary shall create, incur, assume or suffer to exist any Lien of any nature
upon or with respect to any of its respective Properties, whether now owned or
hereafter acquired, except for (a) Permitted Encumbrances, (b) Mortgages
------
securing Permitted Mortgage Debt or Permitted Tax Exempt Financings, and (c)
other Liens securing Indebtedness for Money Borrowed not prohibited in
accordance with Section 9.07.
ARTICLE X
---------
FINANCIAL COVENANTS
-------------------
In order to induce Administrative Agent, Syndication Agent, Documentation
Agent and Banks to enter into the Loan Documents and to make the Loan
contemplated hereby, Borrower and Weeks Corporation covenant and agree with
Administrative Agent, Syndication Agent, Documentation Agent and Banks that from
and after the date hereof, and so long as any amount remains outstanding on the
Obligations or this Agreement remains in effect:
1.109MINIMUM INTEREST COVERAGE RATIO. The Interest Coverage Ratio shall
-------------------------------
not be less than 2.00:1.00.
1.110MINIMUM FIXED CHARGE COVERAGE RATIO. The Fixed Charge Coverage Ratio
-----------------------------------
shall not be less than 1.75:1.00.
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1.111 MAXIMUM LEVERAGE. The Leverage Ratio shall not exceed 0.50:1.00.
----------------
1.112 MAXIMUM UNSECURED DEBT. The Total Unsecured Debt shall not exceed
----------------------
either (a) 55% of the Unencumbered Property Value, or (b) 60% of the
Unencumbered Property Value calculated with respect only to Property of
Borrower.
1.113 MAXIMUM SECURED DEBT. The Total Secured Debt shall not exceed 35%
--------------------
of Total Asset Value.
1.114 MINIMUM DEBT YIELD. At any Measurement Date, Total Annualized NOI
------------------
shall not be less than 13% of Total Interest Bearing Debt.
All accounting terms used but not defined herein shall be used as defined
under GAAP. All references to financial information and results of operations
are intended to apply to Weeks Corporation and the Consolidated Entities on a
consolidated basis.
ARTICLE XI
----------
DEFAULT
-------
Each of the following shall constitute a Default hereunder:
1.115 NONPAYMENT OF OBLIGATIONS. Failure of Borrower to make any payment
-------------------------
of principal or interest on the Obligations when due;
1.116 OTHER MONETARY DEFAULTS. Failure of Weeks Corporation or Borrower or
-----------------------
any other Subsidiary to make any payment when due, including payments of
principal or interest (whether by acceleration or otherwise), or before the
expiration of any applicable cure period, on any obligation of Weeks
Corporation, Borrower or any other Subsidiary (other than the Obligations, any
Permitted Mortgage Debt, or any Obligations (as defined in the Syndicated Credit
Agreement), or any Swing Obligations (as defined in the Swing Credit
Agreement)), the aggregate amount of which obligation (whether or not then due)
exceeds $1,000,000, or there shall occur any event or condition which results in
the acceleration of the maturity of such obligation (including, without
limitation, any required mandatory prepayment or "put" to Weeks Corporation,
Borrower or any other Subsidiary) or enables (with any requirement for the
giving of notice or lapse of time or both having been satisfied) the holders of
such obligation or any Person acting on their behalf to accelerate the maturity
thereof (including, without limitation, any such mandatory prepayment or "put");
1.117 DEFAULTS OF MATERIAL VENTURES. Failure of any Material Venture to
-----------------------------
make any payment when due, including payments of
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principal or interest (whether by acceleration or otherwise), or before the
expiration of any applicable cure period, on any obligation of such Material
Venture, the aggregate amount of which obligation (whether or not then due)
exceeds $2,000,000, or there shall occur any event or condition which results in
the acceleration of the maturity of such obligation (including, without
limitation, any required mandatory prepayment or "put" to such Material Venture)
or enables (with any requirement for the giving of notice or lapse of time or
both having been satisfied) the holders of such obligation or any Person acting
on their behalf to accelerate the maturity thereof (including, without
limitation, any such mandatory prepayment or "put") or there should occur a
default by any such Material Venture under any Mortgage securing any such
obligation which default shall continue beyond any applicable cure period;
1.118 BREACH OF WARRANTY OR REPRESENTATION. Any representation or
------------------------------------
warranty made by Borrower or Weeks Corporation in the Loan Documents, or any
other statement furnished at any time hereunder or in connection with the Loan
Documents, is untrue in any material respect when made or furnished;
1.119 BREACH OF COVENANTS. Default by Borrower or Weeks Corporation
-------------------
under, or in the observance or performance of any of the covenants contained in,
this Agreement or the other Loan Documents;
1.120 WEEKS REALTY PARTNERSHIP AGREEMENT DEFAULTS. There shall occur a
-------------------------------------------
material default by GP Holdings or LP Holdings in the performance of any of its
respective obligations under the Weeks Realty, L.P. Partnership Agreement and
such default shall continue beyond any applicable cure period;
1.121 PERMITTED MORTGAGE DEBT DEFAULTS. Default by Weeks Corporation or
--------------------------------
Borrower under any Permitted Mortgage Debt or any Mortgage securing any
Permitted Mortgage Debt which default shall continue beyond any applicable cure
period and the aggregate amount of which Permitted Mortgage Debt (whether or not
then due) exceeds $5,000,000, or there shall occur any event or condition which
results in the acceleration of the maturity of such Permitted Mortgage Debt
(including, without limitation, any required mandatory prepayment or "put" to
Weeks Corporation or Borrower) or enables (with any requirement for the giving
of notice or lapse of time or both having been satisfied) the holders of such
Permitted Mortgage Debt or any Person acting on their behalf to accelerate the
maturity thereof (including, without limitation, any such mandatory prepayment
or "put");
1.122 VOLUNTARY INSOLVENCY PROCEEDINGS. The filing by Weeks Corporation,
--------------------------------
Borrower or any other Subsidiary or any Material
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Venture of a petition under any chapter of the Federal Bankruptcy Code, as
amended, or of any proceeding seeking any relief under any other insolvency or
debtor relief act or law, state or federal, now or hereafter existing;
1.123 INVOLUNTARY INSOLVENCY PROCEEDINGS. The filing against Weeks
----------------------------------
Corporation, Borrower or any other Subsidiary or any Material Venture of a
petition under any chapter of the Federal Bankruptcy Code, as amended, or of any
proceeding seeking any relief under any other insolvency or debtor relief act or
law, state or federal, now or hereafter existing;
1.124 VOLUNTARY RECEIVERSHIP. The application by Weeks Corporation,
----------------------
Borrower or any other Subsidiary or any Material Venture for or the consent or
acquiescence of such Person in the appointment of a receiver or trustee for all
or a substantial part of any of their respective properties;
1.125 INVOLUNTARY RECEIVERSHIP. The involuntary appointment of a receiver
------------------------
or trustee for all or a substantial part of any property or assets of Weeks
Corporation, Borrower or any other Subsidiary or any Material Venture, or the
issuance of a warrant, attachment, execution or similar process against a
substantial part of the property of any such Person;
1.126 ASSIGNMENT FOR THE BENEFIT OF CREDITORS. The making by Weeks
---------------------------------------
Corporation, Borrower or any other Subsidiary or any Material Venture of a
general assignment for the benefit of creditors;
1.127 INSOLVENCY. The inability of Weeks Corporation, Borrower or any
----------
other Subsidiary or any Material Venture, or the admission of any such Person in
writing of its inability to pay such Person's debts generally as they mature;
1.128 INTEREST RATE AGREEMENTS. Default by Weeks Corporation, Borrower or
------------------------
any other Subsidiary or any Material Venture under any interest rate agreement
or similar agreement between any such Person and Administrative Agent or any
Bank relating to this Agreement shall occur, such default shall continue beyond
any applicable cure period, and such default shall render such Person liable to
pay the counterparty under such agreement a net amount in excess of $1,000,000;
1.129 SYNDICATED TERM LOAN GUARANTIES. The termination or revocation of
-------------------------------
any Syndicated Term Loan Guaranty, the denial or disaffirmation by any Guarantor
of its obligations under a Syndicated Term Loan Guaranty or any provision of a
Syndicated Term Loan Guaranty, or any Syndicated Term Loan Guaranty shall
otherwise cease to be in full force or effect;
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1.130 SYNDICATED CREDIT AGREEMENT. Any Default (as defined in the
---------------------------
Syndicated Credit Agreement) shall occur under the Syndicated Credit Agreement
and shall not be cured within any applicable cure period; and
1.131 SWING CREDIT AGREEMENT. Any Swing Line Default (as defined in the
--------------------
Swing Credit Agreement) shall occur under the Swing Credit Agreement and shall
not be cured within any applicable cure period.
ARTICLE XII
-----------
RIGHTS AND REMEDIES
-------------------
1.132 PRIOR TO DEFAULT. Before or after the occurrence of a Default:
----------------
Administrative Agent and Banks may examine, audit or inspect Borrower's or Weeks
Corporation's books and records at any reasonable time or times and may enter
upon their respective premises for such purposes. Borrower and Weeks
Corporation shall assist Administrative Agent and Banks in whatever way
reasonably necessary to make each such examination, audit and inspection.
1.133 UPON DEFAULT. Upon the occurrence of any Default and the expiration
------------
of any applicable cure period: Administrative Agent shall, at the request of the
Required Banks (a) terminate this Agreement and declare the Obligations,
notwithstanding any provisions thereof, without demand or notice of any kind,
immediately due and payable, whereupon the Obligations shall become immediately
due and payable and may be collected forthwith; (b) perform any agreement of
Borrower or Weeks Corporation hereunder or under any of the Loan Documents which
such party shall fail to perform, and Borrower and Weeks Corporation agree to
reimburse forthwith Administrative Agent and Banks for all expenses of
Administrative Agent and Banks in connection with the foregoing, together with
interest thereon at the Floating Rate from the date incurred until reimbursed;
and (c) exercise from time to time any other rights and remedies available to it
and the Banks under the Loan Documents and applicable law.
1.134 CURE OF DEFAULTS. Anything herein contained to the contrary
----------------
notwithstanding, the provisions of this Section 12.03 shall not apply to any
Default consisting of a failure to comply with any Sections of Articles IX or X,
to any Default consisting of a failure to repay the Notes on the Maturity Date,
to any Default consisting of a failure to make any payment of principal on the
Obligations when due, to any Default under Section 11.15, 11.16 or 11.17, or to
any Default that is specifically excluded from any provision for cure of
defaults pursuant to the terms of any other of the Loan Documents. In the event
of the occurrence of a Default which consists of failure to make a payment of
interest on the
61
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Obligations when due, neither Administrative Agent nor any Bank will, on account
of said Default, accelerate the maturity of any Obligations, exercise any other
rights or remedies under the Loan Documents, or institute any court action under
this Agreement or any of the Loan Documents if, within three (3) Domestic
Business Days after the date of occurrence of said Default, Borrower makes such
payment to Administrative Agent. In the event of the occurrence of a Default of
a type set forth in Section 11.05 pertaining to covenants set forth in this
Agreement or in the other Loan Documents, other than those covenants set forth
in Articles IX and X hereof, neither Administrative Agent nor any Bank will, on
account of said Default, accelerate the maturity of any Obligations, exercise
any other rights or remedies under the Loan Documents, or institute any court
action under this Agreement or any of the Loan Documents if (a) within thirty
(30) days after the earlier to occur of (i) the date written notice thereof has
been given to Borrower by Administrative Agent, or (ii) the date a Key Executive
otherwise has actual knowledge of any such Default, or (b) in the case of any
covenants set forth in the other Loan Documents, within any applicable grace
period provided for therein, Borrower fully cures said Default. Except as
specifically set forth in this Section 12.03, no default notice or cure period
shall be applicable with respect to the breach by Borrower or Weeks Corporation
of any of their respective obligations under this Agreement or under any of the
Loan Documents. This Section 12.03 shall not be applicable during the pendency
of any bankruptcy proceedings affecting Borrower or any Guarantor.
1.135 COSTS OF COLLECTION. Borrower agrees to pay all costs of
-------------------
Administrative Agent and Banks of collection of the Obligations and enforcement
or rights hereunder, and, if collected by or through an attorney, reasonable
attorneys' fees and also other legal and court expenses.
1.136 SETOFF. Borrower and Guarantors hereby agree that Administrative
------
Agent and any Bank may, upon the occurrence of a Default and during the
continuance thereof, without notice, apply any balances, credits, deposits,
accounts, monies or other indebtedness now or hereafter owing by any Bank to
Borrower or any Guarantor in satisfaction of any Obligation then due and
payable; provided, however, that nothing herein contained shall authorize or
-------- -------
entitle Administrative Agent or any Bank to exercise any right of setoff against
any accounts, monies, government securities, or other properties held by such
Person under any escrow, trust, special purpose account, or similar arrangement
established with such Person by Borrower or any Guarantor for the purpose of (a)
implementing a "legal" defeasance, a "covenant" defeasance or an "in substance"
defeasance of Debt of Weeks Corporation or Borrower or any Guarantor, or (b)
maintaining security deposits of tenants of any of the Properties.
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1.137 SHARING OF COLLECTIONS. Each Bank agrees that if it shall, by
----------------------
exercising any right of setoff or counterclaim or resort to collateral security
or otherwise, receive payment of a proportion of the aggregate amount of
principal and interest owing with respect to the Note held by it which is
greater than the proportion received by any other Bank in respect of the
aggregate amount of all principal and interest owing with respect to the Note
held by such other Bank, the Bank receiving such proportionately greater payment
shall purchase such participations in the Notes held by the other Banks owing to
such other Banks, and such other adjustments shall be made, as may be required
so that all such payments of principal and interest with respect to the Notes
held by the Banks owing to such other Banks shall be shared by the Banks pro
rata; provided that if all or any portion of such payment received by the
--------
purchasing Bank is thereafter recovered from such purchasing Bank, such purchase
from each other Bank shall be rescinded and such other Bank shall repay to the
purchasing Bank, as the case may be, the purchase price of such participation to
the extent of such recovery, together with an amount equal to such other Bank's
ratable share (according to the proportion of (a) the amount of such other
Bank's required repayment to (b) the total amount so recovered from the
purchasing Bank) of any interest or other amount paid or payable by the
purchasing Bank in respect of the total amount so recovered. Borrower agrees,
to the fullest extent it may effectively do so under applicable law, that any
holder of a participation in a Note, whether or not acquired pursuant to the
foregoing arrangements, may exercise rights of setoff or counterclaim and other
rights with respect to such participation as fully as if such holder of a
participation were a direct creditor of Borrower in the amount of such
participation.
ARTICLE XII
-----------
FEES AND EXPENSES; INDEMNIFICATION
----------------------------------
1.139 FEES AND EXPENSES. Borrower and Guarantors shall provide, at their
-----------------
expense, to Administrative Agent all documents, instruments, assurances, and
certificates as Administrative Agent may reasonably deem necessary to consummate
the transactions contemplated hereby. Borrower and Guarantors shall be
obligated, jointly and severally, to Administrative Agent to pay all reasonable
fees, expenses and costs incurred by Administrative Agent in connection with the
preparation, negotiation, and entering into of this Agreement and the other Loan
Documents and the administration of the Loan, including any amendments or
modifications thereto, whether incurred before, on or after the date of this
Agreement, including, but not limited to, reasonable attorneys' fees and
expenses. All the foregoing costs and expenses may, at the discretion of
Administrative Agent and upon notice to Borrower, be charged to the Notes as
advances thereunder. In the event Administrative Agent pays any of the costs or
expenses under this Section 13.01, Borrower and Weeks Corporation shall
reimburse Administrative Agent promptly upon demand, and all such sums shall
bear interest at the Default Rate set forth in Section 2.12.
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1.139 ADMINISTRATIVE AGENT'S OPERATIONS FEE. In addition to the fees and
-------------------------------------
expenses payable by Borrower pursuant to Section 13.01 and any other provision
of this Agreement or the other Loan Documents, Borrower agrees to pay to
Administrative Agent, for its sole account, in consideration of its
administration of the transactions evidenced by this Agreement and its
performance of services hereunder, those fees provided for and calculated as set
forth in the Mandate Letter, including an annual Administrative Agent's
Operations Fee. The Administrative Agent's Operations Fee shall be due and
payable in advance, for each year (or part thereof) during which any of the
Obligations are outstanding, on the date of this Agreement and on each
anniversary date thereof, and shall be fully earned and nonrefundable when paid.
1.140 AMENDMENT, WAIVER AND PREPAYMENT FEES. In addition to the fees and
-------------------------------------
expenses payable by Borrower pursuant to Section 13.01 and any other provision
of this Agreement or the other Loan Documents, Borrower agrees to pay to
Administrative Agent, for its sole account, as compensation for administrative
and other services in connection therewith, (a) a fee in the minimum amount of
$5,000 (or such greater reasonable amount as may be charged by Administrative
Agent) upon each request by Weeks Corporation or Borrower for any amendment to,
or waiver of, any term or condition set forth in this Agreement or any of the
other Loan Documents, except for such a request, if any, which Administrative
Agent shall determine in good faith shall impose no more than an insignificant
administrative, financial or other burden on Administrative Agent, and (b) a fee
in such reasonable amount as may be charged by Administrative Agent (not to
exceed $3,000) upon any prepayment of the Loan made pursuant to the provisions
of Section 2.10, if such prepayment is not made on the last day of the Interest
Periods applicable to the LIBOR Rate Tranches, if any, which fee shall be due
and payable upon the making of any such prepayment and shall be fully earned and
nonrefundable when paid.
1.141 INDEMNIFICATION. At all times prior to and after the consummation
---------------
of the transactions contemplated by this Agreement, Borrower and Guarantors,
jointly and severally, agree to hold harmless Banks, Administrative Agent, their
respective directors, officers, employees, agents, affiliates, successors and
assigns from and indemnify Banks, Administrative Agent, their respective
directors, officers, employees, agents, affiliates, successors and assigns,
against all demands, loss, damages, judgments, costs and expenses (including,
without limitation, reasonable attorneys' fees and expenses) actually incurred
by any of the foregoing, whether direct or indirect, as a result of or arising
from or relating to any claim for relief or cause of action made, brought,
asserted or threatened by any entity, asserting a claim for any legal or
equitable remedy against any person under any statute, or regulation or as a
matter of law, including, without limitation, any federal or state securities
laws or under any common law or equitable case or otherwise, arising from or in
connection with this Agreement, the other Loan Documents, any of the
transactions
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contemplated by this Agreement, or use of any proceeds of the Loan, except to
the extent such losses, damages, costs or expenses are due to the wilful
misconduct or gross negligence of, or breach of this Agreement by Administrative
Agent, Banks, or any such indemnitee. At the request of Administrative Agent and
any Bank, Borrower and Guarantors, jointly and severally, will indemnify any
assignee to whom any Bank transfers or sells all or any portion of its interest
in the Loan or participations therein on terms substantially similar to the
terms set forth above. Administrative Agent and Banks shall not be responsible
or liable to any entity for consequential damages which may be alleged as a
result of this Agreement or any of the transactions contemplated hereby.
ARTICLE XIV
-----------
MISCELLANEOUS
-------------
1.142 CUMULATIVE RIGHTS; NON-WAIVER. No delay or omission by
-----------------------------
Administrative Agent or any Bank to exercise any right, power or remedy accruing
upon any Default shall exhaust or impair any such right, power or remedy or
shall be construed to be a waiver of any such Default, or acquiescence therein,
and every right, power and remedy given by this Agreement to Administrative
Agent or Banks may be exercised from time to time and as often as may be deemed
expedient by Administrative Agent or any Bank. No consent or waiver, expressed
or implied, by Administrative Agent or Banks to or of any Default shall be
deemed or construed to be a consent or waiver to or of any other Default. No
delay, indulgence, departure, act or omission by Administrative Agent or Banks
or any holder of any of the Notes shall release, discharge, modify, change or
otherwise affect the original liability under the Notes or any other obligation
of Borrower, or any maker, surety or Guarantor, or preclude Administrative Agent
or Banks from exercising any right, privilege or power granted herein or alter
the security title, security interest or lien hereof. Administrative Agent or
Banks may at any time, without notice to or further consent from Borrower,
surrender or substitute any property or other security of any kind or nature
whatsoever securing the Obligations or release any Guarantor, and no such action
will release Borrower's obligations hereunder or alter the effect hereof. No
right, power or remedy conferred upon or reserved to Administrative Agent or
Banks hereunder is intended to be exclusive of any other right, power or remedy,
but each and every such right, power and remedy shall be cumulative and
concurrent and shall be in addition to any other right, power and remedy given
hereunder or under the other Loan Documents or now or hereafter existing at law,
in equity or by statute.
1.143 NO OBLIGATION TO THIRD PARTIES. The Loan Documents are made solely
------------------------------
for the benefit of Guarantors, Borrower, Administrative Agent, Syndication
Agent, Documentation Agent, each Bank and their respective successors and
assigns. No other party whatsoever shall have standing to bring any action as
the result of the Loan Documents, or to assume that Administrative Agent or any
Bank will
65
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exercise any remedies provided herein, and no party other than Administrative
Agent and each Bank, their respective successors and assigns, shall be deemed to
be a beneficiary of any right or remedy provided by the Loan Documents in favor
of such parties, any and all of which may be freely waived in whole or in part
by Administrative Agent or Banks, in accordance with the terms and conditions of
this Agreement. Nothing contained in this Section 14.02 is intended to deprive
Borrower of the benefit of any covenant by Administrative Agent and each Bank in
favor of Borrower contained in the Loan Documents.
1.144 SUCCESSORS AND ASSIGNS.
----------------------
(1) The provisions of this Agreement shall be binding upon and inure
to the benefit of the parties hereto and their respective successors and
assigns; provided that Borrower may not assign or otherwise transfer any of
--------
their rights under this Agreement.
(2) Any Bank may at any time sell to one or more persons (each a
"PARTICIPANT") participation interests in any Loan owing to such Bank any Note
-----------
held by such Bank, any Commitment hereunder or any other interest of such Bank
hereunder. In the event of any such sale by a Bank of a participation interest
to a Participant, such Bank's obligations under this Agreement shall remain
unchanged, such Bank shall remain solely responsible for the performance
thereof, such Bank shall remain the holder of any such Note for all purposes
under this Agreement, and Borrower and Administrative Agent shall continue to
deal solely and directly with such Bank in connection with such Bank's rights
and obligations under this Agreement. In no event shall a Bank that sells a
participation be obligated to the Participant to take or refrain from taking any
action hereunder, except that such Bank may agree that it will not (except as
provided below), without the consent of the Participant, agree to (i) the change
of any date fixed for the payment of principal of or interest on the Loan, (ii)
the change of the amount of any principal, interest or fees due on any date
fixed for the payment thereof with respect to the Loan, (iii) the change of the
principal of the Loan, (iv) any change in the rate at which either interest is
payable thereon or (if the Participant is entitled to any part thereof) fee is
payable hereunder from the rate at which the Participant is entitled to receive
interest or fee (as the case may be) in respect of such participation, (v) the
release or substitution of all or any substantial part of the collateral (if
any) held as security for the Loan, or (vi) the release of any Guaranty given to
support payment of the Loan. Each Bank selling a participation interest in any
Loan, Note, Commitment or other interest under this Agreement shall, within ten
(10) Domestic Business Days of such sale, provide Borrower and Administrative
Agent with written notification stating that such sale has occurred and
identifying the Participant and the interest purchased by such Participant.
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(3) Any Bank may at any time assign to one or more banks or
financial institutions (each an "ASSIGNEE") all or a proportionate part of its
--------
rights and obligations under this Agreement, the Notes and the other Loan
Documents, and such Assignee shall assume all such rights and obligations,
pursuant to an Assignment and Acceptance, executed by such Assignee, such
transferor Bank and Administrative Agent, provided that (i) no interest may be
--------
sold by a Bank pursuant to this paragraph (c) unless the Assignee shall agree to
assume ratably equivalent portions of the transferor Bank's Commitment, (ii) no
interest may be sold by a Bank pursuant to this paragraph (c) without the
written consent of Administrative Agent, which consent shall not be unreasonably
withheld, (iii) if a Bank is assigning only a portion of its Commitment, then
the amount of the Commitment being assigned (determined as of the effective date
of the assignment) shall be in an amount not less than $5,000,000, (iv) except
during the continuance of a Default, no interest may be sold by a Bank pursuant
to this paragraph (c) to any Assignee that is not then a Bank or an Affiliate of
a Bank without the written consent of Borrower, which consent shall not be
unreasonably withheld, and (v) a Bank may not, at any one time, have more than
two (2) Assignees that are not Banks immediately prior to such assignment. Upon
(A) execution of the Assignment and Acceptance by such transferor Bank, such
Assignee, Administrative Agent and Borrower, (B) delivery of an executed copy of
the Assignment and Acceptance to Borrower and Administrative Agent, (C) payment
by such Assignee to such transferor Bank of an amount equal to the purchase
price agreed between such transferor Bank and such Assignee, and (D) payment by
the transferor Bank of a processing and recordation fee of $2,500 to
Administrative Agent, for its sole account, such Assignee shall for all purposes
be a Bank party to this Agreement and shall have all the rights and obligations
of a Bank under this Agreement to the same extent as if it were an original
party hereto with a Commitment as set forth in such instrument of assumption,
and the transferor Bank shall be released from its obligations hereunder to a
corresponding extent, and no further consent or action by Borrower, Banks or
Administrative Agent shall be required. Upon the consummation of any transfer to
an Assignee pursuant to this paragraph (c), the transferor Bank, the
Administrative Agent and Borrower shall make appropriate arrangements so that,
if required, a new Note is issued to each of such Assignee and such transferor
Bank.
(4) Borrower authorizes Administrative Agent and each Bank to
disclose to any Participant or Assignee (each a "TRANSFEREE") and any
----------
prospective Transferee any and all financial information in such Administrative
Agent's or Bank's possession concerning Borrower which has been delivered to
such Administrative Agent or any Bank by Borrower or Administrative Agent
pursuant to this Agreement or which has been delivered to such Administrative
Agent or any Bank by Borrower in connection with such
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Administrative Agent's or such Bank's credit evaluation prior to entering into
this Agreement, provided that such Transferee or prospective Transferee agrees
--------
to take reasonable actions to preserve the confidentiality of any such
confidential financial information disclosed.
(5) Anything in this Section 14.03 to the contrary notwithstanding,
any Bank may assign and pledge all or any portion of its ratable share of the
Loan and/or obligations owing to it to any Federal Reserve Bank or the United
States Treasury as collateral security pursuant to Regulation A of the Board of
Governors of the Federal Reserve System and any Operating Circular issued by
such Federal Reserve Bank, provided that any payment in respect of such assigned
--------
share of the Loan and/or obligations made by Borrower to the assigning and/or
pledging Bank in accordance with the terms of this Agreement shall satisfy
Borrower's obligations hereunder in respect of such assigned share of the Loan
and/or obligations to the extent of such payment. No such assignment shall
release the assigning and/or pledging Bank from its obligations hereunder.
1.145 GOVERNING LAW. This Agreement is entered into in the State of
-------------
Georgia, and the rights and obligations of the parties hereunder shall be
governed by, construed and interpreted in accordance with, the laws of the State
of Georgia.
1.146 SURVIVAL OF OBLIGATIONS. All representations, warranties and
-----------------------
covenants contained herein shall survive the Closings and the execution and
delivery of the Notes or any other documents contemplated hereby.
1.147 ENTIRE AGREEMENT. This Agreement (together with the provisions of
the Mandate Letter relating to fees payable to Administrative Agent) constitutes
the entire agreement of the parties hereto with respect to the subject matter
hereof.
1.148 INVALIDITY. Any provision of this Agreement that is prohibited or
----------
unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective
to the extent of such prohibition or unenforceability without invalidating the
remaining provisions hereof or affecting the validity or enforceability of such
provisions in any other jurisdiction.
1.149 HEADINGS. Article and Section headings used in this Agreement are
--------
for convenience of reference only and are not part of this Agreement for any
other purpose.
1.150 CHANGES IN FORMS. Administrative Agent reserves the right to make
----------------
reasonable changes in the forms of all certificates and other documents to be
executed and delivered to any Bank or
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Administrative Agent by Borrower or Weeks Corporation hereunder.
1.151 NOTICES. Any notice, payment, demand or communication required or
-------
permitted to be given by the provisions of this Agreement shall be deemed to
have been sufficiently given or served for all purposes if delivered personally
to a party or to an officer of the party to whom the same is directed, or if
sent by facsimile transmission or by United States Mail, first class postage and
charges prepaid, addressed or transmitted to such party at the following address
or facsimile number, or to such other address or facsimile number as shall be
furnished in writing by any party to the other, pursuant to the provisions
hereof:
If to Borrower, to: WEEKS REALTY, L.P.
c/o Weeks Corporation
4497 Park Drive
Norcross, Georgia 30093
Attn: Chief Financial Officer
Facsimile No.: (770) 717-2479
with a copy to: King & Spalding
191 Peachtree Street, N.E.
Atlanta, GA 30303-1740
Attn: William B. Fryer, Esq.
Facsimile No.: (404) 572-5100
and with a copy to: Weeks Corporation
4497 Park Drive
Norcross, Georgia 30093
Attn: Elizabeth C. Belden, Esq.
Corporate Counsel
Facsimile No.: (770) 717-2479
If to Weeks Corporation,
to: Weeks Corporation
4497 Park Drive
Norcross, Georgia 30093
Attn: Chief Financial Officer
Facsimile No.: (770) 717-2479
If to Weeks GP
Holdings, Inc., to: Weeks GP Holdings, Inc.
c/o Weeks Corporation
4497 Park Drive
Norcross, Georgia 30093
Attn: Chief Financial Officer
Facsimile No.: (770) 717-2479
69
<PAGE>
If to Weeks LP
Holdings, Inc., to: Weeks LP Holdings, Inc.
c/o Weeks Corporation
4497 Park Drive
Norcross, Georgia 30093
Attn: Chief Financial Officer
Facsimile No.: (770) 717-2479
If to a Bank, to: The address or facsimile number set forth opposite
its name on the signature pages hereof
If to Administrative
Agent, to: Wachovia Bank, N.A.
191 Peachtree Street, N.E.
Atlanta, Georgia 30303
Attn: Steven B. Wood
Vice President
Facsimile No.: (404) 332-4066
with a copy to: Wachovia Corporate Services, Inc.
191 Peachtree Street, N.E.
Atlanta, Georgia 30303
Attn: Corporate Finance Department
Facsimile No.: (404) 332-4005
and with a copy to: Smith, Gambrell & Russell, LLP
Suite 3100, Promenade II
1230 Peachtree Street, N.E.
Atlanta, Georgia 30309
Attn: Ronald E. Barab, Esq.
Facsimile No.: (404) 815-3509
If to Syndication
Agent, to: First Union National Bank
One First Union Center, NC 01 56
Charlotte, North Carolina 28288
Attn: John Schissel
Vice President
REIT Banking Group
Facsimile No.: (704) 383-6205
If to Documentation
Agent, to: NationsBank, N.A.
600 Peachtree Street, N.E.
6th Floor, GA 1-006-6-25
Atlanta, Georgia 30308
Attn: Kevin M. Brown
Vice President
Facsimile No.: (404) 607-4145
70
<PAGE>
Any such notice shall be deemed given as of the date so delivered personally or
sent by facsimile transmission (with confirmation of completed transmission), or
five (5) days after the date on which same was deposited, first class postage
prepaid, in a regularly maintained receptacle for the deposit of United States
Mail, addressed as aforesaid.
1.152 AMENDMENTS AND WAIVERS. (a) Any provision of this Agreement, the
----------------------
Notes or any other Loan Documents may be amended or waived if, but only if, such
amendment or waiver is in writing and is signed ("signed," as used in this
Section 14.11, shall include, without limitation, signatures received by
facsimile transmission followed by a signed original) by Borrower and the
Required Banks (and, if the rights or duties of Administrative Agent are
affected thereby, by Administrative Agent); provided that no such amendment or
--------
waiver shall, unless signed by all Banks, (i) change the Commitment of any Bank
or subject any Bank to any additional obligation, (ii) change the principal of
or rate of interest on the Loan or any fees (other than fees payable solely to
Administrative Agent) hereunder, (iii) change the date fixed for any payment of
principal of or interest on the Loan or any fees hereunder, (iv) change the
amount of principal, interest or fees due on any date fixed for the payment
thereof, (v) change the percentage of the Commitments or of the aggregate unpaid
principal amount of the Notes, or the percentage of any Bank which shall be
required for Banks or any of them to take any action under this Section 14.11
or any other provision of this Agreement, (vi) change the manner of application
of any payments made under this Agreement or the Notes, (vii) release any
Syndicated Term Loan Guaranty, (viii) change the definition of Required Banks,
(ix) change the substance of the Debt Rating Table, or (x) change this Section
14.11.
(b) Neither Weeks Corporation nor Borrower will obtain from any Bank
its written agreement to waive or amend any of the provisions of this Agreement
except through Administrative Agent, and Administrative Agent shall be supplied
by Weeks Corporation or Borrower with sufficient information to enable Banks to
make an informed decision with respect thereto. Executed or true and correct
copies of any waiver or consent effected pursuant to the provisions of this
Agreement shall be delivered by Borrower to Administrative Agent forthwith
following the date which the same shall have been executed and delivered by the
requisite percentage of Banks. Borrower will not, directly or indirectly, pay or
cause to be paid any remuneration, whether by way of supplemental or additional
interest, fee or otherwise, to any Bank (in its capacity as such) as
consideration for or as an inducement to the entering into by such Bank of any
waiver or amendment of any of the terms and provisions of this Agreement, unless
such remuneration is concurrently paid, on the same terms, ratably to all Banks,
provided that the provisions of this Section 14.11(b) shall not impair or in
- --------
any way affect Borrower's obligations to pay, and
71
<PAGE>
Administrative Agent's entitlement to collect, the fees provided for in Section
13.03 upon any request by Borrower for a waiver or amendment.
1.153 TIME OF THE ESSENCE. Time is of the essence of this Agreement.
-------------------
1.154 EXECUTION IN COUNTERPARTS. This Agreement and any amendment hereof
-------------------------
or waiver of any provision hereof may be executed in multiple counterparts, each
of which shall be treated as an original, but all of which shall constitute one
and the same agreement, amendment or waiver, as the case may be.
1.155 ATTORNEYS' FEES. All references to attorneys' fees or reasonable
---------------
attorneys' fees in this Agreement or in any of the Loan Documents shall mean
actual attorneys' fees incurred by a Bank or Administrative Agent without
reference to any statutory presumption as to the amount thereof.
1.156 CONFIDENTIALITY. Each of Banks, Administrative Agent, Syndication
---------------
Agent and Documentation Agent agrees to exercise commercially reasonable efforts
to keep any information delivered or made available to it by Weeks Corporation
or Borrower confidential from anyone other than persons employed or retained by
it who are or expected to become engaged in evaluating, approving, structuring
or administering the Loan; provided that nothing herein shall prevent any Bank,
--------
Administrative Agent, Syndication Agent or Documentation Agent from disclosing
such information (a) to any other Bank, (b) upon the order of any court or
administrative agency, (c) upon the request or demand of any regulatory agency
or authority having jurisdiction over it, (d) which has been publicly disclosed
without breach of these or any other applicable confidentiality provisions, (e)
to the extent reasonably required in connection with any litigation to which any
Bank or Banks may be a party, (f) to the extent reasonably required in
connection with the exercise of any remedy hereunder, (g) to its legal counsel
and independent auditors (each of whom it agrees to advise as to the
confidential nature of such information) and (h) to any actual or proposed
Transferee of all or a part of its rights hereunder which has agreed in writing
to be bound by the provisions of this Section 14.15; provided that should
--------
disclosure of any such confidential information be required by virtue of the
preceding clause (b) or clause (e), the relevant Bank, Administrative Agent,
Syndication Agent or Documentation Agent shall promptly notify Borrower of same;
provided, further, that neither any Bank nor Administrative Agent nor
- -------- -------
Syndication Agent nor Documentation Agent shall be required to delay compliance
with any directive to disclose any such information so as to allow Weeks
Corporation or Borrower to effect any action seeking to prevent such disclosure.
72
<PAGE>
1.157 REPRESENTATIONS BY BANKS. Each of Banks hereby represents that (a)
------------------------
it is a commercial lender or financial institution which makes commercial loans
in the ordinary course of its business and that it will make its ratable share
of the Loan for its own account in the ordinary course of such business;
provided that, subject to Section 14.03, the disposition of the Note or Notes
- --------
held by it shall at all times be within its exclusive control, and (b) no part
of the funds to be used by it to fund its ratable share of the Loan constitutes
or will constitute (i) assets allocated to any separate account maintained by it
in which any employee benefit plan (or its related trust) has any interest nor
(ii) any other assets of any employee benefit plan. As used in this Section, the
terms "employee benefit plan" and "separate account" shall have the respective
meanings assigned to such terms in Section 3 of ERISA.
1.158 MISCELLANEOUS. The Loan Documents shall inure to the benefit of and
-------------
be binding upon Borrower, Guarantors, Banks, Administrative Agent, Syndication
Agent, Documentation Agent and their respective heirs, executors, legal
representatives, successors, successors-in-title and assigns, subject to all
restrictions on transfer herein or in the other Loan Documents. Neither the Loan
Documents nor the proceeds of the Loan contemplated by the Loan Documents may be
assigned by Borrower without the prior consent of Banks, which may be given or
withheld at the discretion of Banks. The Loan Documents may be discharged or
terminated only by an instrument in writing signed by the party against whom
enforcement of such discharge or termination is sought. Nothing contained in the
Loan Documents shall be construed to create an agency, partnership or joint
venture between Borrower and Banks. Wherever in the Loan Documents it is
indicated that the approval, consent or determination of Banks is to be given or
made at the option or in the discretion or judgment of Banks, then such Banks,
or any of them, may grant or withhold such approval or consent or make such
determination without restriction in its sole and absolute discretion. The
obligations of Borrower under this Agreement and the Notes shall be subject to
the limitation that payments of interest shall not be required to the extent
that receipt thereof would be contrary to provisions of law applicable to Banks
limiting rates of interest which may be charged or collected by Banks. In the
event that any such payment in excess of the maximum rate of interest allowed by
applicable law is inadvertently paid by Borrower or inadvertently received by
the Banks, the amount in excess of the maximum rate of interest allowed by
applicable law shall be credited as a payment of principal, unless Borrower
shall notify the Banks in writing that Borrower elects to have such excess sum
returned to it forthwith. All exhibits referred to in the Loan Documents are by
such reference incorporated into the Loan Documents as if fully set forth
therein.
73
<PAGE>
IN WITNESS WHEREOF, the parties have caused this Agreement to be executed
and delivered in their names and on their behalf, and their seals to be affixed
and attested, all as of the day and year first above written.
BORROWER:
--------
WEEKS REALTY, L.P.
ATTEST: BY: WEEKS GP HOLDINGS, INC., its
sole General Partner
_________________________ By:______________________(Seal)
Secretary
Its:_______________________
[CORPORATE SEAL]
GUARANTORS:
----------
ATTEST: WEEKS CORPORATION
_________________________ By:_________________________________
Secretary
Its:_____________________________
[CORPORATE SEAL]
ATTEST: WEEKS GP HOLDINGS, INC.
_________________________ By:___________________________
Secretary
Its:_______________________
[CORPORATE SEAL]
ATTEST: WEEKS LP HOLDINGS, INC.
_________________________ By:___________________________
Secretary
Its:_______________________
[CORPORATE SEAL]
ADMINISTRATIVE AGENT:
--------------------
WACHOVIA BANK, N.A.,
as Administrative Agent
By:________________________________
Its:____________________________
[BANK SEAL]
74
<PAGE>
SYNDICATION AGENT:
-----------------
FIRST UNION NATIONAL BANK,
as Syndication Agent
By:________________________________
Its:____________________________
[BANK SEAL]
DOCUMENTATION AGENT:
-------------------
NATIONSBANK, N.A.,
as Documentation Agent
By:________________________________
Its:____________________________
[BANK SEAL]
BANKS:
-----
Commitment Share: WACHOVIA BANK, N.A.
23.52941176%
Address: By:________________________________
191 Peachtree Street, N.E.
Atlanta, GA 30303 Its:____________________________
Date:
[BANK SEAL]
Commitment Share: FIRST UNION NATIONAL BANK
17.64705882%
Address: By:________________________________
One First Union Center
NC 01-56 Its:____________________________
75
<PAGE>
Charlotte, NC 28288 Date:
[BANK SEAL]
Commitment Share: NATIONSBANK, N.A.
23.52941176%
Address: By:________________________________
600 Peachtree Street, N.E.
6th Floor Its:____________________________
GA 1-006-6-25 Date:
Atlanta, GA 30308 [BANK SEAL]
Commitment Share: COMMERZBANK A.G. - ATLANTA AGENCY
23.52941176%
Address: By:________________________________
2 World Financial Center
New York, NY 1281-1050 Its:____________________________
By:________________________________
Its:____________________________
Date:
[BANK SEAL]
Commitment Share: SUNTRUST BANK, ATLANTA
11.76470588%
Address: By:________________________________
9th Floor, 50 Hurt Plaza
Atlanta, GA 30302 Its:____________________________
Date:
[BANK SEAL]
76
<PAGE>
SCHEDULE 2
<TABLE>
<CAPTION>
COMMITMENT
BANK SHARE COMMITMENT
- ---- ----- ----------
<S> <C> <C>
Wachovia Bank, N.A. 23.52941176% $20,000,000.00
First Union National Bank 17.64705882% $15,000,000.00
NationsBank, N.A. 23.52941176% $20,000,000.00
Commerzbank A.G. -
Atlanta Agency 23.52941176% $20,000,000.00
SunTrust Bank, Atlanta 11.76470588% $10,000,000.00
------------ --------------
TOTAL: 100.00000000% $85,000,000.00
</TABLE>
<PAGE>
SCHEDULE 9.06
WEEKS CORPORATION
UNSECURED DEBT AS OF NOVEMBER 1, 1998
<TABLE>
<CAPTION>
BALANCE INTEREST FIXED/ MATURITY BALANCE AT
LENDER BORROWER 1/NOV/98 RATE VARIABLE TYPE DATE MATURITY
- ---------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Wilma South Corporation Weeks Tradeport LP $2,000,000 7.00% Fixed Interest 27/Oct/00 $2,000,000
Only
- ---------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
EXHIBIT 10.70
CHANGE IN CONTROL AGREEMENT
This Change in Control Agreement ("Agreement") is entered into this
______ day of February, 1999, by and between Weeks Corporation, a Georgia
corporation, and ________________________________________________
("Executive").
WHEREAS, Executive is employed by Weeks or provides services directly
or indirectly to Weeks as an employee of one, or more than one, Weeks Affiliate;
and
WHEREAS, Weeks desires to continue to retain Executive's services,
trust, confidence and complete and undivided attention if there is any
speculation regarding a Change in Control of Weeks;
NOW, THEREFORE, in consideration of the mutual promises and agreements
contained in this Agreement and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, Weeks and Executive
hereby agree as follows:
(S) 1.
Definitions
-----------
1.1 Board. The term "Board" for purposes of this Agreement shall mean the
-----
Board of Directors of Weeks.
1.2 Cause. The term "Cause" for purposes of this Agreement shall mean:
-----
(a) Executive is convicted of any felony or any misdemeanor that the
Board in good faith determines involves moral turpitude;
(b) Executive engages in a fraudulent or dishonest act that materially
damages or prejudices Weeks or a Weeks Affiliate or engages in conduct or
activities materially damaging to the property, business or reputation of
Weeks or a Weeks Affiliate, all as determined by the Board in good faith;
(c) Any act or omission by Executive involving gross malfeasance or
gross negligence in the performance of his duties and responsibilities to
Weeks to the material detriment of Weeks or a Weeks Affiliate, all as
determined by the Board in good faith, which has not been corrected by
Executive (as determined by the Board in good faith) within thirty (30)
days after written notice from the Board of any such act or omission;
(d) Any failure by Executive to comply in any material respect with
any appropriate and proper written policies or directives of Weeks or a
Weeks Affiliate, which failure has a material and adverse effect on the
business or reputation of Weeks or a Weeks Affiliate, all as determined by
the Board in good faith, which has not been corrected by Executive (as
determined by the Board in good faith) within thirty (30) days after
written notice from the Board of such failure;
<PAGE>
(e) Executive's continued habitual insobriety or substance abuse, as
determined by the Board in good faith after written notice from the Board
and after a reasonable opportunity to undergo appropriate treatment for a
reasonable period; or
(f) Any diversion by Executive of any viable and significant business
opportunity from Weeks or a Weeks Affiliate (other than with the prior
written consent of the Board) which Executive effects directly or
indirectly for his own benefit.
1.3 Change in Control. The term "Change in Control" for purposes of this
-----------------
Agreement shall mean:
(a) a "change in control" of Weeks of a nature that would be required
to be reported in response to Item 6(e) of Schedule 14A for a proxy
statement filed under Section 14(a) of the Securities Exchange Act of 1934,
as amended ("1934 Act");
(b) a "person" (as that term is used in Section 14(d)(2) of the 1934
Act) becomes after the effective date of this Agreement the beneficial
owner (as defined in Rule 13d-3 under the 1934 Act) directly or indirectly
of securities representing 50% or more of the combined voting power for
election of directors of the then outstanding securities of Weeks;
(c) the individuals who at the beginning of any period of two
consecutive years or less constitute the Board cease for any reason during
such period to constitute at least a majority of the Board, unless the
election or nomination for election of each new member of the Board was
recommended or approved by vote of at least two-thirds of the members of
the Board then serving as such who were members of the Board at the
beginning of such period;
(d) the shareholders of Weeks approve any dissolution or liquidation
of Weeks or any sale or disposition of 50% or more of the assets or
business of Weeks; or
(e) the shareholders of Weeks approve a merger or consolidation to
which Weeks is a party (other than a merger or consolidation with a wholly-
owned subsidiary of Weeks) or a share exchange in which Weeks will exchange
Weeks shares for shares of another corporation as a result of which the
persons who were shareholders of Weeks immediately before the effective
date of such merger, consolidation or share exchange will have beneficial
ownership of less than 50% of the combined voting power for election of
directors of the surviving corporation immediately following the effective
date of such merger, consolidation or share exchange, based exclusively on
such beneficial ownership of such voting power which is held by such
persons in the surviving corporation immediately following such effective
date in substantially the same proportion by such persons as such
-2-
<PAGE>
person's beneficial ownership in such voting power in Weeks was held
immediately before such effective date.
1.4 Code. The term "Code" for purposes of this Agreement shall mean the
----
Internal Revenue Code of 1986, as amended.
1.5 Confidential or Proprietary Information. The term "Confidential or
---------------------------------------
Proprietary Information" for purposes of this Agreement shall mean any secret,
confidential, or proprietary information of Weeks or a Weeks Affiliate (not
otherwise included in the definition of Trade Secret in (S) 1.13 of this
Agreement) that has not become generally available to the public by the act of
one who has the right to disclose such information without violating any right
of Weeks or a Weeks Affiliate.
1.6 Current Compensation Package. The term "Current Compensation Package"
----------------------------
for purposes of this Agreement shall mean:
(a) Executive's annual salary from Weeks and any Weeks Affiliate
(including any deferrals of such annual salary) as in effect on the date
his employment with Weeks or a Weeks Affiliate terminates or on any date in
the twenty-four (24) month period ending on such date, whichever is
greater; and
(b) the (i) highest average total annual cash bonus paid to Executive
by Weeks and any Weeks Affiliate in any three (3) calendar years (A) in the
five (5) calendar year period which includes the date his employment with
Weeks or a Weeks Affiliate terminates or, if no bonus has been paid before
his employment terminates in such calendar year, (B) in the five (5)
calendar year period immediately preceding the calendar year in which his
employment with Weeks or a Weeks Affiliate terminates or (ii) the average
total annual cash bonus that Executive has been paid each calendar year by
Weeks and any Weeks Affiliate if Executive has been paid bonuses in less
than three (3) calendar years; and
(c) the monthly family coverage premium Weeks charges for health care
continuation coverage under Section 602 of the Employee Retirement Income
Security Act of 1974, as amended, as of the date Executive's employment
with Weeks or a Weeks Affiliate terminates multiplied by twelve (12).
If a cash bonus described in (S) 1.6(b) was paid for a period of employment
which was less than a full calendar year, such cash bonus shall be converted
into an annualized cash bonus and taken into account under (S) 1.6(b) as an
annualized bonus. Such annualized cash bonus shall equal the cash bonus
actually paid for a calendar year, divided by the number of days Executive was
employed by Weeks or a Weeks Affiliate in such calendar year and then multiplied
by 365.
1.7 Disability. The term "Disability" for purposes of this Agreement
----------
means that Executive is unable as a result of a mental or physical condition or
illness to perform the essential functions of his job even with reasonable
accommodation for any consecutive 180-day period.
-3-
<PAGE>
1.8 Good Reason. The term "Good Reason" for purposes of this Agreement
-----------
shall mean any of the following acts or failures to act by Weeks or a Weeks
Affiliate which Weeks or such Weeks Affiliate fails to correct within thirty
(30) days after notice thereof by Executive to the Board:
(a) Weeks or any Weeks Affiliate materially diminishes Executive's
basic duties and responsibilities (as distinguished from his title or
reporting relationships) without his express written consent;
(b) Weeks or any Weeks Affiliate materially reduces Executive's annual
salary, reduces his reasonable opportunity for an annual bonus comparable
to his most recent annual bonus opportunity or reduces any other part of
his compensation package (other than a reduction in such package which is
applicable to the compensation package made available to all other senior
executives) without his express written consent, or
(c) Weeks or any Weeks Affiliate transfers Executive's primary work
site, without his express written consent, to a location that is more than
thirty (30) miles from Executive's primary work site on the date of this
Agreement or, if Executive consents to a transfer to a new work site, that
is more than thirty (30) from such new work site.
If Executive consents in writing to any change under this (S) 1.8, such consent
shall be irrevocable.
1.9 Industrial or Office Property. The term "Industrial or Office
-----------------------------
Property" for purposes of this Agreement shall mean any real property on which a
distribution facility, service center or office building development, or any
combination of the foregoing, has been constructed or is now or hereafter
proposed to be constructed (for example, and not by way of limitation, a
property of the type managed by Weeks or a Weeks Affiliate).
1.10 Managerial Responsibilities. The term "Managerial Responsibilities"
---------------------------
for purposes of this Agreement means managerial and supervisory responsibilities
and duties that are substantially the same as those Executive is performing for
Weeks or a Weeks Affiliate on the effective date of this Agreement.
1.11 Restricted Period. The term "Restricted Period" for purposes of this
-----------------
Agreement shall mean the period which starts on the date Executive's employment
by Weeks or a Weeks Affiliate terminates under circumstances which create an
obligation for Weeks under (S) 2 of this Agreement and which ends (a)(i) 270
days after such termination date or, exclusively for purposes of (S) 3(b) of
this Agreement and (S) 4 of this Agreement, (ii) 540 days after such termination
date or (b) on the first date following such a termination on which Weeks
breaches any obligation to Executive under (S) 2 of this Agreement, whichever
period is shorter.
-4-
<PAGE>
1.12 Territory. The term "Territory" for purposes of this Agreement shall
---------
mean the area within a thirty (30) mile radius of any Industrial or Office
Property that Weeks or a Weeks Affiliate has developed, operated, managed,
leased, constructed, or landscaped, or is in the process of developing,
operating, managing, leasing, constructing or landscaping, or has entered into a
binding, written agreement to do so on the effective date of this Agreement.
1.13 Trade Secret. The term "Trade Secret" for purposes of this Agreement
------------
shall mean information, including, but not limited to, technical or nontechnical
data, a formula, a pattern, a compilation, a program, a device, a method, a
technique, a drawing, a process, financial data, financial plans, product plans,
or a list of actual or potential customers or suppliers that:
(a) derives economic value, actual or potential, from not being
generally known to, and not being readily ascertainable by proper means by,
other persons who can obtain economic value from its disclosure or use, and
(b) is the subject of reasonable efforts by Weeks or a Weeks Affiliate
to maintain its secrecy.
1.14 Weeks. The term "Weeks" for purposes of this Agreement shall mean
-----
Weeks Corporation and any successor to Weeks.
1.15 Weeks Affiliate. The term "Weeks Affiliate" for purposes of this
---------------
Agreement shall mean Weeks Realty, L.P., and any successor to Weeks Realty,
L.P., Weeks Realty Services, Inc. and any successor to Weeks Realty Services,
Inc., and Weeks Construction Services, Inc. and any successor to Weeks
Construction Services, Inc., and any organization whose employees would be
treated as employees of Weeks, Weeks Realty L.P., Weeks Realty Services, Inc.,
or Weeks Construction Services, Inc. under Section 414(b) or Section 414(c) of
the Code if "50 percent" were substituted for "80 percent" in the income tax
regulations under Code Section 414(b) or Code Section 414(c).
(S) 2.
Compensation
------------
(a) If Weeks or a Weeks Affiliate terminates Executive's employment
without Cause (i) during the sixty (60) day period which ends on the date
Weeks enters into any binding, written agreement which will effect a Change
in Control if approved by Weeks' shareholders or (ii) during the period
which starts on the date on which Weeks enters into any such agreement and
ends on the date such agreement terminates or on the effective date of the
related Change in Control, whichever comes first or (iii) during the one
hundred and twenty (120) day period that ends on the effective date of a
Change in Control (if no binding, written agreement had been entered into
by Weeks which effected such Change in Control),
-5-
<PAGE>
(b) if Executive resigns for Good Reason during any period described
in (S) 2(a) of this Agreement, or
(c) if Weeks or a Weeks Affiliate terminates Executive's employment
without Cause or if Executive resigns for Good Reason within the twenty-
four (24) month period that ends on the second anniversary of the effective
date of a Change in Control, then:
(1) Weeks shall pay Executive 1.5 times his Current Compensation
Package in cash in a lump sum within ninety (90) days after the date
his employment so terminates or within thirty (30) days after a Change
in Control, whichever comes first, if Executive's employment
terminates before a Change in Control or, if Executive's employment
terminates on or after a Change in Control, within thirty (30) days
after his employment so terminates, and
(2) each outstanding stock option granted to Executive by Weeks
shall become fully vested and exercisable on the date his employment
so terminates and shall remain exercisable for the remaining term of
each such option (as if Executive had remained employed by Weeks or a
Weeks Affiliate) subject to the same terms and conditions as if
Executive had remained employed by Weeks or a Weeks Affiliate for such
term or such period (other than any term or condition which gives
Weeks the right to cancel any such option) and any restrictions on any
outstanding restricted stock grants to Executive by Weeks immediately
shall expire and Executive's right to such stock shall be
nonforfeitable.
(d) Executive expressly waives his right, if any, to have any payment
made under this (S) 2 taken into account to increase the benefits otherwise
payable to, or on behalf of, Executive under any employee benefit plan
maintained by Weeks or a Weeks Affiliate.
(e) Executive agrees that Weeks will have no obligation to Executive
under this (S) 2 if his employment terminates exclusively as a result of
his death or Disability.
(S) 3.
Noncompetition
--------------
(a) No Competitive Activity. Absent the Board's consent, Executive
-----------------------
shall not, during the Restricted Period and within the Territory, serve as
an owner, partner, employee, agent, consultant, advisor, contractor,
salesman, stockholder, investor, officer or director, or engage in any
Managerial Responsibilities, for or on behalf of, any corporation,
partnership, venture, or other business entity that engages directly or
indirectly in the development, operation, management, leasing,
construction, or landscaping of an Industrial or Office Property.
-6-
<PAGE>
(b) No Solicitation of Customers or Clients. Executive shall not
---------------------------------------
during the Restricted Period solicit any customer or client of Weeks or any
Weeks Affiliate with whom Executive had any material business contact
during the two (2) year period which ends on the date his employment by
Weeks or a Weeks Affiliate terminates for the purpose of competing with
Weeks or any Weeks Affiliate for any reason, either individually, or as an
owner, partner, employee, agent, consultant, advisor, contractor, salesman,
stockholder, investor, officer or director of, or service provider to, any
corporation, partnership, venture or other business entity.
(S) 4.
Antipirating of Employees
-------------------------
Executive will not during the Restricted Period employ or seek to
employ on his own behalf or on behalf of any other person, firm or corporation
that engages, directly or indirectly, in the development, operation, management,
leasing, construction, or landscaping of an Industrial or Office Property, any
person who was employed by Weeks or a Weeks Affiliate in an executive,
managerial, or supervisory capacity during the term of Executive's employment by
Weeks or a Weeks Affiliate, with whom Executive had business dealings during the
two (2) year period which ends on the date Executive's employment by Weeks or a
Weeks Affiliate terminates (whether or not such employee would commit a breach
of contract), and who has not ceased to be employed by Weeks or a Weeks
Affiliate for a period of at least one (1) year.
(S) 5.
Trade Secrets and Confidential Information
------------------------------------------
Executive hereby agrees that he will hold in a fiduciary capacity for
the benefit of Weeks and each Weeks Affiliate, and will not directly or
indirectly use or disclose, any Trade Secret that Executive may have acquired
during the term of his employment by Weeks or a Weeks Affiliate for so long as
such information remains a Trade Secret.
Executive in addition agrees that during the Restricted Period he will
hold in a fiduciary capacity for the benefit of Weeks and each Weeks Affiliate,
and will not directly or indirectly use or disclose, any Confidential or
Proprietary Information that Executive may have acquired (whether or not
developed or compiled by Executive and whether or not Executive was authorized
to have access to such information) during the term of, in the course of, or as
a result of his employment by Weeks or a Weeks Affiliate.
(S) 6.
Reasonable and Necessary Restrictions
-------------------------------------
Executive acknowledges that the restrictions, prohibitions and other
provisions set forth in this Agreement, including without limitation the
Territory and Restricted Period, are reasonable, fair and equitable in scope,
terms and duration; are
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<PAGE>
necessary to protect the legitimate business interests of Weeks; and are a
material inducement to Weeks to enter into this Agreement. Executive covenants
that he will not challenge the enforceability of this Agreement nor will he
raise any equitable defense to its enforcement.
(S) 7.
Specific Performance
--------------------
Executive acknowledges that the obligations undertaken by him pursuant
to this Agreement are unique and that Weeks likely will have no adequate remedy
at law if Executive shall fail to perform any of his obligations under this
Agreement, and Executive therefore confirms that Weeks' right to specific
performance of the terms of this Agreement is essential to protect the rights
and interests of Weeks. Accordingly, in addition to any other remedies that
Weeks may have at law or in equity, Weeks will have the right to have all
obligations, covenants, agreements and other provisions of this Agreement
specifically performed by Executive, and Weeks will have the right to obtain
preliminary and permanent injunctive relief to secure specific performance and
to prevent a breach or contemplated breach of this Agreement by Executive, and
Executive submits to the jurisdiction of the courts of the State of Georgia for
this purpose.
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<PAGE>
(S) 8.
Tax Protection
--------------
If Weeks or Weeks' accountants determine that the payments called for
under this Agreement or any other payments or benefits made available to
Executive by Weeks or a Weeks Affiliate will result in Executive being subject
to an excise tax under Section 4999 of the Code and/or if such an excise tax is
assessed against Executive as a result of such payments or other benefits, Weeks
shall make a Gross Up Payment (as defined in this (S) 8) to or on behalf of
Executive as and when such determination(s) and assessment(s), as appropriate,
are made, provided Executive takes such action (other than waiving his right to
any payments or benefits) as Weeks reasonably requests under the circumstances
to mitigate or challenge such tax; provided, however, if Weeks or Weeks'
accountants makes such a determination and, further, determine that Executive
will not be subject to any such tax if he waives his right to receive a part of
such payments and such part does not exceed $25,000, Executive agrees to
irrevocably waive his right to receive such part if an independent accountant or
lawyer retained by Executive and paid by Weeks agrees with the determination
made by Weeks or Weeks' accountants. A "Gross Up Payment" for purposes of this
Agreement shall mean a payment to or on behalf of Executive which shall be
sufficient to pay (i) any excise tax described in this (S) 8 in full, (ii) any
federal, state and local income tax and social security or other employment tax
on the payment made to pay such excise tax as well as any additional excise tax
on such payment and (iii) any interest or penalties assessed by the Internal
Revenue Service on Executive if such interest or penalties are attributable to
Weeks' failure to comply with its obligations under this (S) 8 or applicable
law. Any determination under this (S) 8 by Weeks or Weeks' accountants shall be
made in accordance with Section 280G of the Code and any applicable related
regulations (whether proposed, temporary or final) and any related Internal
Revenue Service rulings and any related case law and, if Weeks reasonably
requests that Executive take action to mitigate or challenge, or to mitigate and
challenge, any such tax or assessment and Executive complies with such request,
Weeks shall provide Executive with such information and such expert advice and
assistance from Weeks' accountants, lawyers and other advisors as he may
reasonably request and shall pay for all expenses incurred in effecting such
compliance and any related fines, penalties, interest and other assessments.
(S) 9.
Miscellaneous Provisions
------------------------
9.1 Assignment. This Agreement is for the personal services of Executive,
----------
and the rights and obligations of Executive under this Agreement are not
assignable or delegable in whole or in part by Executive without the prior
written consent of Weeks. This Agreement is assignable in whole or in part to
any parent, subsidiaries, or affiliates of Weeks, but only if such person or
entity is financially capable of fulfilling the obligations of Weeks under this
Agreement and Weeks as part of any Change in Control transaction shall assign
Weeks' obligations under this Agreement to Weeks' successor and such successor
shall expressly agree to such assignment or Weeks on the date of the Change in
Control (without any further action on the part of Executive) shall take the
action called for in (S) 2 of
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<PAGE>
this Agreement as if Executive had been terminated without Cause without regard
to whether his employment actually has terminated.
9.2 Governing Law. This Agreement will be governed by and construed under
-------------
the laws of the State of Georgia (without reference to the choice of law
principles thereof). Executive consents to jurisdiction and venue in the state
and federal courts of the State of Georgia for any action arising from a dispute
under this Agreement, and for any such action brought in such a court, expressly
waives any defense he might otherwise have based on lack of personal
jurisdiction or improper venue, or that the action has been brought in an
inconvenient forum.
9.3 Counterparts. This Agreement may be executed in counterparts, each of
------------
which will be deemed an original, but all of which together will constitute one
and the same instrument.
9.4 Headings, References. The headings and captions used in this
--------------------
Agreement are used for convenience only and are not to be considered in
construing or interpreting this Agreement.
9.5 Attorneys Fees. If any action at law or in equity is necessary for
--------------
Executive to enforce or interpret the terms of this Agreement, Weeks shall pay
Executive's reasonable attorneys' and other reasonable expenses incurred with
respect to such action. If any other action is taken with respect to this
Agreement, Weeks shall bear its own attorneys' fees and expenses and Executive
shall bear his own attorneys' fees and expenses.
9.6 Amendments and Waivers. Except as otherwise specified in this
----------------------
Agreement, this Agreement may be amended, and the observance of any term of this
Agreement may be waived (either generally or in a particular instance and either
retroactively or prospectively), only with the written consent of Weeks and
Executive.
9.7 Severability. Any provision of this Agreement held to be
------------
unenforceable under applicable law will be enforced to the maximum extent
possible, and the balance of this Agreement will remain in full force and
effect.
9.8 Entire Agreement. This Agreement constitutes the entire understanding
----------------
and agreement of Weeks and Executive with respect to the transactions
contemplated in this Agreement, and supersedes all prior understandings and
agreements between Weeks and Executive with respect to such transactions.
9.9 Notices. Any notice required hereunder to be given by either Weeks or
-------
Executive will be in writing and will be deemed effectively given upon personal
delivery to the party to be notified or five (5) days after deposit with the
United States Post office by registered or certified mail, postage prepaid, to
the other party at the address set forth below or to such other address as
either party may from time to time designate by ten (10) days advance written
notice pursuant to this (S) 9.9. All such written communication will be
directed as follows:
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<PAGE>
If to Weeks:
Weeks Corporation
4497 Park Drive
Norcross, Georgia 30093
Attention: Chief Executive Officer
If to Executive:
9.10 Binding Effect. This Agreement shall be for the benefit of, and shall
--------------
be binding upon, Weeks and Executive and their respective heirs, personal
representatives, legal representatives, successors and assigns, subject,
however, to the provisions in (S) 9.1 of this Agreement.
9.11 Not an Employment Contract. This Agreement is not an employment
--------------------------
contract and shall not give Executive the right to continue in employment by
Weeks or a Weeks Affiliate for any period of time or from time to time.
Moreover, this Agreement shall not adversely affect the right of Weeks or a
Weeks Affiliate to terminate Executive's employment with or without cause at any
time.
IN WITNESS WHEREOF, Weeks and Executive have executed this Agreement
effective as of the date first above written.
WEEKS CORPORATION
By:________________________________
Chief Executive Officer
EXECUTIVE
--------------------------------
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EXHIBIT 10.71
CHANGE IN CONTROL AGREEMENT
This Change in Control Agreement ("Agreement") is entered into this
______ day of February, 1999, by and between Weeks Corporation, a Georgia
corporation, and ________________________________________________ ("Executive").
WHEREAS, Executive is employed by Weeks or provides services directly
or indirectly to Weeks as an employee of one, or more than one, Weeks Affiliate;
and
WHEREAS, Weeks desires to continue to retain Executive's services,
trust, confidence and complete and undivided attention if there is any
speculation regarding a Change in Control of Weeks;
NOW, THEREFORE, in consideration of the mutual promises and agreements
contained in this Agreement and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, Weeks and Executive
hereby agree as follows:
(S) 1.
Definitions
-----------
1.1 Board. The term "Board" for purposes of this Agreement shall mean the
-----
Board of Directors of Weeks.
1.2 Cause. The term "Cause" for purposes of this Agreement shall mean:
-----
(a) Executive is convicted of any felony or any misdemeanor that the
Board in good faith determines involves moral turpitude;
(b) Executive engages in a fraudulent or dishonest act that materially
damages or prejudices Weeks or a Weeks Affiliate or engages in conduct or
activities materially damaging to the property, business or reputation of
Weeks or a Weeks Affiliate, all as determined by the Board in good faith;
(c) Any act or omission by Executive involving gross malfeasance or
gross negligence in the performance of his duties and responsibilities to
Weeks to the material detriment of Weeks or a Weeks Affiliate, all as
determined by the Board in good faith, which has not been corrected by
Executive (as determined by the Board in good faith) within thirty (30)
days after written notice from the Board of any such act or omission;
(d) Any failure by Executive to comply in any material respect with
any appropriate and proper written policies or directives of Weeks or a
Weeks Affiliate, which failure has a material and adverse effect on the
business or reputation of Weeks or a Weeks Affiliate, all as determined by
the Board in good faith, which has not been corrected by Executive (as
determined by the Board in good faith) within thirty (30) days after
written notice from the Board of such failure;
<PAGE>
(e) Executive's continued habitual insobriety or substance abuse, as
determined by the Board in good faith after written notice from the Board
and after a reasonable opportunity to undergo appropriate treatment for a
reasonable period; or
(f) Any diversion by Executive of any viable and significant business
opportunity from Weeks or a Weeks Affiliate (other than with the prior
written consent of the Board) which Executive effects directly or
indirectly for his own benefit.
1.3 Change in Control. The term "Change in Control" for purposes of this
-----------------
Agreement shall mean:
(a) a "change in control" of Weeks of a nature that would be required
to be reported in response to Item 6(e) of Schedule 14A for a proxy
statement filed under Section 14(a) of the Securities Exchange Act of 1934,
as amended ("1934 Act");
(b) a "person" (as that term is used in Section 14(d)(2) of the 1934
Act) becomes after the effective date of this Agreement the beneficial
owner (as defined in Rule 13d-3 under the 1934 Act) directly or indirectly
of securities representing 50% or more of the combined voting power for
election of directors of the then outstanding securities of Weeks;
(c) the individuals who at the beginning of any period of two
consecutive years or less constitute the Board cease for any reason during
such period to constitute at least a majority of the Board, unless the
election or nomination for election of each new member of the Board was
recommended or approved by vote of at least two-thirds of the members of
the Board then serving as such who were members of the Board at the
beginning of such period;
(d) the shareholders of Weeks approve any dissolution or liquidation
of Weeks or any sale or disposition of 50% or more of the assets or
business of Weeks; or
(e) the shareholders of Weeks approve a merger or consolidation to
which Weeks is a party (other than a merger or consolidation with a wholly-
owned subsidiary of Weeks) or a share exchange in which Weeks will exchange
Weeks shares for shares of another corporation as a result of which the
persons who were shareholders of Weeks immediately before the effective
date of such merger, consolidation or share exchange will have beneficial
ownership of less than 50% of the combined voting power for election of
directors of the surviving corporation immediately following the effective
date of such merger, consolidation or share exchange based exclusively on
such beneficial ownership of such voting power which is held by such
persons in the surviving corporation immediately following such effective
date in substantially the same proportion by such persons as such
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<PAGE>
person's beneficial ownership in such voting power in Weeks was held
immediately before such effective date.
1.4 Code. The term "Code" for purposes of this Agreement shall mean the
----
Internal Revenue Code of 1986, as amended.
1.5 Confidential or Proprietary Information. The term "Confidential or
---------------------------------------
Proprietary Information" for purposes of this Agreement shall mean any secret,
confidential, or proprietary information of Weeks or a Weeks Affiliate (not
otherwise included in the definition of Trade Secret in (S) 1.13 of this
Agreement) that has not become generally available to the public by the act of
one who has the right to disclose such information without violating any right
of Weeks or a Weeks Affiliate.
1.6 Current Compensation Package. The term "Current Compensation Package"
----------------------------
for purposes of this Agreement shall mean:
(a) Executive's annual salary from Weeks and any Weeks Affiliate
(including any deferrals of such annual salary) as in effect on the date
his employment with Weeks or a Weeks Affiliate terminates or on any date in
the twenty-four (24) month period ending on such date, whichever is
greater; and
(b) the (i) highest average total annual cash bonus paid to Executive
by Weeks and any Weeks Affiliate in any three (3) calendar years (A) in the
five (5) calendar year period which includes the date his employment with
Weeks or a Weeks Affiliate terminates or, if no bonus has been paid before
his employment terminates in such calendar year, (B) in the five (5)
calendar year period immediately preceding the calendar year in which his
employment with Weeks or a Weeks Affiliate terminates or (ii) the average
total annual cash bonus that Executive has been paid each calendar year by
Weeks and any Weeks Affiliate if Executive has been paid bonuses in less
than three (3) calendar years; and
(c) the monthly family coverage premium Weeks charges for health care
continuation coverage under Section 602 of the Employee Retirement Income
Security Act of 1974, as amended, as of the date Executive's employment
with Weeks or a Weeks Affiliate terminates multiplied by twelve (12).
If a cash bonus described in (S) 1.6(b) was paid for a period of employment
which was less than a full calendar year, such cash bonus shall be converted
into an annualized cash bonus and taken into account under (S) 1.6(b) as an
annualized bonus. Such annualized cash bonus shall equal the cash bonus
actually paid for a calendar year, divided by the number of days Executive was
employed by Weeks or a Weeks Affiliate in such calendar year and then multiplied
by 365.
1.7 Disability. The term "Disability" for purposes of this Agreement
----------
means that Executive is unable as a result of a mental or physical condition or
illness to perform the essential functions of his job even with reasonable
accommodation for any consecutive 180-day period.
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<PAGE>
1.8 Good Reason. The term "Good Reason" for purposes of this Agreement
-----------
shall mean any of the following acts or failures to act by Weeks or a Weeks
Affiliate which Weeks or such Weeks Affiliate fails to correct within thirty
(30) days after notice thereof by Executive to the Board:
(a) Weeks or any Weeks Affiliate materially diminishes Executive's
basic duties and responsibilities or changes his title without his express
written consent;
(b) Weeks or any Weeks Affiliate materially reduces Executive's annual
salary, reduces his reasonable opportunity for an annual bonus comparable
to his most recent annual bonus opportunity or reduces any other part of
his compensation package (other than a reduction in such package which is
applicable to the compensation package made available to all other senior
executives) without his express written consent, or
(c) Weeks or any Weeks Affiliate transfers Executive's primary work
site, without his express written consent, to a location that is more than
thirty (30) miles from Executive's primary work site on the date of this
Agreement or, if Executive consents to a transfer to a new work site, that
is more than thirty (30) from such new work site.
If Executive consents in writing to any change under this (S) 1.8, such consent
shall be irrevocable.
1.9 Industrial or Office Property. The term "Industrial or Office
-----------------------------
Property" for purposes of this Agreement shall mean any real property on which a
distribution facility, service center or office building development, or any
combination of the foregoing, has been constructed or is now or hereafter
proposed to be constructed (for example, and not by way of limitation, a
property of the type managed by Weeks or a Weeks Affiliate).
1.10 Managerial Responsibilities. The term "Managerial Responsibilities"
---------------------------
for purposes of this Agreement means managerial and supervisory responsibilities
and duties that are substantially the same as those Executive is performing for
Weeks or a Weeks Affiliate on the effective date of this Agreement.
1.11 Restricted Period. The term "Restricted Period" for purposes of this
-----------------
Agreement shall mean the period which starts on the date Executive's employment
by Weeks or a Weeks Affiliate terminates under circumstances which create an
obligation for Weeks under (S) 2 of this Agreement and which ends (a)(i) on the
first anniversary of such termination date or, exclusively for purposes of (S)
3(b) of this Agreement and (S) 4 of this Agreement, (ii) on the second
anniversary of such termination date or (b) on the first date following such a
termination on which Weeks breaches any obligation to Executive under (S) 2 of
this Agreement, whichever period is shorter.
1.12 Territory. The term "Territory" for purposes of this Agreement shall
---------
mean the area within a thirty (30) mile radius of any Industrial or Office
Property that Weeks or a
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<PAGE>
Weeks Affiliate has developed, operated, managed, leased, constructed, or
landscaped, or is in the process of developing, operating, managing, leasing,
constructing or landscaping, or has entered into a binding, written agreement to
do so, on the effective date of this Agreement.
1.13 Trade Secret. The term "Trade Secret" for purposes of this Agreement
------------
shall mean information, including, but not limited to, technical or nontechnical
data, a formula, a pattern, a compilation, a program, a device, a method, a
technique, a drawing, a process, financial data, financial plans, product plans,
or a list of actual or potential customers or suppliers that:
(a) derives economic value, actual or potential, from not being
generally known to, and not being readily ascertainable by proper means by,
other persons who can obtain economic value from its disclosure or use, and
(b) is the subject of reasonable efforts by Weeks or a Weeks Affiliate
to maintain its secrecy.
1.14 Weeks. The term "Weeks" for purposes of this Agreement shall mean
-----
Weeks Corporation and any successor to Weeks.
1.15 Weeks Affiliate. The term "Weeks Affiliate" for purposes of this
---------------
Agreement shall mean Weeks Realty, L.P., and any successor to Weeks Realty,
L.P., Weeks Realty Services, Inc. and any successor to Weeks Realty Services,
Inc., and Weeks Construction Services, Inc. and any successor to Weeks
Construction Services, Inc., and any organization whose employees would be
treated as employees of Weeks, Weeks Realty L.P., Weeks Realty Services, Inc.,
or Weeks Construction Services, Inc. under Section 414(b) or Section 414(c) of
the Code if "50 percent" were substituted for "80 percent" in the income tax
regulations under Code Section 414(b) or Code Section 414(c).
(S) 2.
Compensation
------------
(a) If Weeks or a Weeks Affiliate terminates Executive's employment
without Cause (i) during the sixty (60) day period which ends on the date
Weeks enters into any binding, written agreement which will effect a Change
in Control if approved by Weeks' shareholders or (ii) during the period
which starts on the date on which Weeks enters into any such agreement and
ends on the date such agreement terminates or on the effective date of the
related Change in Control, whichever comes first or (iii) during the one
hundred and twenty (120) day period that ends on the effective date of a
Change in Control (if no binding, written agreement had been entered into
by Weeks which effected such Change in Control),
(b) if Executive resigns for Good Reason during any period described
in (S) 2(a) of this Agreement,
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<PAGE>
(c) if Weeks or a Weeks Affiliate terminates Executive's employment
without Cause or if Executive resigns for any reason within the twelve (12)
month period that ends on the first anniversary of the effective date of a
Change in Control, or
(d) if Weeks or a Weeks Affiliate terminates Executive's employment
without Cause or if Executive resigns for Good Reason within the twelve
(12) month period that ends on the second anniversary of the effective date
of a Change in Control, then:
(1) Weeks shall pay Executive 2.5 times his Current Compensation
Package in cash in a lump sum within ninety (90) days after the date
his employment so terminates or within thirty (30) days after a Change
in Control, whichever comes first, if Executive's employment
terminates before a Change in Control or, if Executive's employment
terminates on or after a Change in Control, within thirty (30) days
after his employment so terminates, and
(2) each outstanding stock option granted to Executive by Weeks
shall become fully vested and exercisable on the date his employment
so terminates and shall remain exercisable for the remaining term of
each such option (as if Executive had remained employed by Weeks or a
Weeks Affiliate) subject to the same terms and conditions as if
Executive had remained employed by Weeks or a Weeks Affiliate for such
term or such period (other than any term or condition which gives
Weeks the right to cancel any such option) and any restrictions on any
outstanding restricted stock grants to Executive by Weeks immediately
shall expire and Executive's right to such stock shall be
nonforfeitable.
(e) Executive expressly waives his right, if any, to have any payment
made under this (S) 2 taken into account to increase the benefits otherwise
payable to, or on behalf of, Executive under any employee benefit plan
maintained by Weeks or a Weeks Affiliate.
(f) Executive agrees that Weeks will have no obligation to Executive
under this (S) 2 if his employment terminates exclusively as a result of his
death or Disability.
(S) 3.
Noncompetition
--------------
(a) No Competitive Activity. Absent the Board's consent, Executive
-----------------------
shall not, during the Restricted Period and within the Territory, serve as
an owner, partner, employee, agent, consultant, advisor, contractor,
salesman, stockholder, investor, officer or director, or engage in any
Managerial Responsibilities, for or on behalf of, any corporation,
partnership, venture, or other business entity that engages directly or
indirectly in the development, operation, management, leasing,
construction, or landscaping of an Industrial or Office Property.
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<PAGE>
(b) No Solicitation of Customers or Clients. Executive shall not
---------------------------------------
during the Restricted Period solicit any customer or client of Weeks or any
Weeks Affiliate with whom Executive had any material business contact
during the two (2) year period which ends on the date his employment by
Weeks or a Weeks Affiliate terminates for the purpose of competing with
Weeks or any Weeks Affiliate for any reason, either individually, or as an
owner, partner, employee, agent, consultant, advisor, contractor, salesman,
stockholder, investor, officer or director of, or service provider to, any
corporation, partnership, venture or other business entity.
(S) 4.
Antipirating of Employees
-------------------------
Executive will not during the Restricted Period employ or seek to
employ on his own behalf or on behalf of any other person, firm or corporation
that engages, directly or indirectly, in the development, operation, management,
leasing, construction, or landscaping of an Industrial or Office Property, any
person who was employed by Weeks or a Weeks Affiliate in an executive,
managerial, or supervisory capacity during the term of Executive's employment by
Weeks or a Weeks Affiliate, with whom Executive had business dealings during the
two (2) year period which ends on the date Executive's employment by Weeks or a
Weeks Affiliate terminates (whether or not such employee would commit a breach
of contract), and who has not ceased to be employed by Weeks or a Weeks
Affiliate for a period of at least one (1) year.
(S) 5.
Trade Secrets and Confidential Information
------------------------------------------
Executive hereby agrees that he will hold in a fiduciary capacity for
the benefit of Weeks and each Weeks Affiliate, and will not directly or
indirectly use or disclose, any Trade Secret that Executive may have acquired
during the term of his employment by Weeks or a Weeks Affiliate for so long as
such information remains a Trade Secret.
Executive in addition agrees that during the Restricted Period he will
hold in a fiduciary capacity for the benefit of Weeks and each Weeks Affiliate,
and will not directly or indirectly use or disclose, any Confidential or
Proprietary Information that Executive may have acquired (whether or not
developed or compiled by Executive and whether or not Executive was authorized
to have access to such information) during the term of, in the course of, or as
a result of his employment by Weeks or a Weeks Affiliate.
(S) 6.
Reasonable and Necessary Restrictions
-------------------------------------
Executive acknowledges that the restrictions, prohibitions and other
provisions set forth in this Agreement, including without limitation the
Territory and
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<PAGE>
Restricted Period, are reasonable, fair and equitable in scope, terms and
duration; are necessary to protect the legitimate business interests of Weeks;
and are a material inducement to Weeks to enter into this Agreement. Executive
covenants that he will not challenge the enforceability of this Agreement nor
will he raise any equitable defense to its enforcement.
(S) 7.
Specific Performance
--------------------
Executive acknowledges that the obligations undertaken by him pursuant
to this Agreement are unique and that Weeks likely will have no adequate remedy
at law if Executive shall fail to perform any of his obligations under this
Agreement, and Executive therefore confirms that Weeks' right to specific
performance of the terms of this Agreement is essential to protect the rights
and interests of Weeks. Accordingly, in addition to any other remedies that
Weeks may have at law or in equity, Weeks will have the right to have all
obligations, covenants, agreements and other provisions of this Agreement
specifically performed by Executive, and Weeks will have the right to obtain
preliminary and permanent injunctive relief to secure specific performance and
to prevent a breach or contemplated breach of this Agreement by Executive, and
Executive submits to the jurisdiction of the courts of the State of Georgia for
this purpose.
(S) 8.
Tax Protection
--------------
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<PAGE>
If Weeks or Weeks' accountants determine that the payments called for
under this Agreement or any other payments or benefits made available to
Executive by Weeks or a Weeks Affiliate will result in Executive being subject
to an excise tax under Section 4999 of the Code and/or if such an excise tax is
assessed against Executive as a result of such payments or other benefits, Weeks
shall make a Gross Up Payment (as defined in this (S) 8) to or on behalf of
Executive as and when such determination(s) and assessment(s), as appropriate,
are made, provided Executive takes such action (other than waiving his right to
any payments or benefits) as Weeks reasonably requests under the circumstances
to mitigate or challenge such tax; provided, however, if Weeks or Weeks'
accountants makes such a determination and, further, determine that Executive
will not be subject to any such tax if he waives his right to receive a part of
such payments and such part does not exceed $25,000, Executive agrees to
irrevocably waive his right to receive such part if an independent accountant or
lawyer retained by Executive and paid by Weeks agrees with the determination
made by Weeks or Weeks' accountants. A "Gross Up Payment" for purposes of this
Agreement shall mean a payment to or on behalf of Executive which shall be
sufficient to pay (i) any excise tax described in this (S) 8 in full, (ii) any
federal, state and local income tax and social security or other employment tax
on the payment made to pay such excise tax as well as any additional excise tax
on such payment and (iii) any interest or penalties assessed by the Internal
Revenue Service on Executive if such interest or penalties are attributable to
Weeks' failure to comply with its obligations under this (S) 8 or applicable
law. Any determination under this (S) 8 by Weeks or Weeks' accountants shall be
made in accordance with Section 280G of the Code and any applicable related
regulations (whether proposed, temporary or final) and any related Internal
Revenue Service rulings and any related case law and, if Weeks reasonably
requests that Executive take action to mitigate or challenge, or to mitigate and
challenge, any such tax or assessment and Executive complies with such request,
Weeks shall provide Executive with such information and such expert advice and
assistance from Weeks' accountants, lawyers and other advisors as he may
reasonably request and shall pay for all expenses incurred in effecting such
compliance and any related fines, penalties, interest and other assessments.
(S) 9.
Miscellaneous Provisions
------------------------
9.1 Assignment. This Agreement is for the personal services of Executive,
----------
and the rights and obligations of Executive under this Agreement are not
assignable or delegable in whole or in part by Executive without the prior
written consent of Weeks. This Agreement is assignable in whole or in part to
any parent, subsidiaries, or affiliates of Weeks, but only if such person or
entity is financially capable of fulfilling the obligations of Weeks under this
Agreement and Weeks as part of any Change in Control transaction shall assign
Weeks' obligations under this Agreement to Weeks' successor and such successor
shall expressly agree to such assignment or Weeks on the date of the Change in
Control (without any further action on the part of Executive) shall take the
action called for in (S) 2 of this Agreement as if Executive had been terminated
without Cause without regard to whether his employment actually has terminated.
-9-
<PAGE>
9.2 Governing Law. This Agreement will be governed by and construed under
-------------
the laws of the State of Georgia (without reference to the choice of law
principles thereof). Executive consents to jurisdiction and venue in the state
and federal courts of the State of Georgia for any action arising from a dispute
under this Agreement, and for any such action brought in such a court, expressly
waives any defense he might otherwise have based on lack of personal
jurisdiction or improper venue, or that the action has been brought in an
inconvenient forum.
9.3 Counterparts. This Agreement may be executed in counterparts, each of
------------
which will be deemed an original, but all of which together will constitute one
and the same instrument.
9.4 Headings, References. The headings and captions used in this
--------------------
Agreement are used for convenience only and are not to be considered in
construing or interpreting this Agreement.
9.5 Attorneys Fees. If any action at law or in equity is necessary for
--------------
Executive to enforce or interpret the terms of this Agreement, Weeks shall pay
Executive's reasonable attorneys' and other reasonable expenses incurred with
respect to such action. If any other action is taken with respect to this
Agreement, Weeks shall bear its own attorneys' fees and expenses and Executive
shall bear his own attorneys' fees and expenses.
9.6 Amendments and Waivers. Except as otherwise specified in this
----------------------
Agreement, this Agreement may be amended, and the observance of any term of this
Agreement may be waived (either generally or in a particular instance and either
retroactively or prospectively), only with the written consent of Weeks and
Executive.
9.7 Severability. Any provision of this Agreement held to be
------------
unenforceable under applicable law will be enforced to the maximum extent
possible, and the balance of this Agreement will remain in full force and
effect.
9.8 Entire Agreement. This Agreement constitutes the entire understanding
----------------
and agreement of Weeks and Executive with respect to the transactions
contemplated in this Agreement, and supersedes all prior understandings and
agreements between Weeks and Executive with respect to such transactions.
9.9 Notices. Any notice required hereunder to be given by either Weeks or
-------
Executive will be in writing and will be deemed effectively given upon personal
delivery to the party to be notified or five (5) days after deposit with the
United States Post office by registered or certified mail, postage prepaid, to
the other party at the address set forth below or to such other address as
either party may from time to time designate by ten (10) days advance written
notice pursuant to this (S) 9.9. All such written communication will be
directed as follows:
-10-
<PAGE>
If to Weeks:
Weeks Corporation
4497 Park Drive
Norcross, Georgia 30093
Attention: Chief Financial Officer
If to Executive:
9.10 Binding Effect. This Agreement shall be for the benefit of, and shall
--------------
be binding upon, Weeks and Executive and their respective heirs, personal
representatives, legal representatives, successors and assigns, subject,
however, to the provisions in (S) 9.1 of this Agreement.
9.11 Not an Employment Contract. This Agreement is not an employment
--------------------------
contract and shall not give Executive the right to continue in employment by
Weeks or a Weeks Affiliate for any period of time or from time to time.
Moreover, this Agreement shall not adversely affect the right of Weeks or a
Weeks Affiliate to terminate Executive's employment with or without cause at any
time.
IN WITNESS WHEREOF, Weeks and Executive have executed this Agreement
effective as of the date first above written.
WEEKS CORPORATION
By:________________________________
Chief Financial Officer
EXECUTIVE
-----------------------------------
-11-
<PAGE>
EXHIBIT 10.72
CHANGE IN CONTROL AGREEMENT
This Change in Control Agreement ("Agreement") is entered into this
______ day of February, 1999, by and between Weeks Corporation, a Georgia
corporation, and ________________________________________________ ("Executive").
WHEREAS, Executive is employed by Weeks or provides services directly
or indirectly to Weeks as an employee of one, or more than one, Weeks Affiliate;
and
WHEREAS, Weeks desires to continue to retain Executive's services,
trust, confidence and complete and undivided attention if there is any
speculation regarding a Change in Control of Weeks;
NOW, THEREFORE, in consideration of the mutual promises and agreements
contained in this Agreement and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, Weeks and Executive
hereby agree as follows:
(S) 1.
Definitions
-----------
1.1 Board. The term "Board" for purposes of this Agreement shall mean the
-----
Board of Directors of Weeks.
1.2 Cause. The term "Cause" for purposes of this Agreement shall mean:
-----
(a) Executive is convicted of any felony or any misdemeanor that the
Board in good faith determines involves moral turpitude;
(b) Executive engages in a fraudulent or dishonest act that materially
damages or prejudices Weeks or a Weeks Affiliate or engages in conduct or
activities materially damaging to the property, business or reputation of
Weeks or a Weeks Affiliate, all as determined by the Board in good faith;
(c) Any act or omission by Executive involving gross malfeasance or
gross negligence in the performance of his duties and responsibilities to
Weeks to the material detriment of Weeks or a Weeks Affiliate, all as
determined by the Board in good faith, which has not been corrected by
Executive (as determined by the Board in good faith) within thirty (30)
days after written notice from the Board of any such act or omission;
(d) Any failure by Executive to comply in any material respect with
any appropriate and proper written policies or directives of Weeks or a
Weeks Affiliate, which failure has a material and adverse effect on the
business or reputation of Weeks or a Weeks Affiliate, all as determined by
the Board in good faith, which has not been corrected by Executive (as
determined by the Board in good faith) within thirty (30) days after
written notice from the Board of such failure;
<PAGE>
(e) Executive's continued habitual insobriety or substance abuse, as
determined by the Board in good faith after written notice from the Board
and after a reasonable opportunity to undergo appropriate treatment for a
reasonable period; or
(f) Any diversion by Executive of any viable and significant business
opportunity from Weeks or a Weeks Affiliate (other than with the prior
written consent of the Board) which Executive effects directly or
indirectly for his own benefit.
1.3 Change in Control. The term "Change in Control" for purposes of this
-----------------
Agreement shall mean:
(a) a "change in control" of Weeks of a nature that would be required
to be reported in response to Item 6(e) of Schedule 14A for a proxy
statement filed under Section 14(a) of the Securities Exchange Act of 1934,
as amended ("1934 Act");
(b) a "person" (as that term is used in Section 14(d)(2) of the 1934
Act) becomes after the effective date of this Agreement the beneficial
owner (as defined in Rule 13d-3 under the 1934 Act) directly or indirectly
of securities representing 50% or more of the combined voting power for
election of directors of the then outstanding securities of Weeks;
(c) the individuals who at the beginning of any period of two
consecutive years or less constitute the Board cease for any reason during
such period to constitute at least a majority of the Board, unless the
election or nomination for election of each new member of the Board was
recommended or approved by vote of at least two-thirds of the members of
the Board then serving as such who were members of the Board at the
beginning of such period;
(d) the shareholders of Weeks approve any dissolution or liquidation
of Weeks or any sale or disposition of 50% or more of the assets or
business of Weeks; or
(e) the shareholders of Weeks approve a merger or consolidation to
which Weeks is a party (other than a merger or consolidation with a wholly-
owned subsidiary of Weeks) or a share exchange in which Weeks will exchange
Weeks shares for shares of another corporation as a result of which the
persons who were shareholders of Weeks immediately before the effective
date of such merger, consolidation or share exchange will have beneficial
ownership of less than 50% of the combined voting power for election of
directors of the surviving corporation immediately following the effective
date of such merger, consolidation or share exchange, based exclusively on
such beneficial ownership of such voting power which is held by such
persons in the surviving corporation immediately following such effective
date in substantially the same proportion by such persons as such
-2-
<PAGE>
person's beneficial ownership in such voting power in Weeks was held
immediately before such effective date.
1.4 Code. The term "Code" for purposes of this Agreement shall mean the
----
Internal Revenue Code of 1986, as amended.
1.5 Confidential or Proprietary Information. The term "Confidential or
---------------------------------------
Proprietary Information" for purposes of this Agreement shall mean any secret,
confidential, or proprietary information of Weeks or a Weeks Affiliate (not
otherwise included in the definition of Trade Secret in (S) 1.13 of this
Agreement) that has not become generally available to the public by the act of
one who has the right to disclose such information without violating any right
of Weeks or a Weeks Affiliate.
1.6 Current Compensation Package. The term "Current Compensation Package"
----------------------------
for purposes of this Agreement shall mean:
(a) Executive's annual salary from Weeks and any Weeks Affiliate
(including any deferrals of such annual salary) as in effect on the date
his employment with Weeks or a Weeks Affiliate terminates or on any date in
the twenty-four (24) month period ending on such date, whichever is
greater; and
(b) the (i) highest average total annual cash bonus paid to Executive
by Weeks and any Weeks Affiliate in any three (3) calendar years (A) in the
five (5) calendar year period which includes the date his employment with
Weeks or a Weeks Affiliate terminates or, if no bonus has been paid before
his employment terminates in such calendar year, (B) in the five (5)
calendar year period immediately preceding the calendar year in which his
employment with Weeks or a Weeks Affiliate terminates or (ii) the average
total annual cash bonus that Executive has been paid each calendar year by
Weeks and any Weeks Affiliate if Executive has been paid bonuses in less
than three (3) calendar years; and
(c) the monthly family coverage premium Weeks charges for health care
continuation coverage under Section 602 of the Employee Retirement Income
Security Act of 1974, as amended, as of the date Executive's employment
with Weeks or a Weeks Affiliate terminates multiplied by twelve (12).
If a cash bonus described in (S) 1.6(b) was paid for a period of employment
which was less than a full calendar year, such cash bonus shall be converted
into an annualized cash bonus and taken into account under (S) 1.6(b) as an
annualized bonus. Such annualized cash bonus shall equal the cash bonus
actually paid for a calendar year, divided by the number of days Executive was
employed by Weeks or a Weeks Affiliate in such calendar year and then multiplied
by 365.
1.7 Disability. The term "Disability" for purposes of this Agreement
----------
means that Executive is unable as a result of a mental or physical condition or
illness to perform the essential functions of his job even with reasonable
accommodation for any consecutive 180-day period.
-3-
<PAGE>
1.8 Good Reason. The term "Good Reason" for purposes of this Agreement
-----------
shall mean any of the following acts or failures to act by Weeks or a Weeks
Affiliate which Weeks or such Weeks Affiliate fails to correct within thirty
(30) days after notice thereof by Executive to the Board:
(a) Weeks or any Weeks Affiliate materially diminishes Executive's
basic duties and responsibilities (as distinguished from his title or
reporting relationships) without his express written consent;
(b) Weeks or any Weeks Affiliate materially reduces Executive's annual
salary, reduces his reasonable opportunity for an annual bonus comparable
to his most recent annual bonus opportunity or reduces any other part of
his compensation package (other than a reduction in such package which is
applicable to the compensation package made available to all other senior
executives) without his express written consent, or
(c) Weeks or any Weeks Affiliate transfers Executive's primary work
site, without his express written consent, to a location that is more than
thirty (30) miles from Executive's primary work site on the date of this
Agreement or, if Executive consents to a transfer to a new work site, that
is more than thirty (30) from such new work site.
If Executive consents in writing to any change under this (S) 1.8, such consent
shall be irrevocable.
1.9 Industrial or Office Property. The term "Industrial or Office
-----------------------------
Property" for purposes of this Agreement shall mean any real property on which a
distribution facility, service center or office building development, or any
combination of the foregoing, has been constructed or is now or hereafter
proposed to be constructed (for example, and not by way of limitation, a
property of the type managed by Weeks or a Weeks Affiliate).
1.10 Managerial Responsibilities. The term "Managerial Responsibilities"
---------------------------
for purposes of this Agreement means managerial and supervisory responsibilities
and duties that are substantially the same as those Executive is performing for
Weeks or a Weeks Affiliate on the effective date of this Agreement.
1.11 Restricted Period. The term "Restricted Period" for purposes of this
-----------------
Agreement shall mean the period which starts on the date Executive's employment
by Weeks or a Weeks Affiliate terminates under circumstances which create an
obligation for Weeks under (S) 2 of this Agreement and which ends (a)(i) on the
first anniversary of such termination date or, exclusively for purposes of (S)
3(b) of this Agreement and (S) 4 of this Agreement, (ii) on the second
anniversary of such termination date or (b) on the first date following such a
termination on which Weeks breaches any obligation to Executive under (S) 2 of
this Agreement, whichever period is shorter.
-4-
<PAGE>
1.12 Territory. The term "Territory" for purposes of this Agreement shall
---------
mean the area within a thirty (30) mile radius of any Industrial or Office
Property that Weeks or a Weeks Affiliate has developed, operated, managed,
leased, constructed, or landscaped, or is in the process of developing,
operating, managing, leasing, constructing or landscaping, or has entered into a
binding, written agreement to do so on the effective date of this Agreement.
1.13 Trade Secret. The term "Trade Secret" for purposes of this Agreement
------------
shall mean information, including, but not limited to, technical or nontechnical
data, a formula, a pattern, a compilation, a program, a device, a method, a
technique, a drawing, a process, financial data, financial plans, product plans,
or a list of actual or potential customers or suppliers that:
(a) derives economic value, actual or potential, from not being
generally known to, and not being readily ascertainable by proper means by,
other persons who can obtain economic value from its disclosure or use, and
(b) is the subject of reasonable efforts by Weeks or a Weeks Affiliate
to maintain its secrecy.
1.14 Weeks. The term "Weeks" for purposes of this Agreement shall mean
-----
Weeks Corporation and any successor to Weeks.
1.15 Weeks Affiliate. The term "Weeks Affiliate" for purposes of this
---------------
Agreement shall mean Weeks Realty, L.P., and any successor to Weeks Realty,
L.P., Weeks Realty Services, Inc. and any successor to Weeks Realty Services,
Inc., and Weeks Construction Services, Inc. and any successor to Weeks
Construction Services, Inc., and any organization whose employees would be
treated as employees of Weeks, Weeks Realty L.P., Weeks Realty Services, Inc.,
or Weeks Construction Services, Inc. under Section 414(b) or Section 414(c) of
the Code if "50 percent" were substituted for "80 percent" in the income tax
regulations under Code Section 414(b) or Code Section 414(c).
(S) 2.
Compensation
------------
(a) If Weeks or a Weeks Affiliate terminates Executive's employment
without Cause (i) during the sixty (60) day period which ends on the date
Weeks enters into any binding, written agreement which will effect a Change
in Control if approved by Weeks' shareholders or (ii) during the period
which starts on the date on which Weeks enters into any such agreement and
ends on the date such agreement terminates or on the effective date of the
related Change in Control, whichever comes first or (iii) during the one
hundred and twenty (120) day period that ends on the effective date of a
Change in Control (if no binding, written agreement had been entered into
by Weeks which effected such Change in Control),
-5-
<PAGE>
(b) if Executive resigns for Good Reason during any period described
in (S) 2(a) of this Agreement, or
(c) if Weeks or a Weeks Affiliate terminates Executive's employment
without Cause or if Executive resigns for Good Reason within the twenty-
four (24) month period that ends on the second anniversary of the effective
date of a Change in Control, then:
(1) Weeks shall pay Executive 2 times his Current Compensation
Package in cash in a lump sum within ninety (90) days after the date
his employment so terminates or within thirty (30) days after a Change
in Control, whichever comes first, if Executive's employment
terminates before a Change in Control or, if Executive's employment
terminates on or after a Change in Control, within thirty (30) days
after his employment so terminates, and
(2) each outstanding stock option granted to Executive by Weeks
shall become fully vested and exercisable on the date his employment
so terminates and shall remain exercisable for the remaining term of
each such option (as if Executive had remained employed by Weeks or a
Weeks Affiliate) subject to the same terms and conditions as if
Executive had remained employed by Weeks or a Weeks Affiliate for such
term or such period (other than any term or condition which gives
Weeks the right to cancel any such option) and any restrictions on any
outstanding restricted stock grants to Executive by Weeks immediately
shall expire and Executive's right to such stock shall be
nonforfeitable.
(d) Executive expressly waives his right, if any, to have any payment
made under this (S) 2 taken into account to increase the benefits otherwise
payable to, or on behalf of, Executive under any employee benefit plan
maintained by Weeks or a Weeks Affiliate.
(e) Executive agrees that Weeks will have no obligation to Executive
under this (S) 2 if his employment terminates exclusively as a result of
his death or Disability.
(S) 3.
Noncompetition
--------------
(a) No Competitive Activity. Absent the Board's consent, Executive
-----------------------
shall not, during the Restricted Period and within the Territory, serve as
an owner, partner, employee, agent, consultant, advisor, contractor,
salesman, stockholder, investor, officer or director, or engage in any
Managerial Responsibilities, for or on behalf of, any corporation,
partnership, venture, or other business entity that engages directly or
indirectly in the development, operation, management, leasing,
construction, or landscaping of an Industrial or Office Property.
-6-
<PAGE>
(b) No Solicitation of Customers or Clients. Executive shall not
---------------------------------------
during the Restricted Period solicit any customer or client of Weeks or any
Weeks Affiliate with whom Executive had any material business contact
during the two (2) year period which ends on the date his employment by
Weeks or a Weeks Affiliate terminates for the purpose of competing with
Weeks or any Weeks Affiliate for any reason, either individually, or as an
owner, partner, employee, agent, consultant, advisor, contractor, salesman,
stockholder, investor, officer or director of, or service provider to, any
corporation, partnership, venture or other business entity.
(S) 4.
Antipirating of Employees
-------------------------
Executive will not during the Restricted Period employ or seek to
employ on his own behalf or on behalf of any other person, firm or corporation
that engages, directly or indirectly, in the development, operation, management,
leasing, construction, or landscaping of an Industrial or Office Property, any
person who was employed by Weeks or a Weeks Affiliate in an executive,
managerial, or supervisory capacity during the term of Executive's employment by
Weeks or a Weeks Affiliate, with whom Executive had business dealings during the
two (2) year period which ends on the date Executive's employment by Weeks or a
Weeks Affiliate terminates (whether or not such employee would commit a breach
of contract), and who has not ceased to be employed by Weeks or a Weeks
Affiliate for a period of at least one (1) year.
(S) 5.
Trade Secrets and Confidential Information
------------------------------------------
Executive hereby agrees that he will hold in a fiduciary capacity for
the benefit of Weeks and each Weeks Affiliate, and will not directly or
indirectly use or disclose, any Trade Secret that Executive may have acquired
during the term of his employment by Weeks or a Weeks Affiliate for so long as
such information remains a Trade Secret.
Executive in addition agrees that during the Restricted Period he will
hold in a fiduciary capacity for the benefit of Weeks and each Weeks Affiliate,
and will not directly or indirectly use or disclose, any Confidential or
Proprietary Information that Executive may have acquired (whether or not
developed or compiled by Executive and whether or not Executive was authorized
to have access to such information) during the term of, in the course of, or as
a result of his employment by Weeks or a Weeks Affiliate.
(S) 6.
Reasonable and Necessary Restrictions
-------------------------------------
Executive acknowledges that the restrictions, prohibitions and other
provisions set forth in this Agreement, including without limitation the
Territory and Restricted Period, are reasonable, fair and equitable in scope,
terms and duration; are
-7-
<PAGE>
necessary to protect the legitimate business interests of Weeks; and are a
material inducement to Weeks to enter into this Agreement. Executive covenants
that he will not challenge the enforceability of this Agreement nor will he
raise any equitable defense to its enforcement.
(S) 7.
Specific Performance
--------------------
Executive acknowledges that the obligations undertaken by him pursuant
to this Agreement are unique and that Weeks likely will have no adequate remedy
at law if Executive shall fail to perform any of his obligations under this
Agreement, and Executive therefore confirms that Weeks' right to specific
performance of the terms of this Agreement is essential to protect the rights
and interests of Weeks. Accordingly, in addition to any other remedies that
Weeks may have at law or in equity, Weeks will have the right to have all
obligations, covenants, agreements and other provisions of this Agreement
specifically performed by Executive, and Weeks will have the right to obtain
preliminary and permanent injunctive relief to secure specific performance and
to prevent a breach or contemplated breach of this Agreement by Executive, and
Executive submits to the jurisdiction of the courts of the State of Georgia for
this purpose.
-8-
<PAGE>
(S) 8.
Tax Protection
--------------
If Weeks or Weeks' accountants determine that the payments called for
under this Agreement or any other payments or benefits made available to
Executive by Weeks or a Weeks Affiliate will result in Executive being subject
to an excise tax under Section 4999 of the Code and/or if such an excise tax is
assessed against Executive as a result of such payments or other benefits, Weeks
shall make a Gross Up Payment (as defined in this (S) 8) to or on behalf of
Executive as and when such determination(s) and assessment(s), as appropriate,
are made, provided Executive takes such action (other than waiving his right to
any payments or benefits) as Weeks reasonably requests under the circumstances
to mitigate or challenge such tax; provided, however, if Weeks or Weeks'
accountants makes such a determination and, further, determine that Executive
will not be subject to any such tax if he waives his right to receive a part of
such payments and such part does not exceed $25,000, Executive agrees to
irrevocably waive his right to receive such part if an independent accountant or
lawyer retained by Executive and paid by Weeks agrees with the determination
made by Weeks or Weeks' accountants. A "Gross Up Payment" for purposes of this
Agreement shall mean a payment to or on behalf of Executive which shall be
sufficient to pay (i) any excise tax described in this (S) 8 in full, (ii) any
federal, state and local income tax and social security or other employment tax
on the payment made to pay such excise tax as well as any additional excise tax
on such payment and (iii) any interest or penalties assessed by the Internal
Revenue Service on Executive if such interest or penalties are attributable to
Weeks' failure to comply with its obligations under this (S) 8 or applicable
law. Any determination under this (S) 8 by Weeks or Weeks' accountants shall be
made in accordance with Section 280G of the Code and any applicable related
regulations (whether proposed, temporary or final) and any related Internal
Revenue Service rulings and any related case law and, if Weeks reasonably
requests that Executive take action to mitigate or challenge, or to mitigate and
challenge, any such tax or assessment and Executive complies with such request,
Weeks shall provide Executive with such information and such expert advice and
assistance from Weeks' accountants, lawyers and other advisors as he may
reasonably request and shall pay for all expenses incurred in effecting such
compliance and any related fines, penalties, interest and other assessments.
(S) 9.
Miscellaneous Provisions
------------------------
9.1 Assignment. This Agreement is for the personal services of Executive,
----------
and the rights and obligations of Executive under this Agreement are not
assignable or delegable in whole or in part by Executive without the prior
written consent of Weeks. This Agreement is assignable in whole or in part to
any parent, subsidiaries, or affiliates of Weeks, but only if such person or
entity is financially capable of fulfilling the obligations of Weeks under this
Agreement and Weeks as part of any Change in Control transaction shall assign
Weeks' obligations under this Agreement to Weeks' successor and such successor
shall expressly agree to such assignment or Weeks on the date of the Change in
Control (without any further action on the part of Executive) shall take the
action called for in (S) 2 of
-9-
<PAGE>
this Agreement as if Executive had been terminated without Cause without regard
to whether his employment actually has terminated.
9.2 Governing Law. This Agreement will be governed by and construed under
-------------
the laws of the State of Georgia (without reference to the choice of law
principles thereof). Executive consents to jurisdiction and venue in the state
and federal courts of the State of Georgia for any action arising from a dispute
under this Agreement, and for any such action brought in such a court, expressly
waives any defense he might otherwise have based on lack of personal
jurisdiction or improper venue, or that the action has been brought in an
inconvenient forum.
9.3 Counterparts. This Agreement may be executed in counterparts, each of
------------
which will be deemed an original, but all of which together will constitute one
and the same instrument.
9.4 Headings, References. The headings and captions used in this
--------------------
Agreement are used for convenience only and are not to be considered in
construing or interpreting this Agreement.
9.5 Attorneys Fees. If any action at law or in equity is necessary for
--------------
Executive to enforce or interpret the terms of this Agreement, Weeks shall pay
Executive's reasonable attorneys' and other reasonable expenses incurred with
respect to such action. If any other action is taken with respect to this
Agreement, Weeks shall bear its own attorneys' fees and expenses and Executive
shall bear his own attorneys' fees and expenses.
9.6 Amendments and Waivers. Except as otherwise specified in this
----------------------
Agreement, this Agreement may be amended, and the observance of any term of this
Agreement may be waived (either generally or in a particular instance and either
retroactively or prospectively), only with the written consent of Weeks and
Executive.
9.7 Severability. Any provision of this Agreement held to be
------------
unenforceable under applicable law will be enforced to the maximum extent
possible, and the balance of this Agreement will remain in full force and
effect.
9.8 Entire Agreement. This Agreement constitutes the entire understanding
----------------
and agreement of Weeks and Executive with respect to the transactions
contemplated in this Agreement, and supersedes all prior understandings and
agreements between Weeks and Executive with respect to such transactions.
9.9 Notices. Any notice required hereunder to be given by either Weeks or
-------
Executive will be in writing and will be deemed effectively given upon personal
delivery to the party to be notified or five (5) days after deposit with the
United States Post office by registered or certified mail, postage prepaid, to
the other party at the address set forth below or to such other address as
either party may from time to time designate by ten (10) days advance written
notice pursuant to this (S) 9.9. All such written communication will be
directed as follows:
-10-
<PAGE>
If to Weeks:
Weeks Corporation
4497 Park Drive
Norcross, Georgia 30093
Attention: Chief Executive Officer
If to Executive:
9.10 Binding Effect. This Agreement shall be for the benefit of, and shall
--------------
be binding upon, Weeks and Executive and their respective heirs, personal
representatives, legal representatives, successors and assigns, subject,
however, to the provisions in (S) 9.1 of this Agreement.
9.11 Not an Employment Contract. This Agreement is not an employment
--------------------------
contract and shall not give Executive the right to continue in employment by
Weeks or a Weeks Affiliate for any period of time or from time to time.
Moreover, this Agreement shall not adversely affect the right of Weeks or a
Weeks Affiliate to terminate Executive's employment with or without cause at any
time.
IN WITNESS WHEREOF, Weeks and Executive have executed this Agreement
effective as of the date first above written.
WEEKS CORPORATION
By:_______________________________
Chief Executive Officer
EXECUTIVE
----------------------------------
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<PAGE>
EXHIBIT 11.1
COMPUTATION OF EARNINGS PER SHARE OF COMMON STOCK
FOR THE YEARS ENDED DECEMBER 31, 1998, 1997 AND 1996
<TABLE>
<CAPTION>
1998 1997 1996
-------- ------- -------
<S> <C> <C> <C>
(In thousands, except
Computation of Net Income per Common Share per share data)
Basic
Income before extraordinary loss.................... $ 35,141 $22,975 $12,745
Dividends to preferred shareholders................. (12,000) (2,720) --
-------- ------- -------
Income available to common shareholders before
extraordinary loss--basic.......................... 23,141 20,255 12,745
Extraordinary loss, net of minority interests....... (267) -- --
-------- ------- -------
Net income available to common shareholders--basic.. $ 22,874 $20,255 $12,745
======== ======= =======
Diluted
Income available to common shareholders before
extraordinary loss................................. $ 23,141 $20,255 $12,745
Minority interests in earnings of Common Units of
limited partnership in the Operating partnership... 8,267 6,219 3,064
-------- ------- -------
Income available to common shareholders before
extraordinary loss-- diluted....................... 31,408 26,474 15,809
Extraordinary loss before minority interests........ (365) -- --
-------- ------- -------
Net income available to common shareholders--
diluted............................................ $ 31,043 $26,474 $15,809
======== ======= =======
Computation of Weighted Average Common Shares
Weighted average common shares--basic............... 19,256 16,357 11,512
Dilutive securities--
Common Units of limited partnership interest in the
Operating Partnership............................. 6,878 5,023 2,768
Stock options...................................... 165 200 106
-------- ------- -------
Weighted average common shares--diluted............. 26,299 21,580 14,386
======== ======= =======
Income Available to Common Shareholders
Before Extraordinary Loss per Share
Basic.............................................. $ 1.20 $ 1.24 $ 1.11
Diluted............................................ $ 1.19 $ 1.23 $ 1.10
Net Income per Common Share
Basic.............................................. $ 1.19 $ 1.24 $ 1.11
Diluted............................................ $ 1.18 $ 1.23 $ 1.10
</TABLE>
<PAGE>
EXHIBIT 21.1
SUBSIDIARIES OF THE REGISTRANT
DECEMBER 31, 1998
The financial statements of the following entities were consolidated with
those of the Registrant in the consolidated financial statements of the
Registrant incorporated herein as of December 31, 1998:
. Weeks GP Holdings, Inc., a Georgia corporation.
Registrant owns 100% of the common stock.
. Weeks LP Holdings, Inc., a Georgia corporation.
Registrant owns 100% of the common stock.
. Weeks Realty, L.P. (the "Operating Partnership"), a Georgia limited
partnership.
Weeks GP Holdings, Inc., owns a 1.3% general partnership interest.
Weeks LP Holdings, Inc., owns a 71.6% limited partnership
interest.
. Weeks Realty Construction Services, Inc., a Georgia corporation.
The Operating Partnership owns 100% of the common stock.
. Weeks Special Purpose LLC, a Georgia limited liability company.
The Operating Partnership owns 100% of the member interests.
. Weeks SPV Financing LLC, a Georgia limited liability company.
Weeks Special Purpose LLC owns 100% of the member interests.
. Weeks Beacon Centre LLC, a Georgia limited liability company.
The Operating Partnership owns 100% of the member interests.
. Codina/Tradewind, Ltd., a Florida limited partnership.
The Operating Partnership owns a 99.99% limited and general
partnership interest and Weeks Beacon Centre LLC owns a .01%
general partnership interest.
. Codina/Tradewind No. 4, Ltd., a Florida limited partnership.
The Operating Partnership owns a 99.99% limited and general
partnership interest and Weeks Beacon Centre LLC owns a .01%
general partnership interest.
. Raha Associates, Ltd., a Florida limited partnership.
The Operating Partnership owns a 99.99% limited and general
partnership interest and Weeks Beacon Centre LLC owns a .01%
general partnership interest.
. New World Partners Joint Venture, a Florida general partnership.
Codina/Tradewind, Ltd. owns a 50% general partnership interest and
Raha Associates, Ltd. owns a 50% general partnership interest.
. New World Partners Joint Venture Number Two, a Florida general
partnership.
Codina/Tradewind, Ltd. owns a 50% general partnership interest and
Raha Associates, Ltd. owns a 50% general partnership interest.
. New World Partners Joint Venture Number Three, a Florida general
partnership.
Codina/Tradewind, Ltd. owns a 50% general partnership interest and
Raha Associates, Ltd. owns a 50% general partnership interest.
. New World Partners Joint Venture Number Four, a Florida general
partnership.
Codina/Tradewind, No. 4, Ltd., owns a 50% general partnership
interest and Raha Associates, Ltd. owns a 50% general partnership
interest.
<PAGE>
. Weeks P-95 LLC, a Georgia limited liability company.
The Operating Partnership owns 100% of the member interests.
. P-95/Global Limited Partnership, a Georgia limited partnership.
The Operating Partnership owns a 99.9% limited partnership
interest and Weeks P-95 LLC owns a 0.1% general partnership
interest.
. P-95/Fed Limited Partnership, a Georgia limited partnership.
The Operating Partnership owns a 99.9% limited partnership
interest and Weeks P-95 LLC owns a 0.1% general partnership
interest.
. P-95/Three Limited Partnership, a Georgia limited partnership.
The Operating Partnership owns a 99.9% limited partnership
interest and Weeks P-95 LLC owns a 0.1% general partnership
interest.
. Weeks WBP, LLC, a Georgia limited liability company.
The Operating Partnership owns 100% of the member interests.
. Weeks NC Financing Limited Partnership, a Georgia limited
partnership.
The Operating Partnership directly owns a 99% partnership interest
and indirectly owns a 1% partnership interest through its
ownership of Weeks Special Purpose LLC and Weeks SPV Financing
LLC.
. North Point Limited Partnership No. 1, a Florida limited partnership.
The Operating Partnership owns an 85% partnership interest and
Weeks Development Partnership owns a 15% partnership interest.
. BT Options Partners, Ltd., a Florida limited partnership.
The Operating Partnership owns a 95% general partnership interest.
The Operating Partnership accounted for the following entities on the equity
method, at December 31, 1998.
. Weeks Realty Services, Inc., a Georgia corporation.
The Operating Partnership owns 100% of the non-voting common stock
and 1% of the voting common stock.
. Weeks Construction Services, Inc., a Georgia corporation.
The Operating Partnership owns 100% of the non-voting common stock
and 1% of the voting common stock.
. Weeks Development Partnership, a Georgia partnership.
Weeks Construction Services, Inc. and Weeks Realty Services, Inc.
own 100% of the partnership interests.
. Sugarloaf Holdings One, LLC, a Georgia limited liability company.
The Operating Partnership owns a 50% member interest.
. BP One Limited Partnership, a Delaware limited partnership.
The Operating Partnership owns a 49.9% limited partnership
interest and Weeks WBP LLC owns a 0.1% general partnership
interest.
<PAGE>
EXHIBIT 23.1
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the incorporation by
reference of our report dated February 26, 1999 and to all references to our
Firm, included in this Form 10-K, into Weeks Corporation's previously filed
Registration Statements on Form S-8 (File Nos. 333-18305 and 333-1108) and Form
S-3 (File Nos. 333-1106, 33-96534, 333-32755, 333-42821 and 333-50871).
ARTHUR ANDERSEN LLP
Atlanta, Georgia
March 26, 1999
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-START> JAN-01-1998
<PERIOD-END> DEC-31-1998
<CASH> 1,503
<SECURITIES> 0
<RECEIVABLES> 15,316
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 1,307,898
<DEPRECIATION> 96,383
<TOTAL-ASSETS> 1,447,592
<CURRENT-LIABILITIES> 0
<BONDS> 654,424
0
150,000
<COMMON> 197
<OTHER-SE> 364,715
<TOTAL-LIABILITY-AND-EQUITY> 1,447,592
<SALES> 0
<TOTAL-REVENUES> 150,974
<CGS> 0
<TOTAL-COSTS> 110,257
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 30,782
<INCOME-PRETAX> 35,141
<INCOME-TAX> 0
<INCOME-CONTINUING> 35,141
<DISCONTINUED> 0
<EXTRAORDINARY> 267
<CHANGES> 0
<NET-INCOME> 34,874
<EPS-PRIMARY> 1.19
<EPS-DILUTED> 1.18
</TABLE>
